Vitalik Keeps Selling, Zhu Su maps the next cycle, Relay Raises $17M, Figure crosses $22B in HELOCs

Transcript

the back. [music] Hop up the [music] back. [music] the back. Back back [music] [music] back. [music]

>> [music] >> JP Morgan, Black Rock, DTCC, Fidelity, the entire thing was just institutions. [music] It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. [music] I'm bullish. You said it. You finally said it. I'm so bullish. 80. [music] I'm blessed. We're bullish. Down the back [music] [music]

the [music] back. >> [music] >> above the I'm the [music] [music] hop off the [music] back.

[music] >> [music] [music] >> The rollup is headed to the top. If we're not already at the top, we're going to the top. We're on fourth floor today. We're going to be on floor one and then we're headed straight to the moon boys. >> Guys, we're going to zero. It's the reality of the situation. Um, not what you want to hear, but uh, that's where we're at. Um, Bitcoin is in an absolute freefall. Uh, we are under the 2021

highs. Uh, we are, or excuse me, the 2024 highs. We've completely erased the entire Trump rally. ETH is under 2K. I've I'm hearing conflicting reports as to why things are down. Um, you know, on one hand, you've got the quantum risk of Bitcoin. Ethereum has six plus years of quantum security research. So why does that mean everything is getting pulled down by everything else? Um you know Bitcoin is not outperforming gold. I can just reinforce all of the things that you guys already know. Uh hyperlid is the only thing that is somewhat holding up. It's uh it's pretty sad what's happening out there. Uh billions of dollars of liquidations

uh in just the last few hours. Um there there's going to be fallout from this. We're going to see market makers uh get liquidated. We're going to see price sensitive businesses uh go out of business. There's going to be layoffs. There's going to be companies that don't make it through uh this point of the market cycle. And so, you know, whether you guys are listening and you're a personal investor, um stay off the leverage. It may even seem enticing now.

It feels like we're approaching a point where blood, you know, is running through the streets and they say, you know, buy when there's blood on the streets. Um, but frankly, we haven't seen the final leg of this, which is obviously what people were talking about, these guys that seemed indestructible and invincible, the Bit mine and micro strategy of the world. Um, these guys are going to have their number called. Uh, Bitcoin is significantly under both of their average entries. They were buying on the way up. Uh, will their LPS redeem these shares? Who knows? We're going to find out. Um, and we're going to talk more

about it. Interestingly, Micro Strategy uh is going to report their fourth quarter earnings this afternoon. Incredible timing. So, um, okay, let's go through a few headlines, try to make sense of everything that's happening out there, and then we're going to kick it over to a couple of guests. We're going to have, uh, another friend from the Avalanche world come in. Uh, that'll be Morgan. She'll be our first guest, and then we'll have, uh, our friends over at Relay who just, uh, announced $17 million raise. Impeccable timing they were able to raise uh, in these market conditions.

So guys, let's uh Mr. Secretary, the price sensitive side of the market, which is what you probably see when you're scrolling through Coin Gecko, you see a lot of the tokens that are liquid. And then you've got the other side of the market, which is price insensitive >> and and these are companies like Figure and a lot of the tokenization companies. It's a lot of the financial institutions. These guys are tokenizing money market funds. stable coins are the core of this business. There's really not a whole lot of digital asset exposure, which is why people were so upset and that is ultimately what's going to save these guys from bankruptcy now that the tokens are quite a bit down. So that's uh that's the current

state figure outlines key operating metrics uh framework ahead of quarterly results. Uh, Figure Heliloc I believe superseded they were up to$22 billion dollars uh in loan origination and uh Figure Heloc is now a top 10 cryptocurrency. So pretty incredible uh that rise. This is something that we anticipate will continue uh they're essentially a tokenized fund and uh you can contribute to these loans uh if of course you meet the regulatory and compliance metrics. Let's keep moving. We're going to speedrun through this since we've got our first guest. uh almost ready in the back. Next up, we see again Arya has been able to uh raise another $15 million late in 2025. Uh

this might be old news. They added even more after an unprecedented level of music industry funding last year. I anticipate teams like Arya are actually going to um find a niche in the AI portion of the market when it comes to music and AI. That is something I anticipate will just continue to skyrocket. Um, there's there's musicians out there that are completely AI generated and they're getting tons of love from the existing music industry because people don't know that they're AI generated. I I think now that everyone has uh top, you know, music label at their fingertips with all of the expertise and all of the instruments that are used to make music, we're going to see a lot more AI generated music.

And I think AI in general is ripe for IP tokenization. No wonder Arya was able to raise another 15 million and they were able to do so before this market downturn, which is going to be extremely important that teams get their raises in now so that they have plenty of runway uh to last out, you know, what could be a at least a multimonth, if not a multi-year bare market. Uh we're going to hear more from raising in the in the current conditions later uh from our friends at Relay. Uh next up we've got uh we've got our lord our previous lord and saver Vitalik. So Vitalic has decided that now is a good time for him to be

selling ETH. Um pretty incredible. If you look at this dashboard, this is from Arkham and you can see, you know, right now uh uh Vitalik's ETH pile is down 14% today. Uh valued at about 6 million. He's got, you know, just over 3,000 in ETH in his portfolio. Uh you can also see here he's got some wheat wrapped ETH, uh you know, almost double upwards of $11 million. He's got some stable coins. He's got $3 million of go LUSD. Uh what is that? Harry Potter Obama. She enu ticker is Bitcoin. Not very much in there. 32 cents. Just some dust for uh

for V. But yeah, you guys can see here that he um let's see. So he started to withdraw in PayPal USD. Uh he's probably got some security reason for doing that. Vitalic uses cow swap uh and he uses a as to uh as to where that uh ETH and that USD was sitting. Uh and he has started to raise funds for what he's calling this uh period of austerity in the Ethereum world. Um obviously markets are not very friendly to austerity. So uh you can see he has started to increase his balances. Uh, and this is

what's happening here. He's doing this on Ethereum, the L1, because there's no need for L2s and and yeah, V is dumping on us. Uh, usually the Ethereum Foundation dumps at the top. Vitalic today decided to dump at the bottom. Incredible. Okay, this is this next one is the one I wanted to get to. uh if we're putting you know our faith in Suzu things might be a little bit a little bit off. So Suzu here uh has said here that um you know now that reasoning by analogy is allowed. The reason it's now allowed is

because Kyle Smani has left multicoin. He was the famous anti- analogy uh logical um reasoning by analogy was just fabric just fundamentally flawed uh to Kyle Sami now that he has left the ecosystem. Uh we have Suzu uh reasoning by analogy saying that ETH is going to perform like Bitcoin last cycle. Um, Bitcoin last cycle was kind of a, you know, it was sort of a unicorn in the sense that it went up. Everything else in the altcoin complex got crushed, um, including ETH. And then, you know, later on, ETH, uh, had a just a rapid rise, uh, kind of a catch-up trade to Bitcoin.

And Soul says, is going to perform like ETH. Uh, and and Soul actually last cycle was a first mover. uh it had a run up to almost 300 if not you know beyond 300 and was an incredible trade. People thought it was going to $1,000. Now we have hype. He says it's going to perform like soul last cycle and uh and lighter to perform like sui obviously had another great great year because um it was performing like salana as kind of a a beta to salana.

You know, the fact that we're going down so hard and fast, I think will ultimately rebound with similar similar velocity. Um, I just don't have any conviction into where that bottom is. You know, I'd love to sit here and tell you guys that, you know, now is a great time to buy. The reality is that we could be going, you know, to 50K because, well, if you're if you're looking at previous cycles, you know, we had gone down by more than 50%. Um, if you look at where we are right now, we're hovering at about 50% of all-time highs. Alltime high this cycle uh was 124K if I remember correctly. Um 62K

would be half of that be the 50% decline mark. and we're pretty much right there. Um, and so Chris Berniski actually had a lot of great tweets about this as well, uh, where he tweeted out some levels that he was watching, uh, and he was able to just call this, shout out to Chris. Um, wish I followed, uh, I followed this a little bit more carefully. was able to sell some and reserve some cash which you know will be the basis of uh starting to uh invest at these lower prices but you know still had some uh some positions in the market absorbed in this downturn and so Chris says uh you know 80k was the November 25 low this

was the local low of this bare cycle which hadn't even really gotten started we've gone through the 80k level 74k was the April 25 low. Uh April 2025 was a result of uh liberation day and Trump's tariffs. Uh it was also just uh below Micro Strategies cost basis which was 76K. We've blown past 74 and 76K to the downside or way way under Micro Strategies cost basis. Uh 70K was the top of the uh 2021 high. 2021 was 69K uh at the top uh and so we've you know now uh plunged below 70k. We're at about 63

uh and you know 50 to 70 was the range in 2021. 58k was the 200we simple moving average. Uh and then 50k and below is the bottom of that weekly range. Uh and the psychological below that number you would see death of bitcoin calls. Once again, I personally don't think we get below 50K. Um, I'm not, you know, going to sit here and say what's possible and what's not, but it feels as if, you know, between 50% uh to the downside, which is where we are now, we are probably going to go a little bit lower. Uh, just in a capitulation margin call liquidation cascade. Uh, then that would be the most aggressive selling. uh which would push

us lower than people feel like is a fair value and then they come in because they feel like you know it it is under that fair value and push the price back up. I I must think that you know even if you if you think this quantum thing is uh just a catastrophic crisis um yeah it it it just seems to me that you know we're not going to get too far below 50k. There's people calling for 35k. don't think we get quite there, but within this around this 50 to 60 number feels like it's a it's a time to kind of just dollar cost average in. Don't go in on leverage. You don't know where the exact bottom will be. You just start chipping, chipping, chipping away. Get in low cost basis. Um and ultimately stay patient

because it's going to be a long road uh back to 100K and beyond. So guys, um that sets the scene. That's where we are today. Our first guest uh is part of this institutional uh world. Uh and so we can go ahead and get uh get Morgan going. Uh we're going to skip Victor. We're going to go uh to the VP of BD at Avalabs. Uh we had a great conversation with uh Olivia Vanad from uh from Avalabs as well, the head of tokenization there. And I anticipate that with all the great things uh that a AVAC is doing on Avalanche. Um we're

going to uh we're going to have another equally great conversation here. So we're going to bring her in in just a moment, get her uh started and then we'll we'll have a great conversation uh despite the market conditions. So stay right where you guys are. If you guys made it this far, I I applaud you guys for sticking with us. We're going to bring the energy no matter what. Um the reality is that there are price incentive market price insensitive markets out there. Uh people are continuing to tokenize. Um a lot of the the hate while the market was going down was that you know these these guys weren't just buying assets, these financial institutions. They were

actually creating their own products. Some people called that extractive, other people, you know, just called that solid business practices. Um, and so we've got Morgan in the back now. We're gonna bring her up and, uh, and Morgan, uh, let's let's have a great show. Welcome. >> Thanks for having me. >> Absolutely. Um, I was just, you know, we were just talking about the markets a little bit. It's pretty catastrophic. >> I was like, what am I coming into right now? >> I know. It's It's crazy. I mean I I I think you know especially with the direction that Avalanche is heading you guys are probably uh you know talking to a lot of people that they don't watch the market with a very close eye but you know we I and I was explaining we we had a great uh a great conversation with

Olivia the head of tokenization at at Aval um and she was you know talking us through the different mechanisms for tokenization how these institutions are thinking about this and ultimately you know what is bringing them onchain I guess just to just to you know stay relevant here. What how how closely are some of these institutions looking at the market? Do they care that you know Bitcoin and ETH are kind of on on a downs slope now or or you know what what is their perspective on this? >> I mean I think we'd all be happier if prices were a lot higher in general [laughter] and if we were in a bull market. But um but no, I mean I think from from an institutional standpoint um various types of institutions whether they're

financial services or government agencies or other types of enterprises and corporates generally when they're kind of investing in this technology it's more for a medium to long-term uh outcome or an initiative. And so I think while you know it's not particularly helpful in the short term, I don't necessarily think that their plans have been totally derailed because of uh maybe short-term kind of price action. Um and I think a lot of them um are you know beyond being able to kind of enable uh you know crypto exposure and crypto trading to their clients whether it's institutions or retail a lot of them are also looking at how to actually use the tech uh in their day-to-day operations.

And a lot of that revolves around stable coins and uh smart contracts and tokenization by extension. And so it's very much looking at it as as a technology and enabler to kind of enable their business outcomes. Um and so ultimately they're they're very kind of long-term oriented and I think that they're still focused on building. >> Yeah, no surprise there. I mean like Summit was last week got a great turnout. Um you know there's tons of tokenization platforms. It seems like there's tons of interest both at the regulatory level as well as the institutional level. We're we're seeing a lot of these products be announced. Um be before we go any deeper, Morgan, I'd love to get your uh your background.

It's your first time on the show. Welcome. Uh despite the market conditions, hopefully you're uh you're a cause for the market to bounce here. Uh give us a sense of, you know, how you how you got to Ava Labs and and uh you know, a bit more about yourself. >> Sure. So um you may have reviewed this but um I run onchain finance uh business development at Avalabs and so when I first started um almost four years ago uh my role was just to focus on institutions and capital markets. So it was really just to get not just because it was a big rema and and of itself but it was to get asset managers FMIS and banks to leverage avalanche in the context of their blockchain and digital asset strategies. Over that past four years, the worlds of Trafi, DeFi, CFI, and tokenization have really converged,

and I think that they'll continue to converge. And so that remmit has kind of expanded beyond just institutional and wholesale finance, but also to tokenization, which Olivia and my team leads, as well as payments and treasury as well as DeFi. And we take a lot of the initiatives and partnerships forward um within my team kind of collectively across verticals or between between verticals because I think a lot of these things that are happening today are not necessarily mutually exclusive and and again I think that they'll continue to converge. Um in terms of my kind of professional fora into the digital asset space um you know everyone has their their story of how they how they discovered crypto and digital assets.

For me it was more boring. I guess I came from Tradfi um where you know I worked uh on a trading floor for for 10 years um and then became chief of staff to um to city's chief compliance officer which which was a very eye opening experience and kind of seeing how the whole bank kind of comes together and operates and how all the puzzle pieces fit into place and even you know even when I was sitting um on the trading floor on on in the front kind of first line of defense Um I saw you know what happens when kind of and this is not necessarily unique to city I think it's any large enterprise and organization but what happens when systems don't necessarily inherently

talk to each other >> um and the manual processes that kind of arise or are needed to arise as a result and um fixes kind of implemented that way and so as I kind of experienced that um you know I started learning more about digital assets and smart contracts and and figured that blockchain and smart contract capabilities could help to solve a lot of those issues as it relates to really upgrading legacy financial services infrastructure and institutional workflows. So, I'm sure we'll get into it, but I think the um tech can be applied to a lot of different kind of use cases. Um and and that was, you know, I got excited about

the idea of upgrading the plumbing, if you will. >> Yeah. So, so let's get into it. So, you know, you you were chief of staff with the city's complian uh city uh chief compliance officer. What were some of the things that you saw there? You know, disconnected pieces of the banking infrastructure and and ultimately, you know, now in hindsight, how can we use blockchains to kind of connect a lot of this plumbing? Everything becomes more composable. Everything's more seamless. You know, the the end value to these institutions that Avalabs and and you know, most of the tokenization infrastructure brings.

>> Yeah. So I think a lot of the use cases that we're focused on uh from a digital assets and blockchain perspective, a lot of them are as it relates to kind of post-trade settlement, collateral management um really things from like an operational perspective. Um which ultimately I think can directly kind of correlate to you know savings in operational overhead and um cost and efficiencies as it relates to again post-trade things. Um and and I think you know my view especially after coming from city is that being able to um be proactive about operations risk and control like it

might not be sexy but it directly correlates with a firm's ability to proactively take risk. And I think like you know a lot of times people in this space say well it's not it's not interesting if it doesn't if it's not a new revenue opportunity if it doesn't generate new revenue. But I think like to the extent you can get all of the middle and back office processes right, you're you're able to again take more and better and smarter risk and you know ultimately increase revenue. Um and so I think those two things are are inextricably linked and it's something that you know when we talk to different enterprises and financial services institutions we work to kind of facilitate that translation. Um but that

was just you know that was kind of my observation after uh you know coming from that background and and seeing a lot of the the tech enablement capabilities here. >> Yeah. And you know we've heard from several of these tech enablement partners you know we we have them on the show frequently and a lot of times you know when they do get an audience with a lot of these financial institutions these fintexs whether it be in the payments industry or the financial services you know it it it's a long sales cycle. You know, a lot of times they come in uh and almost serve as a consultant role just educating those teams, helping the financial institutions learn and and get an understanding of what is possible out there. And most of the time, you know,

the one who comes in and does that education is is who they end up partnering with to ultimately launch those those tokenized products. Um and and it's, you know, a measure of trust that's built up over that over that educational process. >> Yeah. What are some of the things you know you know if you if you have any war stories or experiences that you can share of just coming in and and you know doing the hard work of of taking someone zero to one on this on this on this journey because a lot of this is an education gap you know some experiences and then also like what tends to resonate with these institutions and these fintexs that ultimately like when you see the light bulb moment you know what is it that you say that gets them over that line?

>> Yeah that's a good question. And I think like the way that you framed it is resonates deeply with the way that we uh approach things as well as a lot of the kind of experiences that we've had. I mean we as as one example um a couple years ago we worked with uh JP Morgan in the context of p uh project guardian um around the tokenization of uh alternative assets alongside liquid assets. And like before that announcement was made, we had started cultivating the relationship with our digital asset team probably like two years before then, a year and a half to two years before then. And a lot of it was just relationship building, education, proactive followup, um and and you know, just constantly kind of working on

building the relationship. Um such that you know when they were ready to engage, they knew who we were. And then we really started going on that like trusted advisor journey where you know we we we came in and we did technical deep dives and and showed you know you know the ins and outs of the protocol and the capabilities and the differentiators and really got you know internal stakeholder buyin from an engineering perspective from a product perspective from a business perspective. So I think where we um you know one of the kind of key differentiators uh of our BD team is that um a lot of us uh come from financial services. And so we can kind of tow the line in both worlds and really take our partners along the

journey in terms of that education and translating the tech into um ways that our partners understand and that is relevant for them. And in many cases, to your point, from a consulting perspective, it's helping them sell the business case or sell Avalanche internally to their compliance teams and risk teams and legal and and even like helping them with presentations to regulators. So, it's really kind of getting in there um for formulating these trusted advisor relationships where to your point when they're ready to do something, it's not like I'm just, you know, pedalling a platform. It's like we we really kind of spend the time cultivating that relationship.

>> And is it backwards compatible in the sense that you're also working with the internal avalanche team? You know, you're kind of relaying feedback that you hear from the JP Morgans of the world and hey, we need to adjust this and that on the product to ultimately fit the market's needs. >> Totally. Totally. I think um especially over the past few years um because you know it's there's a very tight kind of feedback loop to from me to our developer relations team to our uh avocacloud team which is our kind of blockchain as a managed service offering as well as to our engineering team and saying these are the themes or this is something that I'm like constantly hearing >> we should think about >> you know obviously they can't make every

single change based on every single little piece of feedback But as things either become repetitive or come from kind of larger financial services institutions, >> it it's really something that those teams have really started to internalize. And part of it is also it's like, well, if it's going to be relevant for this big bank or for this exchange, it's probably going to be relevant for others. And so it's knowledge and features that it's not just a one-off, it's something that we can leverage um you know, as we scale to to other partners as well.

>> Yeah. Um you know you you mentioned it earlier it's this convergence of tradfi defy re really all aspects this is all becoming one world um but it is upgrading and it and it's utilizing tokenization and blockchains to you know as these things uh collide everything is is elevated the asset quality that we've seen on chain it was bitcoin it was ETH those aren't particularly quality assets today but you know like those were the quality assets now for elevating that we're getting a lot of assets that I think you know retail but also institutional investors are they're comfortable holding these things you know for for years on end because they

provide some sustainable long-term growth whereas we really never had that asset universe on chain before. Are are you guys primarily working with the issuers of these products themselves or generally where do you see this market breaking up and and kind of you know what are the segments of of teams you know the asset issuers are they're launching some of these products improving the asset universe on chain and then you have the tech enablement partners is there is there one area here that you think is particularly poised for growth >> um that's a good question I mean so maybe just to talk to your uh comment around upgrading the quality of assets.

I think just like as we take a step back and think about tokenization writ large even before it was called RWAS like tokenization was a thing back in like 2017 it was STOs and so tokenization in and of itself is not um a new concept. I think that there's many things this time around that um make this time different from a tokenization standpoint. I think just to kind of quickly go through those, I think uh a few years ago obviously you had a rising rate environment in the real world and so it basically saw a lot of kind of capital flight from the onchain world back uh back offchain and really put a spotlight on the need to bring real yield and real world assets onchain. I think you also

had the advent of DeFi which showcased that you know after you tokenize and issue an asset there's potentially stuff that you can do with that asset and it's not just you know issue and buy and subscribe and that's it. Um and basically make the asset more productive and especially with programmability and there's a lot of things that we can kind of talk about there. um you have much more robust infrastructure this time around whether it's kind of compliance infrastructure tokenization infrastructure with the requisite licenses to be able to issue and tokenize these assets. Stable coins are a huge kind of piece of infrastructure that didn't really exist, you know, in as much scale as it as it does today.

And then finally, speaking to the quality of the assets, I think historically the the assets that were being tokenized kind of self- selected to use the technical term for crappy assets. Um the insinuation was like, well, if you can't get financing through traditional capital market, see if like crypto will buy it, >> right? >> And there's definitely components of that still today, but it's it's dramatically improved. And with that, you've seen large high quality asset managers entering the space tokenizing their funds and their products and then um you know this this whole kind of universe of private credit where even within there there's a whole you know spectrum of of quality but it's definitely been improving. And so all that's to say is I think tokenization

um you know is definitely here to stay from our standpoint. We work with both the issuers as well as the tech enablement partners. I mean, from our standpoint, we want to have a relationship with both. And I think from an issuer standpoint, a lot of these asset managers, uh, tokenizing their funds is kind of step one in their broader blockchain and digital asset journey. And it's their way of, I think, like dipping their toe into this space. And all that's to say is I want to make sure that me and my team have a relationship with the asset managers because there's so much more, I think, for us to do to do with with those teams um, as we look ahead and on their road map. The one last thing that I'll say is we've we spent many not many I mean I

guess many years for crypto um making sure that there was a you know really good kind of high quality asset supply of tokenized assets on Avalanche and obviously those conversations continue but where we're spending the majority of our time is on the demand and distribution side of things working with like with directly with potential allocators and kind of understanding their mandates and their requirements and what's interesting to M uh so we can you know facilitate the proper introductions to the you know asset issuers but also working to cultivate relationships with the fintexs, neo banks and wealthtech platforms who ultimately would be interested in integrating those assets uh and those offerings into their back end um and and

really focused again on that demand and distribution side of the equation because I think today a lot of the asset managers are focused on you know potentially selling to crypton natives which is fine but I think you know mass adoption really won't come until you start seeing those integrations with traditional distribution channels. >> And and so could you walk us through what you think are sort of the the road map ahead? You know, tokenizing these funds, you know, is step one kind of gets their feet wet. They get in the industry, they get a sense of, you know, how this whole tokenization thing works. A lot of these tech enablement partners start to build those relationships as well.

What do you think ultimately is the next couple of steps and takes us through, you know, after we've tokenized funds, there's some demand from cryptonatives, but like you said, a lot of these other fintexs with, you know, traditional customers that may not even realize that crypto is underneath is is where I think a lot of people think this is heading. Yeah. Take us through what what the road map is after an asset issuer has tokenized their fund. >> Yeah. So there's um I I would kind of split it up into two different parts. I think on on the fintech side of things, what we're seeing in terms of like the order of operations um is really for a lot and you know it should be segmented

out further but using this as a general generality um what we've seen the order of operations be is a lot of those partners start in the first instance to issue um or to allow their customers to have access to dollars via stable coins. >> Um that's kind of the first step. Then there is the idea of turning that into digital savings accounts either through integrations with money market funds in the back end or andor through uh integrations with something like an a or a morpho to start earning on those dollars that are on that platform and then it is a transition to kind of embedded investing which is where you know the funds beyond the money market funds kind of slot in there. So, you

know, and then finally, I would say like uh stablecoin backed card products, which kind of completes the circle in terms of um you know, being able to actually spend spend those dollars on that platform in real life without having to kind of manually offramp those those stable coins. So, that's like the order of operations that we're seeing that a lot of fintexs are interested in. I think as it relates to asset managers and there's, you know, obviously so many different types of asset managers, the ones that we're particularly kind of bullish on is the private credit space.

>> Um, and really um, you know, we've been talking about fund tokenization, which is is introducing the technology pretty downstream in the process. So where I'm excited about as it relates to the private credit space and before we get to the fund tokeniza fund token well it's also fund tokenization [laughter] funds too is um is seeing how we can introduce the tech more upstream >> ideally at the point of origination like when when uh loans are originated to a variety of different entities in the context of like asset back finance specialty finance and like modern fintech lending. But if we're not there yet, then at least introducing onchain

kind of servicing and verification to start creating these efficiencies that we keep talking about and actually provide concrete reasons for allocators to be interested in leveraging blockchain under the hood. And so in that context, you know, some of those things that we've been talking about with with different originators as well as allocators are, you know, to the extent that you manage the facility on chain or you leverage an infrastructure or tech enablement partner that um helps to service an asset or a portfolio facility on chain. There are certain business benefits to you that you get.

for example, because you are embedding the terms of the facility into an onchain NFT, you can therefore start to um prevent things like double pledging of collateral, which is a very big issue in the space. Um you can start to atomically for the originator compare an incoming loan request with the terms of the facility pretty quickly as opposed to spending half a day every week manually reconciling it via an Excel sheet. And then in an ideal world where you start to use stable coins, being able to draw down that from that facility on a daily basis as opposed to a weekly or bi-weekly basis which occurs today. So those are just some examples, but um it's again it's kind of getting into the plumbing, but these are the

things that that um start to provide a concrete reason to put some of this stuff on chain. >> And and this is very helpful context. for so long we've had, you know, tons of conversations about the blockchain plumbing, but you know, not not so many about, you know, the other side of the world, which is ultimately now integrating with the blockchain plumbing. These things are now coming together. Um, I I think you make a lot of great points and, you know, at at the end of the day, I think, you know, people are very excited because especially in that fintech world, what that looks like to the end consumer is a high yield savings account. it it looks like getting, you know, four, five, six, seven percent on their money rather than, you know, a couple of basis points in a savings account. Now they can, you

know, have stable coin backed cards. They can spend it just like they're accustomed to, but they earn some extra yield. Um and and when it comes to the asset issuer space, it sounds like there's a lot of back office optimizations that can take place and a lot of like you said risk management, global risk management systems that can be further optimized as a result of you know not double pledging collateral and and kind of getting an understanding of the entire topography of of where money is sitting at any given point. >> Yep, I would agree with that. >> Morgan, take us home. Any closing thoughts on your side? just you know generally as more and more people because I you know we have conversations with you know plenty of companies in the space this bifurcation is happening on one hand people are going into the AI

agent world on the other hand you know they're going into the financial institution world either way they're leaving like the old crypto >> casino [laughter] >> the crypto casino with no product market fit beyond that like they're leaving that behind they're kind of going into these two new worlds so any any closing thoughts that people should keep in mind would be great >> yeah Well, I do think at some point that the worlds of AI and blockchain will will definitely converge in in various types of use cases, but you know, I'm still not over stable coins. Like I think that whole space will continue to grow. And by extension of that, I think a lot of these real world use cases will be built on and around that. And so I would say um to definitely continue to watch that space in terms of how it

impacts kind of follow on use cases. >> Yeah. Yeah. We're we're calling this world around stable coins neo finance. So, keep that in mind as well. Morgan, thank you so much for uh for joining us today. It was a real It was a pleasure. >> Sure. Thank you for having me. >> We'll see you again soon. Thanks, Morgan. >> All right, guys. We're going to I mean, we're going to continue to bring you guys Neo Finance coverage because this is where we believe a ton of activity is happening. Uh it is much more sustainable than we believe and and like you're hearing everyone agree, the crypto casino is unsustainable. So, we're going to continue to bring uh the best and brightest of tokenization, RWA, stable coins, front and center to you

guys to learn about how institutions and asset managers thinking about it. Um, and one of the things is that they're continuing to operate in a multi-chain world. Um, you know, we we are seeing more and more blockchains pop up. Um, uh, whether those are permission blockchains, we're seeing financial institutions tokenize their funds, maybe not go on one blockchain to rule them all. the multi-chain is uh is alive and well uh as ever uh even if the asset prices don't reflect it on a day like today. But that's why we're bringing uh Michael and Jason, the founders of Relay up on the show. Um because these guys just raised, they've got pren plenty of runway. They're going to be around for a

long long time. Uh so let's bring them up and uh we'll we'll get a sense of how uh how raising is in the current environment. Michael Jason, welcome to the show, guys. >> Hey, us. >> Good to be here. >> Thank you. Thank you for joining us. It's uh it's a pleasure to host you guys. I think this timing is raising in this environment is pretty impeccable. Like you guys have set this to worry about. Yeah. Like what is what is going through your mind as you're reacting to, you know, coming off this raise, which was probably a long process, but you know, finally announced today, and then the market conditions that you're you're seeing out there.

>> Yeah. Oh, go ahead, Jay. >> Yeah, you know, like honestly, uh, we feel really lucky. Um, I think, you know, crypto markets are always a little bit crazy and so we've kind of had a position from the beginning that when things are great and you have an opportunity to raise more money, like take advantage of those of those times. Like to be perfectly honest, this round was on the easier side, right? Like we had our two big investors from our series A double down. And so, um, that's kind of like the best place to be in, right? Like we got to do this quickly with people that we love working with and then we got to like kind of just go back to building. So, um, yeah, feeling very grateful.

>> Yeah. We also just don't look at our personal holdings and look at, you know, the company mission, what we're trying to do. Um, I feel like that makes it a lot easier. like there's a lot of doom and gloom obviously with uh around you know the Twitter sphere but I feel like for us like we're feeling like we're doing really well like customers are pouring in. We feel like we're nailing our messaging and really getting to people. So yeah, it's like kind of a two different worlds where you're like just focus on what we're doing and don't focus on like maybe the little bit of churn or uh stuff that's happening that maybe won't matter ultimately.

>> Yeah. Well, you know, interrupt has changed significantly. Um you guys may not even consider yourselves interop in the traditional sense. We we've had debates on here, you know, between mint and burn and intense, all these different, you know, multi-chain uh transfer strategies, the different architectures of interrupt protocols, you know, now it feels like a lot of this has pretty much been set. You guys have, you know, infrastructure that people love, came out of kind of came out of nowhere and and rose to the top very quickly. Um I it always feels like overnight success, right? That that's you know [laughter] what you guys have been building a long time. Um, but I I'm curious from your perspective how you've

seen this landscape change and and you know, we're seeing a ton of things in in terms of AI institutionalization of crypto, but I'm I'm curious from your perspective operating this financial infrastructure company. How have you seen the landscape change, you know, maybe since, you know, your seed all the way through to your series B? >> Yeah. You want to take this, Michael? >> Yeah. I feel like the for us like things haven't really changed that much. Like when we started we were focusing on okay there's a bunch of NFTTS on a bunch of different chains. People's balances are scattered all over the place. Like we just wanted to solve a very simple

problem of can we help people to crosschain mint and for us that meant okay we need to focus on making this as cheap as possible as fast as possible because in that landscape like a an NFT could mint out all of a sudden you didn't want the cost of bridging to be higher than the cost of minting like a one cent NFT. So we like started there and so we had really really intense constraints on like how we wanted to behave as a company, the type of service, the type of protocol we wanted to build. And so for us like that was the seed and then it bloomed into like let's do the same thing for tokens like crosschain token buying and then like

for us it just started to generalize from there. So like the core experience of what we're trying to provide was the same but it just kept growing in terms of its application. So for us like it's not that different. It's just this is what we're trying to do but more people get it now. it's in more places now and um you know like ob obviously like there's a ton of different players in the space but like for us focusing on crypto UX and like making that experience as good as possible was just that was the thing that we were doing and we're still doing that and we have a long way to go to finish the job.

>> Yeah. I I think the other thing is that you know these consumer expectations that Michael is talking about are the expectations of you know the the majority of people when they come on chain right so you have you know um cryptonative people they're okay using bridges moving money around having some friction um but like if you really want to bring mass adoption you actually have to meet these standards right being on chain has to feel like what it's like to use a credit card at the grocery store or buy something online. And so, um, that really is like our long-term vision, right? It's like how can you make this so simple that it's actually usable, you know? It's like crypto and for blockchains to cross the chasm, you

have to like know what the people on the other side of the chasm need, right? And those are like the majority of users in the world that have expectations about what the UX is like. So, that's kind of always been our focus. Now, we went and applied that to bridging and crosschain swaps because the markets were there and we really felt like was an opportunity to like, you know, cut our teeth inside of the crypto ecosystem, but um we have bigger ambitions than that, I would say. >> Okay. Well, I want to I want to get into those bigger ambitions. Uh Jason, be before we do, I just want to read off some stats here. Relay has powered over $20 billion in volume uh across 100 million transactions supporting 85 chains including Salana, Bitcoin, Tron, every major EVM network. So, you know,

there's a lot going on here. Um how have you guys been able to make this so extensible? Like for a long time we had, you know, look, you know, Mint and Burn was able to do this, Intense were able to do that, but you still had the lift of integrating chain after chain after chain, 85 plus chains. How have you guys been able to integrate this far and wide? >> Yeah, it's a it's a really good question. Um, it was really just a focus of ours from the beginning, right? So, uh, you know, shout out to the Zora team. They were the team that first asked us to help build something that could go crosschain. And one of the big problems there was that there just

weren't a lot of teams that were willing to go and work on this new network, right? So from the very early days, we were thinking about like there's going to be a lot of chains, right? You know, the original story of Relay was Reservoir, this NFT company, and we were kind of working with teams that were on the forefront of trying to push consumer crypto. And that meant cheap block space, right? Like nobody wanted to mint $10 NFTts anymore. And so all of a sudden you had all of these like crazy chains, a lot of which are not around anymore, you know, and um so we needed to go and be there for them from the beginning, right? So that was just a focus from for us from the beginning.

And we really felt like um it was an opportunity to connect the frontier of crypto by just being really aggressive and going to these places really quickly. And I I want to get your reaction to like Vitalik's recent writings here because >> oh yeah >> you know they I think some people are questioning you know the L2 road mapap as a whole maybe the multi-chain and and so as you know uh crosschain payments infrastructure money infrastructure you know for these these sorts of things how are you guys reacting to that? Yeah, I think I mean when I read that it actually I feel a lot of alignment with it, you know, just from the perspective of what I think he's really saying is we

have to have valuable chains. We have to have valuable protocols. Like I believe that too like relay cannot sustain on a bunch of chains like rising and falling and like just h like riding the wave of like chain expansion forever. Like there actually needs to be a bunch of really valuable chains out there that are differentiated from each other. Like I think we are doing something so audacious in trying to replace the in a global economy on blockchain rails and to do that we I feel like it's a necessity necessity to have so many tries so many perspectives so many different types of architectures and

tradeoffs. Like there's just so many different types of needs out there and like right now we're like serving the crypto native ecosystem a lot. But like there's a lot of different types of people out there that are going to have a lot of different needs. And I I feel like we don't have one bank. We don't have, you know, one type of anything out there. And even just like cultural differences and cultural preferences make me feel like there's going to be a lot of chains. They're going to be really valuable and like we don't need a million chains. We need, you know, even just like a hundred or 50. Relay is extremely valuable company under those

conditions. >> Yeah. And so I'm like I'm motivated by that because I think it's a call to action to to do what we're doing which is make a valuable piece of infrastructure and >> you know solve some real problems for people and and I think there's like more nuance to that in his story and you know maybe uh he wouldn't say it the same way that I do but like that's my takeaway and I'm actually pretty motivated by seeing that. >> Very cool. Yeah. He from my perspective is saying, "Yeah, we don't want any more copy pasta chains, you know, build something real, build something valuable or pivot, right?" Like that's that's where it's at. Um, and so >> where you guys are now, you you've got

20 billion in volume, you've got, you know, tons of product market fit here. People want to move across chains. I'm seeing and and we're talking to a lot of people that I think see it too, this bifurcation. You know, there's a lot of infrastructure and crypto casino products that never really had product market fit. Not you guys, but a lot of guys that are out there and and they're kind of falling by the wayside. Now, we see this bifurcation in one end going to the AI agent world, embracing payments. Stable coins has kind of spurred that uh and and you know, kind of pivoting more towards the deep tech. On on the other side, pivoting more towards the financial world. Stable coins are driving a lot of that as well. People want to talk to the asset issuers. You

know, they see Black Rockck, they see tokenization as sort of a a market that is very sustainable and positioned for a lot of growth. How do you think these two worlds ultimately collide on chain? And and how do you think relay can bring like aic finance to to reality? How does it help bring a lot of this, you know, neo finance world to reality? And ultimately, where do you see the vision if you're forecasting out relay, you know, a handful of years from now? >> Yeah, it's a really good it's a really good question. I mean, I think in some ways you can frame the this bifurcation as like um you know, the skuorphic and the non-skephic versions of crypto,

right? Like there's like a world where um blockchains eat traditional finance, right? And the people that are doing the behaviors that um are already in the financial world, they just live on blockchain rails and they may not even know that, right? And then you have like this vision of crypto as something that creates experiences that never existed before, >> right? And um the onchain world and like we believe in both of these things, right? And I think the reality is that under both of those conditions, you need to move money across chains instantly, >> right? And so I think our vision is like really being like critical infrastructure for how people move money between chains as quickly, as cheaply, as reliably as possible.

>> Um, and you know, we don't necessarily see us as being like we need to go in one camp or the other in the same ways that blockchains don't, right? Like blockchains themselves are core infrastructure that you can build all sorts of different stuff on top of, right? So we kind of um it's not that we're like use case agnostic, you know, we think a lot about what types of things people are building on top of relay and how we can support them. We just think that um you know, both of these use cases are valuable and there's lots of things to explore there. Um, you know, I think the the reality is in the cases where you have like a real retail consumer doing something that they're trying to

make a payment at a store or something like that, they really don't care about the blockchain. >> Right. >> Right. And so I think like that fits really well into our mission of kind of abstracting away the chains, helping people just do things that really matter to them. Right. Um, and so I think that's a, you know, there's a lot of positive pieces there >> and and it's something we're paying really close attention to. That like >> uh cycle is a lot longer I think. Right. [clears throat] So like we're still very much interested in like making crypto um work for people, making it possible for people to try new experiments and build new things like inside of the crypto native ecosystem. Um but definitely paying attention to like the kind of

influence of of Tradfi and how things are changing there. >> Yeah. And and to your point about consumers cheaper better faster and if they can get that and blockchain helps with that, >> blockchain's great. But it's whatever that's going to get there uh that the consumer wants. Michael, please. >> Um no, I'm just I think to this point, I'm I'm also like really excited about Agentic Finance. Like I think more transactions, more like just autonomous activity happening. I think that does make me feel like more more chains are necessary, more fragmentation, more experimentation.

Like I just think, you know, you see all these people building so quickly now. I can only imagine there's going to be more applications, more financial applications, more experiments, more you know autonomous financial actors like this is all good for relay like experimentation is good for relay fragmentation is good for relay because you know it's our job to make it coherent and create this UX layer that all these participants can interact with that make interacting with the blockchain feel like digital finance does now. So I think both of these angles are super

exciting for us and I think to Jason's point like we are just trying to be the best you know interop layer that we can be so that those two paths can fulfill themselves and I think we have such an important role and it's going to be extremely hard to fulfill and you know we're working hard and trying to figure out how to do that the best way that we can but um I think it's just forming that foundation and I think we're the best team to do that. >> I I love the the positioning that I hear you guys orbiting around for Relay. It's like essentially making order out ofa money chaos and and which I think >> is generally a really good place to be

because you're betting on chaos continuing to happen which is a pretty much given thing in this you know the the one thing you can guarantee is going to change is there's going to be change right like this is going to continue to happen the entropy of the world continues to evolve there's going to be more chaos and if you guys are there as service providers that can help people make sense of what's happening in this chaos I and and accelerated by AI and agentic payments and you know this new wave of of asset issuers and assets I I think makes a ton of sense and people are really going to need products like relay in order to make sense of everything that's happening on chain. Um I just want to get a sense

>> one one thing I might add to that you know I think it's um >> it's definitely true that we're making sense of the chaos. I also think that like there's a really good case to be made that relay enables not that chaos to exist but for like the types of products that people really want to work right so a good example would be like imagine you're building a neo finance app like a neo bank on stable coin rails and you want to use your own stable coin >> well it's actually pretty hard to do that if your stablecoin isn't connected to the rest of the blockchain ecosystem right >> right so we think of relay as also like giving giving people the tools to use the most innovative primitives that are available and making it possible to

stitch that together with the rest of the ecosystem. Right. Like you want to be able to build an app and issue a stable coin and have your users pay with it. >> Yeah. >> Not just like hold it inside of some app, but actually >> isolated. Right. >> Right. And and so I think like that's one of the things that we think about a lot is like how can relay also help drive that innovation, drive people to try new things and and hopefully do new things that actually work because you know they get the benefits of being sort of globally connected to all the other blockchains and they're not isolated.

It's easy to onboard makes the product better. Um, and so yeah, >> to that point, Jay, I feel like we also help you start anywhere. Like if you start on Salana, like you're not going to get isolated there because you get access to all the liquidity from every other chain. And I think, you know, as long as you're building valuable things, like it shouldn't be that that important where you start. And I think that's part of the experimentation, part of the >> the work that I feel like we're serving here is giving people the opportunity to start wherever, start, you know, deploy that stable coin, deploy on that chain, deploy on three chains. Like we can, you know, help people to smooth over some of

those like chain risks, some of the liquidity risks that might come from choosing one specific spot or another. Yeah. And and it's a much more pragmatic approach than the tribalistic approach of people said, "Oh, L2s are competing with one another. Oh, I want to be on this chain." I think all of that is going away because and and this is what tends to happen in these market conditions. People see, oh, we've really got to make some changes around here and like, you know, we've got to bunker down and find what end consumers really want. And I think that's been a driving force for you guys since the beginning.

>> Totally. >> Last question I got for you guys here is, you know, what what are you gonna spend the money on? What where does the 17 million go? >> Um I think a big part of it goes to scaling the team. >> Okay. >> You know, we uh we're still pretty lean. We're about 30 people right now. >> Um we have a lot to do and you know, we want to hire the best people to bring them on and and kind of join join the mission, right? So, um, you know, we're looking for good people that want to work on this problem that are passionate about blockchains, passionate about how, um, you know, we can deliver amazing consumer UX, you know, through this technology. And I think that's a big

focus for us, you know, like making sure that we build a great team. >> Um, so that's I think like really that's the that's the earmark, right? And uh you know the the flip side of that is we've been in crypto for a long time. We know what it's like to raise money and then have your back against the wall. And like we never want to do that, right? Like we're here to stay. So we we raised enough money uh all the money we need to feel really confident that we, you know, can take a really big swing. >> Um and yeah, so I think that's that's basically the story.

>> Yeah, well said. I think uh unfortunately I think there's gonna be some layoffs out there in the world and and you guys are hiring. You can probably get some people at a steel to be honest with you. >> True. True. >> Yeah. Hopefully everybody keeps their job. >> Yeah, that's [laughter] >> Guys, thank you so much for joining. It was a pleasure. Really? Uh >> yeah, it was great. Chad, >> it was fun. [clears throat] Uh despite, you know, all all the things that are happening out there, it was a great time and uh would love to have you guys on again soon. Um like you said, you're not going anywhere. So, um, you know, keep on building and, uh, keep fighting the good fight. It's a pleasure guys.

>> Cheers. Appreciate the time. Yeah, we'll chat soon. >> See you again soon. Cheers, guys. >> Yep. Bye. >> There we go. Well, guys, that's Relay. Um, unfortunately, I do believe there's going to be some people laid off. That's just the reality of how these things go. Um, I think, you know, we are getting more reasonable and safer with our corporate treasury management in this industry, but it's not perfect. Um, but Relay's hiring. That's the good news. Uh, and they just raised their series B, $17 million led by Archetype and Union Square. Guys, that's our show. Um, you can see that there are there are points of like places where this is still happening. there is still still a very

very much a secular bull market. That's how these companies are able to raise $17 million. It's it's why the the institutions at the highest level are really taking a look at this industry. They want the blockchain. They want the stable coins. Do they want the thousandth and one L2 token with no product market fit? Maybe not. But they're going to bring their own assets. They're going to put it on blockchain rails. Maybe that's a permission blockchain. Doesn't matter. There's going to be lots of opportunities out there. Learn about AI. Learn about finance. Learn about where this industry is heading because neo finance is at the center of it all. Um, and it's really

where AI and financial institutions are converging. All of it is built around stable coins. There's still tons of innovation happening. So, we're going to bring you guys all the info. Here's where you can stay updated, get a sense of everything that's happening in the space. We're going to be back tomorrow for our final show of the week and it'll be a good one. So, we'll see you there tomorrow. Peace, guys. Stay safe. [music] [music]