Will Stablecoins Replace Traditional Money? with Ryne Saxe of ECO

Transcript

I think that stable coins are going to play the biggest role in in in sort of class chain liquidity as well as getting sort of the next way of people on chain uh in general I hope we do not confront the end user with an additional decision point that adds math to their crypto user Journey that is why people don't opt into high yield savings accounts today I have to move my money with new math most people do not want to do those two things [Music] I'm here with Ryan saak CEO and co-founder of Eco they're building a

stable coin liquidity platform that allows stable coin liquidity to be connected across chains and give users the best experience so we're going to dive into what Eco is building as infrastructure and also the stable coin Market which I think is really interesting and has really grown the last uh couple years uh specifically last year uh before we get started though make sure to subscribe and hit the like button and hit the notification Bell to get notified when new episodes drop and be sure to follow me on Twitter at seep 3.0 Ryan thanks for joining me thank you really looking forward to the conversation stable coins say in stable coins yeah yeah it's is a super it's a super hot topic and like there's all

kinds of angles to cover this from uh um you know I was just I was just like reading through Christine lag guard's tweets because I don't know why but like my Twitter feed just like I'm always the first to comment on any of her tweets for some reason and she's been like tweeting about cbdcs and I just troll her all the time about like how bad an idea cbdcs are um but um I'd love to hear about your background and how you started working on eco yeah um okay so my background is kind of um a little bit Meandering on paper but it makes sense maybe if I talk through it quickly so uh kind of technical background um physics and math science mered up through undergrad a little bit

of coding uh some harder science stuff and then I kind of like freaked out about uh getting a PhD and narrowing down on that so um I kind of took a couple Gap years and ended up in law school and um went to law school of Stanford and that's kind of like my tied to the Bay Area still there and relevant at the time because sort of Bitcoin emerged as a thing right that was happening in the years I was at law school like the years I was at Law School kind of perfectly bridged the emergence of Bitcoin from like you know Cypher Punk like deep crypto to like just online nerds and Gamers to you know like business school people starting to learn about it that that sort of bridged

those three years and um I became aware of this thing called crypto at the time and and this is all relevant because this is like the first thing I ever discovered that like engaged a bunch of previously desperate interests in the same head space right so I was sort of an economics nerd and there's like the physics math cryptography side of it and then um I was in law school and so people were starting to like you know figure out this thing called crypto is probably going to have like a legal component that was important to and so uh I started to grck it on that basis just kind of like intellectually on the side and um went to a law firm for few years doing Tech related work got the itch to go back to building something kind of my technical side was not as

engaged as I wanted it to be and then ethereum had launched and was starting to light up and I was like I cannot keep up with this space anymore unless I just go building it and um so left legal practice in that professional season to to go back and this is um you know 2016 going into 2017 2017 um I'm really nostalgic for that era that was sort of like a prime the crypto Community was like pretty small and a lot of people trying to like build infra uh in San Francisco in particular so um it was pretty easy to plug in and we're kind of like of that era and did some stuff kind of building on my own met my co-founders over the course of that year we all cared a lot about payments and where payments didn't

didn't work in sort of the card processing e-commerce stack we knew crypto would disrupt that somehow we knew we could probably find an angle there and so um we started the company uh going into 2018 18 and a lot of people aren't aware that we've been around that long but we sort of had conviction at the time that people are going to pay with this stuff like in some way in some form it's just like better money tax uh stable coins are there going to be this new and interesting thing and of course it was maybe years early on that but we've been trying to um to work ever since then they effectively fote their adoption and so that's how my interest high in and that's what led us to ultimately um starting Eco and and persisting to today yeah it's interesting how the

whole like uh payment use case has kind of been under the radar for so long and and now it's kind of coming back I mean I remember when I first got into Bitcoin uh like 2013 14 15 everybody who own Bitcoin was kind of hellbent on getting all their local shops to accept Bitcoin like your local bar and you're like you know talking to like some bartender about this thing and like you know he doesn't care he's just like trying to get paid and um and that with with Bitcoin and um and the early cryptocurrencies uh certainly like the non-stable currencies like that never really happened I guess in hindsight for

obvious reasons because there's this whole like conversion thing that you have to do unless you're like actually long the currency and you want to hold it which you know some some people did and like got got pretty rich um doing that just like by having a bar that accepted Bitcoin but um but you know on the stablecoin side like living in Western developed countries with um pretty robust Financial uh systems uh and infrastructure it it's not really that uh important for us to be using stable coins for payments but what what a lot of us are not seeing is like what's happening in emerging markets and um and how how important stable coins are there um I wonder you

from where you're sitting how you see this this dichotomy between emerging markets and how important stable coins are there and and like Western markets and how or more developed markets with financial infrastructure and um what stable coins means in those places yeah I I only view it as a as a dichotomy to the extent you're building a product for a market right so I don't know of like very many products in particular that are trying to distribute to sort of real end users that would bridge that Gap and I actually think that's held crypto back I think a lot of people building products over here at crypto thought uh they could be sort of like geography agnostic because the technology GE is geography agnostic and and they be like right it took a few

years to like remember we're still like building nor like products for people and and deliver them kind of within the framework that makes sense to them incidentally we talk more about this in a little bit I trust but inally I think Eco as a liquidity layer kind of enables various products to be built in either direction but um I think the important thing to acknowledge is that stable coins solve real problems on both sides of that that's why I don't do so much as the dichotomy only to the extent you're building an app for a particular Market do I you that as a dichotomy but sort of monetary settlement and payments don't work nearly as well as people think that they do even in the developed world and then obviously money doesn't work nearly as well as it needs to in a lot of the

developing world and I think that it's kind of like eco's mission is like if you bring money on chain which mostly means bringing dollars on chain today um you can just make it work better for people in various ways whether it's yield generation or free or of capital or just like greater optionality you know to some extent like what you do your with your money is kind of like freedom of expression and so greater optionality to opt in and opt out of things uh with your money all of that's made possible by bringing money on chain so whether you are um doing interbank settlement in the developing world or whether you're a mainstream user who already has been no in the United States or whether you're a minay user in subar in Africa bringing your money on chain is still meaningful it's just a question of sort of like what

money flow problem are you trying to solve right so from a product perspective then uh is it safe to say then that like the stable coins that are and will be used for international settlement are not the same as those people will use to pay for like their everyday purchases um yeah I don't know but I tend to think that will prove true and the reason I think that is because I think that they're um the writing is on the wall for more institutions to come in and and basically launch their own stable right which is just like a better settling version of a dollar and a lot of those institutions are the ones that broker those types of transactions and they have a real interest in issuing their

own Stables or partnering with an official stable to make that happen and that might just a lot of those institutions are yet to join the frey but just will I think that's pretty clear based on Market momentum the last couple years and so I just there's going to be new staes that exists some of them are basically going to be kind of abstractive from the enduser experience for a wholesale purpose and those might be different than the ones that in users are already touching and sending today I think it's probably more likely than not I don't I don't know but I would probably bet on that yeah I I um I I heard this prediction on uh on Empire um where you know Jason uh um predicts that in 2025 there'll be at

least one major financial institution to launch its own stable coin uh give us a sense of How likely you think that is and and um what would that product look like what would be would it be a sement mechanism or more something that um is more akin to usdc where actual like retail users are utilizing this product yeah uh I definitely I think it's definitely going to happen I don't really like PR predictions I try to avoid them but that's one I'll opt into I think it's it's pretty clear I think like you know Pi USD with paypals is probably a pretty clear indicator that others will follow um and then it just depends on sort of like who is it do they have an enduser product like PayPal

does if so then they're probably promoting some sort of enduser um adoption but if it's a normal bank then I think it looks like a settlement product um for sure uh and and there's particular upside in doing that I think that they can expand their margins by settling in stable coins if they're sort of like technically ready to adopt that system and then if they enable a sort of a yield bearing stable coin they can obviously sort of share in that yield Maybe higher margin uh than some of them uh currently sort of claim with traditional savings accounts and um that's going to require like some Progressive thinking and rewiring of um maybe the underlying account structure but I think a lot of Institutions are already already sort of undertaking that

challenge I think it's like a question of when not if this year uh but a major institution will join The Fray and then you know I would keep an eye on Visa as well Visa is the Visa is one that kind of like Bridges the Gap um this is settlement Network so probably that's the underlying stable one functionality um but they obviously have a massive director consumer distribution Network through their banking partners that they could leverage if they wanted to promote kind of like an enduser stable coin of their own and they they launched this issuance platform um kind of in the second half of last year I think people have taken their eyes off a bit just because the Market's Super Active but they've been thinking about this pretty progressively for a long

time since before PayPal join the phas so I wouldn't I wouldn't be surprised if there's a following announcement there this year I don't know anything but you know if I'm going to take that you asked me to take that prediction and run with it a little bit so if I'm going to have to just s of like stake a horse um that would be one I'd probably keep an eye on very interesting uh yeah I think it's a space to just sort of keep an eye on and one that's going to continue to develop um can you talk a little bit about uh the like growth in stable coin volumes uh over the last uh yeah I guess like over the last 12 months and how you see that progressing as we go into is presumably you know the the tail end of like the cycle and what

I think will be like a pretty big bull market um sometime this year you know blowoff top um what role are stable coin's going to have to play in the composition of like the global crypto market cap you think enormous maybe maybe the biggest role and the reason I say that is because the stable coin psychologically for people are the shortest leap on chain right if I can just you know doing anything with your money is a high friction thing to convince people to do if I can simplify the journey on Chain by just saying like hold your dollar here not there it's a different digital dollar it works better for you then that's going to be I Pro the the most promising sort of uh

proposition for getting a bunch of new people to come on chain and then do something else and I think more and more of the onchain experience is going to be dominated in stable coins not eth not BTC not other native assets you're going to need to sort of like translate that into a pretty simplistic stable coin based experience which incidentally is what pika's design to do um I think that stable coins are going to play the biggest role in in in sort of mass chain liquidity as well as getting sort of the next wave of people onchain uh in general and the the growth curve has been pretty astounding it's not surprising but it's pretty astounding and I think what's interesting is if you were kind of like earlier uh in the space building anything around consumer adoptions or payments you were probably like looking at stable coins as the big

unlock they're kind of like boring in the right way I mean that I mean that in a good way right it's so they simplify the crypto value prop um in a lot of ways for the mainstream user into something that's easier to understand and it's like I think we just like waited longer uh than we expected to for them to blow up and then suddenly they blew up in the last couple years in a good way they used to blow up in bad ways now yeah not behind us I hope don't going in the good way totally right so this is kind of like stable coin Season 2 Season one was like very experimental a lot of algorithmic stables a lot of like I think like a logical leap too far was that people will almost like skip a traditional stable coin and go to some

exotic one to do different things on chain you know we even like we even sort of like committed that fallacy with some of early early designs that was just an assumption we had in the idealistic world of CCO at the time that that was a little bit too far too far ahead and um bunch of those stable coins didn't work and then stable coins kind of went dead for a couple years and then they lit back up Suddenly in the last 18 months with a bunch of institutional adoption some interesting onchain experiments that I think Athena Athena really inspired and now it's like stable coin season 2 with all this Market validation right circle found sort of their own product Market fit with usdc and uh institutions are coming in PayPal has come in Athena for the onchain world has come in

and so the growth curve has been astounding it just sort of like happened suddenly and it sparked and now it's exponential and then answer the last part of your question I think it only accelerates and I think it's countery counter cyclical I think that like stable coins are fairly robust against the Ms and flows of crypto obviously if crypto's super hot I think you can expect stable coin inflows to be accelerating but I think in general you can expect the stablecoin market cap to grow regardless of how up or down the rest of the crypto Market is because it's just better dollar technology fundamentally there's lots of reasons to use stable coins independent of how crypto is doing and I think that that's only going to accelerate I think I've I've gone on record recently and said as

much growth as we've seen it's like it's like 1% into into the pie of of like stable coin you know theoretical stable coin market cap end game and so it's just so so early in my opinion yeah looking at the I I I actually never looked at this figure but I'm looking at the total Market gap for stable coins right now and it's somewhere around um just short of a quarter trillion dollars so about 214 billion uh of you know of which um close to 200 billion is made up of tether and usdc and then like closely behind us usds and Athena and and d and some of the other ones we're familiar with um I

guess like as a as a user and uh specifically like I I think from the perspective of like a a new user that's coming on chain right you mentioned that like stable coins are the easiest um way to to get on chain how should users be thinking about you know the the more like onchain algorithmic um in the in the s in the in the type like Athena uh versus you know the dollar back usdc tether uh which I guess you could kind of put into different categories as like highly regulated and not so regulated yeah uh i' hope I hope they don't have to think carefully about that at first I think that um kind of Usual Suspects

starting with usdc for a lot of people are just the simplest thing right this this this should be a mode in a major venge or coin Bas as they you know if they play their cards right in my opinion remember what I said earlier it's just a different digital dollar hold your money here not there and the digital dollar that that's most most true for I think is usdc and so for you know maybe in other parts of the developing World they've gotten they've got comparable tether as such those are the obviously the two big ones and that's why right um if you can just convince someone to hold this digital dollar instead of a different one um then that's kind of like the the shortest leap I think psychologically on chain so way shorter leap then by eth to

do the rest of this stuff you know um and so my hope they don't actually have to think about it at the leap but then maybe as you get your money on chain you you realize that there are different variant of this digital dolly that might have different benefits for you and as you get kind of into newer models Athena being the biggest one now uh you can reach for extra yield most often I think that you know we'll see what network effects and distributions surround these things um I might need a different stable to do some other thing uh I hope not I hope we don't Silo money that way but that may be kind of how how things shake out in the interim so maybe there's some sort of like decision calculus there but again I hope it's not

there I hope it's just like simply like how much yield and risk tolerance do I have for that yield that goes into a decision of like what other Stables I might choose to own but I think it just like it needs to start with the most boring ones and again I say boring in a good way here otherwise there's just like a lot of friction for people to move their money um and and and do something new with it uh the yield equation matter matters a lot uh and and and so here we get into like a different part of the landscape that's not necessarily algorithmic versus something else you starting to get in rwas ETC I think that that's where all the competition is going to be it's going to be sort of what are the distribution channels for people to get my stable

coin and how do I pay my yield and how much yield do I pay and is that yield within like a range of risk tance that the average user you know is willing to undertake um that's where a lot of the competition is going to happen and there's a lot that shake there's a lot to shake out there some new Stables are going to have new models 10 different Stables are all you know on the contrary there's going to be 10 Sables that all do the exact same thing raft treasuries right and then the question is like how do they find distribution do any of them find network effects um that'll be interesting to see play out but I I I hope we I guess I'll wrap all that up by saying I hope we do not confront the end user with an additional decision point that adds math

to their crypto user journey I we don't do that that is why people don't opt into high yield savings accounts today I have to move my money with new math most people do not want to do those two things right so I hope that we are not creating the same sort of fragmented experience by shopping Stables I hope that we can just design onchain user experience to get someone into sort of like a a stable rate St sort of like stable rate coin uh maybe into usdc to start and and kind of like let them go from there but that we don't hinder the initial step to use crypto with like this confusing kind of like shopping experience among different yield strategy Stables I think that that would really hold us back yeah and what do you

make of um um kind of this shifting conversation around or this conversation around like coinbase shifting some of the yield onto um onto like holders and uh like exchanges Etc uh you mean just like exposing underlying yield for holding usdc is that yeah that's right yeah yeah I think they have to right like I think that the days it has been a very privileged position that usdc and Taylor have had to sort of just fully monetize the the yield margin on the background one of the it's amazing business you could say it's probably one of the best businesses in the history of the world yeah on the margin but

competition comes they start that you know that they start to share those incentives with end users and they're going to have to play that game as well and they'll they already have the distribution so I I I trust they'll figure out the yield strategy as well yeah so it's entirely competition driven where you know you have Athena and other other stable coins that are offering those higher yields like you know you as a user you'd rather be holding those stable coins if you're more risk averse or if you're willing to take on that risk um so usdc and tether have to respond by offering you know equal not necessarily equal but like some yield opportunities for users where you holding those coins that's exactly right and it so it's competition from new entrance but I

think it's also competition that they're singing to themselves what I'm when I say they I mean like coinbase in circle they're becoming more full service platform Suites which means that a coinbase account pretty soon if not already should legitimately compete with bank accounts for and so they're not only competing you know with other staes paying you but they increasingly should be thinking themselves competing with high yield State high yield savings accounts right right so you want to get users to hold their money there to keep it there you got to pay something on it and then as you as you point out you may be exactly right about this they may not have to share all that yield within users just by virtue of their Network effects and and and and maybe platform login for the same reason the biggest banks don't pay the highest rates either

right um they may be able to capture a little bit of that margin still without seeing users flee to different coins that's going to be super interesting to pend the dynamic to to watch play out very interesting well let's um maybe take a step back here and talk about Eco so what what problem is Eco solving and what is the vision uh for Eco yeah so we want to basically compose any onchain action into a oneclick stable send simple as that so the problem that we're solving is is too confusing to get on chain into native assets to do your thing right and it's certainly too confusing expensive and I would say even insecure to get cross chain to do your

thing right you know we're resigned to the fact that there's going to be a bunch of different things to do on chain that live on different sort of different chains in different ecosystems um it's a known problem you know this is the interal podcast right it's a known problem that that Sil liquidity and sort of fragments user experience and so you know there's been tons of work great work over the last two years to connect chains right and to build a bridging experience that's more standard we want to go beyond that right we want to sort of like combine these Concepts that we call interop and chain abstraction and and and basically compose those actions into a oneclick stable send so if I want to go play a game over there or deposit somewhere else or be an LP somewhere else right I

can just click a button that says send Tim and it will hook into the other side to do the thing that I want to do not only is them sort of a TX Improvement in existing onchain user experience for you and I and everybody else who's already here but I think that's going to be a table Stakes user experience for the wave of people who haven't arrived yet right and no longer do you have to tell them anything about cross chain experiences no longer do you have to use the phrase chain abstraction which is just user experience right no longer do you have to tell them about eth or whatever native asset would otherwise be required is their Ticket to Ride and do the thing they just move their money on chain just move their dollars on chain then we can activate it and hook them

into whatever what they want to do and so that's why Eco exists that's why we've always existed it's just that now finally stable coins have taken off right and I think we found the right angle but we've really always existed to sort of put people's money on chain and make it work better for them and that starts with putting stables in their pockets and um you know by lowering the barrier to sort of like do whatever you want to do on chain and by making it as simple as sort of a dollar send in the ux we think that we're uh we think that we're on the cusp and um that's why we exist that's the network we built happy to talk more about how it's designed where we want to take it um but that's the user experience that is on Northstar

and that we really want to stand for you know so how do you differentiate like well I Me Maybe maybe my my take here so um I've talked to a lot of chain abstraction protocols I just had bonom on um recently one I probably can but like you there's like Omni and particle and like agoric and like and then all the l1s are doing chain abstraction as well and orchestration and like intense and um I think people have a pretty good grasp of what that means so essentially like one transaction uh will ideally um execute a number of onchain

signatures or one signature will execute a number of onchain transactions uh like I I think the the kind of um protocols that are pushing a little bit further would also allow you to hold multiple asset types with a signal um uh smart account and and then you know if you sort of like wrap that all together uh you want to have it such that like you have uh solvers that are uh executing the intent of the user so that most of the stuff not happening on chain but it's settling on chain um so that's chain abstraction orchestration uh account abstraction um what Eco brings to the table is this idea that

people shouldn't that people will not be doing those things with eth or um Bitcoin or salana they're going to be doing that with stable coins and so we need like an additional I guess layer of abstraction on top of that that abstracts away these complex like volatile tokens and allows user just to come in with their dollars do the thing and and have the outcome correct correct um right just abstraction all the way down uh you chain exraction just user experience right yeah I think we need to keep in

mind like how much progress we've made as as a space crypto r large web 3 but also keep in mind how early it is right it's not surprising that we've developed we're still sort of like standing up the stack right and it's not surprising that we've sort of like created fragmentation problem for ourselves that's fine it's like we're we're like a it's a maturing technical solution you know um in Internet 1992 or whatever it is and um so we're having to solve these abstraction problems kind of like throughout the stack as we create them for ourselves but it does feel like the rubber band is about to like Snap into a more standardized expectation for user experience and the way some of these networks talk to each other because there's been a bunch of Great Tech built right and a lot of those Builders are

collaborating on standards and so it feels like in 2025 I think that that we're going to sort of like see some uh some consolidation I mean that kind of just in a good way consolidation of user experience and you know what you said is correct so we we we sort of are involved with those various themes we have intent-based liquidity Pathways because we think that that uh provides the best user experience in transaction execution um we have sort of an account construct which is abstract from the user but it it Aggregates their stable stable Co spending power between connected apps and chains uh basically orchestrates it relays it to do the thing that they want to do um and then we have sort of you know the endgame

play which is something we call crowd liquidity there's sort of like how do you activate user balances to serve order flow anywhere in the network and make sure that sort of capacity is allocated where people want to go and roll all that into a protocol um could you talk a little bit more about that liquidity component I think that's something that is quite interesting about Eco um totally yeah how does that work and what's the endgame yeah so let me walk it back from man Northstar again composable stable coin experience right that's the North Star so what what what distinguishes Eco from some of the other providers you mentioned is we're way more opinionated on the use case optimized for Staples only right we work with some of those providers but we just sort of wrap the

interface in a different way to ensure that any onchain actions composable into that oneclick stable send okay okay what do I need actually if I want any onchain action to be a one-click stable send I basically need like a huge interoperable stable coin liquidity Network right I need to know that there stable coin liquidity that can flow wherever I need it to compose my transaction and execute it right and I need liquidity Pathways to connect those apps and those chains I need sort of a standard ux for making that one click and it calling to the network with my instructions right and then I just need to ensure there's network capacity to do the thing or the things that people want to do and so I've really just outlined

the three parts of the way we think about the new Eco Network there are these routes you can go those are in beta those are live that's part of it there's this construct of an account this is not a new wallet product this is a product that sort of connects to apps and wallets that already exist and make sure that when I'm using eco it's a one-clip transaction that's sort of the accounts interface and that's in Alpha right now soly testing in the background and that enough could give us this one-click stable synd experience that I'm explaining but we can go so much further than that right and at that point in time we've sort of like networked nent Capital uh within apps and chains of connector right and we all sit on Mason

dollars it's just like a bad habit that all of us dollar holders have right um most of the time we got some dollars sitting somewhere in an account or in a pocket that aren't working for us and this concept I for one don't have a whole lot of those I don't yeah I I try to stay pretty dollar light you know yeah but I guess I'm an exception yeah I think a lot of us do some of us some of us onchain folks are are are have maybe sort of like swept a lot of that out but I think a lot of people are are sitting on dollars they either sort of Forgotten I don't like to track they don't they don't want the overhead right there's this artificial barrier between checking and saving so a lot of people don't sweep into yield bearing things they

just leave the money there uh and that's all understandable it's just it's sort of like psychological um but if I have any nent or passive balance connected on chain I want to make sure it's activated I want to make sure that I'm earning on that balance niut of course I should be probably holding a yield bearing stable to give me some base rate but what's really interesting about this concept of crowd liquidity and actually we're writing about this and saying a lot more about it we've already prototyped it we're going to start rolling out the Prototype and saying more about it in February so this is like an alpha conversation right now you've asked the right question at the right time uh but crowd liquidity just basically activates the passive stable coin balances that exist in Connected wall is apps uh across the network and what I can do is

I can just say I give the network permission or I delegate basically my my available stable coin spending power to solve order FL and um you know this is really important the way we've constructed this okay with routes I'm connected to anything else I might want to do with accounts I have a standard user experience across those things what that should mean is that I as a user have confidence that my stable coin spending power is available whenever I need it right I should also be rather agnostic to the stable coin that I'm holding in any given point in time so long as it's a yield bearing stable that pays me that base rate so I basically delegated to the rest of the network with crowd liquidity so long as I do

have that confidence and I know I can use my money where when and where I need my money in between those moments of using my money I'm basically delegating to this network this crowd liquidity Network the ability to pull my sort of excess Capital with the rest of the network to solve order flow for users that are sending stables for any reason and there's so much like there's so much to love about this concept I'm underestimating this concept and I'm building it with a bunch of other people so if I'm underestimate ating it you're probably underestimating it too but as you peel like as you peel the layers back um you realize how powerful it is right and so it's it's sort of like helping facilitate settlement across different pools of liquidity um yeah maybe like perhaps

like an example would be helpful here because I kind of get it but um would be helpful to get a proper example like you know Alice and Bob and Charlie and so any transaction across the network is based transaction right which means as a user I just say I want to do that thing over there and then the network basically says this is how much it's going to cost it's going to cost the amount to do that thing over there plus usually some small fee for execution and someone in the background is going to front you the capital to figure out how to construct that transaction and do the thing you want to do and because you don't have to worry about constructing the transaction and you don't have to worry about all the onchain instructions and gas Etc you're basically paying a small fee for convenience and it's

usually going to happen faster yeah right you know like we all use an intent Network or most of us use an intent Network it's called Uber I tell Uber where I want to show up I don't pick the driver right I don't tell it the route it just tells me how much money it's going to cost me I accept it takes me there right and that's an intent Network and that's going to be not novel to a person who is do not get used crypto if you have used crypto you understand that that has not been how it's worked and so that's a table stake you your exper experience that we been to provide to people okay so Alice sends Bob money over there someone in the background that constructs and executes that

transaction and fronts the funds is going to be called a solver or a filler a lot of people on your in your audience already know this uh BR who are the solvers and the fillers they're usually Prof professional Capital providers right so intensive existed basically in prod at scale I would say for a year year and a half at most and um they're usually market makers that provide the capital and monitor the order flow to go fill transactions and the yield for doing so is pretty juicy right it's usually like high volume kind of lower margin but a lot of volume and it's growing all the time um and so you know there's there's no problem with that

these Capital providers help us bootstrap markets it's just I think not as fee efficient as It ultimately could be because there's not enough capacity provided yet there's not enough Capital to go around to serve all the new chains that people might want to go to and a lot of that orderflow price Discovery happens offchain so it could be a little bit blackbox does the IND user know they're really getting the best price for their execution not always uh We've tolerated that because it's so early days but I think that we can massively scale the capital available for solving order flow with this crowd liquidity concept and you can bring a lot of that price discovery on chain and you can make that yield Source accessible to the average person just holding their dollars on chain and so you know there's this kind of like democratization of

capital Vibe uh I think anytime we we create more Capital competition on chain where it's probably net good um you're probably sort of driving fee structures down and making sure that end users are getting the best execution when you create that forum and here we can do that well at the same time giving average people an access to this heal and source which ultimately has been pretty hard to to serve without a highly sophisticated Capital strategy up until this Point um and that is it is it a race to the bottom though like in terms of giving people access to yield as as um solvers compete for like the best rates everything is it do do we not get to a point where like the yeld basically gets just captured by mostly about

solvers well ultimately I want this network to be sort of the the solver scale you're right in the sense that this probably a race to the bottom as sort of more Capital comes online the fee margin compressive but I think that's actually good because you're just giving then you're giving like actual transactors better tones right so whereas like the margin might be pretty juicy today it's definitely going to narrow as kind of more Capital comes in to serve these networks that's just something fine right but again if it's crowd liquidity it's people that are already earning some intrinsic rate ideally on the stable they're holding before so any yield on top of that's like gravy right um so you know even if that margin's compressing a bit you're

still getting more than you would theoretically and then you know ultimately I think actually the crowd liquidity concept is the only way to scale capital on chain to you know serve the number of chains and apps that people are going to ultimately want to use I think it's highly inefficient to go into the private market and say hey professional Capital provider can you split Capital between chains a b c and d on some rebalancing strategy that you have to monitor manually because people might want want to go do that thing I think it's way more efficient to say people have opted into this network uh that can ensure that it sort of reallocates capacity where it's seeing order flow in real time and smart solve

where that order flow exists um while maintaining liquidity such that users can pull from your balance anytime they want to and um it's thought as as a network play in terms of capacity it's not not that dissimilar it's another way I think that the Uber analogy actually works or maybe the Airbnb strategy there's massive sort of like platform economic power and sort of value creation that happens when you take a bunch of nent supply and you organize it into a market and you AB it right this is not that dissimilar and you you just cannot scale a lot of these networks right uh the same way um as you would with sort of a a strategy that that takes and Aggregates all of the nent capitals

otherwise sitting out there I don't know how you're otherwise going to solve the coordination problem of recruiting professional Capital providers to monitor lot lless overflow manually at the pace chains and new chains and apps are proliferating right um and so that's where the power is in this play that's um that's very interesting and how do you see this um liquidity fragmentation playing out I guess like you know after after speaking with like a lot of I guess you know chain oftion protocols uh to to to uh to put it simply I wonder to what extent to what extent do fragmentation and chain abstraction protocols I.E like many

chain abstraction protocols not create more layers of fragmentation as these Protocols are like not compatible with each other necessarily and like aggregate liquidity in different ways how should people be thinking about that right with because like the entire kind of pitch of change abstraction protocols is you know we abstract away and kind of solve the liquidity fragmentation problem but if there's like 20 of these across EDM chains like all competing for users in liquidity we have another fragmentation problem this is such an important point this is you should be shouting about this one um and this is why this instantly what I don't want to be a change direction protocol

quote unquote uh we work with a bunch of them in at guess you can you can say we are one in the sense of like creating user experience but the the point you're making is so so important because we're basically reconstructing a payment stack that has like 11 fee tankers between point a point B theoretically right so like a meme we've run way too far with in my you're going to be have me in hot take territory here but a meme that we've run way too far with in my opinion over the last few years is modularity and U modularity is like I think like scalable Tech and we needed to simplify a lot of um infrastructure development Problems by like focusing on modular layers but if you take that too far you end up with like 10 modular

layers and they're all trying to roll a protocol which means they're all taking a feet basically and that just like seems like we've like taken it too far and um we're a little bit contrarian with the way we we we designed our thing uh because we maybe a little bit more monolithic than than some other protocols I want this sort of like tightly integrated liquidity account and Route construct and by the way on routes I'm willing to connect to other routes as well uh our routes are 7683 compliant they take a standard orderflow format that other intent-based routes out there also that's a language they also speak I just want users to have the best execution on the route fee which means lowest fee highest fill rate but sort of beyond that I'm pretty

opinionated with how crowd liquidity routes or order flow and accounts sort of talk to each other because I think if you just like fully surrender those layers you're basically kind of like creating this like weird fragmented fee construct and then someone's going to have to come along and aggregate the fee somehow you're going to have to have a meta pay master that like rolls all those fees into a dollar and you're G you're going to need some new exraction in for on the back end for that and I don't think um I don't think it's a thing that enough people are talking about now the market might just take care so how do we solve it like what's the solution here because this open market of ideas is like creating more fragmentation I'm seeing it before my eyes it's like we're not going in the

right direction here I agree with you but um it may end up being somewhat of a moot point because not all these layers are going to work we're still in infro experimentation territory right so I think you're going to see a lot of consolidation in these layers I think there is a lot of good cooperation maybe a lot of good cooption happening in terms of a lot of the layers agreeing on EIP ERC type standards of like at least a way that they're going to like talk to each other and construct fees and then you're going to probably end up with a solution that can sort of like natively quote a dollar fee in sort of like one transaction anyway and so I think we just got to give a little bit of time um

for competition to kind of like weed some out that don't scale um for certain layers in the stack to maybe reaggregate again maybe we look at the chain exraction stack and it's got like seven layers and you think maybe it only needs three or four and some sort of like EIP ERC process gradually kind of brings it back together I don't think it's going to be as bad as it looks like it might be now even though I think the point you're making is like a critical one it's it's also an ironic Point by the way there's these like points of irony all over all over crypto right like are we are we building the same thing again one reason why crypto seems inevitable is payment technology is like a lot of people aren't aware when I swipe my my card today you know there

are like six or seven fees behind the scene on that card swipe right and that just doesn't seem efficient but the problem St you're calling out is pretty soon we're going to have six or seven fees behind the scene whenever I click Send on the crypto transaction as well and the question is whether all those need to exist and even if there are multiple fee takes on the back end how you know can we just like abstract that away from the user and make it an intuitive construct at the end of the day I just want to make sure that we don't sort of like you know you could call them protocols not middlemen but I want to make sure we don't construct a similar payment stack where you you have six people that need to sort of like have their take in order for something to go from point A to Port

B yeah well I am I'm hoping that uh I mean I think we're going to see this I think there there will be some consolidation in in a lot of the uh modular protocols that uh you know will will sort of reintegrate yeah maybe this is too much of a simplistic analogy but you know I see the way um we had like through the late like 2010 mid 2000s to kind of mid-20 a lot of infrastructure startups in web in web 2 that were building new types of databases programming languages like apis and like continuous integration etc for the new mobile web and uh this this new way of developing

uh applications that was scalable and you know was kind of a departure from the monolithic stacks of like asp.net and uh and PHP and then all of that kind of Consolidated back into Amazon AWS and you know Google cloud and and there there's now like you know five or six providers that kind of dominate the market that offer this modular stack but within a singular um monolithic integrated platform uh yeah do do you see this also happening in crypto and like what indications uh do like what what what's your be looking at for for as an indication that that is happening I think it's just yeah I definitely see it I think this is just like metaphysics

this is just like human nature right Universe expands Universe cont contracts it's like so do our systems that we build um you know we break them up and then they reaggregate and you hope that they reaggregate like with some efficiency improvement over the last agregation cycle you know and I think that's just kind of the way it goes I I think the most important thing that I don't I don't I say that pretty neutrally actually it's just like a thing that happens and I think the most important thing as we sort of like you know as we endure that in in the different eras of crypto development is that we protect an underlying set of values that make this technology

important and unique um you know it's a certain set of values that I would say is free flow of capital which some people would call censorship censorship resistance obviously um and just having fundamentally better optionality and functionality for my money um at the end of the day and I think you know obviously there are more but if we want to really protect those tenants that that hold true for crypto and make it so promising so long as we're doing that then I think that we can permit cycles of expansion and contraction and honestly they just happen um you ask what we should be looking at you can usually I I don't know we should be looking at you can usually feel it though right like you

can feel when thing when things have like gotten gone like a little bit too far either way because you know from a builder's perspective those are usually the points in time where it becomes really hard to construct a user experience that makes sense right and you know in the monolithic ethereum days it's really hard to constru a user experience that made sense and now it's felt it's feeling a little bit that way again for the problem statement you called out a minutes ago right like on the build versus buy equation and on like the coopertition Spectrum it's like I could be I could be probably speeding my path to Market by working with like eight different Integrations right but does that

ultimately leave me in a position to construct a user experience that makes sense um I can build like a good cross chain swap app with that but I don't need to build that a bunch of people that built a good one right what I need to do is to build something that allows an app developer to bring the next 100 million people on chain and if it's really hard to do that with too many layers of modularity then maybe need to think about reintegrating and opinionating certain layers of the stack and you can usually just kind of tell as a builder how much friction am mind during just translate a user experience that the average person would even want yeah I think that feels about right um so what's on the road map and

maybe talk a little bit about um how you're working with hyperlane for introp Ability uh between the uh different uh chains that you support yeah that team is so good I appreciate them so much probably one of rep's Partners so um a little bit of technical kind of like nitty-gritty on the way routes work why do we build routes there's other intent routes that are out there right um we build them for a couple reasons probably three reasons I'll highlight here one is routes can be permission permissionless extended so a lot of the intent routes that existed in the marketplace when we started building this solution didn't go to all the chains and apps we wanted them to go to so we wanted to build a more extensible solution uh number two we wanted to

optimize it for stable coins right that's what we care about and when you optimize the order flow kind of input output for stable coins only you can make it a little bit more uh efficient and number three is we wanted to um make them configurable in terms of like how do I validate that a transaction happened correctly well there may be different speed versus trust trade-offs underneath that assumption and we wanted to make that um flexible for developers and so this is where hyperlink comes in uh we built a couple different types of routes one uses like native onchain storage proofs that something we just thought someone needed to build in the market so no new trust assumptions data already posted by rollups to ethereum super super secure pretty elegant

implementation but slower you got to wait on that data to post right good fallback mechanism because the lack of new trust assumptions but you want something faster and cheaper and still like you know very very trustworthy we chose hyperlane to build an alternative approver called hyper prover it just uses it messaging layer sort of an implementation of this messaging layer to bate a transaction happen and um we could use other messaging layers but we chose hyper Lane as a team we just share a really good eth's alignment with and also kind of their superpowers they built a messaging layer that also is permissionless and extensible so it can go with us wherever we want to go as quickly as we want to be there we can just deploy and uh I think there was

also an implementation of their system or sort of like a customization of hyper Lan's General Tech that they wanted to see someone build and so we buil that in Q4 we did it at Devcon and we started to actually distribute in production and so that's the the nature of that of that partnership you want to source as much message volume through hyper Lanes inter opt Network as we can possibly source for them and um it's been really fruitful and so we're really really lucky to work together um and I've I've already kind of like laid the road map out you ask kind of asked you asked what's ahead it's launch season it's launch season that's that's it routes are out there get routes into General prod accounts will be baited and prototyped during February with some action around Denver crowd liquidity has

been proven in the background and there's sort of the you know there's some eye circling on that right now and and we'd love to uh kick off a crowd campaign and run a campaign in March uh and then you tile those together um you sort of integrate them more and more closely than you're talking about a more traditional protocol play that angles for uh the late spring or early summer and we're like full steam ahead on it um like I said we've sort of prototyped all the necessary pieces and now it's sort of the sequencing of getting them into the market putting attention on them how we want attention to to to sort of be on them and um then tying them together in a fond and Powerful way so and one thing I haven't asked is which chains do you

support and what are some of the maybe upcoming chains is it only evm for now or do you also support salana other ecosystems only evm for now salana early Q2 already happening and then um we'll sort of evaluate from there uh ethereum's our home so that's where we started that is our home base but that's not like in no way is that sort of uh not acknowledging there are other things that people want to do elsewhere it's just like a technical sequence in question of like where do we go there and um that's something that will we want like a lot of Market input on obviously we need to go to salana um beyond that where do people want to be uh within the ethereum network we can deploy on an

evm um whenever it can be permissionless deployed like I talked about with the hyper integration or can we can sort of support a deployment same day and uh right now it's on the usual suspect rollups um we are eyeing the space a little bit on on terms of chain expansion like do you need to have 100 or do 99% of the things that people want to do exist on 11 chains right this is again the expansion and contraction kind of like you know I think we probably felt that way about rollups uh over the last six months or so and so we could feasibly be everywhere in the evm I don't know that we that we need to be so there's some evaluation in real time over the next couple months of like where do people actually want to be where's the economic

activity happening where's the order for demand make sure that we're there I think you can look at the market immediately ahead of us you can say abstract is going to be one of those places right tomorrow uh ostensibly and there maybe a select few others that will be similarly well positioned um Cosmos chains space Cosmos chains we uh we have an interesting play there um so we've done some code development uh with polymer tea is basically to take an AP and sort of IBC is and basically built this proof kind of construct that works really well across ethereum we were talking to them because we think it's really interesting implementation for our routes as well we have messaging based routes with

hyperlane but we'd love to have proof based routes and um we we undertook some design work with them and so that might give us that gives us a an ethos link to to IBC and the cosmos network but it also might getness a technical link um before all is said and done but it's part of the the kind of like out the evm sequencing strategy you asked about first and we'll just want some Market input on like where do people want to be uh where is the order flow coming and going and then we will uh sort of sequence ourselves to make sure that we can meet that demand cool Ryan thanks so much for joining me on the podcast it's been a really great talk I've learned a lot about stable coins and uh and yeah thanks for the uh great overview on eco

we're looking forward to seeing uh the future of this protocol for sure for sure then listening several times lately you've had some really really good and diverse conversations on hopefully we can add to the mix with stable points here but I really really appreciate just the the time and space to talk about Stables talk about ego in particular and um it's been great looking forward to it thank you [Music] [Music]