🚨LIVE: Saylor's STRC at $85?! Markets Down After FOMC. Wormhole, Kohaku, and Trace Join Today

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[music] [music] [music] >> JP Morgan, BlackRock, DTCC, Fidelity. The entire thing was just institutions. It's just It's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish.

>> He said it. He finally said it. >> I'm so bullish. >> And he's bullish, I'm bullish, we're bullish. >> [music] [music] [music] [music] [music]

[music] [music] [music] >> The Rollup >> [music] >> is headed to the top. If we're not already at the top, we're going to the top. >> The Rollup is my favorite.

>> From all walks of life, all over the world, all over this industry, come together for the Rollup. >> [music] [music] [music] [music] [music] >> Zoom out. The institutions aren't coming, they're simply here. This is the golden age of crypto, guys.

Get right. Let's go. >> [music] >> Welcome to the nest. See you on the show. >> Trench. >> [applause] >> Stretch to zero. Stretch to zero. >> Who you blaming for your losses today, Rob? MicroStrategy or Federal Chairman Kevin Warsh? >> All my homies hate Kevin Warsh, and they hate Michael Saylor. And Mom Donny is okay, because he's in the rubber room. >> is is getting absolutely fried right now by the New York people for organizing the world's smallest parade in human history for the first NBA championship in 53 years, Rob.

>> Trump signed the memorandum of understanding in the Palace of Versailles last time there was a international treaty signed in Versailles it didn't go so well. >> Really? The war of Versailles? >> The Treaty of Versailles was >> The Treaty of Versailles? >> an agreement that people don't really think was the best agreement in place uh because I think that was when World War I I think the Treaty of Versailles was basically World War I coming to an end and obviously we know what happened after World War I. >> Guys, you are watching the Rollup live from the tokenization tower the nest from the financial capital of the world. Today is June 18th and we have a great show ahead as always powered by our friends at Plume. Shout out to the nest

powering infrastructure for on chain asset management. The nest vault product is alive, it's well. We had the Zama powered privacy day yesterday >> Fantastic. >> confidential new USDC vault >> on Morpho. >> Ladies and gentlemen, it's stable coins, it's tokenization, it's perps, it's vaults. The CME suing the CFTC, uh Sam stretches down bad, Grayscale is making some bullish takes on Ave, the Federal Reserve is not doing any more forward guidance, we've got a busy busy busy show for you all. Markets are cracked.

I mean, hype and per, I mean, looks pretty rough out there. >> Peter Schiff is grave dancing on stretch. The financial house of cards that Sailor built is collapsing. >> Yikes. >> Great sound. We got our intern on sounds today. >> Yes, sir. >> [laughter] >> Yo. All right, let's get into the topics, guys. Uh we got a busy show for us today. Uh should be a fun one. Um we have We're in the tower as usual. We're going to do markets and weather. Rob's got a new light. Look at that, guys. Look Look at his glowing beautiful face. I mean, come on.

You got to be excited about that. >> kind. >> Wormhole Labs CEO calling in about SpaceX. Solana's dominating tokenizing tokenized equity trading on spot. You look at the last 48 hours of tokenized equity trading across all chains, Solana's got it by about 99%. Uh we got a round table about Kohaku and Ethereum's private future. Would have been a nice segment for yesterday. And then we got stable up. Uh the co-founder of Trace, they just raised a massive round to bring stable coins into Latin America. As always, our topics are powered by our friends at Trezor. Use code roll up 10 at trezor.io to learn more about Trezor. Grab yourself a hardware wallet to hold those coins on a down bad day like today, Rob.

>> Um guys, we got a lot to cover today. So, why don't we get right into it? Um great show for you guys as always. I'm excited. Tons of news. Stretch is free falling. People are buying. People [clears throat] are choosing to buy an $85 stretch. Uh 85 cents, 85 dollars? I think it's 85 dollars. 100 dollar par. Um >> Yep. >> This feels You remember when uh Circle depegged? USDC depegged 90% uh or excuse me, 10% down to 90 cents because >> Feels like that.

>> Silicon Valley Bank were getting crushed. >> Yep. >> I kind of think Saylor makes it through. I don't think it's going to be easy. >> Yeah, same. >> Um I don't know if this thing is going to trade exactly at par, but I do think that um this thing is going to come back at least a little bit. Not sure where the bottom is, but I don't think that this is the end and I think people are grave dancing a little too early. >> I agree. I think it's good it's good signal to buy when people are uh free or fudding stable coins like was stable product. It's good time to buy. All right, let's get into the markets and the weather in our opening segment.

Before we do, let me tell you about our friends at Frax, our premier stablecoin partner building infrastructure for the future of digital money, open, stable, and borderless. Visit frax.com to learn more. It is a beautiful 78°. You guys see the Empire State Building in the middle there, right where we're hanging out of. I'm working on some freaking World Cup tickets from our exclusive FIFA World Cup prediction markets partner, PredictStreet. Let's give some love to PredictStreet, man. Hook the boy up with some World Cup [cheering] tickets next week. I'll be euphoric. And look at that Look at that background behind the New York City >> weather on our uh little screen right there. Unreal beauty. Shout out to the Shout out to the graphic designer that put that together.

Um Rollbit team is cooking, and it is a beautiful day for New York City parade. Go Knicks. >> Yeah, it is. It is As always, guys, relay.link cross-chain swaps and more. Use relay.link for all your cross-chain swap needs. Let's get into the market because I think it's not looking so hot right now. Got to >> to say, relay is going to take you where you need to >> Before we do, let me tell you about Denarii. Our tokenized equities partner, huge volume on hyperliquid for SPXCD. Infrastructure for tokenized US equities bringing real-world stocks on chain. I think they hit 4 million or 7 million dollars in 24 hours trading on hyperliquid. The biggest SpaceX on-chain spot trading pair right now on hyperliquid. That's Denarii's SPXCD.

>> Andy, >> Rob, what's going on out there? >> I saw a tweet from you that I wanted to ask you about because I'm seeing kind of a mixed bag. SpaceX on Solana 97% on spot. Denarii, massive day when it comes to volume on their spot SpaceX equity. You put out a tweet. I don't remember exactly what it said, but I'm curious. Maybe you could unpack what is happening in the spot equity world on chain. >> Yeah, I mean, right now, uh the leading spot SpaceX trading platform is Solana Solana's wormhole and >> [snorts] >> backpack by a lot. I think they've hit like almost 200 million, 250 million dollars

of volume. All spot. But Dinari launched their SPXCD or SPXCD on Hyperliquid and they I think they hit about 5 million dollars or so, somewhere between 3 to 5 million dollars in spot volume on Hyperliquid and that's the largest spot market right now on Hyperliquid for for SpaceX. And yeah, I mean, it's just great to see. Like I think Hyperliquid's going to start to compete on the spot trading of tokenized equities. But right now Solana's dominating and honestly, this is going to be Solana's comeback arc is if it can really start to foster this home for tokenized equity trading.

>> You know, and I mean, I don't blame these people for wanting to trade because look at the markets today, guys. I mean, Bitcoin 62-6, Ethereum 816-84, equities down a bit as well, Solana down, Chainlink down a little bit, Near down a little bit. Um, oil was way down. >> Yeah. >> Oil was way down, but I think Saylor's stretch is weighing us down, guys. >> it's certainly weighing down Bitcoin. People calling for the uncorrelated the the the separation thesis where >> Yeah. >> you know, obviously Bitcoin and Saylor very correlated and Saylor is pulling this down. Stretch has a lot to do with that. But why is that affecting companies and products and tokens with real fundamental revenue,

strong earnings of their own? Why does Saylor stretch have anything to do with Hyperliquid? Doesn't make a ton of sense. If anything, the greater volatility that stretch is causing on Bitcoin should increase the amount of activity, volume, and open interest on Hyperliquid and therefore more fees, making Hyperliquid thesis even stronger. So, >> Unfortunately, we will not get away from the king, I don't think in this industry. Maybe one day, maybe, maybe. But right now, it just you just look at Bitcoin and you're like dude, this thing has a clear path to 57, 55, 53 K. And so, you're if you're holding anything, you're just kind of like, "Whoa." You're just kind of scared.

>> Yeah, I think we're not going to completely decouple from Bitcoin. But I also I and I find, you know, there's a confluence of factors here. Trump did sign that memorandum. So, that's good. Oil's coming down. That's going to have less knock-on effects. But then you have Kevin Warsh and you have Saylor. Saylor, I think is pretty isolated to Bitcoin, but of course we're not going to get completely away from Bitcoin in the broader market. Kevin Warsh, I think is the big dog in the room. And I saw some >> Yeah, I think he kind of cooked us yesterday. >> Yeah, shout out to dogs. He let the dogs out. >> I think he cooked us.

>> I think he did and it's going to Look, man, it's tough to figure out what to make of it because he didn't really give us any guidance on what to expect in the future. I think he's coming out and he's doing things in new way. And I think most the reason that people are primarily thinking that it was a hawkish Fed meeting was around this dot plot where people are pricing in the rate hikes. Nine of 18, no one really priced in a cut or put it put in a cut. But then he goes and he says these these pencils have big erasers and these things are super, you know, subject to change. He's going to be collecting a ton of data.

So, I I think you know, people are maybe overreacting to Kevin Warsh a little bit and I think it's going to blow over. I I I think right now it makes sense to price a little bit of this in, but I I think we're going to have I think he has a potential to be a pretty good chairman and do things a little bit differently. So, I make I'm actually excited about the the impact that he's going to have on the broader economy. We also know that he has crypto bags. Not like he's going to >> He does. >> It's not like he's going to curate the economy exactly to the the liking of crypto investors and holders and traders. But I think he is a very thoughtful person. I think he is going to do what's best for the economy and I think we're going to continue the pace of innovation and the financial markets

moving on channels which is ultimately going to help our bags. Man, I can't help but think that anytime market goes down um you just stretch out your time horizon. You know, that's kind of [laughter] that's kind of the >> Isn't that what Isn't that what Isn't that what we always do here? Isn't that what we always do? Man, guys, we're we're we're going to be fine. We're going to hold out. Bitcoin's going to be all right. It doesn't look great right now. It's going to be all right, but yeah, sailors stretch is just killing killing any narrative, anything. It's just going to I mean, you you're just going to see this thing go lower. I mean, it's hard not to see it. >> Um yeah, I think stretch we're going to see. I do think that the war being lifted is is going to be helpful, but

we're going to get, you know, more negotiations as a result of that. >> Dude, I honestly feel like doing that on Wednesday was like it kind of killed the vibe. >> Like why Why did they I don't understand why they moved it up. >> I dude, like it it happened and then and then like it kind of just was signed electronically and people were it wasn't even like a news story is what I'm saying. Like it wasn't like a notable the war is over, you know.

It's But also like isn't the war being over kind of bearish? >> What? >> Like isn't the war being on like able to like you know, I mean, I guess for oil prices it's not, but yeah. >> Well, inflation is the main thing that Warsh needs to combat, right? Like the reason that he's hawkish and tough is because he needs to scare the market into thinking that he's going to raise rates and and lower inflation. And I think the war being over and oil prices coming cuz oil has this systemic property where it's like a factor in several prices across CPI. And so, oil being higher has ripple effects throughout the entire economy. And if oil comes down, you'd think that

inflation in general is going to come down and the Fed doesn't need to be as hawkish as they otherwise would need to be. And so, I think maybe this was like he moved it up in a in an effort to kind of squelch Warsh's hawkishness. Like you kind of have this, you know, this dovish thing, oil prices coming down, you know, Warsh is up there hawkish. These kind of things kind of offset one another and we get, you know, the hawkishness is kind of overpowering at this point, but maybe these things kind of cancel each other out. I I just generally think if we can get inflation down naturally by the war being over, you know, technology and AI is deflationary by by virtue by definition technology is deflationary. >> Yep.

>> Um and so, if we can if we can do that and we can bring prices down that way, then we don't need to hike rates and Warsh can be dovish. And I think that might be the thesis going forward and more people might come around to that idea. >> The MSM does not want to help Trump, Freedom Guy says. I hear you. As always, guys, our markets are powered by our friends at Zama. Visit zama.org to learn more about their confidential and privacy solutions available. Let's keep it rolling into the first pieces of news. Before I do, let me tell you about Near and near.com, your home for building, discovering, and using AI-powered [screaming] apps on chain. One account, no borders, your financial life on chain.

In private, Rob. In private. >> They got that right. >> I don't want to like sip in too much time here because we kind of just did, but the Federal Reserve is increasingly moving away from heavy reliance on forward guidance as a policy tool. This is something that this our our friend of the show Feds Jaws podcast is called forward guidance. >> Yeah. >> Under previous Fed chairs, Ben Bernanke, Janet Yellen, Jerome Powell, markets often priced in rate decisions far before FOMC meetings. In this in in this current environment, Kevin Warsh is suggesting less emphasis on signaling future policy paths and dot plot commitments. Uh interest rate expectations may become more dependent on incoming economic data rather than central bank communication. Meaning guys like in the last several, I mean,

however long, right? Like we we kind of knew what was going to happen. Like we knew that there was going to be no rate change >> Right. >> this time. >> Right. >> We knew when they were going to hike rates. >> And and And you you knew what you know what this led to is that is the the feeling and the the reaction in markets where you have these good job numbers, well, the market kind of you know, extrapolates that. It's like, okay, well, if we have good job numbers, then the economy is great, which means that they can raise rates, and so we're going to dump the market because the economy is good. And it felt so backwards. Like >> Yeah, like dis- like disconnected. >> Totally disconnected.

>> to these meetings not being massive like line in the sand meetings. Kind of led them to be like nothing burgers. But now, you know, let's say we have no idea what's going to happen, traders are going to, you know, price these things in, and who knows? Like, you know, there's there's going to be surprise >> Well, they're >> cuts and hikes >> [clears throat] >> in the future. >> Right, because they're not going to know what to price in. And and Feds Jaws does a great job here cuz he explains why this was instantiated in the first place. And so the ZIRP era, it it started with Bernanke and it went into Powell, and it was the zero interest rate environment. And so this was, you know, kind of on the heels of 2008, right? Cuz they had a lower interest rates and

whatnot. And what they did was they used forward guidance because they didn't want to go negative with the rates. And that was a discussion back then, but they said if we can give forward guidance on what we're going to do next, then the market can price in this theoretical negative rate environment without actually putting it into place. And they can just keep rates at zero, but they knew that they were going to be very, very dovish. And so what what Fijow talks about is how we're not in this ZIRP era anymore. And so forward guidance is no longer necessary because if you cut, then you can cut. If you need to hike, you can you can hike. You don't need a forecast into this imaginary negative world. And so, you know, he he I think ultimately says that this is a good thing. And I think this

is what one washed the Fed chair. Remember, Trump was considering several different candidates, but I think Warsh got in there, and we've heard Trump say this, too. Good job numbers. Why would the market dump? Our economy is great. Why is Why is the market so backwards and dislocated from the data that we have coming in? And I think Warsh went in there and he said, "You're right, Trump. This is dumb. Why would the markets react this way? It's because we have forward guidance." Warsh got in there, and I think his campaign for Fed chair was effectively getting rid of forward guidance, and that's exactly what he did yesterday at the meeting. >> Trump says there is no $300 payment to Iran by the US. That is fake news. Guys, that is forward guidance. That is our friend Fijow. Economic data matters more than Fed messaging in the future. I

think yesterday's meeting definitely took the wind out of the sails a bit. And next can to a little bit of time to recover. We'll be all right. >> Next Fed meeting is July 29th. No change that 77% which here's the important piece here. No change before this. I believe it was closer to 99%. Now The thing that jumped was a 25 Yeah, it was a 25 basis point increase is now at 21% in July. It was at 3% going into the meeting yesterday. Here's why this is Here's why I think this is bullish because people think that yesterday was extremely hawkish and now polymarket traders are pricing in a hike [snorts]

potentially as soon as the decision in July. I think Warsh is not going to hike. But now you have this 22% chance according to polymarket that he is going to hike. When he comes in and doesn't do anything and just keeps the rate unchanged that 22% all of a sudden that is all free What do you want to What do you want to call it? Just free space for the market to to to react. So I I like it. I think um this is a change. We're going to see how it works out. This is not no forward guidance. But I I I'm excited about what this could mean because we're going to get these Fed meetings are going to get a lot more exciting going forward.

>> Yep. All right, let's move on from the Fed into our Grayscale friends here who have put a report about Aave's fair value. New type, what's up man? I just joined. Has Michael Saylor been liquidated yet? When jail time? We're going to get to that really soon new type. We're going to zoom through the rest of this news. Grayscale argues that Aave may be undervalued relative to its cash flow generation. They estimate a fair value of $80 to a 100 to 100 dollar range based on 2026 revenue. Could benefit significantly from regulatory clarity. Aave is increasingly viewed as a cash flow producing asset tied to protocol activity and demand. Unlike Bitcoin, and if you scroll down, you can kind of see the price-to-earnings ratio here of Aave compared to some of these other uh lending markets in the world. So, it's

kind of evenly distributed there. Um I don't really have much here. Um investors are starting to value some tokens less like commodities and more like businesses. Um I just like, you know, Aave's not going to survive any sort of prolonged down move from Bitcoin. Neither is your favorite bags. So, I agree. There's a lot of these mispricings here where we can start to actually look at these things, value them as cashflow-generating assets. For now, I'm not that interested in Aave. I still feel like there was a narrative overhang uh from the hack, unfortunately. Uh it's trading at 71 right now. Has a nice balance from that from those lows earlier this month. >> I'm going to I'm going to take the other

side of this. I think these DeFi protocols, it it's it's in a position now where these things are starting to get attractive from a price-to-earnings ratio. I don't know exactly Oh, yeah, here we go. 16, right? So, uh there is so much future growth here, and we've talked about it. It's a result of the tokenization super cycle, and these DeFi protocols getting re-rated for the amount of supply that they're going to be coming in, which is going to lead to so many more fees. And if I'm looking at the the earnings multiples here, I mean, look, you've got public companies trading at 10x, right?

>> Yeah. >> They have nowhere near the potential growth or opportunities that Aave has. >> No. >> So, I think Aave should be trading at a higher multiple, and now it's getting really, really attractive. >> I mean, I think from a DCA perspective, from a long-term view, if that's your view on the tokenization thesis, then I hear you. I like it. For now, I'm staying away. >> I I think no leverage, take it easy on the leverage, think long-term, build you know, build your thesis over the years and I think we're going to see every asset tokenized. It's all going to end up on chain. Aave is one of the leaders in the lending facility.

>> and just say that they're not. Them and Morpho. >> I just think again, like you can start to see how some of these prices are getting dis- disconnected from their fundamentals. Not to say that they, you know, it might might go down lower, but like their their earnings are going to they're going to hold steady. We're at the depths of the bear, right? This is like as little as the activity is going to Maybe prices get lower, but that doesn't Actually, volatility is what's good. If prices get lower, these things are going to make more money, right? So, the fundamentals get stronger. So, the multiple might compress a little bit, but I think in general, these things are starting to starting to get a bit the multiple I think is is starting to get a bit a bit low. >> New type, Trump is already on board with

the hike. He said it could happen on an interview coming off in Air Force One. Stay away from the three L's: liquor, leverage, ladies. We hear you on that, brother. All right, let's get let's get into the next news. Infinitify, first our premier DeFi partner here on the show. Infinitify, no leverage, higher yields, building DeFi infrastructure for simpler access to on-chain yield, liquidity, capital allocation. All right, guys. Aerodrome. In the global economy, we're going to have the most vibrant deepest richest capital markets in the history of humanity. That's where we're building on base and starting to tokenize stocks, FX bonds, perps, and more. This is Jesse [ __ ] with Alex Cutler. One of these I think Aerodrome is doing quite well, have a chance to take a lot of the spot market share.

Um if not July, we get a cut in the next one before the elections. The issue with DeFi is that TradFi is coming with their own chains. DeFi needs to focus on who they're selling to. >> I I I I that is an interesting conversation topic that we could talk about a lot because they are coming with their own infrastructure, but these protocols have been built for tokenized assets. They've got a lot of catching up to do. And I think there is there's an argument to be made that even with traditional products and financial institutions coming on chain, Aave, Morpho, Aerodrome, Uniswap, these guys are in position in a better position to capitalize more so than this newer technology that might be coming online uh online with the institutions. So >> And they want that composability, the

Lindy, etc. They you know, they want to take positions in these assets as well and then use them kind of like what we saw with Apollo and Morpho. Newtype says it like I said on Tuesday, everyone was coming into everyone's coming into the week bullish from last weekend. Just fade retail emotions and you'll do decent. Unfortunately, we have to agree. End of last week was pure bullish. Do even Monday, Tuesday was like we were like on our horse and the hype and per. >> Oh, yeah. >> Um So, all right guys, let's play this video here. Let's go through it quickly and hear what Alex has to say.

>> You've talked about base being like the next true like on-chain capital market. I'm just curious how you are thinking about the future base in that context and what you would like to see from protocols like Arrow to help you get there. >> Yeah, I mean I I think that in the global economy, we're going to have the most vibrant, deepest, richest capital market has ever existed in the history of humanity. >> Let's go. >> Uh and that's that's what we're building on base. And there's kind of two broad ways I think about the the things that are going to be in that capital market. There is one very large sector of kind of taking all of existing finance and moving it on chain. This is things like tokenizing stocks, it's things like moving kind of local currencies on chain and and FX, bonds, you know, perps, all all of this

different infrastructure that has developed over the last 60 years, 100 years uh in in the United States capital markets and in in other kind of like local capital markets around the world and figuring out, okay, how do we use this new technology stack, this kind of code as as software um that can use money and identity out of the box um to make those systems more efficient. So, instead of having, you know, markets open 9:00 to 5:00, we have markets open 24/7 365. Uh instead of settlement taking 3 days, we have settlement that's taking milliseconds. Like, that is going to be a massive massive part of uh you know, building this global capital markets, bringing all the existing capital structures into this new platform. And and we're seeing really exciting growth on this thus far and um I'm excited to see that keep expanding.

>> So, look look, I think I mean, we heard about the triangle yesterday, which I think is important to incorporate into this thesis, right? It's the fundamental building blocks of the entire economy that M2 is based on. It's FX, it's bonds, and it's repo markets. And I think these are the things that ultimately everything is rehypothecated and levered up of these exact things. Um once we get that, the entire on-chain economy explodes. And I think, you know, what everything is downhill once we get that triangle on. So, shout out to to Eric from Canton for explaining that, but I think I I think Alex from Aerodrome makes a great point. Jesse makes a great point here.

Uh and this is the thesis, man. Like, how can you be bearish on these protocols when the momentum is all of these assets moving into these protocols? >> Yep. And being traded on them, hyperliquid, Aerodrome, Uniswap, Aave, Morpheus. It's very clear right now that this is where all the activity's going to happen. It's going to take a while. Bullish on Aero, insane floor at 31 cents. Yeah, I mean, where's it at now? Is it probably >> Probably lower than where where we saw it. It was tapping 50 cents again. Uh but I think it's probably lower. >> 43 right now. That's probably This is probably the Aerodrome entry, guys.

>> I think if you're looking for it. I mean, look, I I we should move off of of We might come back to Aerodrome a little bit later because they had an interesting uh back and forth with the Uniswap guys. >> Yeah, let's keep it rolling. At this point, I'm only bullish on Base once they get acquired from by Jeff from Hyperliquid. He already had the partnership with Circle and Hyperliquid with USDC. >> think Base is I don't think I don't think Hyperliquid's going to acquire Coinbase anytime soon. That would be insane. >> I think this is pretty interesting. So, uh I am uh value capture is incredibly difficult and um the market is leaking value at an unbelievable pace. Um talking about like this kind of goes into the buybacks conversation. This kind of goes into like the um you know, uh innovation uh conversation about investors only capturing or

innovators only capturing a small fraction of the value that they create. Let's go and play this clip. I think it's interesting that it cuz this directly connects to token design, network effects, business models, and kind of like like what's all the rage right now. Coinbase cannot compete with Hyperliquid. I'm more bullish on mergers and acquisitions acquisitions. Just imagine, guys. I mean, imagine is right. We need some bullishness today. I I totally agree. Let's play the video. >> Now, here's a here's a very unconventional opinion. The reason why capitalists and venture capitalists and like business people and entrepreneurs are so obsessed with value capture is not because it's like serving their greed at every turn. Not because it's like, you know, how I get rich whatever.

It's actually because value capture is incredibly difficult and the market is leaking its value at an unbelievable pace at all times. >> Mhm. >> There's this idea something called Schumpeterian profit. Whenever a business improves its productivity, makes products better, makes products cheaper, you know, whatever it does better, what percentage of the improvement, so to speak, it's fundamental improvement in productivity is captured by it in profits? According to Nordhaus, 97.8% of the value is externalized. Very little of the value is captured by the company. So, take the fact that the value's leaking all the time and it's which means it's very hard to keep the value in. Okay? Okay? The reason why the value's leaking is one, competition,

right? It's like if the obvious one is that if my company's making things better and faster and cheaper, I want to take all that from you, your company. So, I lower the price and no one's going to buy from you. And now you lower the price and we kind of go back and forth and I raise money to invest in even more better system and >> Yeah, only the consumers benefit. I like that. >> benefit. [clears throat] So, that's a very obvious place where the value's leaking. >> And by the way, every price that's posted is a an advertisement for other competitors to jump in. If you're charging a high price and a competitor sees that, that's just like a blinking, blaring red signal sign for them to jump in. >> The The entire market is sharing this information at all times to encourage everyone to compete with everyone else

to take all the value out. >> It is the beauty of market capitalism, yeah. >> Like think of capitalism as this like ship and it's just like sinking all the time, but we're building it like faster than it's sinking. Like it's actually in a runaway feedback loop where it's growing and leaking at an accelerating pace. It's leaking faster and faster and it's growing faster and faster. It's a perma-boom, perma-crisis at all times. >> Interesting. >> Now, here's a here's a very >> what you're >> take here. >> I mean, I think this directly correlates to the should we do token buybacks or should we um you know, recycle the revenue into R&D and building the product? I think the hardest problem in crypto is is it it it is creating value, but it's also just keeping it surviving and it's the ones

like Alex from Airdrop came on and said like the reason that they are winning and the reason that Hyperloop is winning is because they distribute and share all the value that they create with their token holders. I just Yeah, I mean that's like the standard that has been set, right? Like by Hyperliquid, by Aerodrome. We're going to create a ton of value. We're just going to give it all to our token holders. Um and so you just got to wonder like what does that mean for others who aren't doing that? Do they even have a seat at the table? >> Right. And I like this because this is crypto's maturity moment. Like this is what it takes for a industry to grow up. You can't have some sort of like valuable

you know, stock unless you unless you produce some value and you have that, you know, and you monetize it. So, I think it makes a ton of sense. I think we are starting to see this die this this uncorrelation. Um and you know, it's separating the winners from the losers. Uh I don't necessarily think you have to pass all of that revenue back to the token. There is an argument that you should be funding your business rather than just porting it back to your shareholders. >> Yep. >> But that's those the this is like the next level of of like corporate finance that I think our industry is now ready for because now we're starting to make money. The question now becomes what are we going to do with it? Are we going to pass it to shareholders or are we going to reinvest it into our business? That I

think both of those frameworks can bolster a strong asset price. >> Yeah. >> You know, businesses are in different different stages at all times. But I think this is ultimately where where we needed to go and it it it's reassuring that now that now that we're here. >> Dang, Aerodrome is about to flip all the on rolling 30-day revenue on DeFi Llama. There's a new cohort, guys. There's a new cohort happening. It's happening in front of our eyes. We're on top of it, you know, being bullish on hype, being bullish on a lot of these.

There's a new cohort, and they're they're going to win, and they're going to redistribute a lot of that value. All right, guys. Let's Let's keep it rolling. Before we do, let me tell you about LiFi, our cross-chain partner, bringing in infrastructure for cross-chain swaps, bridging, and routing across the on-chain economy. Visit li.fi, your universal market access. The bad guys that have controlled the system for a long time, keeping us from being free and wealthy, will fight back hard. That is why the CME is suing the CFTC today, I believe, because they do not want Celsius to have perps in the US. They do not want Hyperliquid to have perps in the US. They don't want anyone to compete with their US dominance for futures. And I don't blame them. I really don't blame them. I think that's I mean, that's at That's the point that

we're currently at. Um It'd be great to get to some of the Michael Saylor stuff. >> Yeah. Let's keep going. >> Yeah. Yeah. Um >> Yeah, I think we can skip this one. Circle's doing uh doing good work out there. Stablecoin supercycle, but I think we have uh more compelling things >> Yeah, I think Saylor >> Let's get into this. Let's get into the stretch situation. >> at max >> Yeah, let's play this. Let's play this. >> Okay. >> This [snorts] is uh this is where you were very >> peak scared Saylor stretch right now.

>> Yeah. I think I think we get a nice bounce on it. >> So, Andy, you weren't meant to live an uncomfortable life. >> How about this video, guys? >> You were meant to own something and be happy. Let's Let's play this because this is diabolical with stretch down at 80. >> Compared to what's happened, yeah. Go ahead and play it. >> Are you on vacation here? >> I live here. I'm retired. I just don't think I'm meant to live an uncomfortable life. >> Wow. How did you make it? >> I worked hard as an engineer to save money. Again, then I put my savings into Stretch.

>> What is Stretch? >> Stretch is a stock. Right now, I get about 11% [music] a year in dividends. >> Nice. >> Holy moly, what a jingle. >> I live here. >> What if she checks her her portfolio today and she's like, wait, why am I down 15%? >> I worked hard as an engineer to save money. And save money I did. Oh my goodness, Stretch trading at 85.89 right now. Bottomed out there at 82.67.

Again though, guys, I mean, for the sake of my holdings, for the sake of this industry, I do think I am probably biased here, but I do think today is like peak Stretch market awareness and fear. Um, wouldn't be surprised if this was like close to like if if Stretch started to make its way back up from here. >> Yeah. Yeah, I tend to think so as well. And there's some good takes on this out there that people that have looked into the capital stack. Um, my you know, from my kind of somewhat unsophisticated point of view, it's basically in the middle of the capital stack. And so there's like five or six billion of senior debt, which means that it gets paid back first

>> Yeah. >> if strategy gets goes bankrupt and they have to divide up the net assets that they have. Um, there's five or six billion that gets uh that that, you know, is is senior. Then you've got Stretch, and then there's, you know, another five or six billion that's junior to Stretch. >> Yeah, so I'm not tweaking out right now like it's all over, hype double top. Like zero. >> Oh my god. >> here. I mean, I'm down six figures today, for sure. >> analysis >> candle formations I can't. >> Don't copy trade me guys. Like I'm I'm [ __ ] on the edge of my seat today.

Excuse my language. It's quite a morning here at the RollUp HQ. Um but you know, I think it's I think it's uh I think we're I think we're in a decent spot. Isn't Saylor now forced to start selling BTC reserves to fund this STRC doom? No. But if he does not do that, our take on it is that uh MicroStrategy literally goes just down ungodly amounts. >> Hold on. Hold on. That's not necessarily our take on it. There's a like there's a million different takes here. One of the takes that I personally >> Hold up. Did you buy STRC, Andy? No.

Sorry. Sorry. I did not buy STRC. I'm a large holder of hype and per, and boy oh boy, we're getting chopped to pieces today. >> So on >> but hope you're having a nice day there, buddy. >> Way to break the fourth wall, Andy. Um So what what I mean, if I'm if I'm Saylor, before I start selling Bitcoin and cause mass hysteria in that market, I'm hammering the ATM. And this is what he said he wouldn't do, but he's already started to do, is rather than sell Bitcoin to fund the dividends, he wants to sell MicroStrategy shares. >> Yes.

>> He What could go wrong? >> seems like he needs to do something. Yeah. Or he could just chill. Maybe he should just play squash. >> You think he can just hang? >> he could just do nothing, and Bitcoin is just going to find a bottom eventually, and he's just going to have to pay out the dividends. But people are worried that he doesn't have like 7 years of dividends in cash ready to pay out. But if he has like, I don't know, a few couple of years. I think he's got at least 2 years of cash. Just don't buy more Bitcoin right now, right? Save your cash, and use that to fund the dividends for the next couple of years until you get really pressed, but I'd imagine that Bitcoin goes up sometime in the next couple of years.

>> Yeah. Yeah. So, Robbie, you don't think he needs to sell Bitcoin. He can just hang out. Maybe has to sell some MicroStrategy. And so, the MicroStrategy holders are going to be the ones who get squeezed here. >> I think he would probably prefer to sell MicroStrategy shares more so than he would prefer to sell Bitcoin, but obviously the issue with that is that he dilutes MicroStrategy and and then your Bitcoin per share is like his North Star and that goes down cuz you have more shares outstanding. So, he's he's not like he's in a great spot, which is why I'm like do nothing.

Do nothing. Don't sell more shares. Don't dilute MicroStrategy holders. Don't let your Bitcoin per share go down. Don't sell Bitcoin because then your Bitcoin per share goes down, too. And you know, you could save stretch, but >> is him to unload 5 billion dollars of Bitcoin, which would cover his dividends for a while. >> Why would you need to But why do you >> years. Just to get that in cash on hand to like calm the market down. >> got a couple hundred million in cash anyway. I think he can just >> Yeah, but that's only enough for What is 11% of 2 billion, right? Or 20 billion is or something that he's got in there. >> Is it Is that all in I think that's all of his debt, but it's not all stretch debt.

I don't know. I I I don't know. >> it back. Don't you worry, Andy. Zoom out, bros. We good. Winston New calls BTC bottom at its lowest 40 to 55K. All right, guys. We're going to get into our daily equity segment today powered by our friends at Denarii. And then we've got uh the Solana tokenized equity team Wormhole with Backpack uh crushing. We're we're we're going to get Saeed, the CEO of Wormhole Labs, on the show. But we need to talk about net equity issuance and what these another over-levered part of the economy, these kind of tech stock companies doing. So, let's get into it. Let's get into our daily equity.

>> Okay. So, here we go. Daily Equity presented by Denali. These guys are crushing when it comes to the spot equity market on hyper liquid SpaceX. Um and they're we're going to see a lot more of these tokenized equities very, very soon. In this uh topic, we see the AI revolution needs more funding. Net equity issuances are estimated to rise to $200 billion in 2026 and surge over 500% year over year in '27 to 1.2 trillion. That's according to JP Morgan. That includes IPOs, secondary offerings, and other share sales. Um This is uh something that we're going to have to be reckoned with because of course these hyperscalers have raised tons of money already. They're going to need to raise even more. I saw a great tweet the other day that said, "Hey,

instead of buying the hyperscalers and you know, today especially is a great day for it because Mag 7 is essentially flat, but semiconductor and um uh memory stocks are absolutely flying. And I think the thesis here is that you buy what the hyperscalers are buying rather than buying the hyperscalers directly." >> Well, cuz it literally what this is saying is like we are going to issue new equity and raise capital. Um and this is like a sharp a sharp reversal from what we've seen last 20 years where they've taken shares off the market. They're literally issuing more shares, diluting at these, you know, high prices and it's just hard to read this as anything but like not great for tech stocks. And so,

you're reading this and you're like, "So, these large growth companies are issuing a ton more shares. They're sell- They're issuing new equity and they're trying to squeeze as much value of that equity as they can. >> Yeah. >> And yeah. It's That's That's not what you want to see at all-time high levels for stocks. It's uh It's a bit worrying. But, you know what, guys? We're going to let these sup- these hyperscaler companies grow, do their thing, get their value out there, issue their equity, >> This is >> and we're going to see what happens.

>> And and if I'm a business man, not a priest, I'm raising equity at all-time highs. Like, this is what's best for their business. It's the same reason why Sailor's going to issue more shares when he's got an M not M nab that's really high. Like, if your stock is at all-time high, that's when you go, you raise capital cuz you have a higher valuation, you can issue more shares, you have more sell You your share price is higher and you can therefore have you can raise more cash for the same amount of shares. It's just corporate finance 101. So, I think they're going to put more cash in their po- pockets. They're selling their stock. They're going to use it to raise cash.

And then they're going to reinvest that cash into their business, and we're going to get the AI build-out, the data center build-out. The And I think this again is going to fuel Like, what are these hyperscalers then going to turn around and spend their newly raised capital on? They're going to use it on memory stocks and RAM and and and semiconductors. And so, I think that is the read here is like, look, maybe the tech sector is going to see some distribution. If you want to bring in a technical analysis term that Andy loves, right? This is not accumulation at the highs, this is distribution, right? So, maybe the Mac 7's going to take it easy here for a few, and what we're going to see is that they're going to raise this cash, and they're going to go and they'll turn around that cash, and

they're going to spend it. And what are they going to spend it on? That's what I'm interested in. I'm interested in what are they spending this newly raised fund these funds on? Memory semiconductors, these things are all buttons, so it's difficult to really buy them here, but not financial advice. I'm buying what the hyperscalers are buying. >> Bullish. Bullish. Guys, that is our daily equity segment powered by our friends at Denari. We're going to get our first guest up here. I'm actually going to pull something up for you guys because I'm a little bit scared for what I just saw on Twitter, and I think you guys would really really get a a a kick out of this. And then we're going to get Saeed up. I think you guys are going to get a really big kick out of this. >> Please don't show us technical analysis.

>> Definitely not. >> Okay, great. >> Guys, you guys are going to Let's pull this up real quick on the screen, and then we're going to get into Saeed and what's coming up next. >> [snorts] >> But wow. Wow. So So let's go ahead and pull this up on the on the on the on the main, and yeah, Rob, equity supply going to surge. Um Yeah. All right, let's pull this up here. You guys are going to get a total hoot out of this. I know New Type's going to love this one. Um This is Michael Saylor explaining how he came up with the idea of stretch. And and uh check this out, guys.

>> Uh when we did stretch you know, I designed all these with AI. You know, I couldn't have done it myself. I I literally sat and I used artificial intelligence, and I and I went back and forth with the AI for a few hours, and >> So you were just on chat GPT just like the rest of us figuring out how to design these different offerings. >> And arguing with it and saying, "Can I do this? Can I do that?" Uh when we did stretch >> So he used chat GPT to design stretch. >> A $20 million loan. >> And then he posts an AI-generated advertisement of this woman on a beach putting her life savings into it and saying, "You weren't meant to live an uncomfortable life. That is exactly That is exactly what he did, Rob. >> It's exactly what happened, and now

stretches that 86 cents. >> Yeah. 86 dollars? >> Yeah. >> All right, guys. Let's get Saeed up here. We're going to get him in the back. We're going to talk about the the growth of tokenized SpaceX trading on chain on Solana. As I said, they had a notable massive massive win here. Solana needed one. They needed to win. They got the win. They have massive dominance of trading on uh on Solana. And they got the tokenized uh equity win here. And Saeed is the CEO of Wormhole.

And he's going to talk to us about what's happening in Solana. Again, guys, the the they are the undisputed winner right now of spot trading on for SpaceX on chain. It's like not even close. Like I said, the stats was like 99% Solana sell. Without further ado, guys, let's get Saeed up, and let's get this party started. >> What's up? >> There he is. Welcome [clears throat] to the show, Saeed. >> Hello, hello. How's everyone doing? >> Doing great, man. Congrats on the uh the SpaceX uh tokenized equity uh 97% market share there.

>> Amazing. Yeah. No, it was it's incredible incredible to see. And incredible to see so many people kind of launch last-minute announcements uh saying that they're going to do a similar thing. I think that was uh that was something that we did not predict um Binance and Coinbase to to immediately try to follow on and say, "Okay, this might be the new way that tokenized equities needs to needs to happen." >> And it And it means you're doing something right. And we also saw there were some campaigns around people trying to do this with with PERPs, and you know, Binance had to essentially rug their own campaign. Maybe you could just tell us how you guys were able to pull this off, you know, right at IPO launch, whereas others failed.

>> Yeah, well, you know, Sunrise, which is basically the asset gateway that we're building and that we've we've kind of kind of done really big launches with in the past. You guys might have remembered Monad. But the whole idea around it was really day one, minute one, assets should be live and available and and tradeable in in an orderly market kind of way. It's a very hard problem. We hadn't we hadn't seen anyone do it in crypto, right? That's why you just don't have any cross-pollination in terms of having deep liquid markets for non-native assets on a chain.

Um so we took a lot of the learnings for from that and said, "Okay, well, um we wanted to you know, we've been thinking for a couple months to expand into equities and how do we bring tokenized equities on chain in a way that makes sense? Um and so we decided to pick the hardest and most historic IPO to try it out on and and and it worked out pretty well, but uh yeah, SpaceX was definitely the hardest way the hardest way we could have entered the tokenized equities space and um really proud of the team and really proud of the ecosystem for being able to uh to to to execute on it. >> Yeah, but also the most uh rewarding, you know? Like um the amount of demand. >> you know?

It's it's history for us as a company, but it's also it's it's more importantly his historic to a historic IPO to be able to support, right? Um >> Yeah. >> So yeah, that all of that was kind of like um in the back of our minds, which is like, why you know, why did we pick the hardest thing to to to try to test uh our design, our systems, our operations, and like really stress test everything? It's because like we knew that this was going to be a big category. Like uh anyone who's been paying attention on in terms of on-chain volumes in crypto understands that uh the meta is squarely in tokenizing equities and trading tokenized equities. Um that's been the case um since the war started and you saw the WTI and Brent markets launch on

Hyperliquid. Um you can see that there's tremendous amount of capital on chain and it's looking for markets like this that they can trade 24/7. Um and that the the assets available there and the quality of assets available within that within the traditional financial world is just a huge huge, you know, quantity. Um so, we knew we needed to get into that space. Uh how do you do it? Um how do you do it safely, securely, and in a way that makes sense in a way that brings a better product to the market. And I think that's what we were able to do with our partnership with Backpack Securities um and and really not only just do the launch and make sure it was great and make sure that people liked it and and and felt like there was really good tradeable markets on Solana for it,

but do it in a way where it's actually like a product upgrade, right? Um you look at like um some of the other competitors, right? You mentioned like Binance had to pull their their SpaceX listing. Bybit had to put out an apology. >> Yeah. >> You know, uh a lot of them relied on on, you know, a different stack, a different a different way of doing these kinds of things and it just didn't deliver um in a in a pretty big way. Uh so, >> And maybe you could just talk us through, you know, the the difficulty of this and and, you know, part of that is why these other campaigns failed, but what made this one so difficult? Why why was it more difficult than, you know, some some of the other ones at play here?

>> Oh, this is such a good question. I mean, it was so ridiculously difficult because because it's just there's a tremendous amount of demand. It's it's listing on a Friday. It's like a one of the worst days to list. So, there's no pricing data. There's no historical pricing data. No trading desk has any idea how this thing is going to trade. And then within a couple of hours it's the markets are going to go dark. So, you have like such a small sample size. And then you're going to go into the weekend and you're going to have these tradeable markets um with very little pricing history uh not very many venues to uh to kind of try to determine the fair market pri- price of it like on a Friday night or a Saturday morning. Right? So, it All of these things are

like almost accelerated. And it's already like uh you know, a hard thing to do, right? Um just if it was just a normal IPO uh on a Monday, it would still be hard to to kind of uh launch it and then make sure it was it was a it was a great launch that people were happy with through the weekend and through the nights. Um but just doing it on a Friday um is is is difficult. >> And then, you know what? The beautiful thing about similar to how, you know, the selection of the asset, the beautiful thing about it launching on Friday is that well, you know, one could infer that perhaps you wouldn't have as much, you know, demand necessarily if it if it didn't because on on the weekend, you know, you can trade it. And then Monday night, I'm sitting here in the office and the thing rips from 175 to 225 on Hyperliquid at

least. And I'm sure obviously on the same markets there. >> Yep. >> And that's at 8:00 p.m. >> Yeah. Yeah, exactly. >> And so, it's like, "Oh [ __ ] Like, how else can I trade this thing?" You know, I see the thing ripping and I'm like, I have a I have a Phantom wallet. I am I'm a I'm a Backpack user. Bang. You know, and so it's it's weird how like this specific that like the specific run that happened on Monday night happening after hours also lent itself to a stronger demand to trade it on chain. >> Like like like the closing bell is not a a it is not a a a practical thing, right? It's There's no reason for it. Like there was a reason for it because back in the day, you had humans that

were literally trading in the pits and humans need to go to sleep. Right? And so obviously, you need to like accommodate for that, right? Um but for the last 25 years, the closing bell does not need to exist. Um everything is done electronically. We have a globally connected market um on the internet. All trading is electronic now. Um yet we still have this this uh this legacy phenomenon that only really benefits, I think, incumbents, right? Um I I I I really think it's it's it's there there's no other practical reason for it.

Um so I think I think what what's happening today is is you're seeing um you're seeing some form of unification between crypto and and legacy, right? Where it's starting to bleed in. You're starting to see people trade both uh you know, non-crypto native traders trading on crypto simply because of the value proposition, because of the execution, um because of the capabilities uh that that that crypto offers. Um and uh you know, I think it's it's just a matter of time before that closing bell kind of gets eliminated. If they don't do it, I think um Yeah, I I think they'll they'll they'll they won't be able to withstand the competition. So.

>> So, could you describe the collaboration between uh Wormhole and Backpack? Like, you know, what what is Backpack responsible for? Um and and what is Wormhole responsible for? And and how How you guys ultimately make this available? >> Yeah. So so uh Wormhole Labs has basically, you know, um contributed an effort to this to Sunrise, which is like a separate team. It's a separate product. It's a separate um um focus, right? Uh and it it does lean to into the to Wormhole's experience in terms of bridging assets and and and allowing for interoperability between uh different blockchains. But we always knew that interoperability did not was not did not stop at, you know, blockchain to blockchain or crypto asset

to crypto asset. We had for some time now been building bridges into the traditional financial world, right? Um with our partnerships with uh tokenization platforms and different financial institutions that have tokenized their their financial instruments on chain. So those bridges are are a little bit different. Um they're metaphorical bridges, but they're the same thing, right? It's like how do you translate a a financial instrument um from uh you know, from the off-chain world to the on-chain world. Um so Sunrise partnered with Backpack in a in a very simple way, but very very meaningful way. Um Backpack is uh Backpack Securities is the issuing entity. It It basically allows for custody. It allows for people to actually interact with a

brokerage the same way that they normally did. Um and it allows for the tokenization of that asset, so that asset can be minted natively on the Solana blockchain, and then um you know, freely transferred between people in DeFi. Um now that partnership is super important because going into it, what we wanted to do is we didn't want to we saw all the offerings on the market, you know, that that you guys are very familiar with. And the big issue that we saw was, you know, the future isn't like these representations or these like synthetics of of tokenized equities. Like what the market is demanding and like even if you're talking to people in TradFi or in the regulatory world in Washington and New York, like they're all going to tell you the same thing. They're like very bearish on synthetics, very, very

bullish on tokenizing the financial system where um these products are actually giving um all of the same protections and rights that that that a that a off-chain user would get. And so um that was the big impetus uh for for for the collaboration between uh Sunrise and Backpack Securities. It's like, "How can we make sure that that's possible?" And so, whenever you buy um a a SpaceX token on Solana, you can always very easily transfer that back to your brokerage uh on at Backpack, you will get the underlying share, you can transfer it from there to any any of your normal brokerages that you use if you want to use IBKR, or if you want to use Charles Schwab, Fidelity, all that is available to you. Um and so, you

really do get the the underlying um uh security when when when you're when you're using these assets. And that that was just a very important point for us, and that's that's I think that's what I that's what I mean when I say we brought a product that we thought was much better and where the market will eventually end up. And that's why I think you saw the announcements from Binance and Coinbase and a bunch of other exchanges that had already the previous week announced tokenized equity products, 24/5 markets, all of that stuff, right? But you quickly saw the entire industry shift and say, "Okay, well, that is clearly the way that these things should be done. We are going to do them, too. We don't have them ready, but we're going to give you an announcement of an announcement." And so um uh

I think that was very uh validating for for our our our project and what Sunrise has been able to do uh in partnership with Backpack on Solana. >> Yeah. Yeah, you know, so just to be clear, Backpack Securities gives you full uh stock ownership, go like shareholder rights, dividends in any dividend producing stocks. If you get the full ownership of an asset via Backpack Securities. >> Yep. Yep. >> Yep.

>> The token is just a receipt to an actual share. It's not, you know, if you look at some of the others, like you're you actually are not promised a share at all. You're you are at best pop- promised a cash equivalent or you know, some opaque structure of redemption. But uh I think in almost all cases that I saw, none of them guaranteed you the share and you did not have any any investor rights. You didn't have the ability to go and say, "Give me my share of SpaceX. Send it to my Fidelity account cuz that's where I'm going to hold it. Um and that's where I'm going to potentially go and vote on some you know, proposal or some some investor thing. Um none of that was available and and I think that's just so far away from where all the conversations are are today in

terms of where we think when when you hear like Larry thinks a tokenized the financial system, like it that product that existed before what we did with Sunrise and and Backpack was was just so far away from that that world. >> And can you explain and and so you're you're right. Like these wrapped versions are not just frankly not as good because you can't transfer them into a brokerage and you can't take custody or take delivery of them those assets. And so, you know, it removes some of that optionality. Can And and this is the reason why some of these uh you know, the Binances and and other centralized exchange that were running these campaigns, they had to cancel the campaigns because they weren't able to get the shares. And so, were you guys going out and buying this

up in order to present that opportunity? If someone wanted to take custody, you could provide that to them. If so, how did you guys get your hands on the shares whereas, you know, others couldn't? >> We basically opened the door to a bunch of market participants to kind of get their hands on this and and and it's really really straightforward. I would kind of think like I saw someone describe this they were like why are we so bullish on what Centrifuge is doing and they were like this is very similar to the early days of Tether where you know, you've got to think of it as this, right? Like or circle, right? You could you could use both as an example here where it's like you have all of these digital dollars that represent a receipt of a dollar, right? You have faith that they are redeemable

for dollars, but they themselves are not dollars, right? And that model works really really well and has grown really really well. And and so you could see you could see kind of a similar analogy here where it's like the shares actually exist, they are held, they are available and the redemption process is actually easier than I would say than redeeming, you know, redeeming for the underlying for Tether. It's the same sort of mechanism, but it it's it's it's almost easier cuz all you have to do is you know, is is is kind of transfer the token to to Backpack and you've got the underlying share.

So I think it's really interesting that model like that that frame of thinking because you can see like how throughout the history of stablecoins like people kind of thought and said this is not good. This is not good for the dollar and everyone that actually understood how stablecoins were constructed were like this is this is probably better for the dollar like, you know, and then you saw the government do like a complete 180 on that about a year and a half ago once they kind of fully understood it and said hey, there's all this untapped demand all over the world, right? I'm not talking about the US, all around the world of people who actually would love to hold the dollar. All those dollars are being held in US banks, right? And and so you just see this massive proliferation where you see Tether become like a top 15 top 20 buyer of US

Treasuries like they They more Treasuries than the country of Germany and Australia and like these big like uh G20 countries like I think the same argument can be made for for US capital markets, right? You're not You're not You're not This is not a product for US persons. Like there's a lot of people I I spoken to in the US that are like why why would this be interesting? Like this is not for you. This is for the rest of the world that maybe wants to engage with SpaceX and believes in that future and wants and wants to be able to do that. And I think that's fundamentally good for for the for the US capital markets the same way that stable coins has been fundamentally good for the US dollar. Like no one can argue that, right? Um And I think that's that's that's a core belief that we have that's a core thesis

that we have and and that's why we're long-term bullish on on this trend. >> Yeah, and sometimes those US investors, you know, they get a little they get a little bit of tunnel vision. They forget the rest of the world exists out there and that, you know, the rest of the world has has plenty of capital as well. Um >> This is not for you. If you're in the US this is >> No. >> Yeah, you can you can just go on Robinhood your kid. >> And and [laughter] you know, the US is one characteristic of, you know, uh you know, uh kind of the the customer demographic is that it it exists outside the US. And so, you know, yesterday we we had several people on uh on the show talking about this privacy day concept and tokenization and privacy is, you know, very fundamental to the onboarding of RWAs generally, right? You

know, whether that's stable coins, treasuries, bonds, FX, equities, all of these things have sort of these different characteristics that might might go into it. You know, some of those might be for compliance, other of those might just be for capital efficiency. Um and we heard, you know, different founders and teams doing this at different levels of the stack. Uh we had T-Rex on here. You know, they're doing it at like the ERC token standard level. Talked to Canton doing it at the blockchain level. Talked to Near doing it at the smart contract level. Do you guys do any sort of you know, okay, you need to be I guess this is for outside the US accredited investor laws don't really you know, come into purview here. Are there any checks that you guys need to do whether that be KYC or anything like that in order for this,

you know, the buyers of this asset to be matched with the asset itself and that ultimately take custody. And if so, do you guys do that at like the token level, the smart contract level? Just curious like, you know, as we onboard more classifications of RWAs, how people should be like cuz a a big portion of our audience is builders actually putting this into practice, like looking to integrate some of these products. Do you guys do like, you know, checking against OFAC? Like how does that work in a smart contract world? >> On all of [snorts] our products, we definitely check against OFAC. We run TRM, chain analysis, like a bunch of these uh programs to make sure that when they interact with our products that that they are they are being screened against all of

the the great products that have kind of developed over the last 10 years in crypto. Um I would say that the last thing that we're doing or or like to There's a kind of two parts to your question, right? There's the KYC aspect and then there's the privacy aspect. Um I would say when you go and redeem for the underlying share, that's and and you if you don't if you haven't KYC'd on Backpack already, you'll go through a very simple, straightforward, normal KYC process and that's how you'll get your share. Um kind of like the same way like if you were to redeem for the underlying with Tether, you'd have to have an account with Tether, you'd KYB. Um I think the same with Circle. It's the same process, right? Um so that's kind of that the that that part of the question. I think

on the privacy side, there's a lot of interesting stuff that can be done on chain and we are exploring those and we have been for quite some time. We haven't really settled on a design yet. But I will say like funny enough, I got a text from Mert today. Um I don't know you know, their company Helis just bought Light Protocol, which is one of the two main builders of privacy technology on Solana. The other one being Arcium, which is like a great company as well. And basically I got a bunch of cryptic text message saying that they have a really big idea about how to bring that level of privacy to tokenized equities to a lot of the other stuff that's happening on chain. And it's definitely a a problem space and a design space that

we think is going to be important. As you mentioned Rob, a lot of the other big players in the space are you know, materially investing in this this effort and they it is going to be part of whatever financial system however this on-chain financial system evolves, I think there is a going to be a part of it that is privacy preserving and everyone is kind of taking their own different design and different bet on it. And I think we will as well with the right partners. >> Yeah, like you know, say I have KYC'd, right? And I want to take custody, I can do that on Backpack. Sounds like you guys check, you know, okay, did you KYC on Backpack? You release the share, it's in my custody.

But like I mean, you all of us here, we've been around a long time. Like we've seen permissionless transferable DeFi. Like that's the power is that these tokens are composable. I can send them to you, you can use them as collateral, we can do a flash loan, like we do all this creative stuff. And I take it that like I probably couldn't withdraw my share outside of Backpack and transfer it to someone else because they might not have run the same checks. And so this works within Backpack's environment. I can get exposure to SpaceX that if that's what I'm looking for. But when we really unleash the power of DeFi, like these things could become composable, they're freely transferable and permissionless, it feels like there's that much more capital efficiency and that much more value that can be unlocked. And I take it that we will get there with some of the the tooling and the technology that

you're talking about. >> Yeah. I mean, we've had subsequent days of like 100 million plus in volume for these asset for this asset specifically. And so like what did what what That's a very strong signal to the market. Not just the crypto market. I'm talking about the entire market, TradFi, you know, sexes, whatever. All of them are looking at this and they're saying like, "Dude, that is just one asset for one day, you know, how many SpaceX's are there in the in in in the in the financial universe of the world?" I'm not just talking about the US market. I'm talking about the European markets, the Asian markets, China, Japan, Korea, Hong Kong. Like the the addressable TAM of of of of financializing these assets or tokenizing these assets is pretty massive. Um so

um I think that's that's kind of the uh the the signal or the canary in the coal mine for a lot of these other players, which is like the the if you're if you're caught if you get caught behind this narrative or this meta from a product perspective, um it could be quite quite costly because uh clearly clearly this is what what people want. >> Yeah, man. And it's kind of ironic, right? It's like deep in the bear. It's like nobody wants to trade crypto, so what we're going to do is just we're going to put everything else on chain. And then we're going to have a crypto bull run again. Right? And then sometime, I don't know, this year it'll start. It'll be good next year probably.

>> Time in the market again. >> And and then everyone won't won't be excited won't be as excited, you know, but it'll just be baked in. And I think like the like the the cool part is going to be on chain used to just be like your full risk on crypto portfolio and it's going to quickly shift to like being your global macro portfolio on chain. And so So I keep fighting the good fight and congrats on the success. Thanks for being a part of the show today. Hope you guys hit billions of dollars a day in volume. I don't think we're that far off. >> Hopefully. Appreciate it, guys. Thanks for having me on. >> Cheers. >> Thanks, Eid.

>> Pleasure, man. >> See you next time, man. >> Alrighty, Rob. As as as we said, those guys are doing I mean, magnificent numbers. And it does seem like they're doing it the right way in terms of tokenizing the actual asset, holding it in a brokerage so you can fully redeem it. >> Right. You can take custody of it, take delivery of it if you choose to. And there's different reasons why you might choose to if you want to participate in a governance vote or stakeholder shareholder things. Look, we haven't even take you know take this with a grain of salt, but imagine you know, we haven't even seen the world of shareholder eligible airdrops. Like what if I wanted to airdrop all of SpaceX's shareholders?

We haven't seen that yet. And I think you know, we could start to use financial as a distribution mechanism. >> Interesting. >> Um man, I'm just I'm excited man because you know, I I think there's a lot of very creative opportunities here. Um >> I agree. I mean, there's just the the perps volume on hype was at 1.7 billion. Spot volume on I think what his biggest day was 150 million. >> What what So what were the numbers for Sayed's um >> I think the biggest day was 150 million, I believe in 24-hour volume. >> That's great.

>> Yeah. >> On spot. That's really impressive. >> Alright, guys. We've got a Kohaku. I'm not pronouncing that right. >> I think that was pretty good. >> Kohaku. >> Kohaku. >> Yeah. >> Kohaku round table privacy. >> Um >> we're going to Do you guys give a 30-second on Backpack? Yeah. >> We might break the record for the most amount of people on one frame here coming up for this Kohaku round table. We're going to get We're going to get a bunch of gigabrains in one room. Um, and you want to give a quick 30-second round table on Backpack? >> Yeah, they launched this tokenized securities platform. And and yeah.

It is powering SpaceX and the token's ripping and basically you can trade spot tokenized equities on Solana via Backpack Securities and they have a really unique regulatory advantage as well. Uh, they're out of Japan but they have a lot of really solid licensing. They're doing it the right way in terms of the underlying shares. And it's relatively new. It's not a ton of volume but they're dominating tokenized equity spot trading on chain. >> Beautiful. Well, uh, our next uh, topic Kohaku also sounds like it's out of Japan. I'm not sure if it is but it sounds sounds Japanese. Um, guys, let's bring everyone up. I think like I said we're going to we're going to I think we're going to break the record

for the most amount of people that we've had on one frame at one time here. >> Yeah. >> So, welcome to the show guys. >> Um, gentlemen. >> It's great to have you all here. >> Hello. >> Hello, great to be here. >> Hey. >> We'd love some introductions. Um, just uh, we got we we know who's here. We've talked to some of you guys before. Love just a brief intro. Uh, what you're doing to push privacy forward, what your project is all about. Maybe we'll start top left Cass with you.

>> Perfect. Um, so hey, uh, I'm working on the Kohaku initiative. Um, I'm an employee of the EF. Um, this is a this is like an action working group inside of the EF but we're also working with a bunch of partners, um, you know, uh, in the ecosystem as well and grantees. Um, and the goal is really to bring privacy, practical privacy to users on Ethereum, on the current Ethereum and make sure that privacy is a first class citizen and like as Ethereum continues to evolve. So, what makes us different in the EF is really that we're focused on bringing real things to users as soon as possible. It's not like privacy experiments, deep research of things that will happen in 5 years. It's really what can we do today with the tools that

are there on Ethereum today to give people a more private experience as they utilize Ethereum in whatever way they like to. So, yeah, I'm an engineering you know, researcher and that's that's who I am. >> Cast, the way we get privacy is just we just hide in your beard, right? We just burrow a little hole. >> Exactly. >> financial transactions in there. [laughter] >> You know, if everybody votes for the Ambire, I see up next man. Welcome to the show. >> Hey, thanks for having me. I'm Ivo, the founder and CEO of Ambire and Ambire is a wallet browser wallet focused on the Ethereum ecosystem and the end goal of Ambire is and always was to make self custody easy and secure for everyone. So, essentially to bring the powers of Ethereum to the general public

and it's becoming more and more like it's evolving from this DGN wallet getting closer and closer to the next billion wallet or to your mom or grandma wallet eventually down the line. And it's also the project that Kohaku forked uh and one of those partners that Cast was mentioning and also hopefully um I hope that we would be the first to launch with Kohaku integrated. So, with native privacy. >> Beautiful. Welcome. Benji and Co.

>> Hey, hello. Benji here. I work at the Ethereum Foundation focused on helping translate some of the work that incredible much smarter people than me do to the world. >> Yeah, that's what we do here as well. And Nico, good to see you. >> Hey, I'm Nico. I'm the lead of the Kohaku project at the Ethereum Foundation where I've been doing many different things across the protocol and the ecosystem. And yeah, recently I've been focusing on Kohaku and post-quantum cryptography. >> Beautiful. And then I believe Alan from Railgun. >> Yeah, how's it going? GM everybody. I'm Alan. I'm the janitor for the Railgun privacy project.

And Railgun is a suite of smart contracts that's on Ethereum that is used in the Kohaku SDK alongside of some other really cool privacy tech to enable the on-chain privacy that people are trying to build around here today. >> Beautiful. >> Lovely. Gentlemen, thanks for joining. Exciting times in privacy. We had a privacy day yesterday. We talked a ton about it. It's a great follow-up today. I think what would be helpful is just to get an understanding of what Kohaku is, Kohaku, Kohaku in simple terms, and why it's so prescient for Ethereum right now given the state of Ethereum and the state of kind of how the evolution of privacy on chain has really become more and more important. And so, Cass, maybe you and

Benji can just kind of open us up here. What is Kohaku? Why does Ethereum need it now? What are we trying to accomplish here? >> Perfect. Yeah, happy to. I'll start and then you guys you can keep going. I'm one of the engineers so I'll start from like technical point of view nuts and bolts. Kohaku is a set of tools like an SDK and a number of other tools that make it really easy for wallet devs to integrate privacy features into their wallet experiences. It maybe goes even outside of what you might think of as traditional wallets, but anyone who's building building crypto user experiences can benefit from our SDK. And and the idea is really to just take a bunch of privacy tools that exist on Ethereum but

are very difficult to integrate with. You might have to learn about zero knowledge proofs, a bunch of specific things about how these different protocols work and make a simple abstraction layer for people to simply embed these user experiences, get these privacy features without having to be total experts themselves on each of these individual protocols. So it's a suite of a bunch of tools. It's mostly focused on things like Railgun, privacy pools and Tornado Cash as like key primitives for anonymizing coins, but it's also a there's a bunch of other things in the suite of tools that you can use to help improve privacy and security inside of wallets. So yeah, that's my quick take. >> Yeah, I can give an outsider perspective here like as as someone also still learning a bunch about what's happening.

Vitalik and Nico had a presentation at ECC which I think explains this really well around this idea of hygiene where you know, you can clean your house. Like you can just clean your kitchen for example and your living room looks like [ __ ] and your bedroom looks like [ __ ] That doesn't mean your house is clean, right? Similar thing for privacy. So when we think of privacy, it's not just transactions, it's more than transactions, right? It's your IP, it's RPC layer, there's a lot of leakages that happen across the board when it comes to privacy today on chain and the Kohaku project is looking at that from a full stack approach where it's using the benefits of the Ethereum ecosystem. We have all these different developers, right?

Like this is not one team, there's multiple teams contributing to this that are now coming together and to this into this one like open source SDK that thinks about privacy from like the very very root till the end outcome for the user. So it's more than just transactions, it's like various different layers of how a wallet and ultimately a user kind of gets a private experience for Ethereum and the open internet. >> Got it. And thinking more through how this looks cuz you know, if I deposit into one protocol or wallet, but then I go to switch or make a transaction, all of a sudden it's exposed, doesn't doesn't really work, right? Kind of need privacy end-to-end in order for it to really make sense. And is that what we're looking to achieve here? Is is

end-to-end privacy? >> Yes, for sure. And we're trying to enshrine a set of standards. I think what's key about the Kohaku initiative is also to try to do this in a general way for the Ethereum ecosystem. So that you could move like from wallet to wallet and still have like uh the same way that we interoperate with seed phrases, right? And you can take your seed phrase and you can go from one wallet to another and it'll still know where to look for to find your funds and to be able to kind of uh help you use Ethereum. And this makes you feel safe as an Ethereum wallet user. You don't just have to rely on a single wallet client. You can have the same types of things embedded in the wallet that relate to how you have this privacy hygiene. So you could take your

seed phrase, one key thing we're coordinating around, take your seed phrase, and bring it to a different wallet, and it would be able to find the uh notes you have in one of these privacy protocols like in Tornado. So um uh embedding these privacy features inside of the wallet in a seamless way so that users who could maybe get privacy today don't have to stitch this together themselves which makes it really insurmountable to get this end-to-end privacy. If you do it yourself, you basically have to be a cryptographer. Um so uh we want to make this much more seamless. I'm imagining a future user experience thanks to Kohaku's tools where you're you're using a wallet in the way you're just trying to do the actions on Ethereum that you want to do the way you might be used to today interacting with

different applications, and just under the hood, the wallet is making sure you have this hygiene that uh all the activity that can be delinked is delinked, um that funds are constantly popping out of these shielded pools to do the actions you wanted to do. This is like the future we're envisioning for the Ethereum wallet in my opinion. >> I vote Alan, anything to add there? >> No, not for me. That was pretty exhaustive. >> Then on the on on the Railgun side, you guys I mean, you guys have this chat blowing up a ton of people excited about what what's going on here. What is What role does Railgun play here Alan and kind of how how do you think about implementing what what you guys have built into the Ethereum protocol?

>> Yeah, great question. So, Railgun started about 6 years ago under the assumption that mixers are not enough. They aren't good enough to give true privacy for the Ethereum ecosystem. And um so researchers got together to try to build something that would be better, right? The goal for the smart contracts is to act like a private address standard. So, anything that you can do in a normal zero X address you can do from a zero ZK address, right? So, you can have an ENS. You can do a multi-sig. You can do hardware wallet support and you know, true wallet hardware support or true hardware wallet support because um a lot of protocols don't do that and and didn't do it at the time. And so, a lot

of the architecture that we've been after is how do you how do you do DeFi from a private address and do that in an uncompromising way that doesn't have an app to a bridge or some sort of like side chain that bifurcates liquidity and also enables all of the security features that you can assume that you have in a public address standard. Um because without that stuff, um yeah, none of this is going to work. Um yeah, that's that's primarily what we're we're focused on. The I guess like the the recent research has been how do you do um really complex DeFi from these privacy systems that really like atomic transactions that aren't atomic and that's been a lot

of the the really fun research and so if you're into that kind of stuff and you you want to do it with this it's a it's an open source project so come hang out. >> Beautiful. And and so just kind of digging a bit deeper here the things that we can expect that would get anonymized you know is is this how deep does this go you mentioned ENS names is it like transaction amounts transaction like what type of transactions and and how you know what is the extent of the anonymization and and how do you make these things confidential without breaking composability? >> Yeah so that's a that's a great question right and and the answer is it's it's multifarious right so whenever you talk about transactions within the railgun ecosystem that is that zero ZK address

to zero ZK address if I send tokens to say Cass within railgun the sender the recipient the token amount and the token type in other words everything that you would normally snoop on on either scan could be completely private right so this enables a lot of really cool features like private payroll you know paying your lawyer this kind of thing and doing that on chain in a completely private way right however the the big difference here is what we're all going to enable is this wallet side privacy right so whenever you have like two wallets interacting with each other inside the ecosystem you have this really great privacy but whenever you interact with something in defi say Ave or Uniswap naturally you'll see the dark pool of liquidity that is the massive railgun users interacting with the let's say Ave smart

contracts and so tokens will come out interact with Ave and then whatever the results of that transaction are will go back to the railgun privacy system and so the the privacy set that you're working with would be uh everyone that is a Railgun uh uh user. Um and so, you know, in that way, I think it sort of strikes a um interesting balance that um at least I quite like because one of the beautiful things that lured me to DeFi in the first place was the auditability of it. So, whenever I go to things like Uniswap and I and I interact with that contract, I can go and verify that the liquidity is there, right? I can see the LP, right? I know that the loans are healthy on Aave. I don't have to trust it. I can go and verify it on chain. And so, I think that like the the perfect

balance of that is is sort of what we're trying to uh achieve with the Railgun privacy project that is um privacy on the wallet side, but still sort of maintaining that auditability of DeFi infrastructure that people know and love about DeFi. >> Very cool. And um one one more general question from my end is you know, as as we like shield more of this, we make it more confidential, more private, um is the is the user experience here like eventually this will become default? Like And if And And so, there's these tools that are getting implemented mostly into the wallet layer, and and it's up to the wallets to opt in to providing these privacy elements. And

then maybe even further to that, it's up to the user to end up opting into using those privacy elements from that wallet. Is the idea that, you know, we end up making this a default level experience in which you would sort of have to opt out of being private? Maybe this is more of a philosophical point of view, but I'm just curious, you know, generally how we see this playing out in in the Ethereum landscape. >> So, I'll give my two cents, and I'd love to hear from some other people, but uh I think it goes the same way as like uh SSL, right? Um Netscape did SSL in 1994, and it took until like 2012 to get a whopping 15% adoption.

Uh which is nothing. Now, if we fast forward to 2026, most browsers will tell you, "Hey, this doesn't have the S at the end of HTTP, right?" And people know that and expect it, right? So, um are websites obliged to use the SSL cert? No, right? They're they're not required to have that little S at the end, right? You can still go to that website and use it, but it's sort of the the the baseline assumption for the internet today that uh it's going to have some sort of like encryption standard. And so, I think that like the you know, history doesn't repeat itself, but it does sort of rhyme. And I think the rhyme here is that uh it won't be obliged, but I do believe that wallets that don't integrate this kind of thing will never see mass adoption.

>> I've always curious to hear your take on that. >> Yeah, um I think considering how how bad of a reputation privacy had before this uh this current hype wave that's going on, um I think the only way to do it is default. Um because even people who would love to have privacy by default, they're kind of scared by it. Like, even to this day when I say tornado, people kind of like they like keep their distance. So, they're kind of worried about using it. So, unless everyone has it by default, uh people will always think that they might get sanctioned, right? Um there was a lot of a lot of fear-mongering around that. Um so, yeah, I think default is uh the only viable way here.

>> Cass and Genie, any opinion here? >> I just want to say that I feel like uh this this is a really important part of the the topic is at the end. How do we How do we actually achieve this transition from a basically almost completely transparent Ethereum to an Ethereum that is like uh gives a lot of privacy. And the only way to even have privacy for those who are opting into it is if it's if the set is much much wider. And so I feel like we have this opportunity and what this our a Kohaku initiative is about is coordinating teams like the Railgun infrastructure and wallets like Embire here to um, have this I am Spartacus moment on Ethereum, right? Where if we are all doing it, if we if it's all if it's always there, if that's just how it works, it

fundamentally uh, like uh, changes the paradigm. And I would be very happy to see this though. Um, it's a long road, I'm sure. >> Yeah, absolutely. But we we know that this is uh, in high demand from both the the retail audience on Ethereum as well as the institutional ones, uh, which are, you know, driving a significant portion of assets on chain. As this tokenization supercycle, you know, continues on. Um, and so what is the implementation plan here? Does does it require a hard fork to to put these tools into practice? And maybe you guys could just, you know, from the EF side, give us a little bit of a hint as far as what we can expect.

Is Kohaku going to be part of Glamsterdam because we're hearing a lot about this. What can we expect for Glamsterdam? I see Nico chuckling. I I'm I'm curious to maybe hear a little a little bit more from from you guys. >> Yeah, so Kohaku doesn't require a hard fork, which is um, a very cool thing because a hard fork requires a lot of uh, coordination effort around it. Uh, and it it takes time. Uh, Kohaku will ship uh, I hope in the summer with Embire as a first integration. Um, so the quick answer is no, it doesn't require a hard fork and this is how uh, it can basically bring value to the users as soon as possible. Uh, maybe in the future we will be looking

into uh, EIPs that are improving privacy, but Kohaku is here to deliver this now at a very good level. And when we talk about the default experience, I think the hardware integration is super important. Like the default nowadays is you plug your hardware, you go on your extension, you do this, you you do that. You're safe with your hardware, you know what you're doing. And before Kohaku, when you use the privacy protocol, you had to go through all this hustle. You had to store new secrets, create new wallet. You couldn't use your hardware wallet anymore. So, effectively, your security level was going down by a lot. And Kohaku aims to bring this right now to the default level of the wallet user experience.

And thanks to the fact that we don't require your protocol change, we can bring this very soon to a lot of users. >> Yeah, just something on that. There's a tweet here that I'm curious to get your opinion, Nico, Benji's, and Evo's. Which is from Gabriel Shapiro, LexNode, the Metalex guy. And I'm sure you guys saw this, but it's a great time you guys are both in the same room. The EF Tom Layer Consensus should acquire Ambire, rebranded as Ethereum wallet, and create a near.com style experience for Ethereum, an actual Ethereum branded Crops Maxi app that uses all the best aspects of Ethereum immediately when they're released in the protocol instead of trusting third parties to adopt the best most Crops features of the protocol on a lagging loosely coordinated and poorly incentivized basis. This could

boost Ethereum massively. Vertical integration is needed, and everyone in crypto has realized it except dot eth. Benji, Nico, Evo, is this a possibility? Is there a thought about kind of verticalizing an Ethereum native wallet? Evo, curious your perspective, guys. Let's have an open conversation here. >> So, yeah. So, first of all, Ambire is already Ethereum native, and it always has been and this is probably one of the main reasons why they have forked it and probably one of the main reasons it's growing so well now because so much so much time passed without people really believing in that vision especially a few years ago it felt like Ethereum is like the Ethereum words have no future or there is no point to

compete with Rabbi or whatever but now it's paying off but what I would say is I would echo the thoughts of one of our best developers Bobby who just said we don't need to be bold to do all of the above and yeah I second that the only thing that we cannot do in this scenario is rename ourselves to Ethereum wallet but we would be open to doing that if the foundation allows it. >> Oh, we've got the foundation on the on the phone. Was that a good enough pitch boys or what else do you need? >> I'll take it so um I know I've been one of the first Ambire users and the reason why we went with Ambire is because we know that they're these

guys with the right values and they're doing it for the good reason. Um we often say that the EF or Ethereum is a bit too communist and so now we're not going to national nationalize the the wallet. We do believe in the market forces and we do believe that competition is is really good and we don't um need to nationalize a single wallet to make it happen. But we're going to work hand very closely with with Eva and Ambire and we will have basically the same result. Um as for the name I don't know is is there an ENS somewhere that could be acquired? >> There's an ethereum.app for 100 grand out there. It's a domain.

>> I [laughter] I like I like Empire actually just the quick story about the Kohaku name because he asked if Kohaku was from China. Kohaku actually means Empire amber in Japanese. So this is how we chose the the name with with Vitalik and I don't speak Japanese so when um when Vitalik sent me that proposal, I went on Google to like see what Kohaku meant and the first response when you're in France, it's like the Kohaku the koi fish. So this is how we got the logo.

Um so actually Empire and Kohaku is already I think the the right name and Kohaku was named in as a um Easter egg for Empire so I don't think we need to reverse that. But yeah, maybe maybe if there is an ICNS domain, we can do something. >> We got Duke says I did see that tweet. They're coming for I was CEO role. Freedom guy says that's a pretty good idea. Peter is happy to see Empire being recognized here and freedom guy thinks that our rail gun guy has a nice gig and that most janitor's closets are not that nice. Rob, back to you, man. >> I think that's

I think that's a wrap on our Kohaku round table. >> No, hold on. Hold on. We got we got to keep it going. Hold on. Hold on. Hold on. Hold on. Guys, looking ahead 1 2 3 years, right? We've only existed in public blockchains for the most part all of us, you know, I I think my first on-chain transaction was probably like late 2019 in terms of like using DeFi or using Uniswap in the 2020 was obviously like this explosion. Everything that we've known has been public. Um what does this look like as far as user behavior? What does Kohaku How does How are people going to be changing the way that they use Ethereum in the future as a result of Kohaku and what's happening here? Would love to just get some like, you know, thousand-foot, you know, POV, bird's-eye view,

out-of-this-world ideas from each of you guys before you go on how you see the change of using Ethereum as a result of this upgrade. >> Yeah, I I can I can try to answer some of this. So, like, one, privacy's not about hiding, it's about choosing what to reveal. That's just like a fact of life. You close the curtains in your house, right? Like, you're not hiding, you just don't want everyone to see. Um two, everything's being tokenized at scale right now. More and more things are coming on chain, which means more and more things you probably don't want to reveal to the rest of the world are coming on chain. Um the fact that an initiative like Kohaku can enable any developer who's building any front end that uh user may touch to flip a switch and suddenly become have this full-stack privacy is very, very impactful. Um as

such, I think the work being done by the people here, uh not me, like, is really instrumental in just enabling this efficiency for people to be like, flick a switch on the um the blockchain that already has the most tokenized assets, the most stable coins, the most like, you know, in terms of what value is on this chain, it's pretty high. Um and by flipping this switch, you kind of enable this full-stack privacy. That's very, very important, not just for like what happens to the future of Ethereum, but what happens to the future of the internet of value. Um I don't want to live in a world where everyone is like looking through my house. And I don't want to live in a world where if I close my curtains, there's a little webcam that can look into my house. I want full-stack privacy. Um and I want a blockchain that can prove to be uh able

to support of that. >> Who else? Who else has a big view here? >> I have a big take, I would say, and I hope I don't get myself in trouble. But I uh I um I have this feeling that uh the ecosystem, crypto ecosystem's maturing a lot, and we're actually seeing some sort of some bifurcations as well, some some projects going in different directions. But definitely we're maturing, and we're about to get maybe a wave, potentially at some point a wave of more real-world adoption. You're seeing um you're seeing things like uh alternative non-Ethereum blockchains also looking to move into like the payment space in a way where crypto is just like a seamless back-end that the users don't even know has its cryptos behind there. I think

what um what the focus on crops in the EF and what an initiative like this um can potentially be about is showing how moving towards that real-world adoption in a different direction unlocks very different things, right? So, if you're if you're some other chain alternative L1, you're Tempo and you want to get you're you're after payments and and some Stripe integration, this is very very different than being after um like fully censorship-resistant, completely privatized, anonymous peer-to-peer money. And um like these both I believe have could have serious traction in the real world with users who are going to be using apps where they're not worried about the fact that it's a crypto and they're trying to buy the next meme

coin. They just want to use this new technology and do the kinds of uh real-world things they want to do with it. So, uh yeah, this is kind of how I see the the direction a little bit, if that makes sense. >> I don't think anyone's going to get you in trouble for that take. I think it was a good take. Um Evo, Alon, uh any anything else from you guys as far as Yeah. Yeah, please. >> I can add something. So, uh a practical application of privacy would be actually a very huge improvement in UX because I think the concept of accounts on chain would kind of die. So, you wouldn't need to have to manage like 10 accounts because think about it. The core reason why you do that today is like to separate your to separate different classes of assets and

different types of assets from uh uh, from each other in the eyes of the public, in the eyes of everyone who analyzes the chain. So, this core paradigm of everything being on chain and being public is kind of forcing us into having to manage multiple accounts. So, if you eliminate this out of the picture, then you just have one account and maybe you separate it internally for accounting purposes, maybe you separate your like company funds from your personal funds, uh, but none of this is like a hard constraint, right? Uh, and all of it is in one place, which very, very hugely improves UX, very significantly improves UX. So, yeah, this brings us closer to looking like fintech, um, looking like neo banks, rather than looking like, um, the current way that web3 looks like. >> Beautiful. Alan, maybe just close this

out here. >> I think that privacy is the the keystone uh, that's needed for the the next wave of adoption. That's why I contribute to privacy tech. I think that, like, to to do anything that institutions want to do on chain, to speculate, to take and gather positions, um, to have just normal payment infrastructure, you have to have it. It's a pretty hard line in the sand. And we all know it, it's a bit ineffable why we need it, but it's obvious that we do. Um, and I think that whenever we can basically ensure that all of the banks won't end up on whale watchers, um, and people won't be analyzed on, "Hey, look how this wallet made a thousand X on

their trading strategy." All right, we'll see a lot more institutions come and those will be the early adopters. But then I also believe that like privacy is going to be the way that we get to like good crypto on something like an Ingenico terminal, right? Like a point of sale terminal. Sorry, you guys probably don't know what that is, but, uh, you know, where you tap you tap your card and it goes boop and, you know, it takes your crypto, right? Uh and you don't have to worry about that being something that's monitored on chain in real time, right? Uh and so there's there's a whole myriad of reasons why um these things haven't taken off, but I think that privacy is going to be a really great unlock for the future of of privacy of of crypto. >> Love it.

Gentlemen, thanks for your time and for your efforts. Uh I think the Ethereum community broadly appreciates it. Um all users I I think this is uh it's becoming it's transitioning from a nice to have to a must have across the blockchain stack every single layer becoming, you know, part of this kind of private verticalized stack, whether it be through Ambire, through Railgun, through the back end. And so, um thanks for your work and looking forward to the summer seeing this get rolled out and, you know, being some of the first users of privacy-preserving technology natively on Ethereum. So, appreciate all of your efforts and time here today, and we'll let you get back to it.

>> Thank you guys. See you all next time. >> Good job. >> Go Ethereum. >> See you guys. Thanks, guys. >> Yes, sir. See you guys. All righty, guys. We've got our next guest ready to come on because they talk about the mission instead of how to increase increase the value of the network. Super Kaizen wants us to not talk so loud. Um so, our volumes with our guests are closer. Super Kaizen, we need our guests to have mics like ours, but we're working on it. We're working on it. Not controversial at all. Um bad guys who own news banks do everything they can to keep capital from going into crypto for now. They will They will fight us. They will fight us, Freedom Guy, but your name is Freedom Guy 1776. You know anything about American history, freedom will win. Open systems will win. Guys, we're going to

take a quick break before we get our next guest, Bernardo Britto, the CEO of Trace. You guys just raised a massive round, um and they're bringing stable coins to the entire world. It's going to be a great episode of our Stable Up show. We'll be right back in just a second. >> [music] [music] [music] [music]

[music] [music] [music] [music] [music] >> Money, power. >> [music] [music]

>> Money, power. >> [music] [music] >> We get deep. You know we get deep. >> [music] [music] [music] [music]

[music] >> We get deep. We get deep. You know we get deep. >> [music] >> We get deep. We get deep. You know we [music] get deep. You know we get deep. We get deep. You know we get deep. >> [music] >> You know we get deep. We get deep. You know we get You know we get deep. We get deep. You [music] know we get deep.

We get we get deep. We get deep. [music] We get we get We get deep. >> [music] >> You know we get deep. >> [music] [music] >> We get deep. We get deep. You know we get deep. >> [music] >> We get deep. We get deep. You know we get deep.

>> [music] >> We get deeper. We get deep. You know we get [music] deep. >> [music] [music] [music] [music]

[music] [music] >> We get deeper. We get deep. You know we get deep. >> [music] [music] >> Welcome back to another episode of Stable Up, our premier weekly show covering the ins and outs of digital dollars, stablecoins, and the future of decentralized finance. >> This show is made possible by Frax, and Frax is powering the financial engine of the internet, powering FRX USD and genius compliant stablecoins. This is the stablecoin supercycle made possible by Frax. Now, enjoy Stable Up, our weekly stablecoin show.

>> [music] >> Yo, yo, yo. Welcome back to episode number 37 of Stable Up, our premier weekly stablecoin show powered by our friends at Frax. Visit frax.com to learn more about their FRX USD product and more. Today, we've got Bernardo Breeds, a CEO of Trace Finance, a fintech platform enabling fast cross-border payments and stablecoin infra for companies in Brazil and LatAm abroad. Before launching Trace in 2020, he ran a successful crypto trading desk in Brazil sourcing major Bitcoin volumes for local exchanges and held early roles at other blockchain projects. A graduate of a top university in Rio, a party town that we like to be at. Bernardo, good to have you, man.

>> Likewise. I actually dropped out, but uh yes. >> [laughter] >> I also dropped out. So, well, congratulations on the raise and let's set the stage here, man. So, this kind of proliferation of stablecoins has uh predominantly been, you know, in the US, the growth of Tether, Circle, um and a lot of this kind of expanding the US dollar hegemony and really kind of growing that. But, the use cases abroad seemingly are the most impactful for a day-to-day person. Give us the kind of rundown of how you started Trace, kind of what the core vision here is, and just kind of like your view on how stablecoins are going to proliferate and eat finance. >> I have been in crypto for 10 years now,

and I it's really interesting to see how the cycles change and uh what um what the industry puts more more weight into and um by extension value, right? So, on the stablecoin side, I think that it's really an amazing time because before you had tokens appreciating and the interest in blockchain and crypto were a product of, you know, people getting money essentially because uh the token price was was getting up. And that applies to memes, that applies to um any different uh token that has speculation into it. Um people, companies, you know, corporations are not going to stop using stable coins because the stock price of

Circle is down or because any specific protocol token is down. So, if there's a specific company that is adopting USDT and other stable coins because it's faster, cheaper, better to use it in a specific corridor, they're going to keep using it regardless of the Bitcoin or the Ethereum price. But, in my opinion, the adoption of stable coins and the adoption of blockchain in general actually feeds back into Ethereum having value, Solana having value, and even Bitcoin now with some some layer two projects like, you know, like Lightspark and Lightning Network as well, Lightning Labs,

um processing a bunch of like stable coins on top of Bitcoin as well now. So, I do think that it's an amazing time to be alive. It's an even better time to be leading a stable coin company. And I I do think that it's just the start. We are seeing huge companies now having interest in in stable coins and and in using crypto in payments. So, it's really an amazing amazing results in in what I have seen over the years. So. >> Yeah, man. I mean, the proliferation and the growth of, you know, USDT and and USDC has been remarkable. And so, I'm just curious like let's get into like

the nitty-gritty into the niche of Brazil and LatAm and why stable coins are growing so much there. You know, obviously, we know about PIX, the primary payment method in Brazil. How how do you anticipate capturing a lot of this market share in Brazil with Trace for cross-border payments and payments at large? Maybe just give us your view of the flaws in the payment systems in Brazil or in LatAm or specifically like the problem that you find to be solved with stablecoins down there, you know, given your unique upbringing there as well as your understanding of the financial system in Brazil and LatAm?

What is the What is the core of the of the issue and of the opportunity here? >> So, PIX is amazing. Um it's free 24/7 instant um payment system, right? So, that actually enabled a bunch of different industries, even I would say like exchanges to thrive in Brazil because now you can actually receive deposits and process withdrawals in real time. So, that that is really really good for the domestic markets and it's has really enabled a bunch of industries that in other markets um are not as successful because you have to use like card networks to to get into and now you can actually move high volume uh into a very low cost transaction this this case free, right?

>> For users? >> Yeah. And instant. Um so, in that specific case, I don't think that you would use that or or even a local BRL stablecoin to now process local transactions. Having said that, where I really think stablecoins can add a lot of value in Brazil is actually on the cross-border piece of it. So, Brazil is one of the only uh top 20 economies in the world that has a currency that can't be settled outside of Brazil, right? Outside of the country. And we also can't hold uh foreign currency onshore either. So, you can't have dollar accounts in Brazil. You can have dollar accounts that are held by a foreign bank elsewhere and so on, but it's a proxy, right? So, you can't really do that um

natively um in in the nation. So, by us actually enabling a BRL stablecoin, we could actually now enable a connection a bridge between the liquidity of the domestic markets and Tether, for example, that otherwise you would have to settle BRL into USD, wait 1 to 2 days for Swift, and then you would acquire that USDT. You wouldn't be able to do that at scale, right? So, I I do think that stablecoins in Brazil are very interesting for cross-border payments. Now, for other countries in the region, I do see it as an amazing inflation control, right? So, if you want to have easier access to

stablecoins where that you can send to any country, you can actually be a global citizen living in Argentina and have your assets in US dollar stables. In Brazil, I wouldn't say we distrust as much as, you know, Argentina, as much as Colombia and other countries in Latin America, our currency. So, I think there are a lot of companies and consumers that want to spend it locally with that specific currency and hold it as well. But, whenever they are traveling abroad, whenever they are paying for a big import, a big export, they actually need dollars. >> Okay, so more trust in the in the kind

of underlying, better better kind of fundamental use case from the payments perspective, and and a massive global economy, right? And so, you kind of get this recipe here for you've got a consumer base that is already used to, you know, the efficiencies and ease of use of Pix, right? Given that it's so simple. And they also are obviously transacting a lot of Brazilian real on a consistent basis. And so, when you when Trace is looking at this and assessing kind of like the state of of this market, what do you believe is the like zero to one or like the 100X in experience from where we're at versus where Trace is

trying to take things? Like what does that meaningfully like what does that change meaningfully look like if you guys get this right if you guys you know really do this right? What is that meaningful step function improvement from the user perspective, from the money flow perspective, from the economy perspective, you know how how do you see that zero to one? >> So Brazil is one of the toughest markets in the world as far as regulation and capital controls. On the opposite side, you actually have a population that was primed for this type of like instant payment system and they already kind of used to what the stable coin value adds is. So I would say that we have a really cool landscape or an amazing starter points, right? Start starting

points for Trace. So now we are in the US, we're in Mexico, we're in Colombia, in Argentina. We're expanding to APAC now. In three years time I think the shorter the better but but let's aim for three. The ideal vision of Trace is for any company to be able to hold any specific currency and they wouldn't even need to worry about which currency they are holding because we're essentially making it so that it's ubiquitous and we we are taking away the complexity of having different currencies and managing that treasury on the back end. So we want companies to hold money period and

if they want to send that money into MXN, into stable coins, into BRL, or into dollars, they can do it easily out of one single account without the bureaucracy that you have on a fax right now. So, I think that if you own money, you shouldn't actually have different complexities around sending different currencies. >> And you know, you guys just raised this massive round. Like, how do you plan on using these funds to accelerate this adoption? Because it is a difficult nut to crack, right? Like, both the complexity of being, you know, kind of building out the stablecoin ecosystem somewhat from scratch.

And then also, you know, going and getting distribution. How does the $32 million series A help that cause? And where will you be allocating those resources? >> So, I think one of the the first steps here is regulation, right? We want to become banks in many different jurisdictions. Um when you think about stable coins, generally speaking, you have the cyberpunk um idea of well, we are against the banks and we don't want you to use their infrastructure. We don't want to partner with them and so on.

And I actually think completely opposite idea. I I think that for you to build the next dozens of millions, if not hundreds of millions of users getting to crypto directly or indirectly, you actually need to have that back end infrastructure and that regulatory landscape to be able to do it at scale. Because sure, you could probably do it for a specific period of time or for a specific volume. Some amounts and and do business doing the gray area or the even almost illegal path, right? Um but I do think if you are able to build that at scale and have regulations, be able to build that out as Couchbase did, for example,

in the US, right? Um well, you have something that is not necessarily clear, you explain it to the regulator, you make them comfortable, and now you can scale um at full throttle because the regulator understands what you're doing, and not only do they understand it, they actually back you up whenever someone um or a judge uh goes and and tries to to counter that. So, um I do think that regulation is the the first pillar. Uh second pillar is actually having the best thing possible. We want to have people that have worked in some of the largest um entities in the world because whenever we talk with Apple, with Meta, with um you know, huge uh enterprises, they're really thinking, "Who do I have on the other side of this conversation?

Do they understand me? Do they understand my language, right?" And uh we can't just be, you know, cool and um essentially say that crypto's the future without having the words and the structure to back it up. So, um I think that our team is amazing. Uh we we have been able to build an amazing team in Brazil, Latin America, uh and in the US, but we actually want to now um expand that into APAC um and really have a presence uh throughout the world. Um and I would say third, it's less about the money, it's more about the recognition and the partners that we brought on board, uh CoinFund, Coinbase Ventures, Hall, Paxos, and so on. Um it's about having um a a clear um match on our funding

history and who backed us versus what we were processing. Before this round, we were a seed company that raised $4 million and we had processed $10 million of payment volume. Now, I think that having a $32 million Series A with uh such amazing investors, uh really puts us in a position where we are talking with a lot of those blue chips and and huge companies, and they understand that we are the company that can confidently support them with the infrastructure they need. >> Yeah. So, like you said, $10 billion of volume before the series A, and that that is helped with justify underwriting the series A from these investors. Tell us a little bit about the customer segment. Like, what are some of the demographics,

right? You know, this is primarily in the region that we've been talking about in Brazil. Maybe you could just describe a little bit more about who your customers are and how you were able to amass $10 billion of volume. >> So, we are now processing four of the the top global companies operating payment volume in in Brazil and Latin America. So, as an example, we have Diloco as a customer. And Diloco, they are processing some of the largest e-commerce players, streaming players. They are doing a lot of like travel, transportation, even like video games. So, by extension, we are now able to process like behemoths that are moving billions

of dollars each, right? And we also have direct customers as well. We have a lot of like import-export and other segments. But, what we really specializing doing is getting a customer One of my dream customers would be like ADN, for example, or Stripe. And then, we actually go and process all of their payments on the back end because we are really specialized in processing billions of dollars for many different verticals and making it as seamless as possible through APIs and through stablecoin connectivity, as well. >> Yeah. You know, I'm curious, is there a a pocket of the business line right now in the kind of broad cross-border payments or you know, remittances, neo-banking, like like what is the

is the Trace business model just purely look, we've got, you know, hundreds of millions of dollars of volume being sent across our rails every month. We take a small spread on that. That's our revenue. Like talk to us about the revenue lines and the business lines for Trace and then what you see as like the future development as you kind of crack into more economies of scale here, what is the what is that revenue structure look like for the fees and the actual specific lines of business? How will those evolve and change? Just curious, you know, curious how a you know, company of of your size is is generating revenue, what that actually looks like as well.

>> So, we charge a spread. We are projecting $35 million of revenue this year. We are profitable as well. We actually made more money in in net profits than what we raised on the seed prior to the series A. And um the the goal here is to make a the experience as seamless as possible for those companies to move that large mass of money in the best like frictionless way possible. So, we want to make it so that compliance is is key. It's very important, but it shouldn't shouldn't be a a bottleneck, right? So, we make it so that by design all the different um

payment flows they don't have RFIs that's essentially lock your operation, that make it so that you have frozen money and so on, right? We actually built um our payment system in a very smart way. Um so that we only halt a payment if we have something out of the ordinary, right? We want um the day-to-day payment volume to flow as seamless as possible. So, when you are processing a payment for, let's say, Amazon, for example, you are essentially thinking, "Okay, that's an e-commerce player, right?" And you will have a range of payments payment amounts. So, you have people buying all the different sorts of items

on Amazon. We don't really care about what they are buying on Amazon. Uh we care really if uh that volume is consistent, um if one specific person spends $2 million on Amazon, that's probably weird and we have to look at it, but it's definitely possible, right? Um it's out of the ordinary. Um so, we we make it so that all of that volume that is flowing through us, since we already have the pre-existing relationship with um a specific customer or a specific um payment facilitator, we um can already have data points to make it so that we understand the behavior of that specific merchant, and we process that uh in the best way possible that generally banks

aren't able to do, right? Because they um Moreover, in Brazil, but I would say uh generally speaking, cross-border payments is not an area of focus on banks. They're usually um focused on boring lending. They're focusing on other verticals. We really built Trace to be the best experience in moving money globally for corporations. >> Yeah. You know, and then on the kind of more consumer use case, is that really part of the Trace vision, or is it really just enterprise um you know, kind of enterprise use cases for large sums? I- is the consumer, the average kind of like American or Brazilian consumer part of the part of the play here or how do you think about kind of like the the the distinction in the amount of

value that you guys can provide and then, you know, also capture as it pertains to enterprises versus the consumer? >> We don't want to compete with our own customers, right? So, we we will actually stick with like B2B2C. So, essentially I I heavily admire I'm one of the the earliest adopters of CAST, for example. I I would say like Rada Pay, Arc, and a lot of other like card stablecoin cards are are really amazing and we want to be the backbone that powers all of that for them. But, personally speaking, I have always thought that building a consumer business is so tough, right? Because you actually need to not only con- convince a decision-maker and then have that business for years and years to

come, you actually you actually need to every single day convince that specific user and because of a small mistake, you could actually lose them and maybe for life and you wouldn't even know what happened there because your relationship with that specific customer is so far apart. You you don't have this like high-touch relationship that you have with enterprises. So, I think that running a a business with like 10 million plus users must be amazing, but getting all the way there, I really respect the companies that can do so. >> Yeah. >> And, you know, Bernardo, just kind of thinking about the stablecoin supercycle that we're in broadly, you know, we're seeing it happen. Obviously, US dollar stablecoins have

proliferated and become mainstream and now, you know, non-US dollar stablecoins are continuing to do so as well. I'm you know, we've kind of heard mixed takes. Some people have said that US dollar denominated stablecoins are going to continue to be the Goliath and you know there's really not going to be many others. Other people have said the opposite and have said that stablecoins are this catalyst where you know it sort of uh it sort of reconfigures the entire foreign exchange you know industry and stablecoins present an opportunity for non-US dollar currencies to um sort of make up the difference and and become much more prevalent.

Where do you fall in this camp? Do you think you know the stablecoin market will reflect the traditional fiat currency market or do you think this is going to be you know more in favor of the dollar more in favor of local currencies? >> I think it's really about access right and and liquidity as well. So um right now if I have a bank account in Mexico and I want to pay an exporter in Singapore, I can actually go with my Mexican bank and do an MXN payment into that bank in Singapore. And that specific Singaporean exporter can now hold MXN and pay another uh person or company in Mexico with that same MXN.

Um so I think that's the access globally for uh Mexican pesos is very easy and um you don't really have friction on that specific transaction. Now if you ask about BRL, you can't really settle BRL into Brazil if you are not a Brazilian um entity or if you don't have accounts onshore in Brazil. So that makes it so that a Brazilian stablecoin makes a lot more sense uh versus let's say an euro or an MXN stablecoin just because you can have euro accounts almost anywhere in the world, right? Um and talking about like the consumer aspect of it or even the the business aspect of it, you have so many companies offering like euro accounts IBANs, right? Um

but you don't see the same for for Brazilian reais. So, I do think uh there is demand for Euro stable coins, but it's not as dire um as you have for uh Brazilian real, for example. >> Yeah. And and, you know, do you, you know, you you talk about the APAC expansion? Obviously, you have local on-the-ground intelligence and experience and connections in Brazil. APAC obviously is a whole different beast. You know, when it comes to expanding stable coins there, is there some jurisdictions or some specific unique edge you think that Trace has in those regions? How do you How do you think about the go-to-market in APAC? >> So, for different reasons, I I actually think that uh APAC in in a lot of ways is very similar to the complexities of

Latin America. >> Yeah. >> So, um first of all, I think that Singapore is one of the best uh countries for cross-border payments infrastructure in the world. So, you have amazing uh banks such as Standard Chartered. Um you you have um amazing branches of global banks like Citibank uh that's doing amazing job in in Singapore as well. And you have a great regulator in in Singapore as well, the Monetary Authority of Singapore, that really uh holds everything together. Um and then you have other countries that have um very specific scenarios like Japan or South Korea that have regulators that are very worried about um you know, novelty. So, when you look at Japan, I think the best uh picture I can can put

to you guys is uh all the major exchanges in Japan, they don't have more than 20 altcoins listed, right? Because they actually have to be pre-whitelisted by the the um JFSA. And um funnily enough, you actually have Monacoin, which is like a cat's meme coin, as one of them. >> [laughter] >> But, um I I see that Japan, specifically, is super hard to penetrate, right? I have been to Japan 16 times. I I love that country. Um >> 16 times? >> It's um best country in the world, best food, um and I really love the culture, as well.

Uh but at the same time, I understand the complexities around operating in Japan, right? And I think that you have a very specific way that you need to um to behave when you're doing business with a specific with a Japanese company, and when you when you're penetrating the market. So, it's very hard for a foreign company to actually access the Japanese market. Generally, you do it through JVs, right? Um and if you can actually navigate that well, you are heavily rewarded. So, I don't underestimate the the how tough it is to to pull that off. But, if you do pull pull that off, the reward is uh disproportionate.

So, I I'm personally very excited for for the APAC um expansion. But, moreover, because um it's not like we're starting from from from the ground up, right? We are essentially um now having all of our infrastructure in the US, all of our infrastructure in Brazil, in Mexico, in Colombia, and we can start having volume from day one, because we were already moving money to those countries. We were already moving money from importers from Brazil to Singapore. We were already moving money for um Japanese companies that operate in Brazil and need to move their treasury back into the country. So, um it's really going back a step and thinking, "Okay, having being regulated in one end of the

transaction is great, but I think that you really get the most value out of having both sides of the the transaction um being uh a regulated party and being able to uh build systems and build flows that otherwise you wouldn't be able to build if you weren't regulated on both sides of the transaction. >> Yep. Yep. I mean, that's going to be a challenge, but it's going to be a fun like, you know, entrepreneurship is is all about like putting out fires, taking on the next challenge, and it's it's going to be a fun one. So, >> I love it. >> uh Congrats on the raise, Bernardo, again, and um it sounds like it sounds like the evolution of stablecoins in Brazil is really accelerating. You guys are going to play a big part in that. I'm sure there's going to be competition. I'm

sure there's going to be regulatory battles, as you mentioned, but uh you know, more more power to you. Fight in the good fight. Thanks for spending some time with us today, and um again, congrats on the raise, man. >> Of course. Thank you so much. We have to plan a trip to to Brazil, as well. >> Yeah. Real man. >> We'll be there. >> Thanks for coming on, Bernardo. Congrats. >> The laser bro. >> [laughter] >> Valeu. >> All righty, Rob. What are we doing out there? >> There you have it. >> What are we doing out there in Brazil, man? When are we going to Brazil?

>> What's uh what's the drink? Is a caipirinha? Get some caipirinhas, yeah? >> All right, we got uh It's not complicated, guys. Just buy and lock Arrow. You get exposure to FX like a mofo, and then he comes back and he says, "Sorry for coming in here hot and chilling." >> What's going on, guys? >> Yeah, what's going on, man? >> How you doing, Greg? >> Correct. >> Uh non-USD stablecoins in Latin America, 100% my man coming in 4-year lock. Damn right, guys. 4-year locked on Arrow. >> Wow. >> Boy, oh boy.

>> All righty. I'm out I'm on like a 4-day time horizon right now. >> On days like this, you got to stretch it out a little bit. Speaking of stretch, we're at 87. >> at? >> 87. Hit a low of 80 What is that? 80? >> I think that's it, guys. I don't think stretch goes lower than this. >> Low is 82.50. >> I think 82 is the low, guys. It's very sweet lemonade. What is that? The caipirinha? Must be. Guys, I don't think stretch goes under 80 82. I think today was peak. Like, everyone was tweeting about it.

Like, the opportunity to like short it, for example, I think is way behind us. And when you got all of crypto Twitter like losing their minds about it. >> Lyra was the place to short it. >> Was it? >> Yeah, I believe Lyra Hyperliquid doesn't have stretch. So. And Lyra was the place. It's getting [snorts] a decent bounce now. Man, it's just tough to think about what I mean Yeah, I I I think Saylor ought to play squash. I think that's the I think that's the play. I think if anything um sell some strategy shares and use them to buy stretch. Take some stretch off the open market so they don't have to raise any more cash. Right?

>> When every news outlet is screaming about MSTR collapsing and being forced to sell BTC, that my friends is when you buy. Mark my words. Killa XBT tweeted that at 95K before the initial collapse that we saw earlier this year, quite a while ago. Does feel like that's what's happening right now. And it's only going to get worse if Bitcoin goes a little lower. It's going to be peak fear, peak fear. >> Do you think we can get a decoupling? >> As in? >> As in like Hyperliquid, Near, you know, Aerodrome, companies with revenue and value accrual mechanisms either have, you know, don't go down like suppose Bitcoin into the 50s.

You know. >> I don't know, man. >> Relative strength. >> I don't know, man. Maybe. I would hope. Um I mean all in all, hype above the 60s looks great. People are going to call for a double top. We'll see. Um I would hope, you know, I would hope the hype >> liquids, the Aerodromes, the even like the Zcash, maybe, maybe not. Could. But I just like why would you get in front of that train, you know? Why not just let the dust settle? You know? I don't know. >> Yeah. I think it's going to it's going to take some time to play out. I think this train is actually pretty slow moving. >> Yeah. So the adjusted yield of STRC $87 must be huge. >> I think it's like 15% or 17%.

>> That's what that means? >> Well, remember the >> Yeah, so stretch is a mechanism that uses yield to keep it at peg. And it's supposed to be at 100. >> Right. >> Um if it goes higher than 100, then the yield goes lower, which would incentivize people to sell and bring it back down. Uh if it goes lower, which it is doing now, then it the yield rises in order for people to be incentivized to buy it back. But of course, in order for that incentive to work, you have to think that they're going to actually you maintain the yield, fulfill the yield, and pay the yield. Um >> Right. Which >> keep their word, right? That they're going to pay that dividend. And if they

don't have the cash to pay the dividend, that's the fear. That's why it's going down, even though, you know, if you buy it down here, not only do you get the yield while it's down here, you also get the price appreciation if it re-pegs. Is that one or the other? >> 13% plus an a elevated yield. >> Right. So, at par, I think it's 11.5%. Um >> Yeah. Yeah. >> I think down here it's around 17%. >> Jamie Diamond has a lot of influence. Seems he seems he doesn't like Brian Armstrong's strategy. Do you think Diamond could influence the trillions of dollars away from Coinbase business to some degree?

>> What What's the question? >> Do you think Jamie Diamond could influence the billions of dollars or trillions of dollars away from Coinbase? >> I think [snorts] they're going to compete. I think Coinbase is trying to take Jamie Diamond and and JP Morgan's lunch. I think they're aiming for a bunch of deposits and a bunch of trading activity. And I think they started with on-chain crypto native customers and transactions, but now they're going to get re-rated just like the rest of the on-chain world. Uh through the onslaught of tokenized finance. >> Yeah. >> Again, it's you know, can the incumbents build technology faster than the innovators can build distribution? Coinbase is the innovator.

They're main They're main They've got the technology. They're building more and more distribution every day. The incumbents are building technology and regulatory approval day in and day out. Who can move faster? That's That's who you have to That's who you have to decide. >> Ladies and gentlemen, unfortunately, we will not have a show tomorrow. It is uh Juneteenth. We have a lot of our team busy as well. Uh it is a Friday. So, there'll be no show tomorrow. We'll be back Monday. 12:30 p.m. Eastern per usual. >> You playing poker tomorrow? >> Going to Boston, playing some poker, getting into my new apartment. Trying to get these World Cup tickets, guys. On Monday, you will know if I have the World Cup tickets or not. I'm still

waiting for the email. >> What's your What's your poker strategy? Let's Can we see a poker face? >> I don't really have a strategy, man. Just go out there with an amount of dollars that I don't care about and try to look at some old guys in the eye and give them a give give them a run around. My strategy is to start really chill, slow and then start smashing it, hit a big win, and then just like slowly slow roll these boys. So, we'll see if that happens, Rob. >> Okay. Well, I am I'm rooting >> Inshallah, right? >> I'm rooting for you, Inshallah. Uh take some of those >> You need dark sunglasses. Yes, June 10th, lol.

Yeah, I feel you, bro. So, guys, thanks for rocking with us today. W's in the chat as always, man. Uh great fun show. The market's going to be there tomorrow. Don't worry. We're we're we're we're we're at peak fear for sailor and stretch. We're going to get a bounce. >> Let's uh go Knicks. Give me a Jalen Brunson. What does he do when he hits a three? Something like this? >> Something like three. >> Something something like that. It's like >> Our boy Aton is somewhere shit-faced in New York right now in downtown. >> shout out to Aton. >> So, >> Guys, great show. >> for today. You know where where to find us on the green days, on the red days, on the up days, on the down days. The Rollup's going to be here from the tokenization tower, from the Empire State Building, from the capital of finance.

>> From the tops of the palm trees in South Florida. >> To the bottoms of the market, we're here. The market looks horrendous, but it has looked horrendous for months now. So, don't worry. Everything's going to be all right. >> We'll see you soon, guys, rain or shine. >> Stay on top, guys. Peace. >> [music] [music] >> Hey.