Tokenizing Real World Assets: Next Generation for Markets

Transcript

Hey. Thank you all for coming. So, this is going to be an amazing session on real-world assets. I have a very, very strong international cast and a lot of people who have a lot of experience talking about real-world assets. I know previously there was actually another talk about real-world assets, but we're going to spice things up. That's my main objective here today is to spice up the conversation and give you guys a lot of insight on what's happening in the RWA space. I'll do we'll do some quick introductions for everyone here. I'll introduce myself a little bit first. But my name is Michael. I've been starting to do YouTube in the space kind of casually at first in 2016. We have accumulated more than 260,000 subscribers on YouTube. And then

of course, we started investing into the space and namely RWA is one of our biggest investments. So, I co-founded Ozaroo and recently we've been massively deploying capital into RWAs. So, we want to share some of our insights why our philosophy are investing and want to share some of insight with you guys. And I wanted to let our other panels introduce each other. So, I guess Lucas. Yeah. Hi, my name is Lucas. I got into crypto in 2017 and I worked in fintech before. So, the very obvious thing for me was to figure out how do we improve some of the challenges we were facing working with banks and the financial system at the time.

And so I from the very beginning like Centrifuge kind of like try to figure out how do we bring kind of traditional existing assets on chain and that was before DeFi existed and before a lot of the stuff that we take for granted in crypto today was mature like in even and at an idea stage at that point, right? Pre-Uniswap, pre-maker stablecoin, etc. etc. So, so we always we had this clear commitment to the kind of ultimate building real world assets and we were some of the the the first ones to really bring them on chain and actually make them composable with DeFi.

And this is maybe the one thing I would talk about that I care deeply about and I think it's really critical when you're thinking about real world assets. Um tokenization had a big boom and bust in 2017 and I think this problem the space got wrong back then be before we really started working on this was that like there wasn't anything to do with these tokens. So, there wasn't really a demand or like a a fit for the kind of assets that that were coming on chain and there wasn't a any kind of composability in in DeFi terms or or kind of market infrastructure, right? And so we really worked with Maker and many other kind of on chain native institutions to start building this out, which is still kind of what we're working on today.

That's amazing. And I think we want to discuss how that progressed as well. So, Sophia? Yeah. Hi everyone. I'm co-founder and the CEO of Matrixport. So, I embarked on the crypto journey back in 2018. Uh so, we Matrixport is actually quite focused on crypto financial services. So, over the past 5 years we have built a lot of yield generation products. A lot of them is off chain. Of course, there's also staking and DeFi mining, which are on chain. So, uh last year we have experimented in uh bringing the off chain uh RWA asset on chain to provide people with additional source of yield. So, we started to build a a launch one of the earliest

uh tokenized US Treasury bill, which we called the short-term Treasury bill token, in short form STBT. And of course, in doing that we encountered a lot of challenges and tried to uh address some of the concerns that people has regarding the uh on chain transparency, regarding on chain liquid 24/7 liquidity, and also KYC and geo-fencing. So, we'd love to uh pleasure to be here and share some of that experience and discuss with the panel of analysts. Nice. Awesome. And Andrew?

Everybody, I'm Drew. So, I'm the uh director at Carbon Mark. Carbon Mark is a platform that's building off of some some of the technology that KlimaDAO developed, uh where I'm a core contributor. So, last 8 years or so, I've been in the environmental commodity space. So, that's involving the trading of different environmental assets such as carbon credits, renewable energy certificates, and so on. And it wasn't until the last 3 years or so that I really first got involved with blockchain on a professional basis. So, we were doing consulting work with another company I co-founded looking at the energy footprint of different blockchains. So, we had consulting mandates with xDai, Polygon, Polkadot, and so on. And during that work, we linked up with some other companies that

were looking at blockchain not just, you know, from the environmental footprint side of things, but actually using the infrastructure to facilitate the market itself. And so, we viewed some of these companies as competitors, honestly, at one point, but we came together and we co-founded KlimaDAO. So, KlimaDAO really resulted in a a step change in these markets. Before that time, you didn't have any type of environmental commodity that was actually trading on chain. But after launch, you know, this was an experiment for us, and it actually resulted in a huge amount of liquidity coming onto the blockchain and a lot of industry players from the space starting to take blockchain seriously as a as a piece of infrastructure to facilitate the market.

So, just to put things in a perspective real quick, in the first 1 1/2 years after launch, we actually had over 24 million carbon credits from the major registry, Vera, come on chain. So, that's equivalent to the emissions of about 32.5 million round trip flights from New York City to London. And it represented about 4% of all of the carbon credits issued by the Vera registry up until that point. And Vera is the the leading registry in the carbon market itself. Um we've now had major industry working groups looking at blockchain from all these different players in that time.

And it it really looks like, you know, we're seeing a migration and a really a transformation of this industry utilizing blockchain technology. And I'm sure over the course of this panel I'll talk about uh some of the advantages of that and why it makes sense for these assets uh to be facilitated on chain. Uh thanks. All right, and last, Jeremy. Hi. Um good morning. I'm Jeremy, co-founder of Open Eden. Um thank you for having me here. So, I started my crypto journey back in 2020 when I started Gemini crypto exchange uh in Asia um out of Singapore for the Winklevoss twins. Um prior to that, I spent 20 years in investment banking. Um I was running Goldman Sachs cross-asset derivative business in Hong Kong and

Singapore. Um so, you know, after 2 years in the building up Gemini, uh me and my co-founder, where we worked together in Gemini, decided that we wanted to to come out and build something that can connect, you know, our investment banking past um with DeFi to bring, you know, financial assets, you know, on chain uh and creating utility, composability, and access um for the crypto communities. So, today, Open Eden um our flagship product is a Treasury bill fund.

Uh we call it T-Bill. Uh TBI LL is a token. Uh investors can, you know, go on to our dapp, connect our wallet, deposit USDC, and instantly mint T-Bill token 24/7 365. And, you know, knowing fully that the issuing structure uh the legal structuring of it is, you know, fully regulatory compliant um because the token issuer is a regulated fund vehicle that is set up and managed by a Singapore uh regulated fund management company that is owned by OpenEden.

I like to share, you know, more about other interesting stuff and especially challenges and risk as we move along. Awesome. Awesome. So, just to start the context for for this, it's been an amazing journey for us cuz I when I started with blockchain, it was all about like all this invisible stuff like Bitcoin, which is not a real world asset. It was all about intangible assets. And now we got full 180 to tokenizing real world assets like real estate or carbon credits, everything on a blockchain. So, it's a pretty amazing twist and we've seen an amazing growth in the sector as well. BlackRock recently said this is a $10 trillion opportunity. Let's put that with a

capital T on there. And then of course, we have our own chains in blockchain that are catering to the RWA space. Recently, we saw Mantra. They skyrocketed 1,500% in the last year and now their chain is worth half a quarter of sorry, half a million dollars right now. So, this is an insane growth area. And looking from this, right? What is the driving factor? Let's establish a driving factor of why we need to have RWAs in the space because traditional finance had RWAs for a long time. Why do we need blockchain? What's the kind of a driving force? So, let's let's talk with our panelists to see what's what inspires you guys all to push RWAs forward. Starting with Lucas, I guess.

We'll just take it to I just go around. I mean, so we Centrifuge came up with the term real world assets. We like we were always struggling with what do you call these things because like like off-chain asset didn't really sound that great. Like token tokenized assets didn't really make make that much much sense either at at least at the time. I mean, RWAs of course like spend so much time talking about the term, but in the end the the funny thing is like we had to give it a name today, but like I don't believe the name in the future will matter at all. This would be like like any I mean, if we if we're right with this bet on basically on-chain financial products being superior to off-chain financial

products, uh then you will ultimately you will see most assets to be on-chain in one way or another, right? And so the until that has happened, uh we'll probably have to specifically mention the ones that are on-chain, but then like at some point um I think this will be the vast majority, right? So, for me like that and and that's kind of like why I'm I'm talking about the name here, but I think in general, right? Like it's just smart contracts give us uh the ability to program money, which is something that is not possible with any other technology. Uh that's wasn't really possible with just having the internet.

And so I think finance in a way was stuck in the like pre-digital age. A lot of this stuff now is digital. There's a lot of some assets that are actually traded digitally, but it's still like mostly just contracts centered around a PDF. Uh that is very different than when you order a pizza through an API or like you have Uber that just like it's it's all like digital messages, whereas like imagine you had to like sign a PDF of a taxi order to your uh taxi company every time, right? And so I think that is like the the driving the driving force behind this is like we have this technology that can do stuff that we can't do, and we have this whole in massive industry, right? That's um I think finance is like 10% of global GDP. Um so, like we have

this massive industry, right? That like is hugely inefficient. And so, like when you think about that, like yeah, like I agree with BlackRock, it's a multiple trillion-dollar opportunity. It's a big jump forward, for sure. Sam, do you take have the same take of that as well? Yeah, I think tokenization has been a buzzword back in 2017, right? When a lot of us just got into the industry. But why it didn't really proliferate back then? Why it become a thing last year, right? And people started to talk about it, and we talk about RWA in every conferences now. I think that's really because back then there was the the blockchain as a financial infrastructure is still quite nascent, right? So, on that new financial infrastructure, only

a few assets exist, and people are generally and also fewer people exist and actively participating in that. So, it's mainly driven by speculative demand. But now, two cycles after 2017, we're now in a much more mature stage. Still early stage, but much more mature compared to two cycles ago. First, we have seen a lot more assets on this on this on this financial network, and some of most speculative, some are not, right? Some are more like a value-seeking. And also, I think in terms of the number of the participant, we're probably talking about a few hundred thousand a few hundred million users on blockchain right now. So, not all are looking for

high high-yield speculative yield-seeking. Some of them are looking for get access to to different type of assets and explorers. So, now I think the entire infrastructure and investment investor base is moving towards kind of a critical points where a lot of the tokenization of the real world can stay and stick in this new financial network and grow the user base from where we where we are now. Yeah. Yeah, it's it's pretty amazing as well because I you guys kind of acknowledge the failures of RWA early on, right?

I've seen we've we've seen like tokenized gold, and then never trading volume never really took off. I guess in that in these two cycles we brought new technology forward as well. So, do you see that as well Andrew in what what you're seeing is is that new technology also pushing carbon credits and everything that you guys are passionate about? Yeah, I mean, blockchain doesn't always make sense to be applied. For a lot of RWAs it does. Certainly in the case of environmental assets it makes a ton of sense because of how the market exists today. So, what's the strength of blockchain really? Well, all right, it's an immutable ledger, it's fully transparent.

Uh it's very hard to alter these records of course. So, you have a security there in being able to trace and transfer things and have the data about what's happening in the market. When you take the environmental commodity space today, it's heavily fragmented. Uh there's siloed exchanges that can't transfer liquidity to each other. Uh there's a lot of opaque OTC trading that's occurring. And so, when it comes to understanding the dynamics of the market, what you know, participants actually have to do is they have to rely on these retrospective survey-based reports. So, it's literally analysts going out, sending forms to traders and brokers, and you know, corporates that may be buying these assets and saying you know, what did you buy? Like, what was the quantity? What was the pricing?

So, just imagine this, right? I mean, I'm sure a lot of people in here have looked at a Dune dashboard for some sort of protocol. And we can all appreciate the fact that when you have everything facilitated on a blockchain, you have those real-time insights into what's actually happening in the market. So, one of the big value adds that we're seeing for these, you know, commodity traders and so on is that they can they can see through our data dashboard. So, it's carbon.climate.finance. And you know, they know what's being purchased. They know what assets are being consumed for their environmental benefit. They know what the pricing is in these different liquidity pools that we have set up and so on. And so, that's, you know, driving a lot of adoption on that front. The other piece is the fractionalization. So, we're

seeing this in real estate, which is really really exciting, and it's also a major benefit when you're talking about carbon credits. On the registries today, you basically can only trade one whole ton, one metric ton of emissions as a carbon credit, but that has some limitations, of course. When you move these assets on chain, now you can suddenly trade a kilogram of carbon emissions. Now, why does that matter? Because we have certain automation opportunities right now, where you can automatically compute the emissions of, you know, maybe business travel or supply chain transfers, things of this nature. So, you have consultant groups that are computing this stuff, and now what you can do through smart contracts is you can link that directly to, you

know, at the kilogram level a carbon credit on chain, and you can automatically purchase that and utilize that to neutralize the emissions of that activity. So, this is something that it's simply not possible in the traditional market when it comes to these assets, but when you start to tokenize them and you bring them on the blockchain, you really have a just a fundamental, you know, step change in the market and a massive opportunity to ultimately direct more financing towards projects that actually mitigate or remove carbon emissions. Yeah, I think that's that's pretty like insane how like more transparent it is.

So, do you agree with that, Jeremy? Like do you see this push as well for this reward adoption on your side as well? Yeah, I I think you know, clearly 2024 versus 2017, a lot has changed, right? And and I really, you know, the way that you know, we think about why tokenization is taking off in in a big way, apart from obviously there has huge growth of users, right, that are on the blockchain, is really accessibility. So, if you think about in the traditional finance world, maybe say 20 years ago, you know, if you were a fund manager that you want to trade you know, Taiwan, or Korea, or Indian stocks, you actually can't. You need to

have like a local ID and whatnot. So, what some of the investment banks they do is they create these access product in the form of a tracker certificate. So, that it is a synthetic, you know, form of exposure to these local markets that you can now access as a, you know, foreign investor. Now, moving to the crypto world is actually, you know, pretty same kind of analogy. You know, people in, say, emerging markets or in countries that have, you know, currency control, they want dollar asset, they actually are not able to do so.

But, now in blockchain, they are able to do so because now they can buy Bitcoin, they can buy stablecoin. And then what comes after that is, you know, can you provide them with access to some of these financial instruments that they would like to, for example, say, US government bonds in the form of a token. So, that they can use their stablecoin and have access to those and get exposure and earn the investment yield. And this is how tokenization is providing that access. Now, that's step one. Providing access is good, but I think, you know, we can do more than that by providing utility. You know, because in the crypto world and the DeFi world, it is very composable.

And there's a lot of utilities and just giving you access to this token. For example, now you can use this token and transfer to each other. Is Is like in the TradFi world, you own Apple shares, Apple stocks. Can you do anything with it? Not really. You can only look at it on your brokerage account and wait for it to appreciate. You can't send it to Cynthia, for example, because, you know, she she bought me a nice dinner and I want to pay her in Apple shares. I can't. But, in the form of a token, now I can do that. So so it's a very powerful tool. It's instant, you know, transfer as payment.

And the other thing is leverage or collateral value. You know, if you own you know, certain stocks or bonds in your brokerage account, you can't really borrow against it to to invest in another platform. But now in a blockchain world, you can. There are lending protocols that you can deposit your your your RWA tokens and get lending value. So there's there's really a lot of composability and utilities and I think that's really the true value that blockchain can bring, you know, using tokenization of you know, either financial assets or any other form of real asset to kind of bring on chain as long as there's demand for it, there is a lending value,

there's collateral value, then we should see this continue to proliferate. Wow, that's a very good discussion. We got a full range of the discussions. Not just of why to tokenize, but how we can push composability forward. So I feel like I'll do something risky. We'll just open up the stage. Instead of taking turns, we'll just like like I guess just like discuss because I think this is a really interesting topic because on the topic of composability, we have so many blockchains right now, whether it's Ethereum or we've got the layer twos some coming out. We've got new blockchains like Solana. Do you think this current infrastructure is it is it the right infrastructure for RWAs like this kind of multi-blockchain environment or do you guys think that we should you know, focus on something

different? I'd say is our current infrastructure good enough? It's hard It's a hard question, right? Was the internet of the '90s good enough for opening up my phone and doing pretty much anything? No, right? I think Well, still not really to be fair. Maybe no, yeah, still not really. Um so I I I think that this is still the very very early days, right? Like I actually was I went down I did look at when the first pizza was ordered online and it was like Pizza Hut in Santa Cruz, in California, I think, that offered pizza delivery with an online form, but like that was before credit card payments were even really a thing online. So, like yeah, we have a long way to go, I think, in crypto. We also have a long way to go.

Um there is for me the biggest thing that's missing is like any any sort of feasible privacy. Um I think what we will have is for example, and and we did a lot of research in this, um you want to be able to verify that the the asset is not touched more than once or that the credit score of a borrower is uh what it's supposed to be, right, without actually revealing uh said person's social security number or like uh what the balance sheet of the borrower is, for example, if you think about like trade finance assets or or or like corporate debt. Um so, it's today a lot of the stuff we're doing

actually, I think, will will not really scale to to the to the size that we want that we wanted to in in um in kind of the blockchain world that it is today, but I also don't think we've seen the end of what uh crypto looks like, obviously. Um the other thing I would say, you asked about the kind of fragmentation. I I do believe like Centrifuge, like we have gone pretty aggressively on like a multi-chain strategy because I don't think that uh investors will move their dollars to another uh blockchain just to buy an asset. I uh know how much friction it is for me to move money from one bank account to another.

Um I think like uh kind of wallets and blockchains are are somewhat similar. There is going to be a lot of like improvements in arbing one blockchain versus another, like kind of managing out liquidity. Um but in the end, like we've basically just said, um we want to make sure that anyone that issues assets on Centrifuge has can have them on any L2 any uh L1 that we support any EVM L1 right and and that is that is actually what we've been been working towards and it's been live now for for a while. Um and and for us it really is I don't think like you I don't think about chains anymore.

Got it. Ah, I mean it is very true that now you have to like do multiple more developments for multiple chains. It's not as easy as before where it's like okay just support Ethereum call it a day, right? So um on your side as well I think I think Jeremy talked a lot about risks as well cuz like should we bring that topic up as well because like we have multiple chains and then I feel like every day we see a lot of hacks and a lot of kind of like cross chain issues as well. Do you think that's going to be a negative factor for moving in real world assets onto blockchain?

You know I think from our perspective the what we've done is we tokenize at the end of the day is treasury bills. And where are the treasury bills actually sitting in? They are sitting in your traditional licensed you know regulatory custodian, right? Um so the token is a representation of your ownership to that uh in different shape of form. So you know from our perspective you know if there is some form of a hack um actually there are ways to kind of salvage that because the actual asset was not being stolen. It is still sitting in in the bank, right? Um you can either you know upgrade the smart contract you know reissue or burn certain tokens. So

so that that is not too much of a big risk problem for the kind of product that we are offering. But I think you know one one key risk that I would like to kind of highlight you know of course we we like to talk about benefits you know all all the great things but I think it's important for investors to also realize that there are risks involved. Um because there are a lot of different products and issuers out there. Um, they are tokenizing different kind of asset. Now, I think something that we we are most worried about, uh, you know, from an OpenEden standpoint is that are we going to tokenize a triple-A rated product um, and after tokenization it actually becomes a

triple-C junk product. And and why do I say that? Um, the legal structuring, you know, it is extremely important. Because depending on how the issuer, um, structure the tokenization um, you know, your ownership of the token, you know, might not necessarily represents what you think you're getting exposure to. So, one example is, you know, we talk about, you know, the issuing entity, you know, being bankruptcy remote. Um, bankruptcy remote meaning that the issuer, you know, if they fall into financial difficulties um, they should not be able to gain access to your money because you are investing in the product. And then your

money is actually invested in the underlying. Now, it is actually difficult for any layman to determine the whole legal structure, whether is this truly, you know, secured or or whatnot. And that's why we feel that, um, being regulated is actually very important. If your product is structured in a way that there is regulatory oversight, either, you know, using a licensed entity or being regulated by certain, uh, regulators then you will have that protection because you know that the regulators are regulating and ensuring that there's audit in the independence, uh, review and whatnot.

And and I think that's how, when OpenEden spend a lot of time and effort um, to do that, you know, including, you know, spending over a year to get a securities license, um, and and among other things, you know, creating legal structure, uh, in a fund vehicle that is tried and tested, that is trusted by the traditional for you know, hundreds of years. And then using that as the legal structuring um to tokenize the embray on chain to ensure that the credit quality of the underlying asset that's being tokenized does not diminish once it goes on chain.

It is the same credit quality of chain Sorry, sorry to interrupt you, but um there could be many issuers, right? Cuz you talk about composability and this is a very composable platform. There could be many different type of issuers. Do you think education is going to be a big issue because different party can have different um legal um infrastructures uh to issue RWAs, right? Do you think that Do you guys think that this is going to be a big problem for RWA holders in the future where they have to educate themselves on every single platform, every single issuer, and then for every different type of asset, do you think that's going to be a problem?

We've been through this process with a number of people in industry. They had what they called digital carbon working groups where they started looking at blockchain technology and trying to understand how to use it. And for sure, there's a process there to get people comfortable one with, you know, what is the underlying technology, how it can be utilized. But one of the risks here is then how can they actually use it? How do you educate them to really use this stuff? So, one of the major work streams we have at Carbon Mark is really abstracting away all of the, you know, classic Web3 interfacing itself for people to then interact with this underlying ecosystem. And that's going to be really crucial as we try to onboard, you know, the next, you know, tens of millions of users into this space. Certainly for your your more

traditional corporates and so on. Um there's one other aspect of risk that I think is interesting here as well where blockchain has a value add and that's in the carbon credit market itself. So, monitoring these projects, right? Currently, there's a lot of manual processes undertaken to view and and, you know, measure things and say, "Okay, is a project actually removing a certain number of emissions? Is it mitigating them? You know, is a is a forest still there? Has has burned down, and so on. And so, there's two examples of blockchain um having an advantage here. One is with a company called Corista. So, they're using Chainlink's Floodlight Oracle, which basically measures changes in biomass using satellite imagery. And then, through smart contracts, these changes are then reflected by automatically issuing

carbon credits on chain. And this is something completely new to the market. The other is uh we we have a a press release that just went out on this with a company called Linnet in Italy. Uh they're doing a a novel carbon removal um process where they actually take emissions carbon emissions in seawater, and then, you know, binding them to a mineral so that it just sinks to the bottom, and so on. But, their whole process is monitored by IoT. And that data is recorded on chain as well. And what's really exciting about this project is that it's the first time that a let's say more traditional carbon removal type project like this has actually been issued directly on chain.

So, we're no longer having to transfer assets from some sort of, you know, siloed SQL database in a centralized, you know, repository somewhere. This is just going immediately on chain. And all that data is available transparently for folks. So, this is a way to mitigate risk, essentially. If you're a company and you want to buy these assets, if you have a full chain of custody of all of the information of the asset's origin, where it's been traded, its pricing, its integrity, and so on, then that's a massive advantage. And that's why we're starting to see this industry migrate on chain.

Oh, that's really interesting. Sorry, I can go on. You can save your Yeah, sorry. I just uh thought of another friction that I we I think as our domain industry is trying to overcome is a KYC, right? I believe a lot of us have good product. But, for example, a user who want to get access to the private credit product of Centrifuge or um TBL product of Matrixport or Open Eden, it would need to do KYC with all of the three of us. And maybe we have a different KYC requirements, which make uh already kind of a small investment base even smaller. I think what really would be helpful in the future is that there is a KYC layer, universal KYC layer. People can store their KYC

information in their own wallets in the form of the KYC token, and this it can be ZK proved with different interfaces with different service providers. That okay, you meet certain criterias that that thus you can um hold the token or transfer the token. I think this will greatly reduce the friction that we're seeing today and uh probably make the user base exponentially bigger. Exactly. And I think like you touched on some um new technologies as well, like ZK technology. I think we have 7 more minutes left on section um and I really want to talk about like what is needed, like what's in the future, like looking forward, what's needed for the mass adoption of real world uh world assets.

So I guess we'll just take turns and just talk about, you know, what we think is really important. Who wants to go first? I mean, I could hit it off again just with the the wallet abstraction, right? I mean, you can't expect a company to use MetaMask. There are some companies in the environmental space, for example, that, you know, set up Fireblocks accounts or have some sort of custody solution because they were trading other commodities that are on chain. Um but you don't see a lot of it and you can't expect the other 99% of the industry to to figure that out. So you really have to make it easy for people to take advantage of all these tools. We know that DeFi, you know, is really a wellspring for innovation in different industries. Composable tech, people

building together. It's incredible. But to realize those benefits, you have to, you know, make it so that people can really access these tools and everything. So I think that's that's one of the major challenges that that you know has to be taken care of. And then of course, there's the the question just on the regulatory side, different jurisdictions, how do you treat digital assets? Is is the regulation for a digital asset of a certain type different than if that asset was off chain for example? All right, we see this somewhat in the carbon credit space. So, a lot of open questions there, but you know, hopefully the the crypto industry driving forward and helping out.

Yeah, I think I think that's really a big challenge, you know, I I really share the same goal as what Cynthia wants, but it's actually extremely difficult because there are already in the companies that are creating all these kind of soulbound tokens for like KYC. But the problem is you know, every regulators in different jurisdiction will have different standard. So, you know, this KYC might fulfill, say, you know, a specific country A, but then, you know, for for offering into country B, it might be deficient. So, it's actually it's extremely hard to find a universal standard and and I I do wish that one day we can we can get there because you're right, you know, once you can have that, then it's a one KYC time. And

then you can kind of access in all the different products in in the market. I would I would I want to talk about what Jeremy talked about earlier, which is like the risks. Effectively, if you bring a product on chain and it's yielding 10% off chain, and you bring it on chain and it's also yielding 10%, but then you're adding say like 1% of risk because the technology, maybe the regulatory, all of these unknowns or like it's extra overhead because it's it's all this stuff is new, you end up with like effectively getting 9% for something that you'd get 10% in the old world, right?

That obviously doesn't work. And and so like the the thing to make real world assets successful is actually figure out okay, how do you make something that's yielding 10% off-chain yield, 11% on-chain. And so ultimately this is I think risks are one of the biggest factors in this, both technical and legal regulatory compliance. Um you have like regulatory clarity where that's just I mean somewhat in our control. We can We certainly Fuse is also doing a lot to like move the image of the space and not make the technology better understood by regulators so that we're actually have them support us, right? Um what you mentioned with like I think carbon markets are actually great example because this is a completely new market. So we We're not starting with a

legacy system. So I think that's going to be a place where regulation will actually probably be like more more favorable than any other asset class. Um so you have that and then you have also um also on the technical side, on the offering structures, etc., etc. And I think that is like the the place where you remove the kind of early adopter pains as much as possible. And then you look at like there's so many things in in the traditional financial world that you simply don't need if you do it on-chain. Like this is an example, like your standard like fund has more than 10 service providers that traditionally all send each other spreadsheets around of what your portfolio looks like. And

there's a data entry, a verification, a like processing, and then like you send it off to the next person. Right? The auditor, the fund administrator, the NAV calculation agent, the custodian, the traders, etc. And like there's friction at every single point of that. And I think like that's for example one one place where we're spending a lot of time is like making sure that we don't just bring the actual token, the asset on-chain, but the entire process behind it, which is where I think some of the biggest um like efficiency gains are, which actually then do create uh a better uh product in the end that can actually compete with uh and and and outcompete um the the old old way of doing things.

Mhm, for sure. Yeah, um you know, kind of going back to your question about education. Um so, I think there's really two parts, you know, for for institutional investors, I think they um offer a certain level of a sophistication, so they understand. Um but for the the rest of the investors, um it will be extremely difficult uh even through education, I think it's not going to be uh that straightforward. So, that's why, you know, we think that um you know, regulatory compliance is where it comes in, because if the product the tokenized product, you know, has gone through certain kind of regulatory oversight, then I think for investors, they can rely on that.

So, you know, for lack of good education, you know, which obviously as a community, you know, we we need to continue to strive to to educate, but I think that that can that can be a very good um starting point um to help to mitigate the risk of when there's regulatory oversight. Yeah, and I think it's very interesting because like if you delve in the tech side, tech can move closer together. So, we see cross-chain being done, you know, before these standards were all different different, but we can do cross-chain. But cross-compliance is very difficult, cuz every country has a different compliance system, and they want to stick with their compliance system. So, going back to the point that Cynthia said earlier about, you know, a universal KYC, all these countries, they want a different they want to stand out, right?

Every country wants to be, you know, we're the special country that requires this kind of KYC. So, it's actually kind of interesting that we're kind of moving in opposite directions. Probably a lot of um compliance side, they want to be special, and they don't they don't want to be composable, but on the blockchain side, we do want to be composable, and we have we're pushing forward to that. So, I see it as a very interesting space and a very interesting dynamic coming up here. So, I think we're we're close to the end of the session, and I just want to say um this is a very amazing group of panelists. We had a very impromptu session, like I didn't plan super much for this, but I wanted us to flow and then we did super well flow. So, I just want to all thank all the panelists here

sharing their knowledge and really want to thank you guys. Thank you. And thank you guys for being an amazing audience.