NEAR’s AI Money Thesis Is Finally Working

Transcript

Bankless Nation, there's been pockets of growth in different corners of the crypto industry. The improved UX of the Zado wallet has been a main driver of Zcash adoption and the growth of the Zeus's shielded pool. Venice AI user growth is accelerating as more people want private access to self-s sovereign AI inference. I've personally been using Infinex as my dominant crypto wallet simply because it has solved all the major UX issues that has plagued Ethereum for years. What do all of these different platforms have in common? They're all using near intents. Near intents appear to be a breakout use case for the near layer 1, a layer 1 that has seemingly struggled to define and differentiate itself throughout the years has finally found product market fit supporting some of the fastest growing ecosystems in the industry. So

go to chatbt or claude, whatever you use, or Venice for that matter, and ask your chatbot about all the projects that have integrated near intense in 2026. just go do it for yourself. It's a long list. So, naturally, this piqued my curiosity. What does NAR have to do with these pockets of growth in crypto? And is NAR itself its own pocket of growth? In order to get more clarity on the state of near and what's going on, I went and I found today's guest as perhaps the most articulate person in Near's investor circles to fill me in in what's going on with Near and what the future may hold for the protocol if the NER team executes. Sal Trello is the CEO of Sovereign, a NASDAQ listed AI infrastructure company built around a near treasury strategy. It's one part

near Treasury company, but also a commercialization partner for the near ecosystem, a for-profit entity focused on helping the near ecosystem establish and grow its commercialization efforts. Sal is an expert at articulating the growth story for NAR. So, that's what you're going to hear today on the podcast. I like bullish content, so that's your disclaimer. I'm sure that there is a bare case for near too. One might be that cryptonnative infrastructure that is simply infrastructure for other crypto projects is just not a hot category at the moment. And some people fear it may never be. Maybe maybe another bare case is that near's ironclaw is a very distant third behind Hermes and OpenClaw in the race for AI agent frameworks. Now all of this is to say is that maybe

there's a bare case for near too, but that's not what you're going to hear on the podcast today because the bullcase I think is pretty good too. So, let's go and hear that bullcase from the air from my guest Sal Trinello. S, welcome to Banklist. >> Thanks, man. Appreciate you having me. >> S, everywhere I go lately, there I'm poking around in different corners of the crypto industry. There seems to be near there somehow. And here's what I mean by that. Uh, Infinex is using near intense and chain signatures to do their whole unified crosschain experience thing in the wallet. Uh, Zashi is using Near for crosschain swaps and on-ramping assets from other chains into the Zashi wallet. Uh, Venice uh, the AI platform is using the Near AI cloud to do their

provably verifiably private AI inference. These are just some of the the top these are the apps that I use and have gotten a lot of attention lately and Near is in every single one. There's more. I could go down the list. Uh, what's going on? How come near is in all of these little corners? Yeah, I think this is the result of five years of really top-notch engineering and delivery now on the product side as well with near intense proving product market fit over the last year rapidly scaling um and near AI and ironclaw now coming to the four to really show the thinking that's been part of the ecosystem and design of the system over the past 5 years and really coming to light now with the focus on the cryptoi narrative

but more importantly how near shines in the context of agent to commerce. Um, we could talk about these specific kind of verticals in their own regards, but I think it's the result really of the technology now reaching product market fit with Intense and ironclaw quickly following on a similar trajectory to what we saw with Intense over the past 12 months. there's been maybe a branding thing that Near needs to pierce through because it's got it's had this like series of um pivots of like a strategy pivots. There's been the most recent one which is near pivoting to being like AI AI infrastructure and I think maybe the the crypto community and people

understanding watching these pivots is like oh this is just the next pivot I this is just what they do. Uh, is this talk to me a little bit about that and you know granted pivoting shouldn't be frowned upon. Is this like the final pivot in the sense that like this is working out and we're going to go forward here? >> Yeah. I mean that I I I don't contest the point in terms of narrative changes in the ecosystem. I've been on the ground floor since pre-made net launch where investors out of two venture funds uh A100X being the most recent in the native token but also in pro projects in the ecosystem. I would describe this not as a pivot but as a returning to roots in the context of you know why near was actually built with Ilia leaving Google

research looking at how to build distributed training systems and distributed comput systems um and ultimately realizing that there was a missing backend infrastructure layer which became their protocol I think now they've landed on you know kind of what you'll describe as the final pivot with real product market fit behind these verticals and you'll see that continue to tick up throughout the 26 year. Um, but I kind of describe it of coming back to the roots and realizing the vision that Ilia and Alex and team have always painted around the protocol. >> If you could get a 3% top off on your entire portfolio today, would you take it? Because Coinbase is basically offering exactly that. If you've been looking for an excuse to consolidate your assets, this is it. Until May 31st, Coinbase is giving a straight 3% Bitcoin

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to compete, not investment advice. How would you articulate what that vision is if you could just articulate what Near is trying to do? like the grand vision. How would you explain that just simply? >> Yeah, near near the token is really like AI money. It's like how do agents in a self-s sovereign user controlled fashion actually transact on our behalf in the real economy. And so in this broader frame that crosses web 2, web 3 of aentic commerce, I look at near as a token as AI money. Um, and these components and verticals that we're talking about around near intense, near AI, private cloud, um, and ironclaw are really the embodiment of how do you build private userowned AI and have a native asset in your token that is the

mechanism of settlement and value exchange in an abstracted way, right? You don't need to know how you're interacting across chain using intents. It's just a seamless user experience, unified liquidity. Um, and so that's how I would describe near in kind of a simple simple form. >> So you're really putting AI near is putting AI as like the first class dominant use case that it's going after things like near intense which is like like we've established finding product market fit even near intense is a means to an end to service this larger vision which is AI. Is that correct?

>> Yeah, absolutely. I mean the the the common narrative and chalk track in the market is we're going to have billions of agents that will do transactions at a frequency and velocity that is inconsistent with how humans interact with software and financial systems today. I think that's absolutely true and near has delivered the first building block of this through intense which is how do those agents actually transact seamlessly across any surface whether it's web 3 rails public networks or in the context of some features that will come on the intent side to integrate into traditional payment systems or RWAs as you saw with the tether gold announcement recently. So it's really this ubiquitous transaction settlement layer and unified liquidity with intents enabling agents to operate

across any surface and doing that in a manner that's private and secure uh which is really where ironclaw is differentiating in this kind of secure harness category. So Zashi uses near intent and to great effect has grown a lot of the the Zashi wallet adoption. Same thing with Infinex. But this is maybe kind of like a happy byproduct according to your framework of uh you know humans and human forward apps can use near intent to do some of the same things. But that's actually kind of just an accidental maybe not accidental but just like a happy circumstantial uh byproduct of what Near is really trying to do which is do exactly what you said which is uh provide this crosschain communication layer for for agents.

>> Yeah. Exactly. and and like Zashi and kind of the Zcash moment in October, maybe even earlier September, October, November of 2025 was a demonstration of human interactions, leveraging intents for these seamless crosschain swaps and opening up access to Zcash at a moment where the privacy narrative and private money was extremely hot. I think you saw, you know, incredible volumes. Zash has done more than 3 million in fees generated on top of intense today and it has become the primary mechanic for anyone in the retail context to interact with Zcash and swap between Zcash, Bitcoin, etc. But those are all human interactions. The whole vision that Ilia and the team have been building towards is towards this agentic future. And so I look at it as the proving ground to show

product market fit, which absolutely is the case. were almost 20 billion in total volume that's been processed through intense 30 plus million in fees to date. Um, and that's going to explode as we start to see the realization of these production use cases using your AI and iron caw of which there have been a couple announcements the past week government of Bermuda Abound which is effectively like the times of India um all using the combination of ironclaw plus intense and that motion will continue to scale. Are intents the core value driver for near? As I understand it, there's a pretty similar mechanism that Ethereum has with the burn EIP559.

Uh near intent also burns near. >> Is just uh intent consumption is consumption the right word? Is it intent consumption like the core value driver of the near token or is are there other things to talk about as well? >> Yeah, it's a good point. It's a conversation I've been having with a lot of buyside investors. To your point, it's not just in kind of the the media side that NER has had a spotlight on it. It's also been across the investor buy side community. A lot of liquid funds, candidly, a lot of family offices looking at taking positions and seeing the points that I've been making around the asset being mispriced based on fundamentals and tokconomics. So, over the past 12 months, Year has had a a revolution in tokconomics. Starting in October, we have the protocol emissions.

Uh, all the validators voted in favor of doing this. were down to 2.5% annualized emissions on the inflation side and near intense in February flipped the switch where all of the fees that are being generated through near intense are now a buy force on near token. Um the analogy to EIP559 I would put at like the protocol layer and I think about near intense as kind of a hyperlquidesque vertical integration where the fees that are being generated at the app and middleware layer are now also driving by demand and ultimately permanent removal of near from supply. Um and I think you there's a dashboard live now

revenue.near.org or that is tracking this in real time that you can take a look at but it's about 3 million near that has been removed from circulation um from the higher levels of the stack not contemplating the protocol level burn maybe you could go into that a little bit more because this breaks my brain coming from Ethereum land where you know the the burn happens in the protocol what do you mean it happens higher in the stack so you're positioning near intense closer to the app layer not actually part of the core protocol maybe you can go into that a little bit more >> yeah it's this it's this conscious strategic approach that near took over the past 18 months which was to build these vertical products. So near intense being the first near AI and ironclaw being the

second which were core and intentional bets to facilitate value acrruel across the entire stack to near token which varies in some regards to how you look at the Ethereum world. Um on the Ethereum side you would contemplate kind of the DEX exchange feature in the unis swap context as well soon if not today being the mechanism that acrews value to uni token in in the near land as you're describing it the value acrruel from that vertical product integration the middleware that nearets provides and the flow from the applications using it are all acrewing to near and so when I look at this from an investor and buy side perspective having these vertically integrated products that are all acrewing value to near token presents a really really compelling

upside case as these things scale past human interactions using intents towards agentic interactions at higher scale and higher volume. So one thing you're articulating is just there's a philosophy difference with the near-term versus the Ethereum ecosystem like the Ethereum team as a concept doesn't even make sense. Uh but there is a near team and the near team is uh interested in building firstparty apps that are opinionated about a particular future that they want to manifest. It's actually worked out as well in addition to that uh judging by the actual burn rates. Uh and maybe that's just like a philosophical difference between uh near and ethereum if we're using ethereum as a benchmark. Yeah, I think it is a

philosoph philosophical difference and the design looks more like hyperlquid in my opinion where you have in the hyperlquid context, you know, the layer 1 protocol that is bundling consensus and execution together with per being the primary use case on it creating incredible value acrony kind of the next wave of consumption and buyside pressure on near token. So to your point, very conscious and different design approach than what we see in Ethereum. Um, and thus far proving product market fit and continuing to go that direction even in a candidly challenging market over the last 6 months.

>> Aside from your opinion that NER is an underpriced layer 1 token as an investor, how does that make you feel about uh the near token? Um, and I'll just ask I'll add more context. Uh, there's an episode I'm working on with Jake Sherbinsky in the future. He's now doing policy at Hyperlquid. >> A lot of the su successful modern uh crypto platforms um Hyperlquid uh Venice AI uh Mega E as well. It's a centralized equity team in the back with a protocol in the front. This pattern is kind of emerging as like the dominant building pattern where if you want to like get something done and succeed in the world

of crypto, you need a centralized equity team. building a protocol in the front and so you know is mega decentralized no and that's the point is poly market decentralized no there's a team in the back and a protocol in the front seems to be that near is kind of fitting that mold that I'm identifying and as an as an investor how does that make you feel >> I it makes you feel quite good and it's even almost more aligned in that there is no equity corporation here right like we're talking about near foundation and the other nodes of the ecosystem being your AI being diffuse labs who is the primary developer of near intense um driving towards >> maybe equity was the wrong word but legal corp legal corp in the back

>> yeah and there are adjacent nodes and legal corporations that are driving these different development verticals that we're talking about um but it makes me feel that there is a cohesive effort around value acrruel to near and so I think that's been you know one of the the pieces in the industry that we missed on through the period of kind of regulatory gray space and challenges was trying to decentralize so far that we ended up creating coordination challenges and capital investment or grant allocation issues and that has really been resolved by the way that near is approaching the last 12 months intense near AI and ironclaw.

>> What would you say is the near philosophy on fees? Uh because if you look at the smart contract platforms that have come before like Salana, Ethereum, uh fees are a bug. Uh fees actually want to be eliminated. Uh it's an anti-PAM mechanism, not a value acrruel mechanism. You know, once upon a time the Ethereum fee burn was phenomenal, but we've we've fixed that. Now it's now it's at zero. And that's actually good because more people can transact on Ethereum, >> but like as a Ether the asset holder, the burn was correlated with an Ether uh higher Ether price. Is there a philosophy around near fees?

>> Yeah, that's a good point. It kind of gives me a segue to like a broader view. I know you've been in the Ethereum ecosystem for a long time. When I first started underwriting and diving deep into Near back in 21 and 22 in many ways, it was the embodiment in a cohesive system architecture from day one of a lot of the thinking of Ethereum 2 back in 2016, 18, right? We talk about account abstraction as a hot topic in 21 and 22. Account abstraction has been embedded in their protocol since day one, which has allowed for them to implement and integrate quantum resistant cryptography with accounts that can migrate signature schemes. So you're not losing your accounts, there's no massive upgrade process to quantum resistant cryptography. Uh at the layer

1 protocol itself, dynamic resharding. So if you remember back in the days before the E2 rollups in road map came to play, it was always a focus on how do we get to synchronous sharding, which NRE is not at today. they are still an asynchronous sharding system but allows for horizontal scalability that has proven out with nine shards live today interacting with 100% uptime. Uh so behind all of that the fees question that you're asking this is not necessarily a bug but it is not the predominant source of value acrruel near has 1.2 second fidality fractions of a penny cost to transact um but the core value acrruel mechanics are from these vertically integrated products. So I would I would compare that and think

about it in the Ethereum context of imagine if all fee revenue generated from a and unis swap were acrewing down to ETH as token and all the ETH L2s were didn't have their own native tokens but ultimately were consuming ETH which some have done with a stronger alignment to the L1 and generally I like that pattern but that's how I look at FDS in the protocol side it's it's similar u but it's it's not a source of massive value acrruel given how performance and low cost the is to transact on. >> Okay. So what what I'm hearing is that there is actually a similar philosophy towards fees in the near ecosystem where we actually want we want scalability and therefore congestion fees contention fees trend towards zero. But the core

difference is that near is far more into building firstparty applications that create fundamental drivers towards near. >> Exactly. Yep. If you take a look at near.com, uh they just launched confidential transactions at Nearcon back at the end of February. But from a user experience perspective, it's one of the most seamless kind of retail self-custody solutions that you can use today. And it allows for privacy to be embedded across every transaction if you toggle to confidential mode. So to your point, on the first party app, it's demonstrated live in production today.

Um and it's a genuinely great user experience. it does not feel like you're interacting with clunky web 2 from you know 2021 and two. >> Is the philosophy of value capture at the app level the first party app level level really any different though uh because ultimately it's just uh because you know near intense isn't that just a fee burn and so you know maybe we're not doing it at the protocol but the app philosophy or structure of the fees is still the same. >> How is it how is the nature of the fee capture any different if it's a first party app?

>> Yeah it's a good question. So the the difference is that in the context of the third party integrations like the Infinex and the Zashes of the world, swap kits etc. those are negotiated bilateral agreements where there is a fee share between the third party integration surface and near itself. Um the first party applications don't have any type of distribution agreement or partnership on revenue share. It's 100% of fuse generated through near.com or consuming near and so it's a better take rate for near consumption than you would see through these third party integrations but to your point it is the same kind of waterfall of of value capture >> right do you expect these fees to trend towards zero then over time or do you expect them to actually grow

>> at the protocol level I think over time we'll see this continued pressure um block space is a commodity common kind of frame I don't think that's going to be any different here Um but on the the functions and features that near.com shows on crosschain swaps and soon other features like lending um there will still be proper spreads and fees there even as we start to see compression on the centralized side from competition to Coinbase and other major centralized venues with Schwab and Fidelity coming in and pushing fees down. Why will there be a rich robust uh like DeFi app ecosystem or like you know an a equivalent or a unis swap equivalent?

Why will that happen on near uniquely when that is already pretty well serviced in the rest of the ecosystem? >> Yeah, I don't think it's about emulating having a robust ecosystem of those features and and primitives natively to near. about leveraging the foundational technology behind intent chain signatures as a mechanism to tap crosschain settlement and liquidity across any venue and platform. And so in order for me to ultimately get to a place where I can take a loan out through near.com, I don't need to have the lending pool with the best pricing and the best rates available on Near.

I'm able to tap into Ethereum and a to do that if I choose. >> Ah, okay. I see. The rest of the ecosystem produces a lot of the value near cross-links everything and makes everything seamless. That's its fee capture moat. That's the service that it provides. And so to the actually when there is fantastic utility built elsewhere that's actually really good for near because near just connects it to everything else >> 100%. And and this was the narrative that I think they pushed in 23 and 24 around chain abstraction. It was like you shouldn't have to know as a user >> where this liquidity pool sits that's going to give me the best rate. You should say I need to borrow $20 at the best rate possible

>> oneclick interaction and make that make that happen. Uh and that's what Near.com is doing today and with privacy embedded on confidential transactions. I'm still kind of getting hung up on the volume of the fee burn that happens because everything that you're saying still kind of collapses down to the idea that like it's not the the magnitude of the fee burn is still under the influence of scaling laws where we're going to scale and then the fees are going to approach zero. And the fact that it's a first-party app doesn't hasn't really changed that for me. What what am I missing here? Yeah, I think I think it's the it's the difference between the way that we look at fees in Ethereum at the protocol layer versus at the middleware layer and the app layer. So in in your

world and universe, do you imagine a future where there are no fees generated to a for loans and no fees generated to unis swap for exchange, right? They're always going to have some spread on the back end and this is the same case with near intense and on the ironclaw side as well. And so it's not necessarily that the fee burn is fully derived from the protocol and smart contracts running on the network. It's from the vertical stack. So is the idea here that near intense you know dominates the market of crosschain swaps and crosschain communication and that its margins are immune to this properties of like block space scaling because it is a has like a monopoly 80 90% ownership of the cross swap market and so it can actually have

margins strong fee command strong fee margins because it's a because it's just won that market share is that correct? Yeah, to to some extent I would I would never call anything immune like we live in a highly competitive marketplace so nothing is immune. Um I think you will see fee compression from the exchange feature be a competitive surface to near intense and the take rates that that can be realized through the system. Um but I wouldn't look at it as purely a direct competitor to the protocol and these topics that we're talking about scaling laws and block space costs. >> I see. I see. In fact, scaling laws actually benefit the near crosschain swaps assuming I actually don't really know of any other ecosystem that is doing this uh the the crosschain stuff.

Who who who else is near competing with to do some of this crosschain chain abstraction stuff? >> Yeah, I mean I think the biggest kind of like popular project in the category that people perceive as a direct competitor which I have have different views on is Lair Zero. And so Lair Zero has has done a great job in in many regards. Obviously had issues recently >> um in certain specific examples, but they would probably be like the largest competitor as we go to market on the near intense go to market motion, the most commonly discussed competitor. And I even look at that where like it's not direct. It's not feature par on both sides. They offer slightly different trade-offs. Uh, and I think Near Intense just on a market capture basis has

proven its worth in the design choices that were made. >> Hey, Bankless Nation, a quick pause in the conversation with Sal. Don't worry, I'll get you right back there. We still need to hear from Sal about how he thinks Near price is moderately dislocated from the human usage fundamentals of Near, but potentially massively dislocated under the condition of AI agent adoption of NAR. That's probably the most exciting part in this conversation. But first, I want to tell you guys about OKX. It's one of crypto's biggest exchanges and now it's available in the United States. With that, they're introducing the new money app. Basically, it's just one universal place to trade or use a DEX and manage self-custody. All for people who are brand new to crypto, but also for more advanced traders who want real tools and deep liquidity. OKX has over 170 crypto assets listed and they're shipping

pretty useful tools for its users like trading bots where you can automate strategies like grid trading DCA or arbitrage so your strategy can keep on running even when you're not staring at a screen. So if you haven't tried OKX yet, now is the perfect time. Users who deposit and make their first trade through the bankless link in the show notes can earn up to $500 in Bitcoin. So try out OKX and the new money app, an exchange, a DEX, a self-custodial wallet, all in one place. And now let's get back to my conversation with S. Okay. So I can uh take the argument that layer near as a layer 1 is materially underpriced and I'll look at things like Venice and Infinex and Zashi and be like oh yeah there's actually more demand and maybe maybe Near's you know 10 pivots has made

it made a current against it and from a branding and narrative perspective and may maybe Near is underpriced because it's actually getting adoption. There's some fee burn and that's pretty great. Um there's a difference between being underpriced by a few billion dollars because near near's at two billion. So maybe you one somebody somebody could argue yeah it should be four or six but I think what people in crypto are really looking for is they're not going for the 2x or 3x or 4x they're going for the 20x and the 50x and I think the way that near gets there understanding your arguments is AI. Can you talk about uh talk about this like how how is AI the the 50x opportunity rather than the two or 4x opportunity?

>> Yeah, it's a great point and I completely agree with you like the structural change that era has gone through over the past two years has led to a place where right now today I view the asset network as misvalued and it probably has a multiple towards the 4 to6 billion FTV range that you're describing tokens fully unlocked. There's no more vesting cliffs. Um so I feel like today right now just based on fundamentals from intents with human interactions we should be at that type of price point. Um when you contemplate the scale of a billion or billions of agents interacting and this system being the most robust to serve that market as it grows and adoption scales. I think that's where you start to get the force multiplier on top of okay this is what the economics look like behind the token

today with just human interactions and just the intense product vertical proving product market fit. Now look towards the lead indicators that show you the opportunity around private secure userowned AI and agents that will operate and transact at scale is when you start to get that force multiplier of okay if we have 20 billion of volume that's been processed to date unintent and we now have billions of agents interacting and this is one of the top platforms to interact on. you can see a world where even just intense volume starts to scale towards the point that we described in a in a research piece we published back in I believe March uh that looks at 175 million effectively of daily volume through intense at the

current take rates being the point at which the buyback pressure through just intents exceeds the total issuance from the protocol over time that doesn't even contemplate mechanic design around Iron Qua and near AI which are also looking at similar types of value acrruel mechanics to near token. Um, and so I think when you're when you're contemplating like how do I underwrite this and think about a 20x or 50x opportunity, it's extrapolating from the fundamentals that we already see live right now, you can check yourself to what does the future look like and where is near positioned in context of competitors to capture these agentic interactions at scale and obviously given my role and job I I view that as they are the leader in that category and

the opportunity is huge. what gives you confidence that there's actually a there there uh and and what I mean by that is I think no one's really in doubt that you know the agentic future is a thing uh you know why are memory stocks up well because agents need a lot of memory uh open AI anthropic these are everyone's kind of betting on agents and there's like this perceived future not distant future but like somewhat close future of like you know agents running around semi-auton autonomously on the internet doing things. What gives you con uh confidence that like Near can actually penetrate that market share?

Why do we know agents will use Near's intents? Why do we know it'll use the chain abstraction? Why do we know we even as a crypto industry, will we even be able to claim some of that market share? Like what gives you confidence here? >> Yeah, it's a really good question. There's there's an analogy to kind of the public cloud adoption era that I like to use as I'm describing this. If you go back, you know, AWS 2008, 2009, we started to see the emergence of cloud service providers. Um, I was working at the time at State Street in the mid2000s, regulated tier one financial institution, systemically important bank, you know, all sorts of regulatory guardrails and overhead. And in the early days even in 2014-15 there was a massive hesitation to

embrace public cloud and shared infrastructure specifically because of data compliance requirements and data security um confidentiality and intellectual property. There are all sorts of concerns that prevented highly regulated institutions from actually adopting cloud infrastructure. Fast forward to where we are today in 2026. Cloud infrastructure is by far the predominant infrastructure platform for all regulated institutions. And it's the reason that we got here is because ultimately the controls that focused on security and compliance and data management got to a place inside these cloud environments where you actually have a greater degree of assurance over, you know, issues related to compromise

or exfiltration of data than you would if you were running private data center footprints yourself. And so we're in that similar adoption curve now on the AI side where I believe that we will ultimately end up with shared services infrastructure that allows for these same attributes of security and privacy and confidentiality to be expressed to users and businesses who are using LMS today. If you look at the enterprise market, a common pattern for organizations that can't get comfortable with anthropic or open AI is to actually roll their own infrastructure inside their own AWS environment and deploy open source models that they control.

That's their boundaries around this. What Near AI is doing is providing the shared services infrastructure that imbuss security, confidentiality and privacy by design into the system and allows you to use, you know, a cohesive tool set that also allows for agents to transact. And so it's really the coming together of a trend that we've seen in the past in cloud adoption with the modern AI era and then layering on top of that the ability to transact seamlessly across any web 3 and any web 2 service soon. Is NAR a privacy token? >> Um, this is a good good question.

>> I feel like that was what your answer was just there. Like if I wanted to that what you just said is pretty brainy. I feel like the the left side of the bell curve is saying that NERS is a privacy token. >> Yeah, I wouldn't just describe near as a privacy token, but Near certainly allows for privacy through confidential transactions and privacy in how you interact with models. So, it's one of the key value attributes that Near provides, but I wouldn't put it directly in the same category. I would put >> Ccash, right? Yeah. I'm being a little bit facicious here. I want to try and um understand what you said because like I said it was it was is pretty smart. Um >> there is a demand for enterprises, institutions, anyone companies just having more control and sovereignty over their data and and data centers and so

like rather than putting too much data on the cloud, they just need a little bit more control, a little bit more assurances. We could even talk about things like HIPPA laws which actually puts like restrictions on where data goes. Uh and one of the one potential driver of Venice, we don't really know uh if this is actually showing up in in in reality or not, but like a perceived driver of Venice uh and it's it's confidential compute is like HIPPO laws is we need to pro protect patient confidentiality. You know, doctors can't just go typing into you know chat GBT consumer interface. I've got this patient named this person and here's all their medical history because it violates HIPPA and so they need to have stronger um protections around the data.

And what you're saying is like near as a and it's the crypto ethos that comes with being a blockchain which is more sovereignty, more control is highly conducive towards companies and enterprises. being able to manipulate data, you know, interact with data, having agents do the same uh under um certain compliance requirements or you know like internal rules of the company compliance about how data is managed and allows people just have more control but also in an agentic world. Yeah, I think that was a spot-on synthesis and analysis of of what I was describing. And I think we we're seeing this as well like the

retail bid for privacy as a narrative has been clearly expressed with Zcash, right? We've seen that. Um I've had this debate over and over and over again which is like does retail do retail consumers and markets generally care about privacy? And I think Ali from A16Z just put out this point where like you know people don't actually care about privacy. But I do feel like, and maybe I'm wrong, maybe we look back and I'm wrong on this point, with the current kind of social consensus with negative viewpoints towards centralized LLMs and concerns over, you know, private information being stored inside of centralized servers, not just API keys like Ilia likes to talk about, but like your most sensitive information in life, you know, the status of your

relationship, mental health concerns, physical health concerns, all of that sitting inside of central databases. you know, there is this kind of collective awakening towards do we want a future where all of our most sensitive information sits inside the servers of three or four large companies or do we want to realize the power of AI as a technology and still have control and privacy as we do so? And so I do think we're at this inflection point where privacy actually matters more to retail consumers than it has over the previous two decades. And I think AI is driving a lot of that kind of wakeup call.

>> Yeah. Yeah. There was um the uh Grayscale uh privacy report on Zcash made a very good point which was um every time there is a leap forward in uh internet communication technology there has also been a equal and opposite reaction towards a greater need to privacy. Um, and I can't articulate it off the off the the off the top of my head, but um, uh, I just thought it was a very interesting uh, kind of counterargument to the idea that retail doesn't care about privacy, which I think is true. Like I think if you are a startup and you are acute problem is privacy, that's a hard cell.

Mhm. >> But if you are kind of riding a trend while doing some other things and the trend is bending towards I kind of really want privacy like and you're but you're not going privacy as like a first class product. I think that's probably the safer bet where there is just a slow shift in consumer appetite towards privacy and there are going to be some ecosystems that benefit from that more than others. Yeah, totally agree. And I would put Near very much in the category of will benefit from this and Candly is is already benefiting from this, but I do think we're we're kind of past that inflection point now where >> consumers will increasingly care and I do think the Grayscale report that they

pushed had a great the analogy there to site. I think you put it put it well, but it it's spot on and I think that's what's happening right now with the modern AI era. >> Uh Sal, uh talk to me about what you do at SVRN. Is that how you pronounce it? Do you just uh Yeah. Sovereign say sovereign. Okay, makes sense. Yeah, talk to me about what Sovereign is and what you do there. >> Yep. Yeah, happy to. So, I'm the CEO of Sovereign. It's a near focus treasury company and commercialization partner. I put on the second part because I think over time, despite the negative sentiment you've seen on companies in the treasury category at large, >> there will be some segmentation in this category based on the nature of business activities that these vehicles are actually doing. And it would put us

squarely where 80% of our efforts are actually on the second side of this driving commercialization and adoption of NER. Um what that means in practice for us is active governance participation. You know we pushed the first governance proposal for an economic incentive designed around MPC nodes which are the foundational infrastructure behind chain signatures and intents. We're also driving the go to market motion to bring tier one institutional validators or MPC node operators into the system to scale the cororums and increase the security and resilience of the foundational primitive behind intents. Um but also doing work as it relates to kind of treasury accumulation of near as well. So I I do think this kind of segmentation

framework of companies in this category will get more crystallized this year. And I do think for those that are playing in not the Bitcoin and ETH treasury company space, but those that are playing in, you know, further down the ladder ecosystems, success will be defined by the second part with good execution on the first part. >> Right. The the whole uh how did you describe it? Commercial commercialization >> commercialization partner. >> Commercialization partner. It sounds like it's kind of like the opposite of a nonprofit where you are a for forprofit. Your your profit is being a near treasury company and your alpha is being is commercializing the thing that you have invested in making you an active participant. Not like a steward but

still like still stewarding the actual like uh commercial success of the thing that you've invested in. >> 100%. Like at the end of the day, we're talking all about tokconomics and demand, building demand for near, which drives value curl to near, which circles back to expression in the balance sheet value that we have in the business. Um, and you made an interesting point between nonprofit and kind of commercial entity. This was something that Billy and I and the management team on the foundation side discussed at length which was if we didn't have such lack of clarity on the regulatory side in 2015 1617 as a lot of the alternative L1 thinking was coming to the four would we actually have had foundations or would

we have had for-profit centralized companies that were driving the core development of these protocols I don't know the answer to that question but I do know that we found really good harmony with the foundation focus focused on kind of these core product and protocol development verticals with us driving go to market motions um and participating in governance from a different platform which is a for-profit commercial entity. I think this just aligns with also what Sailor is doing at strategy. Maybe he wouldn't call it commercial but he would call it um the capitalization partner of Bitcoin. Like what is he trying to do? He's trying to he doesn't he doesn't say uh Bitcoin is digital gold. He calls it digital capital

>> and then strategy is like the credit layer. And so what what's he trying to do as a you know a DAT a treasury company. >> He's being a forprofit steward of the whole Bitcoin effort. The way that it works for Bitcoin because Bitcoin is like money. It's he's capitalizing it. Near is more of a commercial platform with products and services. And so commercial is the better word for this. It makes sense as like the role of the DAT is to do something a little bit more than just buy the asset and put it on the public stock market but actually you know juicing the effort of the whole structure makes makes sense to me.

>> Yeah. I mean great comparative analysis and candidly like this role would not have been interesting to me if there was not the second component. You know, all the work on the capital market side is interesting and I've learned a ton about public markets uh challenges and successes thus far. But uh the second piece is what actually attracted me to say, okay, maybe this is the next chapter despite the fact I knew inevitably there would be a negative sentiment fallout on treasury companies. I've been around enough cycles and hot narratives in this space >> to know better. And I consciously chose to do this because I believe in the vision that Near is going after. I believe it's the right team to execute.

And I saw the gap of a commercialization partner and a figure had to come and speak on its behalf in a more public context from a capital markets and commercial point of view. And so it was kind of the perfect harmony. Candly, I don't think my CO Dave Schwed would be here either if he didn't see that second piece as so compelling. And so it really was kind of a a different view and different vision of what a treasury company would become. And it was that commercialization piece that got us all excited. >> How do you have KPIs or goals or objectives? How do you define that for yourself? Cuz while the philosophy makes total sense, commercialize what you've invested in, uh, the strategy and implementation details, I I think I could use some help with.

>> Yeah. And and I know I know you don't love this, but will be thoughtful in terms of MNPI. Obviously, everything that I'm sharing with you today is public information. Um and so in that same context of the two pieces of our mandate, there are clear KPIs that management is driving towards that traverse both elements of what does it mean to operate in capital markets form capital acrew near in terms of accumulation on the balance sheet but also a large skew towards KPIs and measurement on the commercialization side and some of those things that are are public again like MPC nodes. We started off with a mandate where there was no clear incentive system. There were nine MPC node operators to date. We wanted to scale that to 21. We took an active governance role in delivering

through the house of stake decentralized governance forum an approval of an incentive system. And then we ran the go to market motion to bring new MPC node operators on board a number of which are coming on board today literally actually today. So that's kind of how we think about it. But the KPI split is across both the treasury and kind of capital markets piece as well as commercial and go to market motion. >> In 2024, emerging markets generated over $15 billion in annual yield for investors with yields ranging between 10 to 40%. These are some of the highest most persistent yields on Earth. The problem, DeFi can't access them. Bricks changes this. Built on Mega ETH, bricks takes emerging market money markets and sovereign carry and turns them into

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Let the yield flow with Bricks. Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know. His name is Michael Nato. He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy.

I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you. Now, >> give me a uh it's just a sentiment uh sitrep. uh around the investor community that you talk to. Yeah, you alluded to this at the very beginning, but uh is there like activity from the investor circles around near are people excited? Uh just what's it like to be in that world?

>> Yeah, I mean candidly more excitement than I've ever seen. A number of liquid funds have taken positions uh directly through spot. Some of them did so very advantageously. one year was around a dollar which obviously taking risk. It was uncertain where we would go from there at the time but seen a bunch of liquid funds already take positions. We've also seen flows. I think you probably saw Hunter uh piece yesterday. This was the largest inflow week to uh the European ETP that they have for nearstaking. I think there were three million in flows just this week. Uh and so the way that I would put the archetypes of investors that have interest today are you know family offices, liquid funds and scaling into institutional capital and as FRN represents one of the best public

markets exposure patterns that you can get absent an ETF today given that they're still pending approvals. Um but the sentiment has never been higher on NER as an asset largely as a result of all the things we've been talking about today. >> Cool. Um, are there any things that we haven't talked about today that are worth uh exploring? Any questions I haven't asked? Any stone I haven't turned over? >> No, honestly, man. Like intellectually honest, great debate, good questions, um, good grounding. So, always here if you have further questions, happy to revisit in a period of time. Uh, but I think you will continue to see and hear near in the center of all conversations that cover these fundamentally driven assets in this cycle. Cool. S, if people want to follow you or follow what you do

at Sovereign, where should they go? uh s_nell onx svrn_ai for the business um and obviously doing a bunch of work through our website svrn.net as well through our newsroom. You can follow us there. >> Thanks for coming on, Sal. I appreciate it. Banklist Nation, you guys know the deal. Crypto is risky. You can lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you were with us on the bank's journey. Thanks a lot.