The Rollup TV: Tuesday, May 13th 🦣

Transcript

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[Music] GM2. Welcome to Mammoth May. Today we are coming live to the world from New York City, the Big Apple. Welcome back, Rob. H how you doing, man? I think we're going to be coming hard and fast today.

It's our first show with guests, so I'm excited. We've got a stellar lineup. Um first one, we're breaking out of the Echo Chamber right away and into the world of robotics. Niels from Aayuki. He had a amazing podcast that we did with Arthur that was super fun. Um we've got Eric from Fireblocks coming a little bit later. And then Nick from Derive, a super exciting Celestia native app that personally I think is a great way to kick off Mammoth May. I'm doing great. It's another beautiful day in Florida. And uh I'm excited to join you up there in the Big Apple here pretty soon. Good stuff happens live, baby. We are we are coming live with a uh robotic appearance in our first guest. So looking forward to that. We're going to jump into the latest happenings on the frontier across

our industry, the lovely crypto which is absolutely pumping, and of course, tech, finance, AI, and money. Uh, welcome to the Rollup TV. And it's good to have you guys back. Second episode, first one with with the guests. The rad's not going to be perfect, but we're figuring it out as we go. Let's rock and roll. Um, and let's dive into Open AI. Here we go. So, I think the first thing to mention here is that Sam started this with Elon and has tried to basically overthrow the Elon super villain his entire career, right? So, now he's appointing a new CEO. That's that's what's happening here. Sam has appointed a new CEO who's really in charge. Seems

like there's a bit of a struggle for power. My take here is basically Sam is trying to be Elon. He's trying to be a serial entrepreneur and he's going to start launching companies left and right, instituting new people in his place, and then ultimately come back in and try to recoup power. Remember, Sam almost got thrown off the board once already. Was this a strategic play? Was this his own doing? Or is there someone else controlling things behind the scenes? What do you think, Andy? Well, I mean what's interesting is that this the Instacart CEO uh Fiji Simo who will become the new Open AI CEO for applications. Uh Simo is already on the open AI board and she'll be tasked with helping OpenAI and scaling the

traditional company functions. Um we didn't really get any details from Sam as to what that means, but people are basically saying that this makes Sam look weak and they have no idea what's going to happen with the future of of OpenAI. Now the other interesting part here is that this is ahead of rumors that OpenAI is aggressively negotiating with Microsoft around an IPO. Um so it kind of poss Alman be the CEO of OpenAI 5 years from now. Um or is you know is he a Zuckerberg who stays in the pocket stays in the driver's seat or is he going to pass the reins off? You know, AI is such a weird moral dilemma topic that, you know, uh people are giving them for

even charging money for chat GBT. So, you know, I don't know. Whenever you have like these autistic gigab brains in the uh in the driver's seat, you know, things are just things are just wonky. Let's just put it that way. I think I think you raised a good point. I think incentives here are one financial of course, but ultimately it's power. These guys are playing the long game. They can see 5, 10, 100 years down the horizon, biohacking and robots come along. Who knows? It could be longer than that. And so ultimately, are they trying to make a quick financial buck that we've seen time and time again? Or are these guys trying to balance the power dynamic for something that could be longer time horizon? Maybe that does mean that Sam's already starting his second, third,

fourth company. We'll talk about world in a little bit and everything that has to do with robotics. Um, ultimately I do see a world where a lot of these companies start to work together. You can already see how Elon is posturing for Tesla, working with SpaceX, working with XAI. All of these things are part of a broader thesis and vision that I think Elon has, I think Sam has, and ultimately these guys are playing not just one game with their particular company, they're playing the long game with multiple companies. And these guys know how to scale, dude. So, uh, I saw Sam and Elon were like Sam wrote to him and was like, "Yo, can we be friends and put like the two finger emojis together or something?" It was they were like on Twitter like trying to like bring bring

it back to life. So, anyway, what's exciting for me is that I've been all in Coinbase stock for like the last two years. I, you know, if you guys know me, I you know, I did pretty well in the 2021 bull run. Bought a house, got some gold, decided to just full port my stocks into coin um down there in in the bare market. So, I'm very bullish today. Coinbase is up 25%. I I believe I'm euphoric. It's a good day. It's a good day for the industry. This just marks like this is like the moment of um how big crypto has gotten that is now inevitable that this is going to be more. So like my take here is is Coinbase the first of many? Yes. Like I think that there will be more and more

crypto companies joining the S&P 500. Coinbase obviously being the clear leader, but there's a lot to come. And so for me in my portfolio right now, I'm excited about this. I support Coinbase. Um, stock kind of got beat up in the last three months, but absolutely flying right now. My target's a thousand. Not financial advice. I love Coinbase. Oh my goodness. One day, Andy, you're you're toing stable coins. It's a terrible intermediate step towards a global reserve currency. Next day, you're buying stocks and and euphoric about the Coinbase IPO. One one day we'll dude, but you're not all in like I You're probably holding like the typical S&P or I don't even I don't even know if

you own any stocks. Wouldn't that make me more all in? Oh man, he still has still has some things offchain. Look, get like the rest of us. I thought you were crypto native. Yeah, I I hear you, man. I hear you. So, look, I'm going to hold that stock for a while. Um and uh I'm excited to see how how that goes. I still want to say about about the Coinbase stock here and and I know we've we've got a new segment coming up on AI, but I I do think it's worth mentioning that, you know, we've we've long talked about how uh the the core use case is something that's going to look invisible to the end user. Well, you know what? Anyone who owns indices in in, you know, their brokerage account now has crypto running in the back end.

It's invisible to the end user and they own it. I think this is this is absolutely going to be a a pioneering move. They're going to start a trend. There's going to be more companies that from crypto join the S&P 500 and I think they're all going to work together. You you can see how Coinbase is going to start to provide services to other companies in the S&P 500, Black Rockck, uh uh Stripe. This is just the tip of the iceberg. And I I'm particularly excited for how we're going to see the combination of tokens and stocks and equities. I think Coinbase will launch a token at some point and what happens on the public markets and and the stakeholders when that happens I think is a super super interesting field to

explore. Yep. Yep. Like I said, coin to a thousand. I think that you are um you are further making me bullish. Um so we're going to talk about air good good spot for the Coinbase airdrop. Yeah, I mean I'm not sure that's ever going to happen. Imagine if Bass launches a token. That would be pretty wild. But we'll see kind of how that how how how that one plays out. We've got an interesting new uh pope here. Um and they are there is a once in a-lifetime event effectively. Uh which is a new pope. Um and there was white smoke from the uh what's it called? The the it starts with a C. There's like the

C caval or something. Yeah, there's a movie about it. I'm not very religious to be honest, so I'm not sure. Did you go to Catholic school? Yeah. Two years. Didn't do too well there. [Laughter] The conclave. The conclave. We saw white smoke coming from the conclave. And I think what you're trying to get to is that there was one mission, one core mission that our new Pope Leo has in mind, and it's around AI. And I think one of the reasons that he chose the name Leo was a throwback to a previous pope, the last pope Leo who was around during the time of the industrial revolution. And there was a lot of lites maybe in the Catholic church. They want

people in church praying. They don't want people working in factories. There's a fundamental divergence and divide here when it comes to the cultural the cultural scene. And Publio sees that coming again with AI. So he named himself Publio. He talked a lot about AI in his speech. I mean, when you see AI taking this this level of center stageness in in the public eye, what what do you make of this? I mean, it just throws me back to how Trump originally decided his tariff policies, right? He was like, look, we're going to, you know, take the square root of this and that and, you know, we're going to divide the exports by the imports or something and and we're going to, you know, have a this is our tariff policy.

And then you ask chat GPT what the tariff policy should be and that's what it is. And so my like this guy signal here has some super good takes about it. How um effectively we are in the in a world here where the pope is basically like he makes a joke about A16Z being that you know the pope has his name after some sort of like AI uh you know setup here. And so our new Pope Leo is concerned about AI saying Pope Leo um you know he's he indicated on Saturday that his papacy would would follow closely in the footsteps of late Pope Francis telling church cardinals that they should take

up the the precious legacy and identifying artificial intelligence as the main challenge for human dignity. What what do you take away from our boy Signal here as far as his thoughts on on on this particular matter? Well, I think it it's important to note that this guy is not some, you know, religious fanatic that is not well read and not academic. He's got a math degree from Villanova. He he does comment on the church, the church's moral authority and its academic strength. And I almost think about these religious groups as their own sovereign ideologies. You can think about American nationalism, Chinese nationalism. Well, we have Catholicism

and that is once again another ideology that has a significant follow follow following just like a country has its citizens. So for new Pope Leo to comment on the nature of AI in in this the evolving way that it is right now, you know, I I think ultimately he has his finger on the pulse. He knows that this is going to be a a a trying time for society as a whole as we start to grope with these these new progressions, right? So, if if we're going to be moving in this direction, right, I think the question is, will AI bring us closer or farther away from

God? I think that is the church's question here. And I think, you know, there's a there's a real push whether that's going to happen or not. But ultimately, I think, you know, we can use these tech these powerful technologies we can use for better or for worse. We can use them for good or for evil. And I think the church is going to be primarily concerned with using these technologies for good. They've obviously got their own ideologies. They're going to want to see the technology used in a certain way. And I do think that, you know, if we have knowledgeable people in charge of these these ideological functions, they're going to be able to guide their constituents in such a way that they understand the technology and and they they utilize it and leverage it for their their own purpose. And I think in

the church's case that they're going to try to use AI to get people closer to God, whatever that may mean. Um I I'm curious to see how that's going to happen. And ultimately, I think everyone's curious as to the pace at which this is going to happen because the quicker this happens, the more shocking it's going to be for society as a whole to try to adapt. How does the church tie into the USD? How does the church's AI abilities tie into the USD's world reserve currency? Well, here we are. I I I think I got an answer for that one. And it's ultimately, I mean, it it's indicative of corporations as a whole. It's, you know, why have sovereign nations been the only ones to launch fiat currencies?

Why is the church not launching fiat currencies? Why is Meta thinking about launching a stable coin? I think we're going to comment on that a little bit more in a bit. Why is why is Meta getting in into the currency game and not the church? But the US dollar is the world reserve currency and we have banks soon. States in the United States are going to be launching their own stable coins. We have world liberty obviously sponsored heavily by the Trump family is going to be launching a stable coin. This and I think we'll get into this as well with Niels who's going to be joining us in a few minutes. The concept of hyper localism is something that he talked about on our last show with Arthur and I think he talked about it in terms of robotics and compute and why

it's going to be possible from an energy standpoint will have the power to power these hyperlocal uh robots and and economies. I do think we're going to see hyperlocalism further entrenched into our society. We're going to get hyperlocal currencies. And what is that going to look like? Well, it's going to look like Meta launching a stable coin. Maybe it's going to be looking like the church launching a stable coin. I think we're going to continue to see these patterns perpetuate. These like tokenization things are like on the last podcast here in New York with Yela, we talked about this as well. And I mean our fund we even just invested recently into into a company Rob that um you know is is doing like is bringing like the web3 payment rails to restaurants and

they already have a ton of these uh in Asia and and they have some of the biggest brand names that they're you know you know your McDonald's bucks right like these are kind of things that that that are starting to come about with with regards to the world reserve I think people overreacted so heavily off of the tariffs um in terms of all markets. But what what I really think happened here is that Trump basically rolled a snowball that is now unstoppable in the sense that it is clear that there are ways that political leaders can jeopardize the stability of their long-term currency or trust in their currency. Um and that that can't really be taken

back. And so my thought here is that we overreacted and the whole world overreacted to the actual consequences and and problems that would come with these tariffs. But what people are I think are underestimating is the the erosion of trust in politicians institutions happening more broadly. Um, and so I think that's the only question here with regards to the USD status more so than uh whether or not it it it'll be kind of taken down. So I I agree with you in part and I think the part where I agree with you is the erosion of trust in politicians. I think that has been a

trend that's been happening for quite some time and I think that's why you see a rise of Trumpism, populism. Ultimately, we had the Democrats fall into this very bureaucratic party that ended up becoming almost like this this uh Goliath of government. Everything was so it was such big government, such uh slowmoving ships that we weren't there was no pace of innovation. And so we saw the rise of populism because where people were fed up and and there was so much of the blob the governmental blob that was happening behind the scenes. No one really likes that. No one really likes the fact that things are happening in the shadows and we don't see it. So now we have the rise of populism. Trump is the populist president. We're going to continue seeing that. And I do think

the part where you know we we may separate is that they're going to see the stretch into multiple industries. We talked about stable coins. You have the erosion of trust in the dollar. Well, so you see alternatives rise up, whether that's an, you know, an an Apple stable coin, a metastable coin, or Bitcoin, or a Pope stable coin. Apple has already got enough cash that they're one of the biggest banks in on earth. They're one of the biggest, if you just take their cash holdings, they're one of the the biggest uh GDP producing earners of the entire world. So I think ultimately we're going to see more and more of the fundamental proliferation, the entropy of innovation start to reach the fringe.

And and you know I'm I'm very very happy to welcome our friend Niels back to the show. Uh Niels is up now and he was talking about hyperlocalism on our last podcast which has been a concept that's really stuck with me. Um, and as we as we sort of explore these topics of the erosion of trust in politics, in in um in in uh in financial systems, in the market as a whole, we're going to start to see localism continue to accelerate. And ultimately, I think hyperlocalism is where we're going to go and and and that's where we're headed.

It's just a matter of time. Yeah. So, we have the the rise of robotic money. So, today I think what was really really really cool from Nil's recent post was this uh this robot that is going to go on a flight or perhaps it was a flight attendant or even a TSA agent. We're going to talk about that. We're gonna we're going to roll him in here. Um Niels, you are in the screen. Welcome to the Rollup TV, man. Good to see you. Good good to be here. Thanks for having me.

Sound is crisp as always, man. And uh are you in Hong Kong? I am. Yeah. Greetings from uh Hong Kong. It's May 14th over here already. That's how fast Asia moves. What can I say? And Bitcoin's got to be at like 200K already, too, huh? No spoilers. Oh, man. It's still May 13th over here, but we're happy to see you. And uh we've been we've been really really excited about this new trajectory for the rollup TV and and this new trajectory that it seems like the world is on. You helped open our mind to to the concept of hyperlocalism, everything that's happening in the world of robotics.

Maybe you could start by just giving a quick catch up on, you know, where where things have gone um since our last episode. The China US trade war started and ended since our last episode. maybe you could catch us up on everything that you're seeing over there in Hong Kong. I don't know that it's it's ended. There's a 90-day ceasefire, right? But uh I I think um the US has recently had a bit of a wakeup call that for the first time really since World War II, the US is not the clear winner in a very important uh area of tech. Now, I would argue that China is actually

meaningfully ahead uh in this particular area of tech when it comes to robotics and machine perception. Uh but you don't have to grant me that. Uh you you just have to admit that for the first time it's not super clear that the US is on top. And that hasn't been the case for anything really since World War II. And I think that uh this is largely what the trade war is about that the the new administration wants to uh force as much um industry to come back to the US, manufacturing to come back to the US because Shenzhen, this city just across

the border here in Hong Kong is the number one place in the world for making hardware products and it's not even close. Um, an anecdote I shared last time I was on, right, was as we were working on a on a robotic product of sorts, we needed a a special camera, uh, a camera that has never been made before. You know, we couldn't find a vendor that had a a camera with these kinds of characteristics. and we could get a oneoff made of this camera for just a few hundred bucks and it would it was on our desk uh you know within a matter of days less than two weeks um which is you can't iterate on hardware at that speed uh in in the US or really anywhere

in the west and what this means is that you know robotics is of course it's partially a software race but it's also a hardware race and if push comes to shove And it's about who can make the most drones, who can make the most robots, China would win that today. And if you don't understand why that's a big deal, you have to uh not just look at the economy, but also look at what would happen if action capacity like German tanks may

have been Americans could make 12 tanks for every one German tank. tank. If you look at those numbers now for navy, you know, like maybe American ships are better, but I've seen numbers as high as China being able to produce 90 ships for every one ship that the US produces. So getting production capacity back to the US is very important and I I think that's really what the trade war uh is about. Yeah. So with this accelerated timeline here that you mentioned and just accelerated speed of development and delivery specifically from China, what's your what's your ETA for humanoid

robots in you know my house in everyday homes? Is this like a fiveyear plan, 10 year plan? You know when when will I have like a little robot assistant? Yo, Niels, I think you need to refresh

your your other browser. Sorry about that man. Yeah, cool. And while while you're getting that going, I I think, you know, you're you're putting together a a a picture here of so many more robots and you're also putting together the the the rationale for why it's necessary to have production capacity, not only in the states, but for any country that wants to be independent with its national security, it's going to have to have production capacity, and it's going to have to have robots to man that production capacity. So, you're you're talking about the scale and the level at

which we're producing these robots. Please pick up pick up where you left off. The the best cell phone factories in China can make one smartphone per second now, right? Like they're they're on a whole other manufacturing game and we have a lot of catching up to do in the West if we want to be able to outproduce um in terms of quantity. But honestly, also for quality, I think uh the the meme that China creates cheap knockoffs has been very slow to die. It was many years ago now that Tim Cook of Apple came out and said, "You don't go to China for cheap manufacturing anymore.

You go there for the best manufacturing." But uh you know, the the meme that China just makes cheap knockoffs, that's still hanging around from the 80s, 90s, early 2000s, but that's just not the case anymore. Um, Chinese cars are very, very wellmade, right? Like, yeah, this just is what it is. Like, those are good cars. Uh, they're they're they're not cheap, rickety cars. Uh, a fun thing here here in Hong Kong, a Tesla is an UberX, right? Yep. They all are Teslas there, man. Yeah. Nils, what quick question for you. Do do you think like you know you you brought up

the national security concern of a lack of production capacity? Do you think that is still as high a concern given the ceasefire that you know we have in the trade war right now and sort of the friendlier tensions between these two? Do do you see that um sort of tension starting to subdue and and do you think it's as still as necessary to have the level of production capacity that that we're talking about? I don't think that China is a military threat to anyone in the West.

Um like I I don't think there's any reason for anyone in the West to be afraid of China. I I don't think China is on some imperialist bent want to go out and and conquer and impose their will and be colonialist or any of these things. So, uh it's you know a little bit since the US does want to engage in some soft forms of colonialism and imperialism etc. uh they have wanted to be the absolute uncontested military power uh and have been since World War II and we don't know what the world order will look like if the US is not an uncontested military power. U if someone could say actually

no it's not cool if you do that and if you do that we'll stop you um we don't know what that world looks like. No, I and I think people are kind of scared um of of of that and of just like robots and humanoids in general um where you know you see these these movies from back in the day that that kind of freak you out and and you know you like I I think I saw something on um Aoki's page about um your robots in supermarkets like like that's just got to scare the out of people you know you just like have a robot running around in a supermarket. You also had this this uh one on the that you were suggesting would come on the plane, right? So maybe

you could just like talk us through what's going on there. Like are you bringing robots on planes? Like isn't there an explosive risk there? What's going on here? And what are they doing in supermarkets? We are kind of bringing a humanoid robot on a plane. It turns out that it's very very difficult to travel with a humanoid robot. um especially when there's a trade war going on. Uh I don't I don't want to uh name names cuz I don't know if they want this to be public, but you know, a partner project of ours with a similar robot uh had the battery for that robot uh seized in customs. So, they're still, you know, just the battery. They're still waiting

for the battery. Uh we've been warned that uh just the hands of the robot could be seized. Uh it's it's not easy to travel with these things. Uh what we're going to our humanoid robot has been invited to come speak at a conference, which is cool. Uh but what we're going to have to do is we're going to have to get a replacement body in the United States, transfer the software to this replacement body, even though they're not fully the same make. So we know like we're not entirely sure how how well this will go and then uh bring the cosmetic pieces of the robot like the chest plate etc that makes our robot look like our robot and you know kind of assemble that in in uh in the states

because um yeah we don't trust that US customs will not just seize our robot. Wow. Wow. And when you're when you're talking about transferring the software from one robot to another, you know, we have this concept in crypto called interoperability. That's sort of the impression that I get from talking about robottoroot transferring of things. You know, maybe every robot still has the functionality of an ears and an eyes and a mouth and they can, you know, perceive digital and audio uh excuse me, video and audio information and and therefore respond to it in real time. But when we're talking about, I want to call it subliminal robottoroot communication without

anything that's really happening out in the open, what what kind of I mean, is it email, Bluetooth? What kind of technology underscores the the robot to robot communication? Uh robottoroot communication is very rare today. Um but uh a friend of ours uh six who is working on uh fighting robots uh like boxing robots had this great quote that a robot is really just a Linux server on legs. Um what kind of true actually like if you if you look under the hood software wise of what's inside a unitary robot like there there's a Linux server in there um robots don't have an app store you know so if if you are not comfortable you

know programming a Linux server you're not going to get your robot to do stuff um there is no good robotics operating system today like that's a a a huge opportunity uh you know that we're hoping to be able to seize on with AI down the line. There is something called ROSS, the robotic operating system. Uh and uh I say this even though I, you know, know some of the creators, the industry consensus is kind of that that's a flaming bag of dog It's not easy. It's not easy to build on. Um it's just, you know, the open- source thing that's out there to get started. Yeah. And some of the better funded robotics companies now uh

in web 2 at least are starting to look at how can they build a robotics operating system which I think is absolutely a huge opportunity. It's just not cheap to build an OS. You know if I was sitting on $und00 million in the bank I would start building today because I think it's almost certainly the case that 10 years from now the OS with the largest install base in the world is not going to be Windows. It's not going to be iOS. it's going to be whatever is running on the robots because uh regardless of if they're humanoid robots or not very very soon um buying robots will be as common as buying automobiles and I think within 101 15 years the average household will spend more on robots than they spend on

cars. I'm I'm I'm somewhat um unimpressed by the the current design that we see in the robotics. And I know we're just scratching the surface now, but I it just seems so obvious that, you know, we're going to be putting these robots to work. Why not give them three arms? Why not give them, you know, another leg, another arm, another hand, like you know, more fingers? Like why are we stopping at humanoid, right? When we can with this technology go beyond this and improve the balance of this technology. I think most of these are proof of concepts and Nils I I I I do want to ask you cuz you know I think we're running up on time here pretty soon. It's been a absolute pleasure. You know I think a lot of people you know maybe boomers friendly friendlier term

is my mom and dad. You know they want to know like why are why are robots really coming for their jobs? And if so because we hear this all the time. What are like what are the three things that people in the in mainstream industrial jobs today, what can they do to prepare themselves for the robot invasion and ultimately help them keep their jobs and not be uh replaced by a robot. Invest in your sense of agency. I think in an age of abundance in in many ways, you know, there's a abundant cognitive resources, perhaps even abundant

physical labor. Uh what is going to help you succeed is having a great sense of agency, the the belief that you can get things done. Like I believe it is the case today already that everyone can ship an app, absolutely everyone. And if you are not shipping your dream app today, that's an attitude issue. It's not a skill issue. You literally haven't tried. Like, dude, just sit down and tell the AI what you're trying to do. No one stopping you. You You could make the next top three app on the iOS app store.

You absolutely could with no technical background. Um, the reason people don't is, you know, they don't believe in themselves. They don't have a sense of agency. invest in your sense of agency. Teach your kids to have high agency. Um because yeah, like when when when when cognitive resources and physical labor become abundant, they're not going to need you to do low agency things. Like no one's going to hire you to do low agency things, but there will be more opportunity than ever in history to do high agency things. So, the nose, what would your 10-year-old self say if we told them that you were building robots for a living?

Will they be able to play computer games with me? Probably. Uh, and that that did come very very quickly. It is tricky to, you know, know if you're on the right side of history or not when uh working on technology that can take a lot of jobs. And one of the things that helps me sleep at night and look myself in the mirror is trying to apply AI and robotics in service of people that don't have such a great time in the workplace. you know, like creating AI tools that make it easier for people that work in retail to be good at their job, uh, I think is a lot

more meaningful to me personally than making AI that makes rockstar programmers be even better programmers. Yeah. Yeah. And um, do you do you think that there's any specific country that's going to have the majority of these robots? Is it going to be China? For sure it's China. Like anything else is just massive cope. Um, it is the case today that more than half of all robots in existence on the planet are on Chinese soil today. Like that is a medical fact. And more than half of all robots that were sold last year were sold to China. So the gap is widening.

Like it's not even close. We're we're not playing the same game as China. We have so much catching up to do if we want to be a a runner up for this. Um, like I have a humanoid robot. You can buy them here. You have one in your house. I I will go show you right now. I can switch my camera. Please show us the humanoid robot. Yeah. Yeah. Hold on. I would switch my camera in the other window, right? Yeah. Yeah. All right. Niels is going to be back with his humanoid robot. I've only seen these with uh with like the the Boston Dynamics.

Uh we're still waiting on it to come up. So, we're getting a live look a live look at a Chinese humanoid humanoid robot. Humanoid robot. All right. Neil, can you switch on the other uh thanks? Yeah, we we All right, we got you. We got you. You're live. All right, so we're here. All right, at the Ali Labs lab. We got a fake grocery store here.

And right there is my back. That's what it was. What is this? North Korea. Yo, Terry. Terry hanging here on the sex swing. Wow. Power down. Look at that. What is Terry doing? He's a short king. He's a sexual robot. Uh yeah, he's not very tall. He weighs about 50 kilos. I am 6 foot for comparison. So he's he's a short boy. Uh 51. Yeah, he looks about 3 4 feet. That's Wow. And he's got What What can he do? I mean, maybe next time we'll get a live look when Terry's feeling a little bit more awake. Dude, he he does absolutely nothing. Like, you have to be able to program him. Uh, when you buy him, you can only remote control him

using this controller, right? It's like an Xbox controller. You can walk him around. You can make him wave. You can make him reach his hand out. That's about it. If you want him to do anything else, you you'd better be comfortable programming. H NS how important do you think video game players are going to be when it comes to piloting the next generation of robots? So that's a very very interesting question right because there is this idea of having teaoperated robots like robots that are remote controlled rather than autonomous and you can remote control robots today with like a VR headset and special gloves and

and things like this and what's interesting with that is in theory you can get um you know cheap labor to do work in expensive countries, Right. The only real limiting factor is latency. Uh like the speed of of internet signals because if you're swinging around, you know, a robot arm um that has the power of a baseball bat and you have a latency of 100 milliseconds, you're a liability, right?

So um finding low enough latency teleoperation is a challenge. But in theory, you can have cheap labor in Indonesia perform work in Singapore for example, you know. Yeah. So, yeah. So, that's the breakthrough there. That's why it's be it could be better than autonomy in the in the interimm at least is that you can have these like scaled labor or scaled supervision effectively from wherever. Yeah. So that already happens with service robots today in uh hotels and stuff where there are robots with like human style arms and hands that can uh clean toilets, fold laundry, etc. But they do so with teleoperation.

So you know there's a worker like in the Philippines or something uh that is using a robot body and a VR headset to clean a toilet at a hotel. Like this can be done there. Neils, last thing for you and then we'll let you go. Who do you uh who do you look up to in the robotic space? Um and you know, is it are Tesla robots something to think about as being big and worthwhile or is there is there uh is there better? I I I think that Tesla robots are not much more than a PowerPoint. Um I I don't you know I can touch this robot. It's it's it's real.

Uh, I I will wait to see what Tesla actually produces, right? When they sell a robot, I'll pay attention. But, um, Boston Dynamics are obviously the the OGs of robotics. Uh, they're fantastic. There are many, many really cool uh, Chinese robotics companies like Engine AI and AGIB Bot uh, that don't get as much attention in Western media as Unitry, okay? But they're fantastic. So check out EngineAI and AGIBOT. Those are those are really really great robots.

Awesome. N thank you so much for joining us, man. It's been a pleasure. Thanks for calling in from Hong Kong. Great to have you on and looking forward to coming out there. I think I'll probably be out there in September or October. I would love to come in and and check it all out. Do a podcast with Terry, man. Oh, let's do it. I'm so down, dude. Absolute pleasure, Niels. Thanks for coming on. See you. All righty, man. That was crazy. We got a live look. First guest ever. Guy takes us into his robot factory for looking to Terry the sex robot. The fake the fake grocery store employee. Well, so that's what the supermarket was, right? I saw my super and I saw him on the plane. I didn't realize that. So they're training that robot on the supermarket basically and then they're

they're using the the fake supermarket to basically, you know, stage a real environment. So anyhow, up next we got our boy Eric, an institutional um capital custodian from Fireblocks. Um Eric is going to talk to us about what he's seeing on the inside edge of the institutional crypto markets. There's a lot going on. Markets are absolutely ripping again today. I think it's clear to say that we're in in a bull market. Um so looking forward to having Eric on. Let's bring him up.

Eric, welcome to the show. Good to see you. Hi everybody. How are you doing? Hey, doing well. My bags are pumping. Uh, can't complain. Coinbase doing strong today. Everything else as well. You uh, very good. Very good. I'm I'm excited about what's happening. If you don't mind, where are you calling in from, Eric? Uh, from Spain, actually. All right. Well, thank you for joining us in a nice evening in Spain. I hope you uh hope you've had a good day and yeah, Eric would just love a quick intro on yourself, man. Uh who are you and what what is your role at Fireblocks and and what is Fireblocks? Yeah. Okay. Uh so I'm Eric Galanski. Uh I'm the VP of technology at Fireblocks. Uh been in

engineering like startup land for the past uh 20 years or so. Uh kind of giving my age. Um, and I lead the technology research at Fireblocks. So, so you actually brought the geek into this conversation. Maybe you That's what we're here for, man. No, no, no. You you brought the tech geek. Um, so yeah. So, and and maybe maybe a few words about what Fireblocks is. Uh, because I think Fireblocks is in this unique place like you know, everybody knows who Coinbase is and everybody knows like Ethereum and Salana. But then Fireblocks in some parts of the ecosystem we're like the most well-known company. Everybody knows Fireblocks. Uh but the biggest name and in some other places it's like

Fireblocks uh can you explain what you do? Um uh so so we are basically a a provider of infrastructure for institutions to build on the blockchain and to use the blockchain, right? So there's like we have different kinds of uh uh companies that use us. It could be all the way from like the serious banks and like the financial institutions, Treadfi, um going to like different exchanges that use Fireblocks, fintexs that use Fireblocks and all the way to just investors, right? Like very big uh uh uh uh hedge funds and uh prop funds and all of those different uh investors in crypto. So, some companies use Fireblocks because we provide them with

a very safe institutional environment for using the blockchain and a lot of other companies use Fireblocks because we help them build on the blockchain without having to deal with all of the nuances and complexities of building on the blockchain. Um, and I think I think to some extent we facilitate their path uh into adopting this new world, right? Because I think it doesn't happen in a in one go. It's not like you go from traditional finance and in one day you go fully digging. Everything is on chain. You use all of the new cool things. It takes a lot more time and actually in a good way because like not everything new we have happening in this ecosystem. You actually want people at like you you don't necessarily want your bank to be the most dig actor on chain.

So we go the path with them allowing more and more interaction in the places that make sense to them and supporting them with basically anything they need to to build. So when we're talking about the institutional wave, we've been hearing this since 2018 and the institutional wave has been coming. It's been happening for quite a while now. What are you hearing from institutions? What are some of the things that they're saying on a daily basis that they're talking to you? What are they looking for? What do they want? What do they need in order to enter into this space? And ultimately, are they satisfied? Do they have the things that they need or are they continuing to look for more?

What what are some of the things that you're hearing from the institutions directly? Right. Yeah. So, um yeah, they have been coming for a while and I think it's important to understand like we see the announcements, right? Like, uh Stripe giving a huge announcement uh u a few days ago. It does. It's not like a week before that they were like, "Hey, we should do crypto and then a week later they're like launching something, right? It's like years in the making. They bought a company that worked for years on this, right? So like there's there's been years of work where people were like the institution are coming but nothing is happening." That was kind of the vibe uh in a lot of places. But people were building uh right like uh companies were exploring some companies

like wanted to understand the ecosystem better understand the technology better so they were building up teams they were investing in research they were trying to p their use cases some of them were going faster some of them were going slower and also in a lot of situations they were just trying to understand what are the use cases that actually make sense uh um like over the last few years a few use cases emerge as kind of like more victorious over others Right? Like now we see that uh um everything around stable coins and payments has been getting a lot of traction based on many years of companies experimenting with payments.

Some of our payment clients have been working with us for like 3 four years now. uh but some of the biggest releases are happening uh uh now and will continue happening right because there are still quite a few big companies that we know work in the space like we see Visa they're doing a lot of things in this space we see Mastercard they're doing a lot of things in the space American Express like everybody's doing thing in this space uh but each one is kind of going their own tempo and and and releasing uh the use case as they see you know as they see it evolve u and over time yeah go ahead No, I was just saying you have a a very unique perspective on on like you know seeing things from kind of like a whole different lens than most people get to

see them in terms of crypto at least. Yeah. Like one one of the real luxuries we have at Fireblocks is we're connected. We have like more than 2,000 clients nowadays and we're talking about institutional clients, right? So like talk to them all the time. Okay. I was I was going to ask this, but I I didn't know how to ask it, but since you brought it up, who are some of the craziest people that you're in group chats with or or doing business with or clients that you think are are really interesting? Now, so first of all, obviously I cannot say anything about companies that are not launching things or not saying things publicly. Uh um but like think about like think about the fact like we've been working with Bridge for a very long time, right? So like those kind of things like they evolve

into like the big announcements by the huge company but like uh but yeah we see those things earlier like again I I have to say you brought the geek so like I was very excited to meet a guy who's like very deep into smart contract wallets but then I see him talking on like postquantum cryptography in a different place you know like that's that's the craziest people I meet most of the time. Uh um but yeah coming from a slightly different different direction. So, so Eric, I got a question on the tech like you know, you you see a lot of these uh traditionally blockchainbased companies like a bridge um and and you see them sort of ex they exit to these larger companies that end up acquiring them and and look to

incorporate them into their technology. How plugand play and taking maybe Stripe for an example, how plugandplay is Bridg's technology with Stripe? Is there a lot more work that has to go into it to ultimately integrate it into their vertical stack? How do you see these things progressing and what other work has to go into it so that we do get a more robust mature ready to use system? Yeah. So I I don't want to talk about them specifically obviously right but like if we take it to the generic case so first of all I think we're going to see more and more of those uh M&A acquisitions because companies have been so like initially the companies building in the blockchain space were very

blockchain people right but over time we saw more and more companies that have this mix between the blockchain people and the traditional finance people they they understand the traditional financial world but they also understand the technology that this needs to be built on and they iterate with different ways of solving these problems. So when you acquire a company that has been in that middle for a while, first of all, this company has a lot of expertise by then and they know how to talk your language like the language of the acquirer in this case. So they've been basically building towards this opportunity towards being able to be integrated and we already have those paradigms, right? So like when everything started there was like one company doing everything but now there

are companies who are doing like uh on-ramp and there's companies who do off-ramp and there's companies who do like the AML and security stuff and there's companies so like there's actually categories so you know what you're buying much more than just like those crazy guy that know some technology. Uh so I think a lot of work has been done to make those integrations actually uh um easier and better. Yeah. And also I think it has a lot to do with uh a lot of the blockchain companies understanding the regulation space and and Eric you've you've you're and you and Fireblocks are in the spirit of this entire show. The roll-up TV is all about breaking out of the echo chamber, building a bridge between the

traditional crypto blockchain based companies and those on the real world, the the ones that are end up acquiring something like a bridge, right? And so you guys have been able to cross that chasm. What advice do you have to founders and builders that are looking to get acquired right now? They're building in crypto and blockchain. What do they need to do to prove to the large companies that they could exit to that they're worth their their weight and salt and they have the technology, the product and the team to ultimately get acquired and make a successful exit. So I think a lot of these kind of acquisitions there are based on like the relationship that has been formed while the company was operating independently, right? So like you basically need to do

something that's very useful to those companies before you will not just get bought because you have very smart people, right? Uh uh so I think a lot of the thing that you don't see necessarily in in the lower levels of the blockchain ecosystem is talking to a lot of clients, understanding their actual needs, understanding those companies like their needs are different, right? as an ecosystem in crypto Twitter sometimes it sounds like we want institutions because we want like price go up but we don't want institutions right like even your conversation last time stable coins is it good is it bad we're not sure right there's a lot of debate about this but if you want to serve those companies you want to help

those companies uh and be acquired by those companies you basically need to understand that it's not a uh black or white situation that there's a lot of really good people in those companies that want to make the world better. Um, and they will use this technology. It's a permissionless technology, right? They will use it. We will not stop them. Uh, uh, unless if we really as an ecosystem stray away from what we actually wanted to do, uh, with the permission ecosystem. Um, and so what you need to adopt is the mindset of okay, so how do I help them help them uh, kind of take the path without forcing my opinion on what should be the end state? uh if right now what they need is things that

help them solve compliance uh requirements then just ignoring it and assuming that someday compliance will not be an issue is not helpful for them. So like you really need to meet them where they are and hopefully take them a few steps forward. Yeah. Yeah. I feel like one important aspect of that of that specific point is around like you know what you guys do at Firebox which is custody right and I mean amongst other things but I feel that our terminology one like the word wallets for crypto is difficult to understand I think like accounts may be a better way to think about it but even just the actual infrastructure to own crypto right like what we have is essentially these multi-IG wallets these multi-

signature wallets that helps us to um you you know, securely have like this like social social sharing effectively of security. Um, but but I'm I'm not sure that institutions really can grasp their head on this or really back their security on this, you know, their either client funds, customer funds on something just like a a Nosis safe or a safe wallet. So, what are you guys doing on the wallet side or on the on the custody side specifically that institutions are giving you guys the thumbs up for like like how does that work? Yeah, that that's a that's a great question because I really do think the word wallet is like way overloaded by a lot of people doing different things in

the space. Um, so I think the average user when they think about institutions, they'll be like, okay, I hold, I don't know, if I'm lucky, I hold a 100K in some cryptocurrency, right? Great. I understand how to run this, but also very likely I'm holding 1K. Um, but then there's this other company and they hold a million or 10 million or a billion or more. And I just assume it kind of translates similar because who cares? The blockchain, it doesn't matter, right? It's a few bits and your Bitcoin account is either this or that. What's the big difference? But when you start thinking about the actual company, right? Like the bank does not have this one person or three people that if they

agree, they can just move all of the money, right? It doesn't work like that. uh and more than that even if it did is it possible that the same people will want to make the decisions for all of the different flows. So let's say I have a company it has has a thousand people working for it and now I need to do a server upgrade. I'm not calling the CEO and the CTO to like approve an upgrade to some machine, but then also call them when some trader in my company wants to invest 50K in some coin, right? Or even 10K or even 5K, right? So like I we need different people having different roles.

We need to have flows between them. We need to have different wallets that they manage where some wallets are more for the operational side and some wallets are more for the like custody of long-term funds called wallets and then there's like the flows that move money between them and then there's user wallets that also need management that but they need automatic management. I need like to create user wallets via sc like backend work, right? So like there's this entire construct of a company but then we kind of like okay it's a wallet. No, it's like there's it's again like a lot of people love to compare this to AWS where you start working on on your project and you're like I just need one server. Who needs more than a server? Like it can hold

multiple programs. But then I don't know a couple of weeks later you have like 10 servers and then uh if you're a company and you have a couple of years suddenly you're like why do I have 3,000 servers? And it's like okay this service scale and this service is like you know like it becomes really complex. Um, and in in the blockchain space, you take all of that complexity of a company and of all of the things we understand from software and on top of it, you put the financial risk of everything, right? Because blockchain is all about the financial uh acts. You move value around. So now if you have some admin they have access to funds uh or some funds or maybe they have access and

you're not even sure like permissions in organizations are hard. So what we provide them as a technologies we basically provide them a lot of different things that allow them to manage this could be chaotic thing but also could be very structured organized thing. Um where there's ways to create wallets, there's ways to move funds between wallets. It can support multi-chain. So again, like if your organization and you build up your permissions and then you decide I want to launch another blockchains, you don't want to redefine everything. You don't want to launch the new wallet and then all of the permissions and then update and then somebody left your company.

Okay, now we need to update 15 blockchains on the permission model. So like there's a lot of different things that just don't work when you're trying to simplify it to the lowest level. Um so what we do is we give them all of the different layers they need whether if it's connecting to other services that can provide them things like uh you know like regulatory oriented the checks uh uh whether if it's connecting to by the way to a lot of our partners also for things like liquidity and you know other financial operations but also all of the technical infrastructure to just do it in a secure way. Um and there's a lot more to it but like I'm not sure how deep we want to go into the tech. Yeah.

Yeah. No, I mean on the tech side, I mean I I I appreciate that mental model because I I was kind of trying to understand how right because you've got these multiaceted organizations, you've got different risk parameters, you've got different teams within these organizations for certain um you know operations and so bringing that together and bringing then bringing that on chain seems challenging. So so I appreciate that. On the tech side, what I'm curious about is like what are these what are the institutions that you're working with most interested in? Like is there a is there a sector or an idea or a a group of technologies that that the institutions are really trying to get exposure to like like where is where are you seeing the majority of the of the

demand and perhaps even where are you not seeing much demand on the tech side? Yeah. So I think the what institutions want first is like to set up the basics right any institution that goes into the space a lot of time what they want to set up is like the basic flows they want to set up uh their wallets they want to set up their permission layers the transaction flows all of the different things they need to just operate uh basically uh within the blockchain once they do that usually the second thing they'll want to do is they'll want to connect to the Fireblocks network so like the Fireblocks network is all of the different whether if service providers uh or is it partners that they need to interact with because they will need again like they will need somebody

operating liquidity and they'll they might need a banking partner and they might need like on-ramps and off-ramps and network connections and a lot of different things like exchanges connections a lot of different things that they would need to connect um and I think over time what they will want to do is like touching on the things that are the last thing before they can launch right so like in basic stable stable coins the the regulatory framework is a bit easier uh because payments is like a simpler transaction. You just send money. There's a bit of information you need to know but in a lot of cases it's pretty simple. Uh but once you go into like the more complex workflows uh tokenizations tokenization of assets securities right we're talking

about possibly having like stocks on chain that becomes something that has a lot more regulatory exposure. And so once you do that you need to start thinking about technologies that are partially there right there's like technologies around privacy there's technologies around identity I think there's a lot of interesting tech that is being developed in those uh spaces right now and I think they'll be the upand cominging a lot of people talk about them not a lot of people implement the latest ones in that space yet but I think it will happen over time as well got it cool Eric well Eric thank you for joining us today it's been an absolute pleasure was a short short conversation, but um provided some insights here on just the wallet infrastructure, what

what people are are looking for. Again, RWA's tokenization. We've we've heard so much of that, but also the privacy elements. Um and really, man, I hope that businesses is going to keep keep going well because I know that typically, you know, there's a a some sort of bips based on aum and these types of things. So, bull markets can be great for all. Um, and yeah, thanks for coming out, man. Sure thing. If I can only plug a small thing, we literally today released our grants program with a few partners, right? So, it's not something we make money on. So, it's kind of easier for me uh to here, but we're we're collaborating with like PayPal and Salana and Stellar and Ton and ZKYNC and we're basically trying to

help builders because I think bull market is is amazing, but the VC funds have not really come back to crypto very easily. So, if we can help power some of that with like our partners so that people build, right? Uh that's that's something like you can find the Fireblocks grant program and just apply. Talk to us. Talk to me. Happy to engage on it. Awesome. Thank you, Eric. We'll see you soon and enjoy Spain, man. Thank you very much. Thank you very much. Thanks, Eric. Congrats. Thank you. Thank you. It's exciting times. I I I just feel like there's so much in institutional, you know, interest coming that it's just like it's going to be just I mean it's just going to be so fast and so so aggressive that we're we're going to look back in 6 months 18

months and be like wow. So I I I do too and I think ultimately the the lines are getting blurred here between the two spaces you know that and that's again what this is all about. We saw institutions coming into the space, tokenization, uh, ETFs, RWAS, all of these things are are sort of that one direction, uh, of the institutions coming in, making our space bigger. It's great. Also, we're going out, these crypto founders and builders are going out into the wild, getting real customers and real businesses to dog food the tech. That is what it's all about. And I think ultimately coin and and it's a great day. Coinbase making it into the S&P. I mean, look, Coinbase is an institution.

There's no doubt about it. So, to think that the institutions are coming, they're here. And and crypto companies are crypto institutions. These are one and the same. Yeah. You know what's funny is I think that that a lot of these micro strategy 21 strategy things, these leveraged uh Bitcoin stuff are just going to accelerate the Bitcoin flywheel so much to the upside and the downside. We can cover that at a later time. But, you know, I think the targets for Bitcoin can be, you know, raised extremely high. But I also think that this next bare market for Bitcoin, if if any of these things go belly up, it's going to be an interesting time for these like kind of like leverage spirals here. The CFI the CFI leverage, you know, we had Celsius and uh Yeah, but

that's just different. This is just like out in the open just blatantly just ripping debt to buy Bitcoin. But it it's it it is different, but ultimately you see the levels of of bloat that are in the industry. When a when a company goes belly up, take FTX, they've got to fire, sell all of the holdings in order to liquidate and ultimately keep Yeah, that's what I mean for Bitcoin, but they they could also run it way higher. So anyhow, we got Nick from Derive coming up next. Um they are crushing it on the options in game in DeFi. some of the LRA OGs as well from I think from like the synthetics ecosystem. Um, and yeah, I'm just super curious to to to hear from hear from Nick about DeFi, about their experience building so far and uh what's

coming up. So, we'll we'll bring them up and uh let's get him on. Nick, what's up, man? Good to see you. Hey guys, thanks for having me on. Looking forward to this. Where are you calling from, Nick? Uh, I'm calling from New York today. changes uh frequently, but at the moment in New York. Nice. Thanks. You're probably just like somewhere back there then in the in the horizon here. So, good to see you, man. Likewise. Likewise. It's great. Great, man. I I frankly I'm really excited because I don't know a ton about derive, but I've heard a lot of great things. So, I'm looking forward to learning. I think there's, you know, tons of through lines in these conversations about consumer applications going bringing this technology to those who are on the

periphery at the moment. Tell us a little bit about yourself, how you got involved uh into into building and founding a company and and tell us a bit about derive. Yeah, totally. So, um my background, I kind of got into uh Bitcoin in 2015, Ethereum 2016, made some friends. uh where I'm from is is in Australia and Sydney in the Ethereum ecosystem there. But I went off I became an equity options trader um over on the east coast actually in Philly for a few years at a firm called Saskuana. Um and so I was trading uh market making equity options during the the pandemic uh and actually with the GameStop like uh you know throughout the whole GameStop era which was super fun. Got a uh really

good sense for how crazy derivatives markets and options markets can be. Um and uh at the time a guy I had connected with was one of the early contributors on the white paper for the first version of synthetics. Uh and we were looking at DeFi summer and the gaps in the market and it really made sense. Options are like a really flexible powerful financial primitive. Um you can do and create almost any payoff out of them. So putting them on a programmable sort of blockchain environment makes a ton of sense. And we got going in early 2021 on on uh on Lyra which became derived last year.

Yeah. Yeah. Yeah. I I remember that vividly. It's was uh it it was kind of in the synthetics ecosystem if I'm not mistaken. Right. And so effectively kind of tied tied together using some of their mechanics. That's right. Yeah. We were a separate product. It was an AMM. We weren't a spin out. We were completely separate from them but used integrated tightly with their their per hedging for for the V1 which was uh very different to where we are now but back then it was an AMM uh it was really different time when we first started building uh L2s didn't exist um and so the first team to launch natively to an L2 uh in August 2021 on optimism after uh I remember building that after building that options

protocol and now fast forward to today and seeing Coinbase acquire DAR Darabit for $2.9 billion. What? Yeah. What what what do you think? What what do you think made Darabit right for that acquisition? And you know, what do you think about LRA and in sort of that path? Yeah, options are I think the stickiest uh they're the stickiest derivative vertical. Um like they are anchored by flows which are uh more institutional, slowm moving. Um, and they rotate a lot less than I would say like the per flows that we see in crypto today. Um, and for a number of reasons. One, because of how like institutional the anchor flows are in options. You get like a massive Bitcoin

miner buying puts every week because they have to hedge their cash flows. It's this kind of like economic activity you just don't see in per which are more speculative and short-term in their nature. Um, so you know because of that like when Darabit started I think they were one of the earliest like big exchanges around um and they did a great job of building like this business and the network effects they were the only game in town for options and so they bought on brought on a bunch of these institutional users whether it was like miners or you know people various people earning like Bitcoin and then ETH as part of their day-to-day um as well as you know being able to generate yield at scale on these assets by selling volatility through options uh and selling you know calls and and you selling puts and doing all sorts of

crazy structures and that advantage just compounds in a in a big way. Um you become the the hub. Uh and it it is really difficult to rip capital away. Um because when you you know it's different to per when you know uh someone sells a six-month option on Bitcoin, a market maker owns that that option um and they have to have their capital and their position sitting there on that exchange for six months or lay it off to someone else. And that position just exists. It's there. It's sticky. It keeps people coming back. And so it lowers the cost of capital um for that market maker and it creates better liquidity conditions and you just don't see that dynamic anywhere else. So from our perspective we are like you know uh aiming to be and you know I would consider us like a category leader in onchain options.

We're going to be the first and we are the first and we're we're looking to build that network effect for ourselves. It's taken longer uh than I would have guessed in 2021, but they are typically the last derivative vertical to mature in a space and I think we're really starting to see uh some tailwinds for them as a product and you know onchain at the moment. So exciting times. Yeah man. Yeah. I mean I think that we've seen iterations of options in DeFi since 2020 basically. I mean as you guys said you guys launched on optimism at you know in the first L2s in 21. There was some on ETH mainet prior. Um, but now it just seems like the level of of sophistication of people entering the

space is starting to get to that that point where, you know, I was talking to a market maker out in in Colorado a couple months ago and he was talking about how there's just so many basis trading inefficiencies. There's so many different kind of longtail strategies that are just not yet being played out at scale in crypto because of liquidity, because of the lack of products. And so, you know, that coming those types of minds coming to to the capital markets of crypto will seem seems to change the kind of demand curve for for where people are trying to look where maybe it was just previously a lot of per um and and now that's kind of shifting to more, you know, flexible or sophisticated products on chain. Totally. And particularly as we see the

sophistication of just economic activity increasing onchain, whether it's like RWAs themselves being issued or like onchain native businesses and cash flows being generated, that's when options become really useful. When you have something that you need to generate yield on um either onchain or hedge uh into the future like looking beyond you know like a three-day price action move um as fun as you know trading shortdated options can be as well. So, who's who's trading on uh on derive mostly? Like like what type of people?

Yeah, we have a like kind of an interesting mix. I would say there's like a good chunk of like um I would describe them as like uh professional like semi-pro like um you know kind of oneman sort of trading bands. um people with um you know chunky balances that like are sophisticated, know what they're doing um and uh you know have opinions on that they want to express using options. And so we see you know we we know a lot of our top traders quite well like they you know they message us, they talk to us, they're in our discord um and they have a huge variety of strategies that they're trying to you know kind of uh implement. Then on the other side, you know, we work really closely with some of the largest uh sort of asset issuing protocols. Maybe they

wouldn't agree with asset issuer as a category, but like you know, these new these new teams that have really uh found a lot of product market fit over the last couple years. Etheri, um Lombard, uh and Athena of course as well, who we're really close with. Um they have large user bases and they have these new assets they want to imbue with useful things. the ability to generate yield at scale or to use as collateral within a basis trade or or whatever it may be. I like the risk engine we've built and because of how flexible options are, you can really tailor uh the trades uh and the products to whatever those users want and you can scale that up extremely easily um with you know uh with the exchange and the infra that we have. So we found a lot of fit with some of the large, you know,

like uh onchain uh sort of DeFi native hedge fund style outfits and family offices that are that are working closely with these teams um on you know on their push and uh building you know products around their collaterals has has been a big source of of users and uh flow for us as well. Yeah. I I think we remember LRA on optimism but obviously now building derive. Could you take us through you know what what happened in between? Uh how did you go from LRA on optimism to to derive nowadays? Yeah. Um it was just a gradual evolution alongside uh the the tech uh itself.

Like when we started you know as I said L2s weren't a thing certainly like custom L2s weren't a thing. Um, and it was really hard. Uh, and it was mainly a game of survival, like just trying stuff. Um, getting a a product out there that really wasn't like ideal, which was our first version. It worked. Uh, and you know, LPS actually made money, which was kind of crazy for an options AMM, but it just couldn't scale. Um and ultimately we came I think pretty early to the conclusion in in early 2023 uh to the conclusion of our own rollup with like a off-chain order book uh style architecture um which I think is now becoming like very common uh in crypto.

And so that was uh you know we spent like a year really designing and building the the version of the protocol uh that's live now. And um I think with that upgrade we really wanted to sort of uh highlight the step change in what we were. We were no longer like just an AMM um kind of in the corner of Optimism mainet. We were like very much a full stack solution for uh institutional scale derivatives and um that was like really where the the the motivation came from and we got the rebrand done from idea to implementation in about two and a half weeks um all internal. So, it was just a inspired push by some of the guys on the team who were super into the uh the new brand. 100%. That's great. And and now, you know, it's not just that,

you know, you have a new brand, new visual, new look, new name. You also have this new rollup. And correct me if I'm wrong, it's a sovereign rollup, right? What what are some of the the things around the tech stack? you know, correct me if I'm wrong there, but you know, going from kind of like a smart contract application on an L2, just a, you know, general purpose L2 to your own, you know, custom rollup, what is the text stack now and and you know, after you enumerate that, what does that help you enable from, you know, the the consumerf facing side? Yeah. So, um, it's an OP stack rollup and we use Celestia for data availability. Um, I think the the there are a couple like major wins uh that we got from this. The first is um just controlling the user

experience and making it seamless like it's now closer to part of the course in terms of abstracting gas away like having to sign and approve every transaction um using your wallet like that for our users it's like the same experience as a centralized exchange you deposit um and then it gets relayed through to the L2 and uh you're you're just making trades and clicking clicking buttons and it's all seamless like it would for you know a web 2 application. Um so a lot of that account abstraction like best-in-class user experience comes from the ability to really control um like gas and you know settle to you know Celestia to save uh you know a lot of money there for users. I think the second thing as well is um for us we have a unique use case um with respect

to like all of the margin settlement clearing for options is is really mathematically intensive. there's a lot of compute and um we found we were running up against gas limits on optimism mainet all the time and that was for a much simpler protocol than the one we have like today in terms of like the amount of compute it needs to do. Um, so by having our own chain and not competing for block space, you can go and build and expand like really the design space for uh the amount of guarantees you can put on chain uh and really like codify and make immutable like a lot of the crucial rules uh that you know big derivatives traders are potentially concerned by um like editing the margin or how liquidations are occurring. That's all on chain. give strong guarantees and it's only possible because um you know we're not uh

competing with a million other protocols for for blockspace. Yeah. Yeah. Do you do you think that that there's a an edge that you're seeing from the users on your platform now like like or even you yourself? I I saw you post some uh trades for the last couple weeks that you've been doing well on like like is there a consistent edge you've been seeing from your view of the users of derive as far as like strategies go or is there like a like is there a current edge in the market that you think will be consistently able to be executed on um and perhaps if you can say it publicly then maybe it's not the actual edge so yeah it's I mean I would say whatever I could say now is like it

changes all the time like and particularly with options. Um I would say like my my hunch in general and my bias is that um wings continue to be underpriced in crypto like the really like kind of far out there um you know options and that sort of closer to the at the money options are overpriced with respect to volatility. Um so to put that into context uh the trade that I made last week which was to make it to be very clear like lucky like you know you have to be you have to be lucky to get any sort of result when you're doing the these sorts of trades but um essentially like I think it was ETH was at 1780 the S&P 500 was kind of like back to where

it was pre- tariffs uh Bitcoin was stronger than ever it was close to 100k and ETH was yeah 1780 and um it was a Tuesday and then the Friday expiry. So you had three days. The 18850 calls were trading at like $7. So you know like if if ETH just rallied to 1900, you'd be making, you know, six seven to seven to one uh on on those calls. And I kind of just looked at it and went this just doesn't feel like right. Like I did did not expect 50% in a week, but like it just felt like a cheap shot to take. And you know, you can even fund that bet by selling some puts like downside puts and you almost do it premium free and you can um you know, if you sell like the 4050 delta, so you sell like the 1700

puts or and you buy like the the sort of upside calls, you get this cheap wing and you're financing it with like sort of chunkier, more out the money style options. Um and I got really lucky like it rallied, you know, uh to 2400 by the end of the week. Um, and uh, you know, that won't happen every time, but I think it'll like the cool thing about options is it kind of allows you to have that nuance of opinion like if it does make it out of this range in the next few days, it's really going to make it out of this range, which is essentially what that bet was. Um, and uh, expressed, you know, with options. But I I do think there's still work we need to do to make that expressiveness more available to to a wider user base. And I, you know, I think that's one big

focus for us this year. Great, Nick. Well, man, thanks for coming out. I appreciate it and um really really just been wanting to just track more and more of these, you know, app chains rollups that have made an opinionated infrastructure stack verticalized and then now basically your your goal is distribution, right? Go out there and get this product into as many hands as possible. So, you know, best of luck with the next couple months. Hope you enjoyed the bull market. uh should be good for volumes and uh yeah man, thanks for coming out. Definitely.

Thanks for having me, guys. Appreciate it. Appreciate it, Nick. See you next time. Cheers. All right, that wraps up the guest segments today. There's a good one there with Nick. Definitely just hit like a 50k ETH options uh trade. That was great to see. It's a bull market, man. I mean, East pumping even just while we've been on the stream. So, yeah. What do you What do you see out there? I don't know. I don't really see much. I just see a lot of green and uh feel like it's been a feel like this week's gonna end well and you know I'm thinking Bitcoin to all time highs pretty soon.

So I one thing that I like about this format is that it forces like me and us to to look from the outside and looking in. meaning that, you know, I I'm I'm getting feelings that I haven't had since, you know, way back when we first started this. And we were totally looking at something that was foreign and new. And it was like we didn't know about the onchain world. We didn't know about smart contracts and a unis swap and yield farms, but we were learning about it in real time. And I think what what this format is forcing me to do is think like from a normal viewpoint from a normal just real world perspective. Is this company going to add value to the economy? Is it going to give end users a

real uh a real sense of value? And I is it helping people out there? Is there a real business case for this? You know, I think in in you know, the the role of podcast, we get so into the weeds of the technical design and blockchain architecture of, you know, are using this stack and this throughput and this latency. And it was almost like we were critiquing these rollup architectures in real time. We didn't really have a sense of the business propositions that a lot of these companies are are making and taking. And so I can already feel, you know, my sense of uh due diligence when it comes to validating some of these business ideas is is getting pushed to the limit. I think it's making me a better a better thinker overall. And I think this will end up helping us on the

venture portfolio side as well. Yeah. Yeah, I mean from my perspective it's just that uh between the the you know different types of guests, different types of conversations, shorter, more dynamic style also the um you know just like the the tech setup, the streams, all of that. Um mixed in with just kind of taking a new swing. I agree. It just it feels like it it feels like there's just a diff like it feels like there there's still things to learn and to be a part of. And so, you know, I'm excited to to grow and scale this. Um, today's was pretty good. We got off to a bit of a late start. Um, felt like, you know, just got to get get up and get going.

Um, get through got through those topics quickly. All three of the conversations were really interesting. Um, Neil's robot was probably my highlight. That was a that was hilarious. Um, but yeah, man. Looking forward to Thursday. It's been a great show and um we'll roll it up and get get on to the next one. Absolutely. This is the rollup and I think you know the unique perspective that I think we can bring to the table is the combination of we can roll up AI, crypto and robotics into into a single through line. And I think you know that is something that uh the current meta is missing and I think we're here to bring it. It's something that personally if if

we weren't doing this, it'd be something that I would be looking for and watching myself. So, I'm glad uh I'm glad that we're here doing it together and and we're filling a space and we're filling a gap in the space. So, yeah, thanks for uh thanks for tuning in, guys. It's been a great episode. See you guys on Thursday. Thanks, everyone. Cheers.