Quadrillions: The New Wall Street | Nick Shalek & Mathew McDermott

Transcript

a believer that it's not permissionless or permissioned. These things are symbiotic and there's lots of, you know, what we call like consortiums or permission chains that be have become really critical infrastructure that have existed for a long time. So, you'd have to be a zealot or an ideologue not to look at ICE or market or the way cards develop or look today at UPI or or Pix and say it's all going to be decentralized or permissionless. like as an investor I think it's very interesting to invest in things like Tempo or Canton and we're excited about it. I also think the like most relevant question maybe to be asking you know what's the downside of talking about risk and regulation and being pragmatic and thinking from the valuable incumbents perspective or you know what

are the misconceptions. >> Quadrillions is a miniseries produced by block works and is sponsored by Canton Network. Nothing on this show is a recommendation to buy or sell securities or tokens. It's forformational purposes only. And the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in companies, funds, or projects discussed, including those related to Canton network. All right, everyone. Welcome back to Quadrillions.

very excited about this. Been an amazing series, amazing season. Um, and this is the last episode. So, bum b b b b b b b b b b b b b b b b b b b b bummed. But we have uh I think the best lineup that we've had the entire season. So, we've got Nick from Rivet Capital, we've got Matthew from Goldman, and Yaval back with us from Canton. So, Nick, Matthew, welcome to the show. >> Thank you. Thank you. >> Yeah, Nick, I thought we could maybe start with you. I want to use this conversation to talk about uh how I mean it seems like basically all capital markets are quickly moving on chain whether that's a company like a Goldman down to maybe some of the fintexs like uh Revolute or Robin Hood and brokerages and payment providers. Give me your you

guys wrote this amazing piece on just tokens at the end of last year. Tell me how you guys are viewing tokens and tokenization and yeah capital markets moving on chain. I'd love to get your like macro thesis for this to kick this off. That's a big question but uh there's there's a lot of uh a lot of really really interesting stuff happening. I mean I guess we we started on on tokenization you talking about tokenization a long time ago right? tokenization were was the words that uh um you know kind of first came in everybody's conscious you know broadly when Apple Pay launched and um you fast forward uh whatever it's been 10 years 11 years since then and we we just started to see

this thing outside of crypto which was you'd listen to the you know earnings call for Google or you listen to earnings call for Visa or you listen to earnings call for Coinbase and all the CEOs were talking about how many tokens they were producing thing or how many tokens they had and how much they were processing and we're like it's same word different concepts but what's the thread that tied them together and I think that's been you know that question has been kind of like a guiding uh one for us as we we think about what matters the next 10 years I guess the the high level you know just to to to break break down our thinking simply would say what tokenization is really about is making the world legible for machines and machine interpretable so that um we can build intelligent software that's able

to inter you know interact with the world's the world's assets and what we define as an asset is going to be a lot broader than what we thought about in the past and the combinations of assets you know will be very very different. We'll end up with a a financial system that looks something like what we have today but is far more personalized far more intelligent and also in a lot of ways like totally unrecognizable. You know, I think that the analogy I would say is like when you go to Amazon and you experience that as a store and the millions and millions of products that are there, in some ways it's like a department store, but in most ways it's totally unfamiliar. you go to Netflix in some ways it's like Blockbuster it's doing the same job but you know the combinations the way you find content

and um to get to that world we think you have to make the world you know legible to machines you know around uh around different different assets and and data so yeah a lot more I could say about that but that's the core thing >> maybe I'd go one level deeper that I mean you for people who don't know Ribbit you guys are probably the most prolific fintech investor of all time potentially, right? New bank and Coinbase and Robin Hood and Stripe and Brex and Revolute and I think at one point Mickey might have owned like one or two% of the total Bitcoin supply. I heard that somewhere. Um so, you know, maybe we can get into like I I see all of your guys' port codes moving on chain faster than many other folks like like New Bank um right who just hired Michael

to run their cryp who's now head of crypto there. Coinbase obviously is a crypto company. Robin Hood quickly moving on chain. Stripe Launch Tempo, Revolute doing the same. Why is why do you see like what's the trend that's underlying this? What's the underlying reason? >> Um, I think it's two things. One is just these companies have these companies are are all 10 to 15 years old. They were started in a digital era when uh when there was this opportunity to get distributed on mobile or on the internet. And um so they have innovation in their DNA like they're natural disruptors. They were started by disruptors and there's just something about the culture of the organizations that wants to push and wants to adopt new technology and they have relatively

modern software stacks and they have their you know they're big companies now so they have their own challenges with operating as big companies but compared to institutions that have been around for a couple hundred years I think they're just they're they're still very they're quite risk-seeking and um so just on the kind of riskreward you know uh scale they're they're in a different spot. I think the second thing is their businesses are still relatively, you know, small. Like they're they're hundred billion dollar companies, not $500 billion companies. And they serve, you know, for the most part a couple markets, not all the markets. And I think they're they're interested in the expansion potential that comes with being able to um you know operate on a

on a a global state machine and um serve lots of customers in in nontraditional ways outside their geographies. So to say that that that's the main thing, right? If you're you're a bank, there are a lot of reasons not to get into crypto. if you're Revolute or your Stripe or your Robin Hood, you see where things are going and you've got your core business, you know, obviously to to protect, but your DNA is uh is about figuring out how to bring more value to your customers. That's what made it, you know, that's what got you where you are 10 years, you know, starting 10 years ago. So, you just you kind of continue to hold that.

>> Yeah. Matthew, maybe we can I think Nick's talking a lot about the, you know, new new companies. You guys are uh yeah, obviously, yeah, historic been around for a very long time. what um and we you know we've known each other for many years and you've spoken at DAS and been on the podcast and stuff like that. I feel like it's fair to say there's been a few um uh you know false starts for like institutional adoption and now you guys are pushing now it feels like this is finally the time that it's actually happening. Can you maybe tell us like yeah just what feels different this time and why things stalled out before but you know they won't stall out this time. >> Yeah, it's a good question. But I mean I guess if you kind of take a little step back to when I even started in this

space I mean there was you know still a lot of talk around kind of blockchain technology um and if you use the old adage it was kind of you know a solution in search of a kind of problem and initiatives kind of need to be kind of commercially driven and I think that was one of the things that really kind of was highlighted to me when I first kind of started to spend time in the ecosystem that there's a lot of proof of concepts that really give you a great glimpse into the power of the technology. But it was just that a glimpse and none of them were really kind of scalable and we know kind of some of the reasons for that. There was an absence of regulatory clarity something that you know is close and dear to kind of all of the financial

institutions. Um and so that kind of leads you know to kind of I guess uncertainty both kind of in and kind of internally and external to organizations and therefore that broad-based adoption you know was pretty kind of I guess slow to to really start. now you know kind of what's changed. I think we all kind of know that there's been a big and significant kind of momentum shift um you know over the last kind of 12 18 months in terms of certainly the US where the posture is just very different and I think you know what breeds confidence is that seeming regulatory clarity we've had the genius act we've got all of the agencies you know most of the agencies working very positively you

know kind of towards digital assets and that just breeds that like I said that confidence that clarity And that's when you see now most of the sell side, the buy side investing kind of real dollars, you know, in terms of building out their digital asset businesses. Um, and also their strategies and, you know, technologies moved a long way as well. Um, you know, obviously Uval's here, but but when we think about kind of the development and the focus on institutions, that's been very prevalent in the market. And I think that's also been, you know, hugely helpful as people do start to move forward, you know, with their kind of strategies. And although there's kind of still probably

more clarity we need on the rag side, I think the broad cross-section of the market really focus now on this space, I think now you can really start to see where adoption will truly accelerate. >> No, I just want to say, you know, this question of like why why the fintexs and and how the incumbents, you know, react. I think the incumbents largely move when they have to. They're, [snorts] you know, they're natural second movers. And we can we can talk a bit more about that. I love Matt's thoughts on it. Um, you know, on the fintex, I I think the experience of building a regulated financial company over the last 15 years was that the channels were open and you could build better customer experiences, but you had to do a you had to like shovel a lot of to figure out the

infrastructure. And that's been very like when you're building a fast growing company um you know that's really felt by technologist if you're Patrick at Stripe or Vlad at Robin Hood or or Naked Revolute or or Devid at Newbank you know you're referencing the banks but you're also referencing what's happening in tech you're looking at you know billion users uh plus at chat GPT you're not you know you're not necessarily thinking by the old rules so you get really frustrated by the inability to build build new things and I think it's we're talking I think a day or two after the fiveyear [snorts] anniversary of uh of GameStop and you know the the feeling that Robin Hood and the people around the company had when because of T plus2 settlement you the company almost went

bankrupt and you then went through this experience that was very damaging to the to the brand and their relationship with customers. Yeah, there's just a frustration a desire to help bring in a new system. Um, so that's back to your your first question, Jason. Some of I think what's happening too. >> You all, how do you think about this? The contrast between the I don't know. I mean, you guys work with both the fintex and also these, you know, quote unquote legacy institutions. >> Yeah, I mean I think I think inherently uh Nick is right, but the question is what is the reason for that? and you know uh big incumbents have you know a big uh revenue base and you know it's it's much more of a bigger ship right making changes uh could also be much

more disruptive um you know it's it's no different than the US dollar issuing uh CBDC versus you know a private company issuing a stable coin you know the consequences are much bigger so I think that's that's a natural thing but at the end of the day I do think that incumbents and and Stripe today I would say is also to some extent an incumbent have an opportunity that if they do adopt the technology and kind of set the rails for for a new system. I think a lot of times people think that just because I use crypto I can disrupt everyone. And I I I try to explain to people that creating a network and network is not a physical network of actual client connections or people that are using your services is a

huge competitor advantage uh competitive advantage. uh and therefore I do I do see that there are a good number of incumbents that are actually taking you know some serious steps of using the technology and as Nick say creating creating this new system where they can actually leverage their you know client connections or customer connections to actually bring a whole different user experience uh to them. So I I think I think it's just it's just part of life for incumbents. It's a much more challenging thing to to disrupt.

>> I think it's what we should expect too in general with new technology. And it's not just true of crypto. I mean, it's you why why did Stripe and Brainree emerge, you know, as the as the leaders or PayPal and in digital payments versus the banks who had other advantages. You know, it's it starts with serving a customer base that's not that interesting to the incumbents. the incumbents are focused on as you've all points out they have really big businesses customers that are asking for things and usually they're not asking for the new thing and so kind of begins with well actually there's a lot of the world that doesn't have access to good financial services and we can make you know financial services a lot better broadly but you kind of want to frame it as this or that and the reality is Zelda's a trillion dollars of payment

volume now and Venmo's got 109 million users what's actually happened is people transact digitally between each other more. [snorts] Um, and the players either the the new players or the incumbents that get with it quickly are winners, you know, while while people who are are slow to change, you know, kind of fall off. >> Yeah. I mean, I would can a little bit of that with the old institutions. I mean, we're not s, you know, sat here like Ludites. I mean, we recognize the potential of the technology, but I don't think you can underestimate the regulatory kind of point that that I made earlier and that legal clarity. I think one of the other things that has definitely kind of evolved over the last few years has been that institutional grade for institutions in you know with that backdrop where KYC AML

interoperability I guess the point you's making is absolutely key and that's you know kind of in the context of a network but also separately when you think about legacy systems you know kind of some of the systems we have are as old as me right and so you know that interoperability with those systems as well is is things that we need to consider just given the legacy of the of the institution and the market more broadly and I think with these institutions at large and also it's the kind of education you know that's you know both in the context of working with clients as well as kind of you know internal stakeholders as well >> Matt how do you think about the product to offer and like how basic okay so so your title is global head of digital assets at Goldman right so there's all

these different ways that you could attack crypto right you could do trading you could offer crypto products to customers you could do it more on the technology side. You guys have done I think I remember you talking at DAS maybe two years ago about collateral movement and collateral mobility cash settled crypto uh trading. Uh I I'm not sure what's happened with GS forget the name GSDAP. Yeah, DAP GSDAP. Maybe you can give us like the lay of the land of what crypto inside of Goldman Sachs looks like today. >> Yeah, I think you know it's kind of broadly similar to what we talked about but just probably kind of evolved you know quite a bit since then. Um I mean the core tenants of the business you know with regards to kind of the capital market side of crypto we are able to trade pretty much all the products that

we have the regulatory approval to do still you know we don't touch the underlier for regulatory reasons uh which is down to permissibility but you know we're very active and driven by kind of the client base and you can kind of layer in content and um data into that part of the business. We have invested in companies and I would say you know those companies are a microcosm of what we see across the market um both in terms of M&A and kind of equity kind of capital market activity. Bitco being a good example of that just recently. Um we do um focus on tokenization you know kind of from again from a client perspective and the digital asset

platform that we've developed is something that we continue to build on and and are pretty excited actually by I guess kind of um the fluidity of the regulatory backdrop in the US. So there is actually a lot of focus both there and you know across the globe. So, so definitely we'll see more you know kind of in that context your point around collateral mobility a big big big focus and I think that more broadly of the market um and again you know when you come back to kind of what are the commercial use cases that really do work you know the kind of interoperability the intraday so um kind of activity as well as when you start to look at more broadly the focus around collateral moves to to collateralized derivatives

securities finance and repo And we see that with Broadidge for example obviously you know they're extensive users of that. So so as we continue to see that scale um and become you know a more global endeavor that becomes very powerful. And then probably the last thing you know kind of is digital money and that's just something we continue to take a broad-based approach on. Obviously you know there's a lot of focus last year on stable coins. part of a large consortia that's exploring, you know, whether there's something to do amongst the GI banks um and probably thinking along symbol line to others with respect to digital deposits and central bank digital currencies.

>> Do you guys think question for both I guess Nick and and Matthew. Um was it the regulatory side of things holding holding the industry back or was it the technology was not actually good enough? And I'm I'm teeing up your ball a little bit here and talking about Canton, but um yeah, just curious how you guys think like how you how you weight that. And it's obviously not binary, but >> um I think it's probably combination of everything, right? I mean the regulations naturally you know kind of certainly from you know kind of a bank perspective different for the buy side as we've seen with Black Rockck and others but in terms of you know the bank's capabilities is has definitely been driven by what's permissible um so that's probably you know been something

that's perhaps slowed down you know kind of a cross-section you know of the market really kind of embracing that's as I said changing in a very positive way hence you know Morgan Stanley announced it new head of digital assets. We just see all banks coming out with statements you know as well as FMIs and the buy side. Um but the technology has evolved and I'll you know leave you to talk about that a bit more but you know obviously when I think about kind of institutional grade you know when you think about networks privacy is is a big consideration I think for the institutional players in the market and you know what we see on Canton is something that you know kind of I think has been very warmly received by that cohort

>> I guess I I I would say probably there's lots of things that have needed to upgrade and improve their many ways in which the techn technology hasn't been ready from uh you know just the uh core technical points being settled but I think it's mostly like to me it's mostly incentives you look at the adoption of UPI or pick you know and the real-time payment sphere the government mandated it and took the risk away for the banks and really pushed and promoted it in the US Fed now has hardly been adopted at all so while uh there are all these you know issues that have have made it I think it's it's largely that um it doesn't pay to innovate when it's risky for for for the incumbents and it's been um it's been too risky and there hasn't

been a competitive imperative until we've gotten to the point that we're at. You know, now we're at the point where we've got some regulation. Stable coins are pretty big and real and it's time to act. So, you know, maybe I'm being overly simplistic, but I think that that explains kind of most of the story. >> And I think that's really interesting though, stable coins. Yes, we've got the law which I think is fantastic, right? And but you still need the regulations to complement that. Uh which is what's being presently crafted by the agencies. >> Yeah. Yuval, what's what's your um what's your high level take I mean actually you can go deep on this too like what's your take on why what you guys are building is the thing that the industry needs in 2026 of all million

chains, million infrastructure providers like yeah what's the what's the take there? So first first of all just to to your previous question my my view is that and and whether whether it's a good thing for the incumbents or not I think that one of the things that scared regulators is that the industry started saying this is permissionless you don't need an inter intermediaries and no rules to be honest when we built canton we didn't build it for the clarity act or for the genius act I think that building a business where you relying on the law changing is not a good business model.

Personally, uh maybe maybe Nick as an investor will say that that's not true, but my my personal view was if we need the regulation to change to make what we're doing successful, then then we're in, you know, in a bad position. That being said, I think that the posture of that administration, even pre Genius Act, already allowed a lot of incumbents and regulated entities to actually do things on Canton more publicly because they knew that the regulator is not just going to go after them because they're using blockchain, right? And I think prior to this administration, I think that that was a lot of the concern. It wasn't necessarily just clarity. It was like if you use the word blockchain that was bad and you know if

you're an incumbent you know it's just not worth it. It's not worth it for your business to get in trouble with the regular even if you didn't do anything wrong just to be clear. It's just not worth the headache and you know the the uh the the problems that it can cause your business. So I think that that's really what I think that you know have have stalled a lot of the innovation. I think that you know when we started the company a long time ago our view was that if you want to achieve onchain finance at scale you have to solve for privacy that was just kind of day one thesis and you know it's I think it's playing nice now uh 10 years ago we were told that we were dinosaurs and we don't

understand crypto and now it's like you know everybody's talking about privacy so that's one thing that I think went really well the other two things which again I think uh were a bit of a miss at crypto is aligning the incentives at the end of the day. You know sometimes I use this example when the internet was just being created you know there was no internet. So the you know the the companies that were making you know switches and and routers and all of those things were the hottest thing in the world because you needed a lot of it to make the internet a thing. But once the internet became a thing, those became commoditized companies. And it's really like the Stripes, the Robin Hood, the Google's, those companies that

became the most important things on the internet because they were actually bringing people to use the infrastructure. I think in crypto the incentives till today on most L1s have effectively drive all the economics to the infrastructure providers and therefore I think you've seen a lot of forking of EVM chains because if I'm now rich and famous and I have a uh a dedicated client base well why should I just own the sequencer fees why should I send sequencer fees to someone else because at the end of the day if the user isn't feeling any change in behavior or or from what they get from the product. Well, great. I can get more revenue. And that to me is a very commercial decision to make as we've

seen in a lot of these L2s that will claim they are part of the ETH ecosystem, but in my opinion, they're not. They're just a private chain that that that you know is maximizing value for those that launched it, which is good. I actually don't see it as negative. Um, so one of the things that when we designed the economics of Canton, we said that it needs to look something similar to credit card networks. Meaning the infrastructure is important, but it's at the bottom of the value stack. So the people that run the infrastructure make money. They should be a positive profit margin business, but at the end of the day, you run servers. You don't have clients. You don't come up with new business models. You don't come up with

products. you don't go to events, you don't do marketing, and therefore those that actually drive value to the network actually get most of the economics of the network. And and you know, although I I really like what Ribbit wrote about the token economy because I think it's the concept, the idea of tokens, one of the things that I'm actually really proud of, there have been to date zero tokens launched on Canton. So no one thought that they need to create yet another token to create a monetization strategy on Canton. They actually built products that drive, you know, volume to the network and they they participate in the economics of the network.

>> But do you want that to continue? Do you want like do you want eventually, you know, millions of tokens on Canton or No, >> that that sounds fine to me today, but what about in, you know, the next few years? It feels like a really big missed opportunity. Well, I I think that if you needed to launch so so my view is that if you actually drive economic value, I think that you should be able to make enough money on Canton that you don't need to come up with another. Now, I mean, I'm not saying that there that there couldn't be positive outcomes, but I'm just saying that my point is that the builders currently in the ecosystem are generating economic return that allows them to focus on the product.

Managing a token, with a community, with tokconomics, with listing, with all of those things, as you know, Nick, is not a trivial thing. I mean before we start recording you were like asking me about listing and like it's not a trivial thing and it actually does draw a lot of focus from the from the entrepreneur. So my point is I I actually am proud that the people that build on canton can monetize their business and focus on how do I ship better features you know get better more clients drive more activity and I don't need to think about yet another problem set. It's not that I'm saying that you cannot do it, and I totally agree with you that there's potentially a lot of an opport a a lot

of opportunity there, but again, I'm I'm actually proud that that people can monetize by participating in the network without having to have that that kind of additional additional uh distraction. And then and then the last thing I would say that I think again um you know, I I haven't I haven't done a PhD on this, but at least from my experience is governance. And you know at the end of the day I think that one of the things that we've been thinking a lot about uh in the Canton ecosystem is how do you govern a network and for multiple reasons one is if you want large scale institutions to actually participate at scale and again this is why I think you're seeing these

what people call corp chains they're saying like I need to know that I'm building it on a piece of infrastructure that I can actually rely a missionritical business on and that there's going, you know, so so governance, you know, we don't control the foundation. We're actually one vote. DTCC and Euro Clear are the chairs of the foundation. Goldman is on the foundation. There's another three or four banks. There's multiple exchanges and there's a lot of DeFi players. So, you're actually getting a really nice mix of of uh voices there. And one of the most important thing is about the foundation is we see an L1 no different than any other technical product company

like like and and if you want to innovate it means that changes need to happen right like you need to be able to add features take feedback from your community think about how do you create better developer experience governance experience like those type of things. So we made sure that the people that join understand that it's a it's a full-time job to participate in the governance. Uh just today someone posted an X that like they were on the tokconomics subcommittee. the there's a hundred people that dial in every week for you know now two years almost every single week and that's great because you know the feedback loop is much faster as you would expect from a product company that

wants to innovate and stay you know stay you know uh ahead of the curve and that to to me is potentially just as critical if not more critical from some of the technical capabilities of the underlying technology. Matthew, what do you see? Uh I'm do you guys get I'm sure you guys get pitched all the time from crypto companies and crypto founders and uh you know the rivet porter coming into Goldman's office trying to say why you know Goldman should build on top of them or something. What do you see crypto companies get right and get wrong when they're coming in for an institutional pitch?

>> Um I think we've kind of touched on some of it already to be honest. I think you know for us and you know not kind of want to labor the point but I think you know the stuff that really kind of focus you know our attention is is kind of the governance the privacy uh interoperability and I think you know Yaval's talking about the tokconomics with regards to the canon network I think being rewarded for developing applications that we see actually have true foundational value kind of in the financial system these are things that really kind of resonate um and so look obviously naturally keep an open mind, but we we've, you know, found with the council network that really kind of does, you know, kind of offer a lot of what we're focused on. Um, which is why we've been very, you know, keen to

continue to develop all of our kind of DAP applications there. >> Yeah. Are you you guys are building on Canton? >> Yeah. >> What what are you building? Well, the the digital asset platform um is an application on that and then there's things that will be developed in and around that and that you know as we start to think about because I mean really fundamentally where you want to get to is a place where if I'm a kind of repo trader or I'm a issuing equities that you we're not talking about the technology we're just kind of really reaping the benefits of the underlying technology and I think that's the kind of key kind of place we want to get to but you need to kind of replicate today's financial system on those rails which you know easy to say not that easy ultimately to deliver certainly in the

short term. So for us that you know is is kind of um the real foundational you know focus. Um so everything that we look at and you can really you know going back to the first comment I made you know kind of way back when there really wasn't the obvious commercial you know value propositions in many of the things that we looked at now it's very clear where the value proposition is and those are the areas that we're very focused on and in part you know that's because of broader adoption the evolution of the technology but again it needs to kind of go back to those core tenants that we talked about one of the other kind things I'll pluck on you talked about kind of what are some of the misconceptions and I think we touched on them but I always find and even less so probably now but even you

know last year people to continue to really labor the nefarious activity that you see on chains and to me when you look at kind of all these blockchain intelligence companies and the visibility that you get I mean it's incredible the insight and so I really think you know that's a massive misconception that is slowly being addressed and I think yes privacy is absolutely key but you do have great visibility to the activity. >> Um, >> what's the what's the buyin like internally at Goldman right now? >> Yeah, I think very positive. I think, you know, I think, you know, kind of like most financial institutions, it's a kind of an incredibly um, you know, important topic for pretty much all of our client base um, globally. I mean, I was just I've actually been in Hong Kong this week. Um, you know, we we did a

panel yesterday at our macro conference, which is probably our flagship conference in the macro space and we talked about AI and digital assets, you know, quite extensively and the clients were, you know, very focused and interested in that space. So, I'd say, yeah, probably very very focused. Um, and also we're seeing, you know, kind of things like the innovation exemption that the SEC is talking about and kind of the implications on that for the, you know, the the digital native companies. what does that mean more broadly for you know traditional financial players? So you know there's a lot to consider that's exciting as we think forward. I think this conversation is uh is interesting but just to to push some hot takes or to push it to make it more

provocative because you know first I'll say like I'm a believer that it's not permissionless or permissioned these things are symbiotic and there's lots of you know what we call like consortions or permission chains that be have become really critical infrastructure that have [snorts] existed for a long time. So you'd have to be a zealot or an ideologue not to look at ICE or market or the way cards developed. I mean this is or look today at UPI or or Pix and say it's all going to be decentralized or permissionless. So I I like as an investor I think it's very interesting to invest in things like Tempo or Canton and we're excited about it. I also think the like most relevant question maybe to be asking while we're talk if we all

agree on that is what can that approach miss you know what's the downside of talking about risk and regulation and being pragmatic and thinking from the the the the valuable incumbent's perspective and or or you know what are the misconceptions and maybe I'll say things we agree on or not but part of the reason I pushed on sort of you've all about you know new assets not tokens specifically but new assets is because to me you there are a few few big things first you know I think whether it's it's regulators or incumbents sort of this question of like can you contain what's happening on chain and do you look at it through the right framing you know you take Coinbase you can now trade I don't know 300 350

assets directly 20 million tokens indirectly stocks prediction markets per there's um a really different way that the consumer may access financial services that's not consistent with the way they have in the past. And I think you want your chain to you you want your ecosystem to to benefit from that growth if it does. I think you know related to that is like the assets that matter today may not be the only assets that matter in the future. Prediction markets are a good example of this. um you know the more I put these under the more broad broader category of like there's so much opportunity and efficiency and that's what incumbents tend to talk about speed and efficiency but it's it's usually new markets that are the biggest deal the old new you know under underserved customers

um and and then I and this point came up earlier but like the you know you got I think you have to be really careful in a permissioned ecosystem to make sure that we don't think of the audience as humans and institutions but we think of it as machines Um and we imagine you know the the right level the right kind of permissioning the right kind of security models that still allow for the type of experimentation we were talking at the very beginning before the you know before before we started about um everything that's going on with cloud code and these tools. I mean the world the future is going to be weirder than we think. So that that that was a long way of saying like I would push us to say okay we love Canton and you know we gota we got to move at the pace of

regulation but how do we make how do you make sure not to miss >> some of what you said is actually kind of interesting and I think people are naturally kind of going to have to embrace that anyway I mean a 247 market is pretty kind of groundbreaking you know when you start to think about how the financial system has kind of operated you know for decades and as and when you know folks start trading the underlier and we've been involved with secured lending of crypto for example you know you got to have a 247 risk management and that suddenly kind of just changes the whole nature of how the market operates and so I actually think you know kind of one of the points you made around the efficiencies and things I think that's hugely important because you can extract huge value by freeing up

capital and liquidity by leveraging this technology and I don't think you can underestimate that but that's only possible because of the interoperability, the ability to get real-time pricing, you know, and settlement finality. And so that kind of aids all of this and really plays into some of the positives that you talk about. And I think it is self-empowering for, you know, I think wealth management clients are going to be some of the biggest beneficiaries of this technology quite frankly. Um, but I think it does, you know, and it has to be, you know, done in the right way, but I think it will be very transformational in a very innovative and positive way.

>> Yeah. If I if if I may, uh, Nick, and we didn't we didn't prepare for this. I actually I actually think that what you said was the perfect pitch for Canton. I the reason that we chose the name Canton is because we believe that the world is very heterogeneous. And I actually think that in crypto, we kind of were kind of like funneled to make these two extreme decisions. It's either public permissionless or it's private permissioned. And the reality of the world is that it's not like that, right? Right. I think that if the internet had to go in these two extreme uh uh directions, the internet also wouldn't become uh what it is today. So I actually I actually very much I I would say I'm 100% aligned with you. The reason the name Canton is that if you

think about the Cantons in Switzerland, they're not homogeneous, right? They don't even spell Canton the same way, but they all kind of interoperate under one country. So this idea that you could actually create a fully permissioned application like let's say a life insurance company which does exist on kanjon and now I want to for because I decided that from a risk perspective this wonderful thing of stable coins which is fully permissionless have been created and now the thing have matured now there's genius act now I want to be able to actually pay premium with stable coins I don't actually have to choose oh I I I cannot exist on the same rails. So now you can actually compose a

transaction between a permissioned application and a fully permissionless asset. So I I actually I actually totally agree with your thesis that um what we have tried to build and this is why it's taken so long is a rail that doesn't kind of like force a world view on the application or the assets but actually says to the assets you decide what are your properties but you can all compose to each other on one diff on one single protocol. >> Guys as we think about wrapping this up I'm just looking at the time. Um, if this is your first time listening, I would I I hope that uh you guys would go back and listen to the the first five episodes of Quad Quadrillions. They were great. Um, yall, it's been an awesome season with you. And yeah, thanks to Canton for doing this with us. And Nick

and Matthew, thanks for doing this episode. You've all any um >> pleasure. >> Yeah, just closing thoughts. I know I know a lot of people have been listening to every episode and just, you know, have sat with us for maybe six or seven hours now. Any closing thoughts as we wrap up the quadrillion series? >> Uh, no. To be honest, I'm I'm uh super excited about this industry, not just Canton. I I think that we, you know, when you actually take a step back and you just mark to market what is happening from actual activity and you just [clears throat] take back like you don't even need to go five years. I was going to say look back five years. Just think two years back and just think about the sentiment. I mean, if if if if someone could say to people where where we're at right now from a from a real

activity perspective, I think everybody would have said that Bitcoin is probably at half a million dollars. And the reality, there's other reasons why the market is where it's at. But I think that at the end of the day, if we are all believers that this technology should be worth more, that the ecosystem should be worth more because there's utility that is using the ecosystem, then you should be extremely bullish about it. That's that's just kind of my perspective. So when people ask me about the sentiment in the market, I always go and say to them, look at how much utility gets added every day. And that's how I look at this market. I don't I think that prices sometimes are are a misleading indicator to where the industry is at.

>> Yeah, it's a good way good way to end. Yeah, 100% agree with that. >> I love love love being here. Thank you guys. And uh yeah, I just want to echo what uh you've all saying which is you when we at the start of Ribbit, most of the world didn't have access to financial services. And you you fast forward to today, everybody's [snorts] got mobile phones. you have a couple billion new people who have, you know, access to to digital money and the infrastructure underneath is not good enough for where we need to go next and it's not going to happen without the world's biggest financial institutions, the most important, you know, financial services companies involved. And um so it's just like a a hugely exciting and

generative time and uh it's always been to me inevitable that like you know the the the the best the best finance companies in the world are going to be part of it. So to see it coming together with Canton and you know obviously the work Goldman and others have been doing for a long time is is exciting. >> Yeah 100% well said Nick Matthew thank you and you all big thank you to you know Yeah. supporting the show and making this happen. >> Of course. Thank you everyone. [music] >> Thank you.