Noble: Solving Crypto's Liquidity Problem, One Chain at a Time - Jelena Djuric Ep619

Transcript

Really, it's only now I would say that we've had proper scalable infrastructure like ready to take stable coins to the masses. Noble is neutral purpose-built infrastructure for the transmission and proliferation of these stable coins. I do believe and can anticipate that the launch of the app layer will be like a new era for for Noble because again, we've never actually had DeFi on Noble itself, which is kind of crazy. And yet there's all of this traction. >> Is Cosmos finally dead? Yenna? I guess that's the question I want to ask you.

Like, do you think this episode is brought to you by Nosis, building the open internet one block at a time. Nosis was founded in 2015 and it's grown from one of Ethereum's earliest projects into a powerful ecosystem for open userowned finance. Nosis is also the team behind products that have become core to my business and that of so many others like Safe and Cow Swap. At the center is Nosis Chain. It's a low fee layer 1 with zero downtime in 7 years and secured by over 300,000 validators. It's the foundation for real world financial applications like Nosis Pay and Circles. All this is governed by Nosis DAO, a communityrun organization

where anyone with a GNO token can vote on updates, fund new projects, and even run a validator from home. So if you're building in web 3 or you're just curious about what financial freedom can look like, start exploring at Nosis.io. Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization and the blockchain revolution. I'm Sebastian Guucho and I'm here with Yelena Jurich who is the CEO at Noble. Noble is a Cosmos chain that's purposebuilt for native issuance of stable coins and RWAs. They are uh one of the key players in the USDC ecosystem. I believe they're probably fifth or sixth in issuance now.

You'll correct me on Yana, but if I think I check USDC. And you guys are sitting at somewhere around $350 million of USDC issued on Noble. You also have your own USD stable coin USDN which we'll talk about. Uh but yeah, how how you doing? How's how's everything going for you? >> Yeah. No, thanks so much for having me on, Seb. It's been great. Obviously, it's stable coin summer that is going into the fall, I guess, now that it's October 1st. It's been great. There's a lot of things going on obviously in the stable coin space, and I'm excited to talk about that and also some exciting updates on the Noble front. Uh so, thanks for having me. So like stablecoin you you mentioned stable coin summer and uh and actually I think you're it's a very apt uh way to talk about it because

uh the stable mark the stable coin market is now surpassed 250 billion. Uh it's up I think something like 45% uh this year alone. There's much clearer US rules now. We have lots of announcements. Uh also a few here. Paxos just announced their privacy focused stable coin. I also read that uh Circle is going to enable things like reversible transactions. Obviously, we have like Plasma that just launched their Neo Bank. It seems like everyone is trying to get a a piece of the stable pie coin coin pie. Um, and you know, it little it little bit reminds me of other hype cycles we had in the space like NFTTS and and DeFi summer and memecoins.

And you know, if we look at those, a lot of that innovation and certainly the valuations have dropped off a lot. Uh, why are stable coins different? Why why should we treat stable coins differently? Should we treat stable coins differently? Will we still be at this level of hype and excitement in a year from now? Yeah, it's a it's a really good question. So, I think it's important to distinguish to your question like what is different about about this about this time around. I think inevitably uh you know there will be overhyped projects that maybe don't sustain themselves and don't last into functioning products and businesses. But despite that potentiality, there is something concrete kind of happening now, which is

maybe different than previous hype cycles that we've had in crypto. You know, to your point, whether that's NFTTS or memecoins or the like. And that reason is is pretty simple. That's legislation, right? So, we had obviously the passing of Genius a couple of months ago where it was signed into law by President Trump. We've had a very concerted effort by multiple uh interest groups, right? Um that actually want to see Genius operational and in full force. Uh one part of that interest group of course is the crypto lobby. But it's also actually bigger than that, right? Basically what Genius is simply a

revolution in in payments, right? And so if you think about like the payments industry and you think about kind of what payments are and how payments kind of work today, uh it's pretty antiquated, right? And a lot of this payments infrastructure is running on legacy infrastructure that is pretty old and antiquated. And so what is Genius? Genius basically set the standard a legal framework to issue stable coins as payment instruments, right? And obviously, you know, for cryptonative people such as ourselves, we've been very familiar with stable coins for quite some time. You know, some of us maybe, you know, do payroll in stable

coins, get paid in stable coins ourselves as employees. Myself, I've paid rent in stable coins in the past. You know, we're very familiar with these products, not to mention the trading, DeFi use cases, but if you think about what Genius is and the framework it establishes kind of on a more mainstream legacy level, it actually allows first of all like legacy payments businesses to like legally let's say innovate and you know offer really interesting uh you know kind of innovative products that maybe are cheaper, more seamless, etc.

But then it also allows crypto projects like Noval to kind of play a role within that. So yeah, as you said, right now it's about a $275 billion market. City Bank just um you know, they had a report that said that by 2030 we'll be at 1.6 trillion. They then uh actually upped that uh prediction to 1.9 trillion by by 2030. Um and and like let's remember like five years ago or five and a half years ago we were at half a billion. So yeah I mean today you know today and in the last year we're up 50%. But basically we have a much much longer way to go and that is in a large part due to genius and the appetite from the legacy mainstream world to basically bring payment into the 21st century.

>> Yeah. I I think one of the kind of key insights in what you just said is that it enables or what I take away from it is that it enables a new form of infrastructure uh for payment um for payment issuance uh issuers for payment systems issuers and uh in many ways that's I think what we've kind of wanted blockchains to be you know there's this idea you that have been circling for a long long time now is like that we want um blockchains and DeFi to be the rails of financial system and I I feel like stable coins may be the catalyst that actually makes that finally the case, right? It sort of makes it possible. And so like this this

sort of institutional sentiment has really flipped. Um I think CoinDesk had this figure that 83% of investors are now planning more crypto exposure. Um stable coins I think are a big part of that because there's yield you know a lot of stable coins are sort of promising yield. Um how do you look at that and you know how should how should investors institutional or even retail sort of be assessing the different yield sources right because >> 4.5% over here 10% over here may may not be you know not all yield is created equal >> and I think people need to be more familiar and sort of aware of that how do you u look at that

>> yeah well well okay so I mean first of all like let me just back it up for a second. So basically, you know, to your point, obviously like the promise of blockchain rails was, of course, uh, you know, a lot of the kind of use cases and kind of ideals was around payments. It was, you know, peer-to-peer payment systems. Obviously, this idea of financial disintermediation. Even in the original Bitcoin white paper, you had this vision for Bitcoin as a payments mechanism. Of course, that is now not the case. uh Bitcoin is not used as you know mo most often in in the majority of cases is not used as a payments uh instrument. It's it's obviously uh a speculative asset that is traded and you know at this point quite commoditized. So on the one hand like it

did take us actually quite some time to get to this point where we actually do have the infrastructure and we actually have stable coins again as a product that are um instruments that will not only have you know very sound legislation kind of governing their their utility but we also have the infrastructure and the actual again blockchain rails kind of ready and able to transmit and proliferate these uh stable coins across you know a wide variety of of use cases and distribution channels. And so I will just emphasize like before we talk about like yield and stable coins that really it's only now I would say that we've had again like proper scalable infrastructure like

ready to take stable coins to the masses. And I would also like kind of love to talk about why that is and how far we've come and again like what is this infrastructure that we're talking about that is suited for us bringing stable coins to mainstream. But yeah to your question around yield. I mean it's interesting right? So first of all when we talk about like yield as relates to stable coins we're typically talking about the yield that is generated from uh short-term treasury bills. Obviously that is uh the mechanism that uh I would call classic traditional stable coins are collateralized by um and so obviously within Genius there is very clear distinctions around how that yield

is passed on. So kind of out of the box um it's actually not compliant to pass on that yield sort of passively right. Um so you have to basically have a mechanism where that yield is claimed or where distribution kind of and partners or entities like a coinbase can actually take that USDC and pass on the yield by having you know people you know hold that USDC on the coinbased platform. So um there is bit a bit of nuance and like legally how stable coins uh you know are uh you know able to pass on yield and another big part of this question of course is the clarity act and basically that is more governing like around DeFi and just generally kind of you know

crypto tokens that are perhaps are more speculative but that will also kind of have some guidelines on again like the passing of yield and how that's kind of uh compliant and basically for for for Noble and this is like one of the principles that we have held very dear to our heart since the beginning is Noble is neutral purpose-built infrastructure for the transmission and proliferation of these stable coins. So Noble itself is a protocol. Okay, Noble itself is a layer 1. We of course are not ourselves a stablecoin issuer. Uh you kind of mentioned in the intro that we have Noble dollar. We're uh of course working with M0 on that product. Uh M0 is a stablecoin issuance protocol which

uh works with a network of off-chain mentors and issuers. Recently, Stripe or bridge was announced as one of their partners. But basically, Noble is distinct from the circles or the stripes of the world in the sense that we are crypto infrastructure again for the transmission of these stable coins, right? So we like to work with wide variety diverse set of issuers. And so yeah, to your question around I guess like yield and like how this will kind of play out. I would say like the issuers themselves are kind of at the forefront of these discussions. Like again when it comes to Noble, uh we are cryptonative. Obviously, DeFi will continue to exist, but as an issuer, that kind of consideration or how you

pass on the yield, if at all, to end users is basically within their purview, right? So basically you're going to have a situation where obviously you know like what currently exists which will probably what be the reality kind of after Genius is operationalized but you'll have a situation where the issuer themselves like a circle can't by default pass on that yield but the distribution partner like a Coinbase like an a like a Binance really any entity whether it's an exchange or even a DeFi protocol can of course um you know pass on yield in in in ways that is like safe and you know makes sense. So anyways, we can we

can chat a little bit more about that and and how kind of Noble thinks about it with composable yield as it relates to noble dollar, but basically the rules are just like now being established and there's no one path yet because the rules of the road have yet to be written by uh the OC in the US as it relates to things like uh passing on yield. Well, I'm glad you brought up composable yield because I think it's it's a perfect segue into the next question I wanted to ask you, which is currently I think most of the yield at least, you know, this kind of floor that we see around like four four four and 5% you comes from treasuries. You mentioned uh short-term and long-term treasuries and and having sort of a mix

there. uh some stable coins uh you know recently we had cap on we also had uh FX protocol of course like these are these are stable coin issuers like different from uh from from noble but they're generating yield in different ways like FX has this stability pool that generates yield basically from um you know sort of deposits in its per protocol uh you know I I feel like probably you know we we can we can keep juicing these yields for some time but they'll probably dry up like the native DeFi yields will start uh drying hang up unless new sources of yield start coming on chain uh actual cash flows from offchain businesses. So yeah, how do you think about sort of like the uh bringing more yield on chain and how are you guys

integrating that into this this uh uh sort of your yield strategy and composable yield uh moving forward? >> Yeah, I mean composable yield is actually quite simple and we don't like to complicate things as it relates to noble dollar itself like the core product. Obviously there's like you know kind of funky things that could be built on top of that but as it relates to noble dollar itself um it composable yield basically is as follows. So you have USDN which is actually over collateralized 103% by uh by short-term treasury bills. Uh, of course that collateral pool is again managed um and uh governed by the M0ero protocol but our implementation of USDN takes

that yield component and basically makes it programmable and programmatic at the same time. So we tell distribution partners or we you know encourage distribution partners like like a like a like a DEX uh a payments app uh really uh it could be offchain distribution onchain distribution we really don't distinguish. We basically say take that uh yield accumulation that is kind of happening in real time on a per block basis and uh you can program it and direct it to any source or or any destination that kind of fits your use case. So you could obviously take that yield revenue and you could distri

distribute it to validators. You could do a buy and burn of your token. You could keep it as revenue. And basically, Noble's thesis again is onchain distribution. It's making sure that the Noble protocol can service app builders and make sure that there is proper incentives and like safety and like reliability around that distribution of the underlying T- bill yield. And uh we've had some pretty pretty good success. Um so a few months ago we ran uh a points campaign where we wanted to kind of demonstrate like this utility of composable yield, right? Right. And so we basically said, okay, so people can participate in this points campaign.

They can get, you know, points, noble points by depositing their noble dollar into the into a points vault, but by doing so, you actually uh for forfeit or give up the T bill yield that you would otherwise get by holding Noble dollar. And what happened to that T- bill yield? That actually got distributed um to a second vault, which was a boosted yield vault. And basically we rolled people. You can also just, you know, deposit your USDN into this boosted yield vault where you don't get points, but you get all of the yield that the people in the points vault gave up. And that was generating about 15 to 20% yield. Um, and that ran for about four or five months. And basically, you know, why we

did that and like a lot of people were kind of asking, well, h, you know, how is that 50% yield generated? like is there something like happening on the back end like like like through like lending or something funky um in that way and the answer was no like it's literally fundamentally uh treasury bill yield that just got redistributed in a way uh that was quite simple if you think about it um where it was basically all the people that gave it up it just got redirected to this other uh group of of holders and the The reason we were able to do 15, you know, to 20% consistently was because obviously overwhelmingly the distribution or the ratio of deposits was within the points

vault. And so basically, you know, on the one hand, we wanted to show, you know, noble dollar look, it's like a thing that exists. It's very powerful. Um and of course the composable yield is this like kind of interesting new mechanism where you can start implementing it in um you know a wide variety of ways and you could gamify it and you could create incentives around that and again it's all possible because the token itself has been designed and engineered to allow for that composability of that yield component.

>> Makes sense. And so the USDN campaign uh how successful was it? >> Yeah, it was quite successful. we uh reached about 125 million at an all-time high. Um all organic demand across 30,000 unique wallets. Um and so you know it was very very great to see that kind of organic um you know demand kind of popping up and yeah >> I want to talk about Cosmos a little bit. I mean so Noble is is a Cosmos app chain and uh you know launched at a time I think when Cosmos was struggling from the downfall of uh of US quite quite some time afterwards. But I think like you know I think US and and the collapse of of Luna I think had uh

pretty significant impact on the Cosmos ecosystem overall. you know, if you look at some of the all-time highs there and like the uh the FTVs of most of I said the chains that were around in 2020, 2021, 2022, you know, a lot of liquidity got, you know, sort of removed out of the ecosystem in in one one moment. Uh I I think when when Noble came online, a lot of people were expecting lots of USD liquidity to come into Cosmos and some has, right? I mean, 350 million or or some change, right? Is is nothing to sneeze at. Dydx also coming to the ecosystem at the same time I think was very much anticipated and people saw that as a positive sign and I I think I think the

appchain thesis generally and sort of the sovereign object chain thesis continues to stand up and and and people across the ecosystem across crypto I think still believe that's the case but the cosmos ecosystem as a as a defi ecosystem has not really done very well in the last you know two two three years uh despite all of this right despite mobile coming there despite having native USC despite you know lots of chains of using Cosmos tech what's happening what do you why do you think that is is Cosmos finally dead Yelena but I guess that's the question I want to ask you is like do you think >> no it's not dead yeah I mean I think it's kind of a misnomer of a question because basically if you look at what Cosmos is it's

fundamentally the stack right it's tender it's common BFT it's the SDK it's cosm it's IBC VC and if you look at all metrics across those like levels of the stack, it's actually quite strong. What's not strong to your point is Cosmos native token performances. Uh so if you like look at a chart or coin market cap and you kind of look at you know a token that is like an IBC token that like launches like unfortunately there isn't as much you know retail kind of demand for those tokens. It's it's you know partially why Noble of course is launching this L2 on EBN which is the Noble app layer and why the Noble token will be an Ethereum token not a Cosmos token but basically as it relates to

like the stack itself and it relates to adoption I mean again by all accounts it is the most performant stack to build an app chain right and whether you use IBC or not I think also kind of dictates whether where you're kind of considered to be like Cosmos. So like Noble for example, right? We of course have IBC out of the box. Uh we you know uh a lot of like volume of course um uh liquidity routing is is is via IBC but we also have CCTP circles bridge. We also have wormhole we also have hyperlane support.

You know probably we'll have other bridges supported by um you know through. So, you know, I think that a lot of the times, you know, when you kind of look at what happened with Tara, like, you know, how much of Terara's success was because they were Cosmos or because they had a great product. I would argue they had a great product for its time. Obviously, that was not sustainable. Obviously, US was fundamentally unsound, but you know, Ankor and what they, you know, did with the Terra protocol was obviously, you know, very valuable in some level. And that's why you had US at a $40 billion market cap and you know you had you know all this like like uh you know liquidity mining of US and you had these like

crazy like APYs and anyways um you also had like a lot of like really great DeFi on on Terra and so basically yeah Terra was Cosmos and it was Cosmos because it's the best way to build an app chain but they also just had like a good product story and good use you like a like a really you know bullish community and so I think again Like it's not to say that um that can't happen again, right? Like it's all about the product. It's all about the uh you know like what you're actually building, who's it for?

Is it useful? Does it work? Is it broken? Is it is there a good UX? Um all of these things. And so I think when you look at like what's happened since US collapsed, obviously there was like a really serious bare market. You know, you had FTX, you had Celsius bankruptcy, you had things happen and then what happened after that was somewhat of a bubble market that was started basically within the Salana ecosystem. Why product? What was the product? Memecoins. And so again, like Cosmos showed, you could build really performant uh app chain infrastructure for DeFi, for stable coins, for trading, for like

all sorts of things. Salana showed that you could get incredible mind share and retail adoption of memecoins. And of course there is like some performance reason for that because of the way that Salana works. But basically it's to say that if you look at any major L1 L2 ecosystem typically it's like power law distribution of like where the activity and liquidity is and it's usually concentrated among a handful of products and applications. So like even Salana right like yes um pumped off fun like kind of kicked off you know the trend you had bonk you had

uh obviously you know then there's like things like jetto but like overwhelmingly a lot of that activity and liquidity and mind share was around pump do and then and you know you look at you know things like you know hyperlid overwhelmingly now that's kind of maintaining a lot of mind share and so basically you So I would say that on the one hand, Cosmos of course can never be dead because you have the stack which will continue to be like the best stack. Like I mean even talk about like stable coin chains like Circle of course is building uh their stable coin layer 1 called ARC and that uses Comet BFT uh for consensus. you know, you have obviously Noble, which of

course leverages some parts of the Cosmos stack and of course has this like separate execution layer around the EVM. But yeah, I think there's definitely no logical way you could say that Cosmos is dead. >> Yeah, that that that's that's really great. I think it it kind of aligns with how I've seen and talked about Cosmos over the years and and that the analogy I often use is none of the uh none of the nerds that were fighting over the right distribution of Linux to use back in the '90s got rich because Apple devices and every Android device uses it uses a Linux kind of like core kernel.

the nerds will come at me and tell me that's that what I said is is inaccurate but but basically that like most devices nowadays use Linux infrastructure and I think Cosmos is kind of similar right it is it is really the best stack to build so sovereign app chain infrastructure just that you know unfortunately there isn't a mechanism by which atom holders get rich or sort of cosmos token holders get rich because you know circle built circle built their their app chain using common PFD and and I think to some extent Ethereum did suffer a little bit from a similar fate with the uh rollup roadmap where value from all these roll-ups didn't necessarily acrue to Ethereum and but you know the EVM is the

best way to you know write smart contracts and write applications on blockchains that has the most amount of developers and etc. So I think a lot of stacks are kind of reeling with the same sorts of um problems with value capture and I don't know what the way around that is. You know do we have licenses where um those who use the stack for commercial purposes need to pay some some fee or some licensing fee back to the token holders and it seems very difficult to manage. Um so I I don't know what the what the solution is here. Maybe the solution is just I mean maybe there is no solution and just people have to accept that just because someone's using your stack doesn't mean that or someone's using the stack that you know that uh that you invested in some other token uh doesn't mean that

you're necessarily going to benefit from that. >> Well, I'll give you like an analogy here. Just because I have an app in the Apple App Store doesn't mean my app will be successful. >> Um >> I think that stands up pretty well. Yes. So just because I have quote unquote distribution through the app store doesn't mean it's going to be in the top 20 used apps because it has to ultimately be a good app. So I think like this idea that just because you're building something on Salana means oh all of a sudden it's like the next pumped off fund like doesn't make any sense, right? just because I'm building, you know, on Ethereum means I'm going to

now get all of the liquidity of Ethereum DeFi. Like that doesn't make any sense. So yeah, I mean I think that the same goes for Cosmos. I think the difference maybe is because like from a narrative perspective, the app chain thesis has been focused on apps, right? And so we understand like apps is where the value occurs and if you don't have a good app then you won't get value and neither will perhaps that value trickle out to other app chains within that same ecosystem and so I think like with Terra obviously we had a very successful app right very successful app chain for its time and then of course it destroy

itself but what did that show it showed that value can acrue to the app layer. It could acrue to the app chain. It could acrue to the token holders. And you know, you could argue, oh well, that's why, you know, other Cosmos app chains did well. Um, I think that's a bit of a rewriting of history. Like it was also just generally a bull market and many applications did well, not just in uh Cosmos, but also in Ethereum. Uh but basically if like your only source of like demand for your token or your app is because like your you know neighbor is doing a good job like that's not a sustainable moat. And so basically you have to kind of think about okay well how will distribution happen in the future? Where will demand

come from? What is the product? Is it sustainable? Is there a moat? Is it easy to use? Is it differentiated? So, you know, basically I think crypto people like have to build real businesses and I think that's a good thing and you know I think Cosmos is still the stack itself is still a very solid stack. >> Yeah, I agree. I mean I think all that makes sense and it bears repeating and it bears reminding um ourselves and folks in the ecosystem all together, you know, all us as Cosmos people. So I I think the last time we spoke when you were on the interop was quite a while ago and there was some uh um you were talking at that time about having an EVM

on Noble. How has that uh yeah can you sort of share the latest on that? >> Yeah, so this is um something we're we're working towards and really excited about. So we're going to be launching something called Noble App Layer. uh we'll probably rebranding it something different but for now we we're calling it the noble app layer and basically the noble app layer is an EVM L2 using Celestia for data availability you know kind of speaking of Cosmo speaking of the stack there's quite a you know a few reasons why we decided to build the EVM component as an L2 versus adding it on top of the Noble L1 which of course is the Cosmos L1 which is currently of

course in production and um you know quite quite um you know significant in terms of volume and routing and adoption and basically the reasons kind of are as follows. One um you know there is a lot of exciting innovation taking place like in the Ethereum world as it relates to performance. Um, you know, Celestia I think is uh obviously like a huge part of um, you know, what makes I guess like Ethereum more delightful uh, to build on top of kind of given their, you know, data availability uh, innovations. And so, you know, that's one part of it. uh we wanted to you know also make sure that we were exposed to the EVM ecosystem and just you know historically

EVM on Cosmos has been challenging to say the least and so you know we figured first of all there was a huge product need for smart contracts and programmability you know for noble and adding an EVM layer on top of Noble was not necessarily the best engineering decision and so we figured Let's deploy basically an L2 on top of Noble that would be validated and secured by the Noble layer 1, but which could act as a distinct execution layer for >> sorry to interrupt here, but e even with the Cosmos uh sort of EDM stack. Um yeah, curious why why you chose to do an L2 rather than use that stack which has

the EVM kind of built into it. Well, um, so, so the EVM is actually not super like well-maintained, right? Um, if you kind of look at like how the EVM, um, kind of software has developed over time, you have like EVM OS, now you have other kind of players attempting to maintain that, but I mean, I'm sure you you understand like EVM is as a as as as a software, uh, you know, it needs to be maintained to make sure that it's like secure and that there's like, you know, de-risking from like a bugs perspective. And so basically we felt a lot more comfortable in the maintenance and the um you know software of EVM proper kind of uh on you know as it relates to

Ethereum. So that was, you know, very much like a concern around again like stability, security, uh making sure we're always properly following major releases and that the software that we use is wellmaintained. And so it just made sense to again build this EVM app layer uh basically as an L2 uh using Celestia for DA and and then again performance right like our EVM app layer you know I think like yesterday there we were doing some benchmark testing and it's like 100 millisecond block times right super fast that's faster than noble core right noble core is like 1.2 few seconds which is fast but it's not call it fast like like like the app layer which can support um you know all

sorts of things that core can't support from like an execution perspective and so you know that was an obvious decision for us again we love working with the Celestia team we think the you know the the kind of software that is maintained again is very solid and it just kind of made sense for us also again like talking about like the power of like the Cosmo stack like you know it not that this was like trivial work it was definitely a lot of hard work but there is also a world where of course noble core validates and secures the L2 and that's also was a big part of the discussion like can we have a single sequencer L2 running on Celelesia DA secured by the noble validator set in a very secure manner the answer was yes and so we're very excited um to be

basically championing that model I did a long tweet thread on kind of what makes this model perhaps different than like other kind of rollup designs within the Ethereum space which maybe like we can link in the notes but basically um a lot of what we've done with the noble core validating and securing the L2 is very similar to kind of like the native rollup vision that I believe itallic and others put forward and yeah we think it's pretty interesting I mean of course it's different where the noble core or is a proof of authority chain, right? So, we don't have like a proof ofstake kind of economic security model with like, you know, a bunch of tokens

staked, but we actually think that the proof of authority model works very well for our use cases, which are stable, pulling ccentric. So, anyways, it's a lot of uh different decision-making factors that kind of led us to where we are today. But I think that kind of speaks to like our approach and our philosophy which is like let's be very methodical. Let's be very considerate around the architecture. Let's not rush things just because everyone else is doing it one way. We we we want to make sure that the way we do it fits our use case and fits our principles. And basically I do believe and can anticipate that the launch of the app layer will be like a new era for for Noble because again we've never actually had DeFi on Noble itself which

is kind of crazy and yet there's all of this traction. So yeah, we'll see what happens. >> And can you talk a bit about the role of the Noble token in this uh in this new L2 and and this DeFi ecosystem that uh you want to build? >> Yeah, definitely. And we'll have some really exciting announcements actually on the Noble token very very soon. Uh but at a high level we're talk we're thinking of the Noble token um in like two ways. So one it will be the base fee token for the app layer. basically uh will users can still uh pay fees in stable coins as they currently do on core but there'll be a mechanism where um that fees those fees are swapped into noble token uh kind of on the back end

and there's like a kind of a pay master's like account system around um the uh kind of fee fee mechanism for the app player which again is noble token under the hood. Um so again assuming there's a lot of activity and uh users and you know products on noble app player that are well adopted that will be positive for the noble token and then the other piece is actually governance. So we are keeping the proof of authority uh model for validation. So there will not most likely be staking but there will be governance. What does that mean?

um similar to you know kind of other models where basically you could use them like the governance token to have certain incentives or uh have certain um auctions uh for let's say um you know deploying liquidity um into certain pools um you know what we call like bribes in the curve model uh where you have like a V in this case a V noble token um that's all kind of on the road map and we actually think again DeFi is at this point battle tested and we have some pretty interesting applications kind of in the works and if you can layer a noble token on top of that where you get the community kind of excited and incentivized and motivated to kind of

govern those various applications I think there could be some interesting interesting things. >> Where do you expect stable coins to be in 3 to 5 years and what will be Noble's role in that ecosystem? Yeah. Um, honestly, I think it's just the beginning. Obviously, we have all of plethora of uh purpose-built uh stable coin chains launching, which uh I think is is ultimately positive. One of the ways that I like to think about differentiation among those app chains and you know, perhaps Noble's uh kind of role within that differentiation is basically as follows, right? The TAM for stable coins, for stable coin payments is massive, right? like we

mentioned earlier this uh kind of 1.9 trillion figure from from city I I've seen you know uh I've seen predictions as high as 4 trillion from financial institutions but if that is to be the case you're going to have specialization within the payments landscape that uh basically uh leverages certain stable coin infrastructure right so for Noble if we think about Noble's app layer if you think about Noble core and performance and stability there. I do see Noble playing a significant role in this future payments kind of revolution around stable coins. Uh whether that is uh more on the BTOC side um you know is something we can uh kind of anticipate.

But we've had some pretty exciting conversations with you know legacy traditional players kind of coming into the space looking at the space and and saying basically we have a need to transform our payments infrastructure. Let's think about how kind of Noble and again uh layer 1's kind of fit into that landscape. So Noble will continue to always exist as this uh kind of router of activity as a uh origin chain for the minting for the redemption of these stable coins because of our performance because of our battle tested infrastructure and basically we want to see Noble and the app layer um do a lot of stuff on the consumerf facing side.

So obviously it's early days um but again it's exciting days and uh there's a lot more to come. >> Great. Well you know thanks for coming on the show. Uh it's been great chatting with you getting an update on Noble and also getting a glimpse into the future. So excited for Noble and the things ahead. >> Amazing. Thank you Seb.