How DRiP Is Able to Give Away Millions of Free NFTs

In this episode, Austin chats with Vibhu Norby, CEO of DRiP, a platform that has distributed millions of digital collectibles to its community … for free. Among other topics, Vibhu discusses the unlikely emergence of the company’s vision and how the innovation of compression helped that vision become a reality. According to Vibhu, platforms like DRiP not only offer new experiences to creators’ collectors and patrons, but also to creators themselves, particularly when it comes to better web-based payment rails. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Why Multisigs are Becoming the Default Security Paradigm

Multisigs, short for “multiple signatures,” are wallets that require multiple private keys to authorize transactions. In the wake of 2022’s many collapses, multisigs have increasingly become the default security paradigm in both the Solana ecosystem and the crypto space more broadly. In this episode, Stepan Smikin (Squads) discusses the many use cases for multisigs and the importance of having a security-first mindset, while also sharing insights on what it’s like building a multisig specifically on Solana. Other topics include Squads’ formal verification, approaches to monetization, and more. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

What It Takes to Make a AAA Game On-Chain with Michael Wagner

As of 2023, the gaming industry is worth hundreds of billions of dollars. Why disrupt something that’s working so well by introducing blockchain into the equation? In this episode, Michael Wagner (ATMTA/Star Atlas) makes the case for blockchain games. Star Atlas, the flagship game that Michael and his team are working on, is a AAA game that uses Solana as its main infrastructure. He describes why this design is compelling for Star Atlas, the technology behind how it all works, its impact on the user experience, and more. 



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

From Anchor to Mad Lads and Beyond with Armani Ferrante

With Anchor, Backpack, and Mad Lads under his belt, Armani Ferrante is one of Solana’s most senior and prolific developers. In this episode, Armani reflects on the values and design philosophies that first attracted him to the Solana ecosystem and where he thinks the ecosystem is headed. He also discusses some of the tech behind xNFTS and Backpack, their use cases, and the importance of building applications users actually want. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Is Banking 3.0 Becoming a Reality?

If web3 had an intuitive Venmo-like app for sending and receiving crypto, could that expedite mass adoption? Aleksie Zakharov (Ottr) seems to think so. Aleksie describes how blockchain-based products such as Ottr can give users the experience of a modern bank, all without the bank. Banking 3.0, as he calls it, eliminates the possibility of bank failures, all while making USD more accessible to emerging markets and reducing friction in international transactions. According to Aleksie, solutions like these will incentivize both consumers and merchants alike to adopt banking 3.0 platforms in the near future.



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Does Web3 Need Its Own Section 230?

When Congress passed Section 230 in 1996, it created the legal preconditions for the growth of the modern internet. Today, web3 faces legislative uncertainty in the US, harkening back to the state of the internet before Section 230. In this episode, Chris Greico (Rain, ex-DOJ) and Lauren Culbertson Grieco (ex-Twitter)  offer a historical primer on Section 230 and consider the law in the context of web3. Could Section 230 apply to blockchain? If not, what would the web3 version of Section 230 look like? Without a comprehensive law akin to Section 230 for web3, what will the future of blockchain be in the US?


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Can DePIN Build a Better Map Than Google?

Traditionally, maps have been built by centralized entities like governments and tech companies. But in this episode, Ariel Seidman discusses the potential of Hivemapper, a decentralized mapping protocol, to completely disrupt the space. When it comes to building a global map, Hivemapper claims that decentralized, community-owned infrastructure can produce a higher quality of service with more granular data than a centralized network.



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Rethinking High Performance Computing with Kevin F****** Bowers

In this episode, Austin talks with Kevin Bowers, Chief Science Officer at Jump Trading. Kevin and his team are the brains behind Firedancer, Solana’s second independent validator client. As Kevin describes the process of building Firedancer, it’s clear that this episode is not only about building a validator client; it’s about Kevins unique perspective on the 1% of computer science focused on making things as fast and efficient as possible. Throughout his interdisciplinary career, Kevin has again and again proven to be an iconoclastic thinker, unabashedly dissatisfied with the status quo. He expresses his unconventional views on programming languages, scaling solutions, data flow optimization, and more. 



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

The Philosophy of Ethereum According to Bankless’ David Hoffman

In this episode, David Hoffman (Bankless) and Austin have an honest and multi-faceted conversation about the differences between Solana and Ethereum’s decisions, community, and future. David makes the case for an Ethereum-dominant future, and in doing so,  illuminates much about Ethereum’s philosophy of design and the culture of its most fervent believers. Naturally, Austin makes a similar case on behalf of Solana. This is a conversation between two people who have mutual respect for each other, but fundamentally different opinions about how a blockchain should be built.  



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

So How Does DeFi Work, Anyway?

DeFi is defined as, “smart contracts that can execute trustless financial transactions,” but beyond that, understanding what’s actually going on under the hood of DeFi protocols and how to use them is still a very narrow area of expertise. Wrapped assets, bridges, automated market makers––these are new tools foreign to the world of traditional finance. In this episode, Cindy Leow offers a primer on how both the technical and practical features of DeFi work. She also shares thoughts on the direction of DeFi in the next twelve months and what we have to look forward to. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Live Show: When to Work with web2 | The Pro-CBDC Case | Crypto Twitter vs. the Hill

In this live taping of Validated from NFT.NYC, Austin has an informal chat with his Solana Foundation colleagues Amira Valliani and Pedro Miranda. They discuss how web3 x web2 partnerships are evolving, the pros and cons of Central Bank Digital Currencies, and the disconnect between crypto Twitter and conversations among crypto regulators. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Two OFAC Lawyers Walk into a Bar … and Discuss the Warren-Marshall Bill

In this episode, Austin, Amira (Head of Policy at the Solana Foundation), and two ex-OFAC lawyers discuss regulation in web3 as it pertains to national security. Naturally, they discuss OFAC’s sanction of Tornado Cash and consider other ways in which the government could have handled the situation. While the Tornado Cash sanction may be old news at this point, thoughtful conversations about the intersection of blockchain, national security, and technology ethics are always relevant. The recent Warren-Marshall Bill threatens to hold blockchain validators responsible for illicit activity on chain, which, like the Tornado Cash sanctions before it, will have overreaching consequences for the blockchain industry if it passes. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities. 

Why Crypto Needs a Mobile Revolution

Will mobile-first applications be a driving force of mass adoption during the next crypto bull run? With over 5 billion smart phone users around the globe, Chris Osborn, founder and CEO of Dialect, thinks that’s a solid bet. In this episode, Chris discusses some of the innovative features that will set web3 messaging platforms like Dialect apart from their Web 2 counterparts. He also shares thoughts on why crypto has taken so long to embrace a mobile-first mindset, the difficulties of dealing with traditional app distributors, and the role of crypto phones like Saga will play in the ecosystem. 


The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Not Your Keys, Not Your Crypto: The Importance of Self-Custody

Self-sovereignty is one of the foundational promises of crypto, but without self-custody, that promise simply falls flat. In this episode, Charles Guillimet (CTO of Ledger) discusses topics like the importance of self-custody and the role of security, in addition to the the evolution of Ledger’s product offerings as the crypto industry has changed over the last decade. 



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

Not Your Keys, Not Your Crypto: The Importance of Self-Custody with Charles Guillimet, CTO of Ledger

Self-sovereignty is one of the foundational promises of crypto, but without self-custody, that promise simply falls flat. In this episode, Charles Guillimet (CTO of Ledger) discusses topics like the importance of self-custody and the role of security, in addition to the the evolution of Ledger’s product offerings as the crypto industry has changed over the last decade. 



The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.  Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives. All opinions expressed herein are the speakers’ own personal opinions and do not reflect the opinions of any entities.  

A Decentralized Collective Memory with Sam Williams

Permanent information storage is not just a means of preserving data, but a way to resist the grip of authoritarian regimes. According to Sam Williams, co-founder of Arweave, immutable storage systems are a revolutionary movement that will make a more objective truth accessible forever. 

DISCLAIMER The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.


Highlights from Breakpoint 2022 – Ep 77

0:00 – Intro

1:19 – Web3 School in Sierra Leone

10:53 – An Artist and Monke Go to Washington

25:25 – How Compression Will Decimate Network Costs on Solana 

DISCLAIMER The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.

NFTs for All – Ep 76

0:00 – Intro

1:17 – Introduction to panelists

1:54 – How Solana’s infrastructure allows for scalability

4:45 – What creators are looking for in NFT platforms 

5:53 – and the future of video NFTs

7:25 – Overview of participants in the NFT space

8:30 – What does future growth of the NFT market look like?

10:12 – The impact of tech behemoths on the NFT space

15:31 – Solana’s low network costs

16:40 – Panelists’ favorite NFT projects 


The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.

Are Wallets Entering the ‘Browser Wars’ Era? – Ep 75

0:00 Intro

0:50 Intro to panelists and overview of the browser wars 

2:25 How do lessons from the browser wars apply to the wallet market? 

3:12 Differences between browsers and wallets 

6:00 The roles of wallets in the crypto ecosystem 

10:50 Will there be one wallet to rule them all? 

16:04 How the dominant mobile platforms will impact wallets

18:55 Lessons from Web 2 applicable to Web3 projects

25:25 What the future of wallets looks like

DISCLAIMER The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.

The Case for Tokenized Carbon – Ep 74

0:00 Overview of ReFi

3:13 Intro to Emma, Ethan, and Shine Capital

4:37 Why Shine sees ReFi as a sound business investment 

7:10 Overview of how traditional carbon markets work

8:03 Breakdown of pricing in current carbon markets 

12:09 Shine’s thesis on how increased demand will impact carbon credit prices

12:51 Where increased demand will come from

13:53 More on how increased demand will impact carbon credit prices

15:13 More on Shine’s confidence in ReFi’s economic viability

17:57 Recap of discussion thus far

19:28 Speculations on the growth trajectory for carbon markets

22:35 ReFi market map

23:48 Current systems of MRV and why they’re inefficient 

25:28 How crypto can innovate traditional MRV

28:02 Opportunities for entrepreneurs in the ReFi space

31:25 Closing remarks 

DISCLAIMER The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.

Can Blockchain Fix Carbon Markets? – Ep #73

0:00 Overview of Carbon Markets and Crypto

2:45 Intro to Brendan and Patch

4:02 Intro to Matthew and Cerulean

6:05 What is a carbon credit?

7:25 Who are carbon credits for?

9:00 Voluntary/compliance market recap

10:40 Innovation in the voluntary carbon market

12:00 Why are carbon credits so hard to acquire?

13:34 Inefficiencies in the current OTC markets

14:17 Examples of carbon credit projects

15:15 Why do carbon credit prices vary so widely?

17:00 More on inefficiencies in the current voluntary markets

19:50 How blockchain will impact the supply side of the carbon market

21:35 Are corporate buyers interested in crypto carbon credits?

23:18 Carbon market scams

26:06 Profit margins in the carbon market

32:50 More on how blockchain will impact carbon credit supply

34:36 Closing remarks

DISCLAIMER The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.

Greenpeace and Greener Crypto – Ep #72

0:09 – Episode overview

2:17 – Rolf Skar introduction and Greenpeace’s mission

4:39 – Daniel Hwang introduction

6:54 – Greenpeace’s history with energy-intensive crypto

8:24 – The Change the Code Coalition

12:32 – Why changing Bitcoin’s code might be feasible 

15:49 – What changing the code would entail

19:27 – What self-interested incentives are needed in order to change the code  

24:49 – How institutions with climate commitments address Bitcoin investments 

26:19 – The Blockchain Infrastructure Working Group

28:57 – Rolf’s impression of the Web3 community

31:37 – Closing remarks 

DISCLAIMER The content herein is provided for educational, informational, and entertainment purposes only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction, nor should not be relied upon as advice to buy, sell or hold any of the foregoing. This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor. Solana Foundation Foundation and its agents, advisors, council members, officers and employees (the “Foundation Parties”) make no representation or warranties, expressed or implied, as to the accuracy of the information herein and expressly disclaims any and all liability that may be based on such information or any errors or omissions therein. The Foundation Parties shall have no liability whatsoever, under contract, tort, trust or otherwise, to any person arising from or related to the content or any use of the information contained herein by you or any of your representatives.


Amir Haleem – CEO, Nova Labs & Founder, Helium Ep #71

Amir Haleem (CEO, Nova Labs & Founder, Helium) talks with Austin about the Helium story and the current proposal to move Helium to the Solana blockchain.

0:00 – Introduction

1:05 – Origins of the Helium network

5:24 – Early challenges for Helium

7:19 – Helium’s unique growth and economic models compared to other blockchains

11:35 – The geo-specificity of Helium’s rewards

14:18 – Why Helium started on its own L1 

16:55 – Current disadvantages of Helium running on its own L1 

20:46 – Why the time is right for a Helium migration

24:28 – Why Solana is the best scaling solution for Helium

28:56 – Composability as parts of the Helium network move off chain

30:57 – Solana’s role in supporting amazing applications

32:12 – How a migration will help Helium reclaim its internal engineering power

34:36 – How the upcoming vote will impact Helium validators and hotspot operators

36:27 – How Helium’s migration will open up the Solana ecosystem to its community

37:36 – Recent developments in cellular networks

41:59 – How long will Helium’s migration onto Solana take, and what will it entail?


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Austin: I’m Austin. This is the Solana podcast. Today, we’re talking with Amir Haleem, the founder of the Helium network and CEO of Nova Labs. Helium since its beginning has operated its own layer 1 blockchain, but in a process set forward several months ago, and which has sort of come to a community governance vote in HIP 70, the network is actually proposing switching from operating its own layer 1 to operating on another layer 1. Uh, in the details of HIP 70, the core developers and core contributors are recommending a move to the Solana blockchain as the new home for the Helium network. So we’re gonna talk a bit about that today, some of the history of Helium, and how the network, uh, sets itself apart from other blockchains, uh, which is pretty interesting because it’s based much more heavily on real world usage and physical hardware, as opposed to simply a software abstraction layer. So, Amir, welcome to the Solana Podcast. 


Amir: Hi, thanks for having me. 

Austin: Great to have you here. Um, so let’s kind of start at the level set here. Um, where did the original idea for Helium come from? 

Amir: So Helium has been around as a company, uh, for a little while and we, uh, we always intended to try and build, really, a sensor network, that was the original intention, right? It’s like, if you wanted to build a big, broad wireless network designed for sensors, you know, how, how would you do it? . Like, it, it felt clear to us that cellular wasn’t going to be the right, uh, solution for things like tracking devices and environmental monitors and things like that. And so we set about trying to build kind of like people have called it an overlay network. I like to think of it as, as more like an alternative network to cellular for small things. Right? Like that’s kind of the easiest way to think about it. Um, Bluetooth wouldn’t really work for this wifi wouldn’t work for it, you know? So we always. Had the intention of like, how do we build something very specifically for these kinds of devices? Um, we had a bunch of friends at the time building startups that needed that kind of connectivity. That was really the thrust of, of why we did any of this. And we, you know, we took a bunch of different turns and iterations of trying to do it in, I don’t know what you would describe it as, the web two way, perhaps, right? Where we would spend a bunch of money and we would build the network ourselves. Um, and somewhere along the line, like we just kind of realized that we’re we’re just like a poor version of AT&T or something. Like we were trying to do, we’re trying to do things the same way that AT&T would do it or an existing carrier would do it, except we, we don’t have any money, relatively. And so it, it wasn’t really until 2017, I, I think, that we started to pay attention to crypto in a more serious way.

Like embarrassingly, like I had just kind of ignored Bitcoin and Ethereum completely up until that time. Like, blockchain just kind of seemed like a buzzword, uh, that didn’t make a lot of sense to me. I read the, the like Mastering Bitcoin book and my mind was kind of blown. Uh, and then I, you know, read the File Coin white paper, I think was the first time that we had seen. Kind of a proof of, of work model that like applied to a real thing, you know, it wasn’t just, it wasn’t just hashing and it wasn’t, you know, just some kind of arbitrary use of compute power. It was actually like in file coin’s case, if I can prove that I’m making file storage space available, then I’ll, I’ll get rewarded for that.

And so that was a big thrust for us to like, think about doing things in a different way, was like, okay, here’s a model for how you might build a wireless network based on a crypto economic model. Um, and do it in a completely different kind of throw the traditional model on its head or turn it on its head. And that was really the start. Uh, we started building in 20 17, 2018, uh, and launched in 2019. Went from being very small, with 150, you know, deployed devices to close to a million now after, after only three years. So a lot happened in that three years, but that’s kind of roughly the, the story of, of how we got to where we wanna be.

Austin: Yeah. So one of the things I really love about that story is it really tracks with, um, on a, on a much larger level, my own journey into blockchain, which is that, um, the utility reason was the reason that I actually first got into the space, which was I was working for a company and they thought the only way they could solve the problem was to build something on blockchain. And it, you know, seems very similar to sort of the way you guys examined a lot of different solutions and decided that that community ownership model is best expressed through, through blockchain. Um, so I think that’s a really kind of interesting story. And one of the pieces I really like, I just find funny is I actually joined the Helium community far before I joined the Solana community. Um, I got, I got targeted with one of your ads back in the early days and actually bought, um, a few hotspots in, I think I actually, uh, I got in the discord and argued with Mark for a while about how this thing didn’t make any sense and how it shouldn’t exist or whatever. And there was no, there was no liquid token. And then, uh, you know, really got kind of, you know, as much used as you can get red pilled by a telco, uh, project, um, you know, really brought into the, the idea that this is really something that has a real interesting application in the real world out of it. 

Amir: Yeah. I, I remember you in the community in the early days. I mean, it was difficult at the start, right? Like, especially as a US based company, like, you’ve gotta be so careful from a regulatory point of view. And, and so I think some of the things that you kind of wanted to say, you couldn’t say, and so, you’re trying to explain what this was, I think was a little bit of a challenge, right? It’s like, “buy this box and stick it in your window and earn this token.” And that was kind of where we stopped. Right? Like we didn’t, we didn’t say anything more about, you know, what, what happens with the token after that, or, or what you could do with it and whether there would ever be a market for it. And, you know, we’ve been very careful to kind of stay away from all of that. But yeah, it grew like, like wildfire at some point. Like I, I remember at the start, it was very, very difficult to sell hotspots for like 500 bucks. And, you know, we were running a lot of ads are the ones that targeted you. Um, you know, we were giving away like pies and like doing promos for Valentine’s day, you know, just said like, whatever scheme you could come up with to like try and get these things out the door, we were, we were doing it. And then at some point he just got its own momentum. And I remember taking, it took off from like 20 or 30,000 hotspots to hundreds of thousands. In what felt like no time. 

Austin: It’s funny. I, I remember the pie. I, I couldn’t remember, but I remember I was like, oh yeah, like you guys mailed me a pecan pie. I think for, cause I bought one around Thanksgiving.

Amir: Yeah. We had pies, we had cookies, literally anything we could think of that would like motivate people to buy the box was what we were doing at the start. And then, you know, you had COVID supply shortage stuff happened and it, it went from like, we’re trying to give these things away to like the demand for them was insane and they were selling on eBay for like 10 grand in the used market. So yeah, it definitely been, been crazy to, to watch and a hell of a journey. 

Austin: Yeah. So one of the things that, uh, I’ve always found fascinating about helium is that both the growth model and the economic model are very different than any other blockchain out there. The primary function of a network like Bitcoin or Ethereum or Solana is to be a software platform and to run well. Bitcoin’s not a smart software platform in the same way, but Bitcoin is a scarce amount of supply. Ethereum and Solana are smart contract platforms that are designed for other people to build applications and services on top of. You know, apart from the fact that the helium blockchain will we’ll get into a lot of the limitations of the existing L 1 right now, but the modeling is, is very different than what you’d see in any other network, because you are both rewarded for providing availability and then also of specific geographic coverage range and proving that you own, you can provide service within that range, and then also passing data through it. And this is one of the things that it took me a while to wrap my head around is like the real value here is on how do you reward the network infrastructure for simply existing and then creating an economic system to meter expenditures on pretty much anything that can be modeled economically as a flow system?

Amir: That was the learning really from looking at something like File Coin, right? Like that they had figured the same thing out, which was that if we can bootstrap the network by rewarding people for making file storage space available, then you can start the flywheel that way, right? I mean, arguably Bitcoin works this way, right? Like, they are delivering block rewards to miners for mining blocks, regardless of whether there are any transactions or like meaningful fees inside those blocks and it’s the same, you know, the same kind of flywheel there in the sense, right? You have to sort of create the network first, um, before it can be taken advantage of, and in the case of a wireless network, that’s particularly challenging, right? Because there’s a threshold that you have to cross before someone really takes the network seriously. And, and by someone, I mean like a user of the network, right? Like a, a UPS or something that’s looking to build like a logistics solution can’t really consider doing it on a network like Helium until Helium is large enough and the coverage is ubiquitous enough that it works in most places. 

You’ve really got a very, very like difficult ramp at the start. And that’s where I think this economic model has been the most powerful, right? The biggest innovation I think we came up with was proof of coverage, where we devised this scheme where hotspots, which are the equivalent of miniature cell towers basically, um, would transmit encrypted packets over the air and other hotspots would receive them, um, and that was kind of the proof, right? Like, are you where you say you are, are you signing things with the right private key? Uh, and that was the reward that’s sort of like the Bitcoin mining reward equivalent, right? If you can prove that you are available to move traffic, then you’re gonna get some reward for that. And then you’re also gonna get more reward if you actually move traffic. And again, if I were to like, continue the Bitcoin analogy, the miners also get transaction fees for whatever transactions are in their blocks. And it’s, it’s, you know, similar kind of bootstrapping. I think, you know, that’s one of the most powerful effects of, of crypto and, and one of the most interesting parts of, of using these crypto economic models is that you really get to bootstrap these networks in this completely different way.

I think when people have tried to build these community wireless networks in the past, it’s been this kind of tit for tat model, right? Where you share your wifi network and you can use mine. Um, but that’s just not that interesting, right? Like I want, I want to make money somewhere. I, I want to be a telco operator or I want to be an Airbnb host or I want to be a cab driver in the Uber model, you know, those were the sort of breakthroughs economically. And so I think crypto is a way of just sort of decentralizing and democratizing that same, that same effect. 

Austin: Yeah. It’s interesting. Cuz with the File Coin analogy, you have a similar idea of a resource flow system where you reward both for availability and then for actual storage or in this case passing data. But you guys added, I mean, I’d say two quite difficult components to that. The first is, uh, you know, File Coin operates primarily in consolidated data centers, right? There’s not many people running File Coin nodes at home because the economics are such that you really need large amounts of storage availability for that network. But there are penalizations on the Helium network. The rewards you get in New York city, uh, because it’s so crowded are, are lower than the rewards you might get in like a, you know, a less dense urban environment. Um, so I think that’s a really interesting component too, where you also have to account for overlapping coverage is incredibly desirable up to a certain point. At which point, then it becomes detrimental and you can’t simply reward that system. So it’s a, it’s a much harder system to model than simply data availability where like, you know, an infinite number of replicas is infinitely desirable. There’s obviously a diminishing utility there, but for here it’s really, um, it’s really different. So it’s interesting. 

Amir: Yeah. It’s, it’s both difficult to, to model economically, but also challenging to educate, right? Like, because people kinda live wherever they live, and you have to sort of explain to people that, Hey, like being the 5001st, you know, hotspot in the greater New York area, not that useful, right? Like there are 5,000 others that are already there, you know, providing network coverage. And the redundancy is just not useful enough yet until there’s, you know, significant amount of traffic. So it’s such a new idea to build a telecom network this way that I think we’ve learned a ton about what users expect and what they do and how they behave. There’s so much that can still be done. People are like, oh, congrats on, you know, all the success. And I’m like, it doesn’t feel like we’ve accomplished anything yet. Like we’re in, you know, 0.1% of the journey is complete at this point. Um, but yeah, I, I think, you know, our marketing team, especially I think did a phenomenal job of trying to like explain this in simple terms. And I think that was one of the other things that was important that we did well. We made crypto mining available to like random everyday people, right? Like it didn’t, you didn’t need to be in a data center. You didn’t need some crazy like warehouse full of Asics. You know, like you, you literally could just stick this thing on a, on a window ledge and, and get going. And I think that was also a, a, a meaningful innovation. 

Austin: So I wanna get into, um, you know, the reason we’re doing this call and podcast today and not, you. Four weeks from now, which is the HIP 70 proposal. Um, so let’s start maybe with some of the history of Helium actually going forwards and deciding that the right model, at least to bootstrap the network was to build its own L1 and some of the learnings that you’ve had along that process that make you think now that the recommendation for the community is to migrate to a different L1.

Amir: Yeah. So when we started, I mean, it’s important for everyone to sort of think about the timeframe here. Like when, when we started building it was 2017 and um, Ethereum was really the only smart contract platform that you could even contemplate using at the time. Um, I mean, this is so long ago in crypto terms that Anatoly was interviewing for a job at Helium.

Austin: What was he interviewing for?

Amir: I don’t remember what the role was, but Solana didn’t exist. And he had a, a white paper in the form of a Google doc that was for something called loom. And he had this proof of history idea. Yeah. So that’s where we were, right. Just to like, kind of set the landscape. Thankfully he didn’t take the job and he went and built Solana, which is, um, which I think was a net positive for, for everyone. Um, But that’s kind of where we were, Ethereum was kind of the thing that, that you could use. Uh, and if it wasn’t for Ethereum, you’re, you’re kind of on your own, right?

Like there were some other platforms where you could create a token. I think like stellar, perhaps, and even back then, we were worried that Ethereum would become too expensive. Like we weren’t sure how to model the network in a way where the number of transactions was reasonable enough to, to not cost thousands of dollars a week. 

Um, and so given that circumstance, we had a bunch of distributed systems guys on the team. We decided to like, build our own blockchain that we didn’t fork anything. We just, you know, started from scratch. We, we borrowed where we could. Um, but effectively it is a novel sort of ground-up build. Um, and I think for the most part, it, it sort of did the job that it needed to do. Like, we designed a system that was like maximally decentralized, I would say. Right? There weren’t even validators, like the whole network was running on these hotspots, which were raspberry pie powered devices. Like, so literally you had like the whole network was being validated by hundreds of thousands of like raspberry pies, which is in hindsight, really cool, but also in incredibly insane, uh, to, to pull off. And so, you know, the network has grown so much, we’ve learned so much about the, the decisions that we made we’ve realized I think a lot of the, the challenges of like being on your own island, right? Like you, you don’t have any of the interoperability with, with some of the amazing projects that you see, like Solana, for example, uh, things like wallet support is harder, you know, like trying to get Ledger to adopt you and, you know, like all of those things which are kind of like table stakes for crypto at this point. Exchange listings, defi stuff, NFT, marketplaces, you know, like we don’t have any of that stuff because we’re like on an island and we’re also trying to build wireless networks. And so we don’t have time to do it. And so I’ve come to think of like blockchains as almost like the database or like cloud infrastructure layer of like web two, where you would be insane to like try and build your own sequel database or to try and bootstrap your own data center when you could just use AWS for nearly all applications. There are some cases where that’s not true, but for the vast, vast majority, that is true. So now that we’re in this sort of new era of, uh, infrastructure and you’ve got things like Solana, it no longer really makes any sense to like, try and maintain your own L1, given that our mission objective is to build wireless networks. . And that’s, I think, just like the simplest way without getting into like a ton of technical detail, that’s the simplest way of thinking about it is. There’s a bunch of stuff that’s very novel and unique about Helium, and none of it is to do with moving tokens around and like validating blocks. And, and so if you can outsource that work, you should. And I don’t think we could in, in 2017, uh, but we certainly can now. And, and I, I definitely think Solana is the best place to be doing that work. 

Austin: Yeah. And I mean, Helium network to its credit, like, there are very few networks that could do something like run proof of coverage on chain. There’s sort of this like strained analogy that you could say to like, you know, to go way back in the day, like Spark, and Sun Microsystems versus like an X 86 architecture, right? Like the, the thing that Helium is good at doing, it’s incredibly good at doing and faster than really any other network could deliver that one specific thing. But as you’re saying, the Helium network, it lacks any sort of smart contract support at this point, which is the foundation of really all the growth that we’ve seen in every other network. There’s two networks that have that anyone cares about that exist, that don’t have smart contracts, they’re Bitcoin and their Helium right now. Um, so I think that’s a pretty interesting kind of place to, to look at being in at this point. 

Amir: And it was a very calculated decision at the time. Like we, we knew the danger of having a smart contract environment. The sort of surface area of potential vulnerabilities was so large. And, and again, like we’re trying to build a wireless network, like we’re building hardware, we’re building apps, we’re building block explorers, we’re building firmware. It’s already a massive endeavor that could reasonably be three or four different companies worth of work. And so to add, like, you know, A smart contract platform and then try and like get integrations across like all of the different things, it it’s just too much. People don’t scale that way. Right? You need focus and I, I think a big part of the drive for HIP 70 is just for our team, but really the whole community, to get focused on what really matters, which are things like proof of coverage and data transfer and usage of the network and stuff like that. And really, again, not on like block validation or transaction validation and stuff like that, which is again, you kind of need it, but it’s not differentiated on, on Helium anymore.

Austin: Looking specifically at, um, why the move is required so some of the things you, you talked about before, that sort of the network is at a place where it’s hard for it to keep up with itself in, in some of those operations, but then, um, as you look at expanding into a network that does have smart contracts on it, that that can do more of these kind of features. What are sort of the, the, the benefits, the trade offs, like how, how is that process internally to come to a place where the consensus from a lot of the core developers, both of Helium foundation at Nova was like, it’s time to do this thing now?

Amir: So a big part of like, what HIP 70 tries to do is, is also like rearchitect the way the network works. So as you kind of mentioned, everything is on chain today, and that has a lot of challenges in terms of, of how you scale it. Um, you’ve got a million hotspots beaconing and transactions that have to be validated all the time and, and the validation or the verification of those is reasonably complicated work from a computational point of view, so regardless of, of any move to a different network or a different L1, we had arrived at the conclusion that moving as much of this off chain as we could was probably the right thing to do for now. Um, so we could get the performance up, we could spend less time kind of firefighting the problems and, and really spend more time on like improving things, cuz there’s a whole bunch of improvements and, and changes that we always wanted to make, but just had never really had the time to, to get through because of all the firefighting that we were doing. So, that’s kind of one component of it, is thinking about like proof of coverage and data transfers being these off chain Oracles as, as we’re describing them. Um, and so once you’ve kind of arrived at that design decision, you you’re left with like, okay, what is it that the L1 does? And it, it really is just about, um, moving tokens around, right? It’s like the Oracles will tell the, the L1, like, Hey, you, you know, these seven hotspots beaconed and these 25 hotspots witnessed, you need to pay out HNT to these owners. Um, and you, at that point, it’s like, why would you maintain your own L1 just to do that? Right? Because you, you don’t gain any of the upside of being part of a bigger community, like Solana. Those upsides are things like, you know, decentralized exchanges and this defi ecosystem and NFT marketplaces and, uh, exchange support and wallet support, and, you know, like all those things, uh, that you don’t have. And you’re still spending like a massive amount of engineering cycles, like maintaining your own L1 when really all the L1 does is move tokens from one place to another. So, really the fundamental design decision is like moving stuff off chain. And once you’ve done that, it’s like, okay, why would you, why would you keep running an L1 if all it does is move tokens around. You should be on a platform where you get the benefit of like being part of this bigger ecosystem. 

And one of the other things I’m most excited about that we haven’t talked about that much, or doesn’t get talked about that much in the community is the ability for like other developers to contribute in a more meaningful way. Right? Like we wrote our L1 in Erlang, which is, you know, a powerful, but somewhat unique and quirky programming language. Um, WhatsApp is probably the, the biggest user of, of it that other people would would’ve heard of. But in general, it’s kind of, you know, it’s harder to find engineers that are Erlang people, uh, and it’s harder for the community to contribute meaningfully as a result versus using something like Rust or, or being familiar with Anchor and other things on the Solana universe. Like, that will open the playing field significantly and allow more and more people to contribute and, and not be quite as dependent on the core team, you know, to do everything. So super excited about that part of things. 

Austin: Yeah. So let’s, uh, let’s cut to the chase a little bit on this. Why Solana? Why was the recommendation out of all of the different scaling solutions out there, um, and all the different blockchains that this, this could have been the recommendation of, what about Solana felt like the right thing to recommend to the community here?

Amir: There were a few things. And I, I know we’re still, you know, putting out this sort of matrix of, of like all the options we looked at and, and how they, how they stacked up. But I think there were a few, like really, really important things. I mean, one was speed, you know, there’s something really to be said about the fact that using Solana feels like using a web two app, um, especially in our environment where the kinds of users are not necessarily like typical of a crypto community. Like we have a lot of people for whom Helium is their first and only like interaction point, um, in crypto. And so having things feel like it isn’t on a blockchain is, is really, really powerful. Right? So like when you add a hotspot to the network, it’s just there, versus, you know, we have to manage these pending states and stuff like that because our transactions take over a minute. So speed is definitely one factor, especially if, when you start to think about the fact that you’re kinda sharing this with a lot of other applications. 

Um, the choice of, of programming language was also quite important to, to us. So the fact that like Rust is kind of the, the environment of choice, um, in Solana at the smart contract level, I think was really, really important, both because we have a lot of understanding of Rust internally, uh, but it’s an extremely popular language with like a big developer community on the Solana side as well. So I think attracting developers and, and sort of further decentralizing core development, um, is important and a popular program language is a big part of that. 

There’s other more nuanced things like key compatibility, which don’t get talked about much. So both Helium and Solana use the ED 25 519 curve, and that doesn’t sound like a big deal, but it’s hugely important because it means we can, we can map a Helium address to a Solana address without knowing the private key, which means that we can migrate the whole ledger without the user having to, like, intervene in any way. And so we were very, very, very afraid of any process that required the user to intervene or to like migrate their key or like do something because you might end up in this case where like there’s orphaned, you know, tokens and like someone’s on vacation or, you know, it’s just a nightmare scenario. So that was a really huge part of it. And, and strangely there aren’t that many blockchains where that is the native address type. Um, so that was a big part of it. 

Um, the fact that, you know, the Solana team is very focused on mobile was also a very big part of it. I think Solana is the only network I’ve seen that has any ambition specifically around mobile and what to do with phones with, with the SMS stack, which I, I think gonna be interesting. The fact that you guys have a phone also kind of interesting, like maybe there’s some stuff we could do there where Saga phones are, you know, POC maps on the 5g network, like there’s all, there’s all kinds of potential crossover there. Um, you know, so stuff, stuff like that, the fact that we, we know the team, well, I think matters, uh, whether that’s fair or not, uh, but the fact that we can access senior people, you know, whenever we might need them, I think is a, is a consideration. Um, so in, in general, I think Solana has probably the biggest and most active developer ecosystem and the best support of, you know, the best wallets. Um, and just, you know, there’s just a whole range of stuff that sort of fits in that mold that I, I think matters is a great deal, but fundamentally, it’s about, you know, speed it’s about having a scalable or, or a sane looking scalability roadmap. I, I think those are what matter. And, and I, I think for the Helium folks, it’s important to also just be aware that, um, We, we are only sort of relying on the L1 for the token movement part, like all the proof of coverage and all the data transfer is kind of off chain. And, and so, um, the choice of L1, it sort of matters a little bit less in that context, right? Like it’s not so much, it’s not, you’re not trying to do so much on chain anymore. Um, so that, you know, that was also a big part of just thinking through the architecture, but yeah, we’ve been playing around with Solana now for a long time um, and super happy with it. it still kind of blows my mind how quickly transactions confirm. I, I just love that. I think people are gonna be blown away by, by it as well. 

Austin: Yeah. So, as parts of the network, move off chain, what does that mean for like, let’s just say I’m a, I’m a, I’m a messaging protocol on Solana. And I would like to, uh, like I know a wallet address that is on a phone that has another messaging app set up. If I wanna actually transmit a data packet over the network, what would that look like from a composability standpoint? 

Amir: I mean, it’s, it’s a really interesting question. Um, there’s gonna be sort of a difference between. The physical network, right? So the, the actual sort of air network and what ends up being composable like on chain, and those are gonna be kind of interesting things to watch. Like we, we intend to, to make as much data available on chain as possible without trying to do all the computation there. So any other application that wanted to take advantage of the fact that it was known where a packet was sent, for example, should be able to do that. Um, but they are kind of two different networks. Like one is a physical like air network and the other is, um, the blockchain network for want of a better way of describing it. But there should be a lot of ways for existing Solana ecosystem applications to take advantage of the fact that you now have like a location aware source of data. I’m not sure if there is one on Solana. And certainly there’s a, maybe there’s a way for step in users to also be POC, like participants on helium. Like why not? Right. They’re already out there doing stuff. Um, so there there’s all sorts of potential there. And, and I think part of what excites me about platforms, you don’t exactly know what people are gonna do with it.

You just sort of give them the tools and they just kind of go off and, and build whatever they need. Um, so I’m excited for that. Just like sort of opening up the creativity and allowing people to like build stuff that, that we don’t have to be prescriptive about, I think is a big deal. 

Austin: Yeah. It’s, it’s funny. You talk about that way. That’s one of like the guiding principles of how the foundation approaches some of this development as well, which is, like, the role the foundation is to, is to create and invest in base level infrastructure that makes it possible for anyone to build anything on top of the network. Um, and so like, this is kind of exactly what you’re talking about, where it’s like, if, if the base layer isn’t actually, what’s integral to Helium’s success, if it’s the network effect, if it’s the ability to, you know, have high availability and meet the uptime requirements of like major clients and users and that sort of thing, then like, why would you focus on that base layer? And, you know, from, from the foundation’s perspective, uh, you know, if we’re focused on the base layer, why would we build the application layer? And so, uh, it it’s a nice, um, you know, there there’s that old sort of saying about like, If it doesn’t make your beer better, you know, have someone else do it. I think this comes from like Anheuser Bush back in the, in the day. Right. Whereas they outsourced everything except making the beer. And that’s sort of that process here of like, as much as you can strip away of what’s required to focus on making Helium the best networks it can be. Um, why wouldn’t you do that? Yeah. 

Amir: Yeah. I, I think, um, that’s exactly the way that I’ve been thinking about it for, for a while now, which is, is, you know, you’ve got a whole team there and a whole ecosystem that is just focused on making the best possible L1 basically, right? Like, so the whole mission objective, and there’s so much for us as a team, but also as the helium community to do on, on the Helium side, um, now being able to just focus on that is, is just gonna be like a gigantic weight of our shoulders. Like if I had to guess we probably spent 60, 70% of our engineering time on L1 related things. Like it may be even more than that, honestly. Um, So, if you think about it that way, like you sort of reclaim like 70 or 80% or whatever the number is of, of your engineering brain power, to be able to spend on things like proof of coverage and reliable data transfer. Uh, and then, you know, from a customer centric point of view, the network gets more stable that way, right? Like we’re able to spend more resources on like making the network useful and usable, uh, and less on, you know, block production, basically. Which is a very, very hard problem to, to do well and to do its scale. So I’m, I’m thrilled by the notion of, of being able to just focus on. On wireless networks cause that’s, that’s really what we’re, we’re here for. And there’s so much good stuff coming, um, that I wish I could talk about today, but gimme another six days or whatever, and we’ll be, we’ll be able to talk about it. 

Austin: Yeah, totally. So when you’re looking at things that like users can expect changes for here, I mean, part of it is, is in some ways, not much, right? If you’re talking about address compatibility, uh, one day, if this, if this hit passes, um, users will simply have their HNT represented or IOT or mobile represented as an SPL token on Solana, as opposed to being, uh, you know, a token on the relying L1. Um, but apart from that, you know, uh, there’s a validator network that’s currently maintained on the IOT side of things. Uh, that’s not necessarily needed anymore. Um, so there’s a whole bunch of like, you know, internal Helium community changes that are also related to this sort of thing. But, uh, you know, one, one thing I guess I haven’t heard, talked about much is, you know, the rewards that validators are getting what actually happens to them in HIP 70 once it passes?

Amir: Yeah. Today it’s 6.8, 5%. I think of all the H and T that gets created is going to validates today. Um, and they get paid that to effectively run the infrastructure and secure the network. In this model, because we are kind of moving to be an L2 ,uh, and you already have Solana validators at the L1, like we no longer need to like dedicate 6.8% of the HNT inflation, uh, to securing the network anymore. Right? So that’s 6.85%, which I think is around 2 million HNT a year at the current emissions rate is now back in the pool, right? Like it’s back in the pool that goes to, you know, hotspot operators, for example. Right. So that’s another 2 million HNT going back into, into that universe, which, which is a huge win, like you’re right. There’s not that many people talking about that part of it. Uh, but using that HNT to pay for security is necessary in the current system and not necessary in, in the new design. Uh, so that’s a big win to be able to, to get, get that HNT back into their hands of the people building the network, arguably. Um, and then from a user point of view, as you pointed out, I mean, most users on Helium today are using our wallet app, cuz it’s kind of the only one that, that I think people trust. Um, and one day you’re just gonna open it and you’ll still see your HNT balance. It will just be on Solana instead of on helium’s L1 you probably won’t even notice except for the fact that your address looks different. Uh, but you’ll still have your same 12 or 24 words. Um, your balance will still be the same, you know, like nothing really will change from, from that point of view, except the fact that you can now send that HNT to your Phantom wallet, or you can send it to a Serum exchange or you do whatever you want with it really within the Solana ecosystem. But, um, it shouldn’t feel, it shouldn’t feel like anything’s happened other other than everything’s faster. 

Austin: Yeah. Well, it’s, it’s funny because, you know, Like there’s no defi on Helium at this moment, so this entire world of, you know, yield farming and vaults products and being able to take out loans against a helium balance just doesn’t really exist nowadays in that ecosystem. And, you know, small things too, like when the validators were launched, like it’s a hard 10,000 token delegation and there’s no ability to delegate stake to another validator. Like there is in most other networks. A lot of these pieces seem like they make a lot more sense once the, once the transition takes place and you’re able to kind of take these things that important structural developments, but sort of set them aside as saying like they’ve served their purpose, the network’s going into its next phase. We can set aside some of this stuff, reclaim some of those rewards for node operators and kind of keep the, the process going. Um, at the same time you, uh, you know, there’s an acquisition of freedom fi that took place as well. Was this sort of, part of the calculus about like, oh, if we’re, if we’re transitioning L1s, we can free up engineering time to work on stuff that maybe isn’t quite as well supported in the world, like hardware. 

Amir: Yeah, a little bit. I mean, you know, Helium had spent a lot of time in the IOT universe, so we’re pretty well acquainted with that world. Like we understood all the technology, all the hardware, all the protocols, um, you know, we’d experimented with it all over the years. And so we understood the universe of IOT, I think intimately. Um, on the cellular side, you know, even when we wrote the white paper back in 2017 or 2018, like, you know, we had in there that we wanna explore using this same set of tactics, basically for other wireless networks, right? Whether they be cellular or wifi or, or whatever, they may be. Um, and again, just like the sort of L1 landscape has evolved over time, the cellular landscape has probably evolved the most significantly over time specifically because you’ve got access to, uh, something called CBRS, which is the citizens band radio service.

It’s an unlicensed block of spectrum that the FCC made available a few years ago, um, that makes it possible for people like us to run a cellular network in an unlicensed band. And usually that’s a huge moat, right? Like you’ve gotta spend, you know, a hundred billion dollars buying spectrum or whatever, before you can run a cell network. But now there’s a pretty decent chunk of Spectrum that you can use, uh, to do that. And, and arguably as importantly, like all the major handset vendors support CBRS, right? So if you have an iPhone newer than an iPhone 11, or you have a galaxy S 20 above or a Pixel 5 or above, um, your handset already works in this citizen’s band radio service block of spectrum, you don’t have to do anything.

So. Those were two like huge developments. And then, you know, as a result of that, there’s a bunch of open source protocol stacks that, that you can now use without having to build them yourself like Magma. And so those were developments that just like, kind of the L1 landscape had shifted like dramatically since we started building Helium. And we had been so busy building Helium that we, we just, quite frankly, hadn’t had time to learn what we needed to learn about how to do this in a cellular domain. And so we started talking to the freedom fi team a couple years ago, um, kind of they found us, I think, really because they were building private LTE networks, but had bigger ambitions. They wanted to figure out how to build bigger, bigger than private LTE networks. Um, and so the, you know, it felt like it made sense. They had deep expertise in doing this. They had spent the last two or three years understanding CBRS, understanding cellular, understanding what it took to like negotiate deals with carriers, uh, to operate networks in different environments. Like, they’ve done a lot in their, in their time, um, and we kind of understood how to do the other part of it, which was motivate the economic build out of a network. Um, so it kind of made sense that way. And, um, but yeah, I think part of it is, is being able to focus now on the network side and not so much on the blockchain side, I think is. It’s kind of like a superpower for, for us basically, right? Like we, we can shed ourselves of a lot of attention. I mean, even when you add people, like, you know, your attention is still dragged away when you know, there’s firefighting and there’s problems and there’s things that you want to change. Um, so it’s not like you just add more people and the problem goes away. Those people also get distracted by, you know, L1 related things. And so I think being able to, to focus on, on what we do is going to be a, a huge win and freedom fi is a huge part of that because they, they bring with them this, this expertise set that we just didn’t have, uh, internally and quite frankly, just didn’t have time to, to, to learn. 

 It’s fascinating to think about, um, that perspective too, like if you think of like, uh, like Rakuten in Japan, like they’re, they’re now a fully software defined cell phone network that’s using ORAN and not relying on, uh, you know, single vendor lock in, and you kind of extrapolate that full and, you know, part of the, the success of, I think the helium I OT network was you could take a Helium brain and plug it into an existing LoRaWAN gateway system and suddenly, you know, all these devices would light up and be able to talk to the network and kind of stay online, and you can see kind of a future where, uh, you know, the, the 5g and cell phone carrier network has that same kind of multiplication effect behind it. Um, but you know, I would say that’s a, that’s a topic we can dive into on another day. 

Austin: As we look at like HIP 70, um, you know, if this thing, uh, passes, which, you know, the vote at this point is I think about 81% in favor, um, so pretty strong support at this point in the process, which is, you know, midday, Wednesday, um, what does that actual implementation migration process looks like? Is this, uh, just like an Ethereum merge processwhere we’ll see it take three or four years to really come to fruition, or are we talking about a, a much more quick process here? 

Amir: I mean, I would love to try and get it done by the end of the year.

Austin: Um, it’s a lot quicker than three or four years. 

Amir: Yeah. I know everyone listening is probably, yeah. There’s no, no chance of that. But, um, I, I think there is a chance of it. I mean, we we’ve been, uh, already spending quite a lot of time on the Oracle side of the problem, which, which I think is the most complicated part of the equation, which is, you know, moving proof of coverage and data transfer accounting off chain. So sort of like untangling it from the L1. Um, to me, that’s by far the hardest part of the problem. And, and as I kind of mentioned, we were heading down that path anyway. So a decent amount of work has already gone in there. So that, that makes me optimistic that there’s a chance to hit that.

Um, the Solana side of it, there’s still a bunch of work to do there, you know? So, so there’s now three tokens in the Helium ecosystem. There’s HNT, IOT, and MOBILE. So there’s some work around, you know, like how those are emitted and, you know, you need to be able to redeem IOT and MOBILE for HNT whenever you want. So there’s certainly work to do on the Solana side as well. Um, but it doesn’t, it doesn’t feel out of the question to, to me that there’s a working version of this by the end of the year. Um, and then there’s some migration details to, you know, figure out, but we’ve already got a pretty good head start on that. Like, I think on a test net somewhere, we have the entire ledger exported and imported as an SPL. Um, so you know, that, like I said, that was a hugely important part of the problem for us, was like, how do we make this like seamless to, to the user? And, and I think we’ve, we’ve successfully been able to prove that to ourselves.

Um, there’s also gonna be an airdrop of SOL tokens to all the HNT holders, um, so that they can cover, you know, roughly a hundred transactions worth of, of transactions. Cause that was another concern coming outta the community is that, Hey, we need this like, even though it’s a fractional amount of, SOL you know, people now have to like ,buy SOL or acquire it and a lot of, again, a lot of our users are not crypto literate in any way. Um, so making that easy for, for people I, I think is super important. So now they don’t really have to think about it. Um, and I expect once we sort of introduce them to the Solana world, they’re gonna have a field day and start playing around with all kinds of other stuff. Um, but yeah, that, that’s kind of where we’re focused is like, how do we, how do we make this as seamless as possible? Um, and make it such that, you know, an existing Helium user is just thrilled by the time it’s done basically, right? Like POC works better. Data transfer works better. Transactions are faster and they have more stuff to, to do with their, with their HNT.

Austin: Yeah. I mean, I think for, for helium users who are, are listening to this, uh, one transaction on salon is $0.00025 to, to send on the network. So, uh, you know, if you’re getting a hundred transactions worth, uh, unfortunately it’s not exactly a down payment, but it’s definitely enough to, to do a lot of transfers on the network and experience some of the, uh, you know, the fun things you can do in both Solana defi as, as well as just interacting with the ecosystem in general.

Well, Amir, thank you for coming on the Solana podcast. 

Amir: Yeah. Thanks for having me look forward to, uh, hopefully being back sometime soon. 

Austin: Yeah. We’ll have to, uh, have you at Breakpoint as well to talk a little bit more about this. 


Jason Keats – Founder & Chief Hooligan, OSOM Ep #70

Anatoly welcomes Jason Keats (Founder & Chief Hooligan, OSOM) to the podcast to talk about his epic career building hardware, the Solana Saga phone and all things mobile and web3. Pre-order the Saga now at


00:09 – Intro

00:25 – Background

03:27 – Working at Apple

08:07 – The Gem Phone

10:15 – Privacy at Essential

12:24 – Building for Mobile

15:52 – Hardware he wants to build

17:07 – Crypto x Cars

19:02 – Do Apple or Google care about hardware and crypto?

21:08 – Innovation in hardware

21:56 – The saga phone

22:56 – The manufacturing process

26:29 – How to start building

27:56 – Working with start ups

29:15 – The innovation cycle in hardware

30:36 – Privacy features

32:42 – Working with non-crypto people

36:08 – Outro



The content herein is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. Those who appear in the content may have a financial interest in any projects referenced, and any content herein is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.  This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.


Anatoly (00:09):

Hey, folks. This is Anatoly and you’re listening to The Solana Podcast. And today, I have Jason Keats with me who’s the CEO and co-founder of OSOM. Welcome.

Jason (00:18):

Hey, how’s it going? Glad to be here. Glad to chat everything we’ve been working on finally.

Anatoly (00:22):

Yeah. Me too. It’s been kind of a crazy journey. You have an awesome background. Do you mind just sharing it?

Jason (00:32):

Yeah. I’ve had a very, weird hardware background throughout my career. When I left Berkeley, I decided I wanted to go build something. I didn’t want to sit in front of a computer all day. Well, my degree is in astrophysics from Berkeley. And then I went on to work on solar panels. And that was-

Anatoly (00:54):


Jason (00:54):

What was that?

Anatoly (00:55):

Yeah. How did you get from astrophysics to hardware?

Jason (00:59):

So my senior year, my professor asked me to… He knew I had access to a machine shop because I was working with the Formula SAE, which is a student racing program. So they knew I had access to a machine shop and they wanted to make parts for telescopes. So I offered and said, “Hey, I can do that.” So instead of being a traditional GSI or something like that, I was the monkey who machined random parts. And that was a lot more fun. At the end of the day, instead of having a program, I was like, “I have a thing. It’s built.” And that was it. I wanted to build things.

Anatoly (01:39):

That’s awesome. How did you get into astrophysics then? What was the reason for getting into astrophysics?

Jason (01:48):

I just wanted to be able to say, I was… It was a rocket scientist was the logic I had, 18-year-old me had. Little did I know that wasn’t exactly how that worked, but it sure sounded cool. And nowadays it just sounds really cool to say, “Oh, I have a degree in astrophysics from Berkeley.”

Anatoly (02:05):

That does sound really cool. So what happened after? You build telescopes, right?

Jason (02:10):

Yeah. I built little bits and bobs for telescopes. I didn’t want to get a real job, so I started a motorcycle company that was a complete disaster. Not a complete disaster, but it was pretty rough. I learned a lot about running a company there. Basically, I learned all the things you’re not supposed to do.

Anatoly (02:29):

I mean, that’s the first one, right? You’re supposed to do that.

Jason (02:33):

Yeah. I’m glad it didn’t hurt me too badly. And then I ended up being a consultant for a company in Silicon Valley. It was like a design engineering consultancy and they put me on to Solyndra, which was a solar panel company. And that was a very fun couple of years building some really interesting technology and honing the skills that I use today and some of the ethos that I still use today because one of the things we were trying to do was how do you make a solar panel easier to install, because right now it’s quite a time consuming process. So my goal was to design a solar array that could be installed with no tools and we were successful in that.

Anatoly (03:14):

That’s awesome. That’s awesome. I’m going to keep saying that the whole episode.

Jason (03:22):

Two years on of creating the name and it still doesn’t get old. So eventually Solyndra went belly up unfortunately, that could be 10 podcasts probably as to what happened there. But my boss at the time was like, “Cool, we need to go over to Apple right away.” So I think that was a Wednesday, the company went bankrupt and on Monday I was working on secret projects at Apple.

Anatoly (03:50):

Cool. So there’s like a period of how many years of what you can’t talk about.

Jason (03:55):

A few years actually. And actually I know for a fact that the program is still ongoing and is still super secret.

Anatoly (04:02):

Cool. That’s pretty cool. What did you work on at Apple that you can talk about?

Jason (04:09):

So when I started Apple, my first project was on Mac PD doing the last generation of the MacBook Air, which I mean, people still review that as one of the best laptops ever made. And I’m still quite proud of that. It was a very difficult project with a very small team, but it was very successful. And at some point in between MacBook Air and the little tiny MacBook, I was asked to help on a small project with Jony Ive which was the Leica infrared camera. And it was myself and one other mechanical engineer working with the ID team, designing this, what was supposed to be a two or three-week project. And six months later, I had my own office where we were doing prototypes of little tiny bits and pieces because Jony wanted it perfect. And that really kind of made my career at Apple was working on that project with the studio directly.

Anatoly (05:01):

Is that camera like something you can buy now?

Jason (05:03):

I mean, if you got a few million bucks. No, we only made one camera and it was purchased at auction for around $2 million if I recall correctly. I think it’s on display somewhere. It was super cool. It had so many bits and pieces that were just absolutely ridiculous. The whole thing was handmade. My favorite little anecdote about that is it needed to be… The tolerances were so tight that it needed to be hand assembled in a very particular way. And so if the owner who currently has it decides it needs to be repaired or refurbished, for whatever reason, if they decide to actually to use a $2 million camera, there’s a little post it inside that says, “Call Jason,” with my phone number.

Anatoly (05:52):

Eventually you’re going to get like a call at 3:00 AM.

Jason (05:55):

Oh, yeah. I do know who has it. And we do travel in the same circle, so I’m sure there’s a day where I’ll be like, “Hey, I built your camera.” Yeah, that was fun. And then from there I joined iPad which was a whole other journey and learning a little bit more about mobile having come from solar panels and motorcycles, and desktop products, and laptops into iPad was a lot of fun. And my first real claim to fame in iPad was leading architecture on the original iPad Pro, which is the original 12.9 inch iPad.

Jason (06:31):

It was a lot of fun because we got to try a lot of different things. A funny story there though, that totally you know and a lot of people who follow me know, I’m huge into racing in cars and I do a lot of silly things. We actually built in carbon fiber speaker caps inside the iPad Pro. Apple marketing made this big spiel about, “Oh, it’s different. It does this, it does that.” That’s all BS. It’s because I like carbon fiber because I like race cars and that’s why we used it. I’m sure there’s some marketing guy going no, but that’s the honest truth is to why there are carbon fiber speaker caps in the iPad pro.

Anatoly (07:07):

I thought those are so cool. I ride bikes. All the cool bikes are carbon fiber.

Jason (07:17):

Let’s see. I don’t think I have one here. I had one somewhere. I had the caps and everything, but it was a lot of work and it was a lot of fun. It was really interesting, but I got really sick of the bureaucracy at Apple. It wasn’t for me. One day somebody was interviewing for my team at Apple, and they told me about what was going on Playground, which was Andy Rubin’s new incubator. And I thought that was super, super interesting. So I just straight up cold called Andy on LinkedIn and was like, “Hey, I’ve done this stuff. I’m interested in getting out of the Apple ecosystem. Let’s talk.”

Jason (07:53):

And the next day I got a call from their recruiter and I went and interviewed a week later and they were like, “Hey, we have something. We can’t tell you anything about it, but can you wait, like two months and we’re going to give you a job. I said, “Cool.” So for that two months, I went off and worked on Apple Maps, which was everybody goes, “What the hell were you doing on Apple Maps?” I was designing all the things you see, like the rooftop boxes and the things that went in the planes and the balloons that went up in the sky. We built some really weird stuff to capture images for Apple Maps.

Anatoly (08:26):

That’s cool. Wow. I mean, there is a hardware component to Apple Maps that people don’t don’t realize.

Jason (08:33):

Oh, yeah. All that stuff has to be captured somewhere. I mean, there’s warehouses full of hard drives of people having to still go through that data and make sure it’s okay to use. And warehouses and warehouses full of hard drives.

Anatoly (08:49):

Yeah, I can imagine.

Jason (08:52):

So, yeah, after Apple, I went and joined Andy Rubin at what was… What were we called? We were called Ninja Army for the first five months. And then eventually became known as Essential. I was technically the first hire, but the second employee at Essential and was there from the very beginning to the very end. It was a hell of a ride. We built the Essential PH1, which was a really, really, really exceptional piece of hardware with some pretty crap software on it, unfortunately.

Jason (09:19):

Particularly the camera side needed a lot of work and unfortunately was released too early. And we could argue for days about what the reason was, but ultimately that was the end result of that. And we never managed to bring another product to market despite building some really cool hardware there.

Anatoly (09:38):

So yeah, man, launching hardware is hard. Why did you decide to do this again?

Jason (09:47):

The biggest product that we built… Or the coolest product. No, that was actually the smallest. The coolest product we designed at Essential was Project Gem. And we are working on that up until the very end. And that was so revolutionary in the terms of mobile experience in which taught all of us that there was really an opportunity here. There was still things to be done and new things to be invented and new ways of interacting to be made available.

Jason (10:13):

So when Essential went out of business, when Andy told me that was that, it was obvious to me that I need to take this opportunity now. I’m going to do it. I have a team available that I know is now all unemployed and let’s keep them together and build something really, really cool.

Jason (10:29):

So I grabbed the key team members and then kept a few on the back burner while we raised money, and we got to the point where we were ready to rock and start building a new phone. So while the first phone is a little more traditional device, I think in the future, we’re going to have some really crazy things to build with you guys.

Anatoly (10:49):

Yeah. I have no doubts. The gem thing was a pretty weird piece of hardware. Right? It kind of looked almost like totally made out of glass.

Jason (11:03):

Yeah. So this is one of those things that I love showing off in person is that glass phone. It was a glass uni body, which has never been done in a cell phone before. The overall shape was… I mean, the best description is either a candy bar mixed with an Apple TV remote and…

Anatoly (11:21):


Jason (11:22):

Yeah. That’s a great description. Piece of glass, size of a candy bar that kind of looks like an Apple TV remote.

Jason (11:28):

Yeah, exactly. But it was all one piece of glass. Even the camera bump, the flash, everything was a continuous piece of glass. And every hardware engineer I’ve shown that to goes, “How did you make this? And how did you manage to achieve the tolerances required to build that?” And it took a lot of work with our good friends at Corning and a third party in China. But we were able to build them. And there’s a couple of them in existence. I think they’re all in Andy’s garage still, except for the two that are in my possession still. And they work.

Jason (12:00):

Some of the issues we were encountering was that GMS wouldn’t… We wouldn’t be approved for GMS with that device. So we were going to have to do some new and novel use cases there and come up with all new ways to interact with the device.

Anatoly (12:17):

So awesome you guys started with a really strong focus on privacy. Yeah. Was that your decision or something that was just you guys wanted to do at Essential anyways?

Jason (12:31):

No, that was definitely my decision and the decision of the team. We looked at what killed, Essential. A big part of that was a lack of focus other than building cool stuff. And that only gets you so far. There needs to be a reason why your customers want to join our adventure rather than go with a Samsung, or LG, or HTC, or Motorola or whatever was available at that time.

Jason (12:54):

So we realized that a big problem facing everybody today is a lack of consumer privacy. And that’s when we came to the conclusion that we could actually address that as an OEM.

Anatoly (13:06):

And that’s a really tough challenge because you still probably want to keep Google services around.

Jason (13:14):

Yeah, absolutely. So I mean-

Anatoly (13:16):

Do you think… Yeah, go ahead.

Jason (13:18):

No, I was going to say it’s a great segue into what things that people keep asking us since we announced our partnership is when we decided to say, “Okay, we’re going to build a privacy centric phone, there have been privacy centric devices attempted in the past, but they were too extreme. By cutting out GMS, by cutting out Android in some cases, you were left with a device that was so private, nobody would use it, which yeah, it works as a privacy device, but you don’t sell any.

Jason (13:43):

I mean, I know for a fact that there are two different phone manufacturers who sold less than a thousand devices, despite putting tens of millions of dollars into it because we all use the same suppliers. So the suppliers are excellent sources of information. And so I know for a fact that one of them was like, “Oh, we only shipped a thousand speakers to that company.”

Jason (14:06):

So what we said was, “We’re going to give you control and we’re going to give the user control and we’re going to give them options and they can make the choice as to how much they want to share or not share.” And if they want to use Twitter, and Facebook, and Instagram and every Google service, then at least they have knowledge that they’re doing that and is less secure than not doing it. Or they are consciously making that decision.

Anatoly (14:31):

Yeah. Go ahead.

Jason (14:33):

And that goes to what we’ve talked about is we’re going to do the same with all the Solana mobile stack that we’re integrating into the phone. We’re not taking anything away. We’re giving users an excellent device, a high-end flagship device that gives them more options and more choice in how they use it and what they use it for.

Anatoly (14:52):

Yeah. If you’ve been a web 3.0 dev, you’ve been building applications and you’ve never started with like, “I need to collect a username and an email and a password.” That concept doesn’t exist. Right?

Jason (15:09):


Anatoly (15:09):

That’s something that being building like in crypto for the last four years, I almost forgot how to build traditional applications. And when I had to remember, I was like, “Oh man, yeah, there just doesn’t seem a way to build privacy without really starting from the ground up and building a whole new set of applications that people actually use. Right? And they deliver value to those users. People use them because they love them. But you need to start from the ground up. And that’s really hard because getting product market fit, building applications and then competing with existing services is just like a uphill climb.

Jason (15:54):

Yeah, absolutely. Building that community, which was what made our partnership so beautiful is you have that community and you have that development group that really wants to be actively involved and emotionally involved, and that’s super exciting for us to be like, “Hey, let’s give you a piece of hardware that you can call home too.”

Anatoly (16:12):

Yeah. I mean, this is the first time, honestly, I’ve seen anyone tweet that they will stop using an Apple product and switch to Android.

Jason (16:21):

That is exciting. If we can crack 5% instead of the standard 4%, I will be absolutely ecstatic.

Anatoly (16:29):

Yep. That would be awesome. Yeah, I remember when the iPhone launch and that was a real watershed moment. A lot of us, I was working on BREW and a lot of us were actually, like, felt really frustrated with the mobile industry because we had all these ideas. We wanted to build rich applications that are easy to code and totally different kind of UIs, dynamic UIs and stuff. And these big telcos would give us like 200-page spec of what a phone should look like because they their customers. And there was like this moment where Apple announced this thing and Steve Jobs showed, “Look, there’s a browser. It’s a real internet.” It’s just not this [inaudible 00:17:15]. It’s not the mobile web that… I don’t know if people remember what that even looked on a LG flip phone.

Jason (17:25):

I do.

Anatoly (17:25):

That was a big deal. I don’t know if we’re there yet with crypto. I don’t know if there’s a single application or anything like that when people open up and they’re like, “Oh wow, this is it.” Because obviously when Apple announced the iPhone, it was already after the internet. It was big. Right? Everybody was already using the internet and there was this obvious gap between desktop and mobile. But I think when people actually pay with tokens for their day to day stuff and all that whole loop works and it, and it’s beautiful and it doesn’t suck, I think that might like open up people to new ideas of what we can do with crypto on a mobile device that actually supports it natively.

Jason (18:18):

Yeah. The day that both of our parents can go and shop with tokens will be a watershed moment for crypto.

Anatoly (18:32):

Yeah. I am really excited about that.

Jason (18:33):

Yeah. When I think about the potential there, I mean you and I have talked about it a few times. It’s immense and almost a little bit intimidating and staggering what the obvious potential is there.

Anatoly (18:45):

So what kind of hardware, what else do you want to build besides a phone? You don’t have to announce anything, but you personally as somebody that’s a super hardware nerd, if you had infinite budget, and could do whatever you want, what would you build?

Jason (19:02):

Number one, I want to bring back Project GEM. I loved using that phone and I’m probably the only person on Earth that used that phone regularly for a while because I wanted to make sure it was great. And that thing worked so much better than anybody ever gave a potential credit for, as a small side device, as something you could toss in your pocket, in your bag and not think about. It was beautiful. I mean, for me, designing a piece of hardware has to also be very physically attractive and I think that was the most beautiful thing I’ve ever designed.

Jason (19:31):

I do want to see the expansion of using your mobile devices, be it your watch or your phone interacting with the automotive sector. Obviously, we’ve chatted about it before. I have a problem when it comes to cars. Oh, wait. Nobody can see what I just pointed at. So I think the inner relationship between mobile, crypto, and automotive is even earlier than anything else in crypto, but there’s a hell an opportunity there. And thankfully, a lot of the automotive companies are starting to catch on and realize there’s different potential there.

Anatoly (20:13):

What would be like a hardware integration between mobile and cars?

Jason (20:18):

I mean, we’ve already patented this idea. So I will talk about it freely now, is the ability to track all your history of your vehicle. And when you sell your vehicle, you have everything written to the blockchain. The NFT itself will simply be a photo or a connection to the title, which is held somewhere else. But you can guarantee that if somebody sends you a NFT of a title, that it is tied to a physical object, which we’ve already patented that as well.

Anatoly (20:47):

So you want like the miles like the RPMs, like the actual raw data. I don’t know what else you got. I’m not a car person.

Jason (20:56):

Like the service history or the maintenance history, the sales history. Do you know if the mile… You can guarantee that the miles weren’t rolled back. You can know if it went through any… What do they call… Oh, when they call you to bring the car back in. Oh, recall notices. Anything with service was done. That’s a real utility of that technology.

Anatoly (21:24):

Cool. And the kind of cars that people would really want this for like collectibles, like classic cars that you’re getting what you’re paying for.

Jason (21:34):

Yeah, I think so. But also with your average Toyota or Civic, at least you know what the history was on that car. Was it repaired? Was it damaged at any given point? There is utility across the board.

Anatoly (21:45):


Jason (21:46):

And then especially-

Anatoly (21:47):

Yeah, I can…

Jason (21:47):

Last thing on that one, especially, if we go into the collectibles, like being able to take a cut down the road. Okay. I sell the car to you. You sell it to somebody else and I can take a fraction of a percent of that sale is pretty awesome.

Anatoly (22:00):

If you’re the person restoring the car. Right?

Jason (22:03):


Anatoly (22:03):

And you did this… Yeah, that’s actually like, I think been… It’s weird that model has never been replicated in the real world, but works so well with NFTs.

Jason (22:16):

Yeah. Exactly.

Anatoly (22:19):

That’s a use case that I think is way under explored for stuff like that, for physical art.

Jason (22:26):

Yeah. It’s one of the things that we patented early on was the connection between a physical and digital assets.

Anatoly (22:40):

Do you think Apple or Google care about what we’re doing right now? Is this like reached anyone’s decision-making yet or is this still-

Jason (22:49):

I know for a fact that our name has come up in both those companies, because I know a lot of people at the highest level. One of my good friends is an SVP at Apple and he texted me. He’s like, “They’re talking about you in an executive meeting.” I was like, “Cool. I’ve made it in life. Are they talking about suing me though?” I’m sure Google has people thinking about it and worrying about it. I mean, obviously Google is still a partner because we are a GMS device and they are thrilled to have us. It’s like being an advocate for the Android ecosystem.

Anatoly (23:26):

Oh yeah, absolutely. I think if we convert people from iOS to Android, Google should be like making parades for OSOM. It’s a lot of…

Jason (23:37):

I’m serious, I haven’t asked yet, but I should ask them like, “Hey, if we convert more than the standard 4%, do I get a bonus from Google?” That’d be nice.

Anatoly (23:43):

Yeah. Absolutely. I’m not too worried. They’re so big that it doesn’t seem like there’s anything to worry about because they’re just like, it’s like worrying about, I don’t know, nation state at this point.

Jason (24:02):

Yeah, exactly.

Anatoly (24:03):

For a startup, it’s such a big competitor that it’s not even a competitor.

Jason (24:08):

Yeah. And I think the companies that people often compare us to, or talk about us, nothing or… What’s it? Oppo and OnePlus. One of the things that I’ve tried to do is make sure I have a good relationship with those companies as well, because it’s kind of silly for a bunch of startups to be fighting over the scraps instead of taking swings at Apple, Google and Samsung in terms of device sales.

Anatoly (24:31):

Absolutely, yeah. I mean, OnePlus made some awesome devices too. That was really cool to see them launch. When I was working at Android at Qualcomm, there was just always like this huge gap between quality and innovation in terms of like how the device looks and feels and they were able to really push the limits there. Yeah.

Jason (24:53):

Well, I think our next devices will be pushing some new limits, which will be a lot of fun.

Anatoly (24:58):

Yeah. I guess, do you think like mobile… Because it’s so big, is there still room to innovate in terms of hardware?

Jason (25:14):


Anatoly (25:15):

Besides like on the standard daily driver.

Jason (25:19):

Yeah. I spend a lot of time actually. Now, that I’m the CEO and I have other teams of people now working for me pushing vision, I can spend a little more time thinking about how I want to change that interaction of device, what new technologies are out there, or even what new use cases of existing technologies there are.

Jason (25:38):

So I have been working on something wholly new for how we interact with our devices in a way that I think people will naturally enjoy using it. It’s a bit of technology that’ll change how you actually touch and use your device, but it’ll be done in a form factor in a manner that makes it approachable. And it’s not foldable because I think that’s kind of silly most of the time.

Anatoly (26:06):

Yeah. Foldables, not also not sure about them. I really like the steel on the Saga phone.

Jason (26:14):


Anatoly (26:15):

Why did you guys pick steel?

Jason (26:17):

Two reasons. Number one, we didn’t want to go titanium like we did on the Essential phone. It was a little too exactly the same, but we couldn’t go to aluminum because it just doesn’t have the same touch. It doesn’t have the same feel. It doesn’t have the same strength. It doesn’t have the same feel, which I want to feel a premium device when I pick up a phone that I engineered. An aluminum loses that a little bit. It’s not stiff enough for my taste.

Jason (26:41):

So we landed on steel for the housing and then we landed on ceramic because we still did want a little tie back to Essential, but also because it does feel premium, it looks premium. It’s not paint, it’s not glass. It’s real ceramic. It’s incredibly tough. It’s very hard and it does well and drop while also allowing to be RF transparent and just, I mean, ultimately looking and feeling super premium to your fingers.

Anatoly (27:09):

When you make those decisions, how many logistics need to change? How many companies, suppliers, machines, how big of a process is that?

Jason (27:24):

Less now than it was five years ago, but it’s because I have the team behind me that is incredibly capable of making it happen where we have a ridiculous Rolodex, a contact list for everybody under 25 of people to call for different materials and different processes. The big one is, as you saw in the first EVT devices. First stainless devices, they were quite heavy. So one of the big changes we had to do was we had to optimize for aluminum on the very, very first prototypes. We switched to stainless, but we didn’t change our cutter pass. We didn’t change our processes. So into the current build, we’ve made a lot of changes to ensure that we bring the weight down just the right amount, but still have a super strong device.

Anatoly (28:11):

Are those separate companies like the company that makes the cutters and stamps the thing and puts on the ceramic. If you went from ceramic to glass, how big of a logistical nightmare is that?

Jason (28:25):

If we switched over to glass, it’s a different company that would manufacture and process the material. And then because it’s glass, we’d have to also find a paint shop to paint the device. Whereas ceramic has that color baked in, literally.

Anatoly (28:40):

Got it. That makes sense. Okay. So you have to do like a bunch of work. It’s not just one company that you go to and they’re like, “Sure, we can do everything.”

Jason (28:51):

Yeah, that doesn’t exist as much as we’d love to. It’s all over the place in Asia. Prior to the pandemic, I probably would’ve spent the last 10 months living in and out of China.

Anatoly (29:02):

And most of the stuff is in China or all over Asia at this point?

Jason (29:07):

A lot of the supply chain comes out of China, but that doesn’t mean we’re manufacturing there. We have plants or factories both in China and in Vietnam, but it’s still all in Asia.

Anatoly (29:18):

Got it. Is there any chance for that stuff to ever happen in the US or is it just like the world is like manufacturing shifted irreparably?

Jason (29:33):

I have had a few conversations with the Canadian government about this. I think the US will be still quite difficult, but in Canada might be possible. But the biggest issue is all the subcomponents are still made in Asia. So even if you were doing final assembly in North America, you’d still have to ship all the individual components from Asia. Your SOC is going to come out of TSMC, which is in Taipei. Your memory is going to come out of Korea. The display will come out of either Indonesia or China and there’s no manufacturing plants for all those components anywhere in the Western world.

Anatoly (30:13):

Actually manufacturing those components in the Western world is impossible. Right? Why is it impossible?

Jason (30:18):

I mean, just the billions of dollars required would be cost prohibitive to build those plants. Those fab houses are huge and would take years to build.

Anatoly (30:30):

And that’s because things have gotten so specialized in displays and everything that it’s just like, “Yeah. It’s basically Intel like level kind of commitment.”

Jason (30:40):

Oh, yeah. I mean, you’re talking massive, massive. And even the ones that are good at it already have issues now at the scales we’re talking about. Like the four nanometer process, which is used to build the chip we’re using in Saga is there are only two companies in the world that even understand how to make the fab devices to make those chips.

Anatoly (30:59):

Yeah. This is the Tungsten droplet, right?

Jason (31:04):


Anatoly (31:04):

You have like a droplet that refracts UV light.

Jason (31:08):

Honestly, I’m not that familiar with that process, but yeah, it is crazy, crazy. It’s tough to explain to people how tiny four nanometers is. And then how many traces they have to put down in a tiny little chip that we’re going to put in your phone and makes everything work.

Anatoly (31:29):

How do you find these places? How do you start? If you were like a 18-year-old that’s like, “Hey, I want to build cool shit, build cool electronics,” how would you start?

Jason (31:44):

I think if I were starting today, I would try to find the R&D team at either Google or Apple or a startup like OSOM and just go like, “Hey, I want to be your man on the ground in Asia and I want to grow my network. I want to go out there with a completely open mind and just be like everybody teach me.” Which is how I really got out there. I said, “I don’t know what I’m doing on some of this stuff.” But I am a sponge. I will sit here and learn from the best and I will be super polite because I see… That was one of the things that used to bug me a lot is I saw Western people acting like jackasses with their Eastern counterparts.

Jason (32:23):

Now they get nowhere and I made it at a point to always, always, always be polite, always say, “Look, I’m here to learn. Let me help you. If I know something that I can share, I’m going to go out of my way to share it.” And that has enabled me to have amazing relationships with the CEOs of all these fantastic supply companies.

Anatoly (32:43):

It’s basically like a relationship thing and you have to know what they can build and know what they do well and stuff.

Jason (32:50):

Yeah. And go in there with an open mind and sometimes an open wallet. That always opens some doors and expect to try to make it a back and forth. Because you get a lot further if you can say, “Hey, let me offer you some of my knowledge in exchange for some of your knowledge.”

Anatoly (33:07):

How open are they to startups custom work with these small scale projects? Because my imagination is that like they only work with Google and they want to sell a hundred million units or whatever.

Jason (33:20):

Yeah. That’s the other hard part. And that comes later on once you have those relationships because it doesn’t matter who you are. If you don’t have that existing relationship, they’re going to laugh you out of the building, if they even let you in the door.

Anatoly (33:34):

Yeah. Makes sense. If you’re building, if you dream of building awesome hardware, I guess you got to start like work for somebody like OSOM or R&D team. That’s pretty good advice.

Jason (33:52):

I think it’s the only way to build those relationships, so you know who to call. And I think a big part of it is it’s not always the CEO you need to talk to. You need to talk to his right hand guy. You need to talk to the CTO. You need to know the right person to talk to at each company, and it changes a little bit. You’ll you learn who the movers and shakers are, the people who can actually make things happen for you. And that’s where it gets super interesting. And it takes boots on the ground to learn that.

Anatoly (34:20):

So I imagine that’s still true for big companies, as you get bigger, you still just need to keep those relationships going.

Jason (34:29):

If you want to innovate, you need to. If you just want to just keep grinding out the same BS you’ve been doing for 20 years, they’ll usually just give you the C team and you can just grind and nobody moves anything.

Anatoly (34:41):

Yeah. The innovation part is hard. How long is the innovation cycle and hardware?

Jason (34:50):

Anywhere from days to years, right? I have been on the back side of things where it’s like, “Oh, I have an idea. Actually, that was super easy to implement.” Okay, let’s do it. It’s done. But I’ve also… Making the glass housing for GEM was an 18-month project to get the tolerance that we need to hold. For everybody who’s listening, you need to hold 100 microns is pretty standard, which a 10th of a millimeter. Very, very-

Anatoly (35:19):

How many human hairs is that?

Jason (35:22):

Less than one. So we need to hold those tolerances on piece of glass and how glass is manufactured is that you literally take a molded part and cook it down into a shape. And you can imagine trying to hold… Like if you’re baking something in your oven and trying to get it to stay within a 10th of a millimeter, it’s never going to happen. So we had to help both Corning and our third party invent new technologies to achieve that result.

Anatoly (35:52):

That’s really cool. That’s pretty cool. Are people using these technologies anywhere else? Or is this something that is basically just only was built for GEM?

Jason (36:06):

I think they’re still using… There’s not a lot of applications where you need a deep draw, weird aspect ratio glass part, but I know they’re using it for two and a half D or even light 3D shapes, that at least allowed them to make 3D shapes that weren’t as extreme as GEM in a more factory friendly manner.

Anatoly (36:28):

Super goal.

Jason (36:31):

Yeah. I could talk about random manufacturing for hours.

Anatoly (36:35):

You guys also have like a pretty awesome software team.

Jason (36:39):


Anatoly (36:40):

And you guys did a lot of work in actually adding privacy features to the Android stack.

Jason (36:45):


Anatoly (36:46):

What are these privacy features?

Jason (36:49):

I’d love to have Gary answer that question if he were here. But mostly what we wanted to do is allow the user to just be more aware of where their data is going and how it’s being treated by any webpage they go, any app they use and alert them if more data than they expect is going out and a place where they can work within their device, where they can guarantee that nothing is going out that they don’t control, which we haven’t named yet because somebody stole our name.

Jason (37:21):

And then the other one that I love that I cannot wait to use more of is what we called lockdown, but then Google used that name for what they were doing. But the ability to just turn off any module on the phone when you want to.

Anatoly (37:35):

And what do you mean by module?

Jason (37:39):

So right now, I think in lockdown mode that Google offers you can turn off the camera and mic. But we can turn off the camera, the mic, the antennas, the USB port, whatever. A module is any piece of hardware on the device we can individually completely disable that.

Anatoly (37:59):

That’s really cool. Does the user have a physical notification that that thing is turned off? Are there like LEDs or something that light up?

Jason (38:10):

Yeah. We’re still working on that with your team as to what those notifications will look like, what that UI and UX looks like. But yeah, there are both physical haptic feedback as well as visual feedback.

Anatoly (38:22):

Can you turn off GPS and things like that and other sensors. Or I guess the GPS radio. I don’t know how baked in those are these days.

Jason (38:32):

It’s actually super, super, super baked in. One of our investors is an Apple employee. And I was explaining to him like, “Look, man, you can put your phone in an airplane mode.” That GPS is still working. And he’s like BS. And I’m like, “No, no, no. Watch, watch, watch. Put your phone in airplane mode.” And we were on a bicycle ride. “Go bike 100 yards down the road and see your phone is still tracking you.” And he’s like, “What the hell?” And the next day he invested.

Anatoly (39:01):

How has it been like getting folks like… You guys work with mostly non-crypto people, up until you met me?

Jason (39:10):

You. Yeah, basically.

Anatoly (39:14):

Yeah. What has that conversation been like? What has been their reaction?

Jason (39:19):

It’s been all over the map. It says there were some very vocal, negative people outside of the company, which I completely expected and doesn’t really bug me at all. We had surprising support within the company, to be honest. I think I told you, I fully expected 10 to 20% of the company to be like, “Ah, screw this. This is ridiculous.” And we really only had one person do that. And then the counter to that, the amount of support where people were like, “No, this is exciting. This is the next generation of mobile will be built on web 3.0. And I think the definition of web 3.0 remains fairly fluid and we get to be involved with really defining what that actually means to the end user.

Anatoly (40:03):

Yeah. I think this is like a huge opportunity for us to set the standards and really push for privacy first and just build something that can be a really good base. The bricks that web 3.0 is built on.

Jason (40:19):


Anatoly (40:21):

I guess, what was like the detractors? What was like the any points that they brought up that you think were interesting or worthwhile?

Jason (40:30):

I think that was the biggest thing is none of the negative comments I heard were worth that much because it was the standard anti-crypto comments, which is like, “Oh, I don’t believe in it. This is scam. I don’t see it.” And I was like, “Okay, I’m not going to try to fight anybody over that. That’s fine.” People thought Facebook was stupid. Frankly, I still think Facebook is a little stupid, but they sure are worth billions and billions and billions of dollars. So there is a market for it.

Anatoly (40:56):

Yeah. It was really hard for me too, to accept, to believe in Facebook in those early days too. But in my mind that is like the quintessential internet company, more so than Google. Because it was really like… All they’re doing is connecting people. And that’s a very weird thing to think about that, that could be worth half a trillion dollars or whatever it is these days.

Jason (41:22):

Who knows? They’re probably more than that.

Anatoly (41:24):

I have this analogy that Facebook has a social graph where you have to hop through people. Right? You’re connected through some intermediaries, but crypto, it’s all public keys, super connected or like a single censorship resistant message bus. Everybody in the world is now in like a single chat, basically, which is why it’s a bit chaotic.

Jason (41:46):

Yeah. But I also see why… It’s kind of interesting because you have that community, everybody is connected, which is inherently non-private, but it is also… Everybody in that group has a strong desire to keep certain things private. And it’s that ability to choose what you keep private when you don’t keep private, which makes this partnership so incredibly powerful.

Anatoly (42:05):

So obviously, a public data structure is really strong forcing function for developers to understand that this data is public, therefore I need to minimize how much it collects. It’s almost like if all your interactions are over a public database, then you really, really try to know the least amount of the users that you need. And I think that’s just been kind of a design constraint on web 3.0 devs from day one. And you forget about web 2.0 that you need to create cookies and store people’s passwords and stuff like that.

Jason (42:46):

Yeah. And I think what we’re going to bring to the fore for web 3.0 is that improved user experience and that UI. I mean, you and I have chat about it almost daily lately about the issues around that. And having a piece of hardware that can bypass a lot of the frustration that’s there right now is huge.

Anatoly (43:05):

Agreed. Well, thank you, Jason, for being here. It’s been awesome talking to you.

Jason (43:10):


Anatoly (43:10):

I’m super excited to work with you. It’s going to be great. Folks, if you’ve been listening, go to and pre-order the Saga.

Sid Powell – CEO & Co-Founder, Maple Finance Ep #69

Sid Powell is the CEO & Co-Founder of Maple Finance. Maple is transforming capital markets through technology and count traditional finance and crypto-native firms as customers. Joe McCann guest hosts.

00:35 –  What is Maple?                    

01:32 – How does Maple determine Credit worthiness?

02:55 – Expanding the addressable market  

04:35 – Who uses Maple and how they get started

08:18 – Defaulting and the recapture of collateral

13:21 – Maple’s advantages against challenges lenders face in crypto

16:45 – Why use Maple: Governance and growth

19:27 – From Ethereum to Solana Integration                

23:37 – Maple and Composability          

27:13- Partnerships and future initiatives

29:56 – Bringing non-crypto folks into DeFi / Partnering with Circle

32:33 – Views on Contraction              

34:59 – How Maple started and where it is going                  

39:04 – Monetary policies and how they affect Maple



The content herein is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. Those who appear in the content may have a financial interest in any projects referenced, and any content herein is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.  This content is intended to be general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented without undertaking independent due diligence and consultation with a professional advisor.


Joe (00:09):

Hey everybody. Welcome back to The Solana Podcast. I’m your guest host, Joe McCann. And today, I have the pleasure of speaking with Maple Finance CEO and founder, Sid Powell. Sid, welcome.

Sid (00:22):

Hey Joe. Thanks for having me. Great to be here.

Joe (00:24):

My pleasure. I’ve been looking forward to this one. For the folks that aren’t necessarily familiar with Maple Finance. Can you just maybe give a brief introduction as to who you guys are and what you do?

Sid (00:35):

So, Maple is a DeFi lending platform. We think of ourselves as a marketplace for institutional lending. So, the right type of mental model to think about that with is, in the same way that Shopify provides out of the box tooling to run an eCommerce business. What Maple is trying to do is provide tooling to run a lending business that just happens to be on chain. So the way that Maple works at a high level is you have managers of pools, we call them delegates, they’ll set up a pool, which is like an on chain lending business or on chain credit fund, people and institutions deposit into that. And then, the manager goes and originates loans to corporate borrowers out of it. So, it’s recreating a TradFi credit fund or a TradFi lending business, but doing this on-chain.

Joe (01:18):

That raises a first question for me, that is, if I’m providing a loan to an actual business, how does Maple go about determining the credit worthiness of that particular business?

Sid (01:32):

It’s a good question. And, what we’ve tried to do with Maple is be asset light, in that, Maple does not want to be the lender or the balance sheet lender itself. Instead, what we’re trying to do is give people who have the expertise to underwrite and assess credit. So I think, people who were in credit teams at financial institutions before, or they might have been in investment banking, but they understand credit and underwriting loans. What they’re doing is they would follow a fairly conventional process where they would meet the management of the borrower, assess their financials, so balance sheet profitability, and then enter a loan contract with them, and set commercial terms around it. So, it is replicating a fairly conventional and tried and true process of assessing whether a borrower can repay the loan. It’s not really reliant on on-chain determinants of credit worthiness in that respect. Really where the blockchain comes in is actually settlement and management of loans and portfolios of loans.

Joe (02:28):

Got it. That makes total sense. I mean, you’re really saying, “Hey look, TradFi folks that understand how to evaluate credit, and credit risk, and credit worthiness, here’s a new avenue for you to do this, which is on chain.” And so, does that imply that there’s more or less a much larger market for this, or is it more just breaking down the barriers of how TradFi credit funds, or credit debts actually tend to work?

Sid (02:55):

It’s both. I often like looking at business history and one of the things I was always really interested in was the way that when Sony released the Walkman, it actually expanded the addressable market of people listening to music, because they made it more portable and therefore easier to access. And so, I think with this, what we’re trying to do is we’re breaking down the workflows of running a lending business, but we’re making it 10X simpler and less costly to run and operate that lending business or credit fund. And so, I think what that does, it actually expands the addressable market of people who can do credit to businesses, institutions and corporate borrowers. I think that market’s really underserved, and I think that’s actually going to crimp innovation and entrepreneurship in the economy and in the private sector.

Sid (03:41):

And so, what we’re trying to do is expand the supply of people who can operate and run lending businesses, so that the private sector can get access to more and better credit. And the demand for that is not really being well met by the banking sector today. So I think, there are a few suppliers in the private credit or private debt markets. These would include players like Fortress Group. But I think with this technology, if we’re successful, we should see a lot more of those types of players, because it will be significantly easier to set up and run that business. Those businesses will be more profitable to run. And, this is beneficial for the economy.

Joe (04:19):

And so, how does someone get started with Maple then? I mean, it sounds like there may be a couple of different avenues. I just want to make sure we go through the permutations of the opportunities for, say, individuals or actual companies that want to create this Fortress 2.0, if you will.

Sid (04:37):

Yeah. So, the central company or user of the platform, that role, we call it a delegate. But that’s the manager of a pool. And so, they’re, in effect, your lending business that’s being conducted on chain. So those types of players, how they would get started, they go through due diligence with us. And then, once they’re admitted to the platform, we really want to go through and see what sector they would be lending to, how they would attract institutions or individuals to lend into their pools, and then who on the other side are going to be the borrowers. We want to make sure that it’s either a new sector. It’s a growing, it’s a profitable sector. It’s one where there are fairly credit worthy borrowers. We’re trying not to get into things that are too speculative. It’s not for small businesses and for startups. It’s more for established companies that are profitable, that have a great track record, and a big opportunity.

Sid (05:31):

So, that’s one side. And then on the other side, institutions who are going to lend into the platform or individuals. I mean, this could be wealth aggregators, hedge funds, family offices, high net worths. But what they’re looking for is a place to park capital and pretty simply earn a yield. That yield is going to be higher than going into things like AVA or Compound, because you’re taking credit risk. You are lending to corporate borrowers. And so there is risk involved in that. But, generally these types of players have a fairly long time horizon and they’re reasonably sophisticated in their understanding. So, that’s lenders.

Sid (06:07):

And then, the other side is borrowers. Now these are typically corporates who are crypto native at the moment. So, that’s the small wedge. If you think about, when you’re going to attack a market, you have to start with a wedge. And what we did was started with crypto native companies who are generally market makers, high frequency traders, or arbitrage traders. But, that’s one sector within the crypto industry that we can attack first. And then, next we want to look at other sub sectors, which could be infrastructure. So it could be players like Figment, Blockdaemon, Chorus. Could be Bitcoin minors, like Marathon, Core Scientific, any of these publicly listed players, or even large private players. And then beyond that, we want to start to look at SaaS companies. The goal here is not to live solely within crypto. We think crypto is tremendous infrastructure, but it’s infrastructure that gives us an edge over traditional finance. And so, that’s not really going to be successful until you can actually bridge and replace traditional finance in lending to those sectors.

Joe (07:09):

Yeah. That’s really smart. Spoken like a true founder too. You got to start with your wedge and expand from there. I love that. This raises an interesting point though, today, starting with, say, crypto companies, I think makes a ton of sense. But more importantly, when folks create a pool and then, say, a family office or an institution decides to lend into that pool, what happens if someone defaults, right? So, in traditional finance and I’m definitely butchering this a little bit just to keep it short, but let’s assume a business goes to a traditional bank and says, “I’d like to borrow a million dollars for working capital.” And they say, “Well, what’s your business?” “Well, my business is…” I don’t know, “We build warehouses.” Or something, right? And they say, “Well, what are you going to pledge as collateral?” Well, maybe they own the land, right, that they’re going to build these warehouses on or something.

Joe (07:56):

In theory, and maybe even in practice, if they were to default on that loan, the lender would then have a legal claim against, say, the land that they pledge as collateral. How does that work? Not only necessarily just in the wedge that you’re using with crypto companies today, but as you move towards, call it, infrastructure companies and even potentially SaaS businesses, how does default work in the recapture of that collateral?

Sid (08:24):

The way that lending began in crypto was largely over collateralized and it was using liquid financial assets, cryptocurrency, to serve as that collateral. And then, the lender would take possession of it, and then liquidate it if it drop below a certain rate, or if the borrower fails to repay. It’s now evolved towards under collateralized lending. Certainly most institutions borrow under-collateralized now. And this means really what you’re having to do is underwrite and assess the strength of their balance sheet. A lot of people think that this is an aberration, but this is actually most commercial lending.

Sid (08:56):

So, if you’re lending against real estate, that would typically be an asset backed lend. But if you’re lending to say Apple or a large technology company, typically they don’t have a lot of property plant and equipment. They don’t own a lot of land and you’re not going to get your money back by being able to sell their land. Instead, what you’re looking at is the equity of their balance sheet and the profitability of their business. And so, where this type of lending can evolve would be effectively a secured loan, but the security for that loan would be a charge over that corporate entity. So that’s what we’re looking at as we expand into other sectors.

Sid (09:38):

But, I think, to be able to actually serve the broad corporate market and eventually have Fortune 500 companies borrowing through DeFi, you need to get comfortable with that type of risk, which means assessing the balance sheet of a borrower. I will say that, if you take security over a house and a borrower defaults, the foreclosure process is about 18 months. You’ll get your money back, but it will take a significant amount of time. So it’s not liquid collateral. And anyone who thinks that DeFi lending against those type of assets is going to give them an instant payback if there’s a default, is going to be disappointed. But, if you’re lending against the assets of a corporate, you want to make sure, ideally, they’re not going to default. Your recovery’s going to be lower than if you’re lending against a house. But, your probability of default is probably also correspondingly lower if you’re lending to a large corporate than an individual who just owns a house or a small business, who’s pledging a house as collateral.

Sid (10:34):

You are still lending against effectively the strength of the business and the profitability of the business. But, as crypto goes into other sectors, I can see asset backed loans also playing a role. We would look at real estate backed loans, but currently one of the main issues is that, that requires paper filing in any individual state that you borrow from. So, it’s not even 10 years behind, it’s 40 years behind in terms of actually having to file security and manage the opposite of that.

Joe (11:02):

Got it. Very helpful answer. I think, the takeaway really is, “Look, if you’re lending money to Apple…” I love that example. “You’re not necessarily having them pledge their One Infinite Loop address and ownership of that land as collateral.” You’re saying, “Look, it’s Apple, right? They’ve got a ton of cash on their balance sheet, or they’ve got great potential for future cash flows, et cetera, et cetera. We’re just taking that to something like Maple’s platform and folks can assess.” Like you said, it’s really up to the lenders to assess the credit worthiness, right?

Sid (11:33):

One of the innovations that we’ve tried to build in is that if you’re coming to the platform and you want to deposit into a pool, you don’t have to be a sophisticated underwriter yourself. What we’re trying to build is a way for you to assess that here’s a pool that is lending to this risk profile.

Sid (11:50):

Let’s say, mega cap companies based in the U.S., here’s the historical performance. It’s earned this much in yield. There have been X number of defaults. And then, you have a bio on the management team that is making those lending decisions. And that enables you to decide, “Okay, I’m going to allocate a bit into this pool and maybe a bit into a second pool.” Rather than, you having to come to the platform and go, “Well, do I want to lend to company A? Or do I want to lend to company B?” Because, it’s not really in most people’s expertise or ability to devote that time to doing that. And I think that was why earlier peer-to-peer lending platforms like Lending Club didn’t quite take off and achieve widespread adoption, because that model is just super inefficient for both the borrower who’s coming to a platform and doesn’t know who they can borrow from, as well as the lenders who come to the platform and don’t know how to assess whether Apple is going to repay its loan. Apple’s probably a poor example, but some other company.

Joe (12:48):

Well, and speaking of defaults, we would be remiss not to talk a little bit about some of the challenges facing the lending industry in crypto right now, without having to necessarily name names. I think it’s pretty well understood at this point that there’s been some stress in the credit markets, if you will, when it comes to crypto. Can you talk a little bit about maybe how Maple does or does not “hedge” against that, being more of the facilitator and it’s really on the lender’s ability to evaluate that risk? Or, are there any sort of advantages that Maple provides that theoretically could have mitigated some of the challenges that some of the lenders in crypto have faced?

Sid (13:29):

So there’s probably three key advantages or differences for doing this in DeFi, which would’ve been risk mitigants. So, the way that Maple works is you have multiple pools, each pool is a basket of loans that you can deposit into and effectively you’re lending to those borrowers on the other side. Number one is that, all of the loans and flow of funds is totally transparent and on chain. So if you go into a Maple pool, you can see who the 25 different borrowers are. So you’d never have a situation where you wake up tomorrow and you find out that a Maple pool was actually lending to a borrower that you had no idea about. And that that borrower was 30% of the pool. So, transparency is risked mitigant number one.

Sid (14:05):

Number two is that the withdrawals and flow of liquidity is all just governed by smart contracts. So, as cash flows back into the pools, people can withdraw. So, you’d never have a situation where you go and you find that on a discretionary basis withdrawals have been halted. At the moment, liquidity is constrained, but it’s purely dependent on just paybacks of the loans, which are coming through over the next 60, 90 days and beyond. And then, element three, as you can see that, there is a reserve for each of the pools. So the reserve is there and it can absorb some of the credit losses. I would say, our reserves in the pools at the moment are probably undersized where they should be on a normalized basis and that’s a learning, but conceptually having that reserve on chain, I think, gives people who are lending inter pools and into protocols comfort when they can effectively see the buffer that is available to protect people who are a senior there. Otherwise, contrasting that with more black box CeFi lending, it’s just a feature that is not there.

Joe (15:08):

Weird. So you mean more transparency is actually better for market participants?

Sid (15:13):

Well, I think, yeah, at this stage with current events, it’s a clear argument, yes. I think, where CeFi lending has advantages is obviously in flexibility, having a protocol and being governed by those rules obviously creates inflexibility and slows things down a bit. But, I would say ultimately what we’re actually trying to design is a system that is resilient and robust enough to shocks that it doesn’t require a bail in, or a lender of last resort concept, because over a long enough period of time, you will see enough volatility that stresses things that rely on a single counterparty. We saw during the GFC, everyone was insured by AIG. Well, when there was an out-sized level of defaults, AIG went bust, then no one was insured.

Joe (16:03):

That’s right. Yeah. It’s interesting, I was chatting with a coworker of mine who was at Lehman Brothers during the GFC and he was having a little bit of flashbacks to some of the stuff that’s been happening in crypto today with the CeFi-related lending.

Sid (16:17):


Joe (16:17):

Let’s talk a little bit about Maple itself. So the protocol, this is obviously The Solana Podcast, we’re going to get into the Solana integration in a second, but I really wanted to provide the listeners with a fairly solid understanding of the actual product and the business, and also the business of lending. So they could understand maybe what Maple’s token is, and what does the protocol do, and how does governance work? So, could you maybe just talk a little bit about if I’m a Maple token holder, and maybe I’m staking Maple, why have this protocol, and what does the governance actually do for the future of Maple’s growth?

Sid (16:54):

It’s a good question. And so, the way that the token fits into things is, it can be staked. So, that’s the first use. The second is that, when you stake it can be deposited into that pool cover. Pool cover is your subordinate reserve. And so, the purpose that therefore provides is, providing a safeguard and some absorption for credit losses, in addition to being used as the governance token to make decisions on the platform. So, what you would do then, in terms of a workflow, so you might stake it, then you’re receiving a portion of the establishment fees.

Sid (17:27):

So, Protocol Treasury earns about 66 basis points on loan origination volume, and then half of that goes to pay stake tokens. And then, the other element where the stake token participates, is that, if it’s put in pool cover, pool cover is paid a portion of the interest. So, generally in most pools, it’s about 10% of the interest cash flow. So, if a pool is a billion dollars, paying 10% on average, it’s a $100 million in interest, 10% of that, so $10 million would go to pool cover. So it’s going to pay effectively for credit protection there. That pool cover is comprised of the token and USDC. In future, we’ll just have single-sided depositing of the token.

Sid (18:10):

But therefore, it receives a portion of revenues for actively participating in the credit protection of the pools and the senior lenders on the platform. So, that’s how it figures in the platform both economically and from a risk allocation perspective. And I think, risk allocation is super important, because as I alluded to before, this is one of the ways in which we’re trying to fix some of the problems inherent in TradFi lending. So, an alignment of incentives is super important and the pool delegate, so that team of managers who are deciding who are good borrowers, they have to put some of their capital into that subordinate reserve, the credit reserve. And they do that so that if there are defaults, they are among the first to take a hit. And that helps ensure that they are incentivized to maintain pretty good credit standards.

Joe (18:57):

It’s really cool, because there’s so many ways that you can participate in Maple. But also, the notion that folks have shared incentives and are aligned is I think one of the most powerful aspects of the protocol, but that raises the question of, “Well, man, it seems like a lot of scope for some engineering talent.” Let’s dive into a little bit of the tech, not get too deep, but certainly enough to give people an understanding of what it is that you’ve built, and ultimately why and when you added salon integration? What does that look like for your team? And, what has been the lessons learned from starting on Ethereum, and then adding Solana support.

Sid (19:36):

Yeah, it’s interesting. I mean, looking back at our tech stack that we have on Ethereum. So, we launched the Ethereum version of the protocol in May of 2021. And then, we were steadily growing. So, Ethereum, or the protocol as a whole, has done about 1.5 billion worth of loans to date. It’s pretty good for 12 months. But what we looked at as we built out Ethereum… So there’s certain things that you really keep in mind when you’re developing. So, upgradability was something we debated for a long time, because if you have upgradability, it gives you flexibility. And it means you can move faster, ideally not break things, but it gives you the ability to iterate, but it’s less secure, because upgrading a protocol or upgrading a component of the protocol, that’s how hacks and exploits can happen. So, we initially traded more on the side of security there and inflexibility.

Sid (20:26):

Now, as we near launching pools V2, we are thinking about upgradability and how we can have something that evolves. But, it was around late last year, I was actually at Breakpoint Solana in Lisbon, and I was meeting a lot of founders who were coming from TradFi backgrounds and looking at building things on Solana. And, we had been receiving comments from people who were using the platform about the transaction costs on Eth. And so, that prompted us to start looking at, “Could we build on layer twos? Should we evaluate alternative layer ones?” And, being at the conference, yeah, I was very much struck by, one, the level of development in the ecosystem, particularly on the DeFi side. Two, the level of talent that was moving across there. And, a lot of our clients and borrowers, like Alameda, obviously have a lot to do with the Solana ecosystem.

Sid (21:13):

And so, we started researching who was doing Maple on Solana. We met a team that was called Avari, and then we ended up acquiring them. And that meant that we were able to get live on Solana probably six months ahead of where we would’ve been. And it gave us access to really good talent in terms of Rust engineering, which was super short on supply. So, for us, it meant, one, speed to market. Two, talent acquisition. And, Jeff and Quinn, the two guys who came on board the team, really aligned with us in terms of values.

Sid (21:43):

And, it’s given us now I would say the advantage of being on two chains is that you can start to build out a differentiated product that ideally isn’t cannibalizing what you’ve already done on Ethereum. It should be meaningfully differentiated. And that’s why I’ve been pretty excited to see things like the launch of the Solana phone, because the more differentiation and uniqueness that we have on the ecosystem that product is built on, the more we can serve a differentiated market, whether if you have something like, SolPay, that starts to introduce tech or SaaS companies into using crypto and blockchain to support their financing, then that’s a market we could go and lend to.

Sid (22:24):

So anyway, that’s a long-winded answer. But, that was why we started looking at Solana. And as we’re evolving that product, so there’s now about 113 million in loans on Solana, Genesis and X-Margin are each running pools there. We’re trying to see, how can we build that product to serve either a unique customer base, whether it’s like SaaS companies or a unique and differentiated lender?

Joe (22:46):

Got it. Yeah. The Breakpoint conference last year, I think, was really eye-opening for a lot of folks that were just getting familiar with Solana. And, the response I’ve heard from most people is that, just the developer activity and the developer acumen, the technical acumen of the developers that were migrating towards Solana was a super strong signal to why they wanted to participate, or in your case support Solana. One of the key features of Solana is this concept of composability. So, the notion that protocols can almost operate as Legos and you can build various things, developers can build various things. Is there a notion of composability with what Maple’s doing? Meaning, could developers actually try to build something with Maple powering it, or as a piece of some bigger product, or protocol idea that they may have? Or is Maple more meant to be, “We’re a vertically integrated thing that supports Solana’s chain”?

Sid (23:46):

Yeah, it’s an interesting concept. It’s, do you go the Apple route and you be vertically integrated and control your destiny? Initially, the concept from Maple was for tranche fixed income, but then it evolved to be full stack lending. And that was because DeFi was so early that we didn’t really want to be dependent on other protocols to get to market and to grow. And so, we took more of the Apple approach early on. Now as I look at DeFi, one, I think there’s actually going to be a contraction in the scope of different products on DeFi for a while. And so, being vertically integrated is strategically pretty good for us, but the counter to the apple approach would be where Microsoft has found itself now, where I think, arguably before they might not have had a stronger set of products outside of Windows and Office.

Sid (24:30):

But, now when you look at what they’ve got, they’ve got GitHub, Teams, Xbox, gaming, Activision. They’re actually adding this full suite of things, where when you go into their ecosystem, you have access to all of this. And it’s a very interesting product to serve to institutions or enterprises from Microsoft’s side. And so, I’m looking at what is within the lending product suite, whether it’s yield. So this could include swaps, could include things like credit scores, could include flavor of insurance or credit default swaps, or it could include different types of credit indices. What are the adjacent or complimentary products that would, one, make our product offering stronger, and two, enhance the strength of a product that’s trying to partner with us.

Sid (25:16):

So, credit scores are really a natural one. But, I’d say, at this stage, it is very early on in that space just because people aren’t conducting most of their economic activity on chain. But other things like fix for floating swaps, or hedges, I think, are a pretty good complimentary one. It’s still very early, but those are the natural ones that I speculate about, because that was what I used to do when I was in banking. We’d also have to go on frequently talk to a swaps desk, or a ratings agency. So I think those would be naturally the first ones.

Joe (25:44):

Got it. Yeah. There’s a conversation that I have with a number of the founders that I advise on their companies about staying very tightly scoped to what you’re building, versus opening up almost an API, or a set of SDKs, or a platform if you will. And there’s just trade offs to both of those, right?

Sid (26:01):


Joe (26:02):

One is that if you are vertically integrated, well, you really control not only your destiny, but you also control the end-user experience, and what that end-user… How they’re going to interact with your product/protocol. And that’s super important, but it could potentially restrict the potential speed of the growth of what you could be doing in these adjacent areas like you’re describing. Whereas, if you, say, theoretically, open up a platform with APIs and SDKs for developers to build on, you’re not necessarily controlling that end-user experience, and that could be potentially detrimental to the brand of Maple, assuming someone has a poor experience. But, it’s a great trade off to make, right?

Joe (26:40):

And I think, staying the course of what you guys have done thus far, the fact that you’re even thinking about CDSs or credit scores. I mean, one of the questions that came to mind earlier was, if you’re bridging a lot of what happened in TradFi, are we going to start to see a ratings agency? Are we going to start to see the CDOs and CDO squares, and for the listeners that may not know what that is, it’s a collateralized debt obligation that could then also have various tranches associated with it, which unfortunately led to a big portion of the global financial crisis. And we don’t necessarily want to recreate that. But I guess, from my perspective, how do you think about that roadmap that you’re doing. And, where are you going to be doubling down, or are there other areas where you want to partner with folks? And, how do you think about that going forward?

Sid (27:24):

Yeah, I actually think about a lot. I mean, we get a lot of inbound interest in partnerships, because I feel like we’ve been around a little while and we’ve demonstrated a certain amount of traction. So that’s good. But then, a big question becomes how do you decide and prioritize amongst those opportunities? And what I try and think about now is… I think, a big focus for us is which opportunities get us fastest out the gate in terms of serving non-crypto native customers right now. So there’s a certain question of, how much do you want to be doubling down serving crypto native borrowers, versus say, leaping out and serving SaaS companies? And to serve SaaS companies, the types of product integrations that you might need, or just any customer outside of crypto, would be things like on and off-ramps.

Sid (28:07):

Now, that’s a really intensive product development on the legal and compliance side. It’s actually pretty simple build, but it starts to become a strategic question of, “How much effort do we want to devote to something like that, versus say, evaluating an alternative L1 or going to an L2?” I think, the scale’s probably tipped in favor of looking at how quickly you can get out and serve just a wider set of customers. And I would say, part of our role at this stage is trying to educate people who are not actually in crypto already, and try and bring them into crypto and into DeFi, rather than bringing DeFi to them. Instead of evangelizing about it to the people who are already in crypto. I think what we’re trying to do is just demonstrate a very workable product to people who are not already in there and wow them with what we think the huge benefits over doing this through the traditional financial system.

Joe (28:57):

I mean, look, I love the notion and the approach of trying to get a lot more non-crypto people into DeFi. I think, one of the things that I look for when I talk to founders or folks that are in the ecosystem… And I know that Anatoly and Raj did the same thing, and the Solana lab team more broadly is like, “How can we get more and more users that aren’t already in the space?” And, there’s a couple ways that you can do that. One is, you can build an amazing product that’s very easy to use. Easier said than done.

Sid (29:29):


Joe (29:29):

But the second is some partnerships. And, what brought this to mind for me was I think when we met in-person, it was at a dinner that Jeremy Allaire, the CEO of Circle put on. Could you maybe talk a little bit about how maybe the Circle is an example of how you’re thinking about levering someone in this space that is absolutely doing God’s work out there, working with institutions and folks trying to get them into crypto and DeFi? Jeremy’s done an amazing job of doing this with USDC and what he’s been doing at Circle. So I’d love to get your take on if Circle is an example of how… Or someone that you would partner with to help accelerate some of those non-crypto native people into DeFi.

Sid (30:08):

Definitely. So, Circle, as you said, is a great partner. So, the pools lend on Maple in USDC, which is the vast majority of the lending that’s happening on the platform, and also wrapped Eth. But if we look at USDC, this is absolutely essential infrastructure, I think, for DeFi, because having this secure stable currency in a digital form, which we can then distribute loans to corporate borrowers, as well as companies who are coming into DeFi and looking to earn a yield, are wanting that yield in stable coins. But, where Circle has been tremendous, and I think where there is a huge opportunity to grow is, one, there is the Circle yield product, which could potentially be integrated with Maple and a partnership there would offer people access to yields coming through the platform. What they’ve actually done really well, which is underrated is, the front-end of the Circle treasury and USDC product has, I think, the best off-ramp in the market.

Sid (31:05):

So, we use it for our own corporate treasury management and when we have to pay things in fiat. And, having that product, that’s a really good Trojan horse, that if a regular non-crypto company starts using that, they have a seamless on and off-ramp through which they could access a product like Maple. So, I could lend to a company and let’s say that company is doing SaaS, or it’s a FinTech business, or even a business in real estate or construction. So, if we could lend USDC to that company, then they could take that through the Circle front-end, convert it into fiat, and then use it to pay vendors, suppliers, salaries. And so, I think, the growth and proliferation of stable coin usage is super essential and it’s going to precede wider adoption of DeFi, because it’s a necessary part, it’s key, picks, and shovels for the space. But I’d say that’s how the Circle partnership is super important for us.

Joe (32:03):

Yeah. The folks at Circle are great. I have nothing but positive things to say about them as well. And, there are other partners in this space that I think have been super helpful as well to DeFi adoption. As you think about these partnerships… What struck me earlier about when you said you think there’s going to be a contraction in DeFi, how does evaluating how Maple is going to play in this space relative to the potential contraction that you’re seeing? So, maybe to unpack this a little bit, can you talk about maybe your view on the contraction and how that may or may not influence how you want to go out and partner with folks to bring on those call it a 100 million new users into DeFi.

Sid (32:46):

The contraction is happening broadly across all risk on assets. So, people are going risk off for crypto for equities. And, what’s happening is that because crypto is a much smaller market, the outflow is felt more acutely. But we’ve seen out general outflows from crypto and DeFi lending as a whole. And, what it’s forced us to do is probably consolidate around a core working product. So, in this case, it’s probably caused us to, say, push out potential partnerships that are maybe less clear in their scalability, because it’s a bird in the hand, two in the bush. So, if you have a customer set that is working and partnerships that are working, you have to be more circumspect and conservative in the new ones, because you probably have less bullets. And so, what the pullback is forcing us to think about is, if we wanted to go and target a new set of borrowers, who is a new set of borrowers that we could potentially sell to lenders who would need to deposit into the pools that are lending to those borrowers?

Sid (33:46):

So, it forces us to think about matching and extending the markets that are offered on the platform, i.e., the pools that are offered on Maple. And, in terms of integrations, it forces us to concentrate more acutely on what partnerships, for example, Circle as well as off-ramps will help us extend our reach to serve customers who are outside of crypto. So things like credit scores, you have to be a little bit more conservative about, because probably the next six months, there’s not going to be as much on chain activity. And so, the amount of value you could get out of, say, an on chain credit score is probably diminished for the next six months. It’s not that it wouldn’t work eventually. It’s just that, probably that goes down your priority list in the near term.

Joe (34:33):

Got you. Yeah, that makes total sense. Can we talk maybe a bit about your company? We’ve been talking so much about DeFi, and of the product, and this and that. I probably should have asked this at the beginning of the podcast, but can you maybe just talk a little bit about the company? How old the company is? And, where you’re located? Potentially remote, like most modern companies. And, what does the the roadmap look like for folks you want to bring on or folks that you’re looking to add to the team? The reason I bring this up is that a lot of folks that tend to listen to the podcast are very passionate about participating in the Solana ecosystem and are interested to hear about how companies started and where they’re going.

Sid (35:13):

We have an interesting structure. So, two segments, we’ve got the DAO, which raised capital. And the DAO is effectively governing the protocol and it has a multisignature that will implement any major changes, deploy new contracts. And then, we’ve got the operating company, which is employing developers, conducting business development and marketing. And so, that’s domiciled out of Australia. And that company receives grants from the DOW, which cover operating costs and cash burn on a quarterly basis. And I suppose with those two segments, it’s worth noting, so most of the team is remote. They tend to be based out of the US, Canada, UK, and Western Europe. We try to aggregate everyone around not too many time zones, so that it was easy to coordinate calls when I was living in Australia. I used to have to do 4:00 AM calls most days.

Joe (36:02):


Sid (36:02):

Yeah. But, we’ve got about 36 people at the moment. And so, we were hiring more aggressively. I think in current market conditions, we paired that back a little bit, but we are still hiring. So, if there are good people out there who want to join a team, we are looking for a couple of engineering roles at the moment. We’re looking for a capital markets associate for anyone who is in TradFi or investment banking, and looking for a change into crypto. Never a better time to do it. And so, I actually want us to run a pretty lean model. So I think, me and my co-founder have always been of the opinion that you add people on the basis of jobs that need to be done, rather than just headcount for headcounts sake.

Sid (36:42):

And so, I’ve definitely been inspired by the FTX model there in terms of how much they’ve been able to ship for how lean they are. I would say, we’ve actually developed a sales team, operations marketing, as well as product engineering and design. So, we are a fairly complete core. And so I think, there are potential roles on the team for someone in sales, design, or engineering, if there are good people out there. Yeah, that’s where we got to at the moment.

Sid (37:13):

But in terms of roadmap, the roadmap for us is we’re launching pools V2. So there’s a really complex engineering ask there. And, the team is doing a lot of research. And particularly with the market events of recent market volatility and some of the points and implosions we noted in the CeFi side, we’re trying to take learnings and incorporate them into pools V2.

Sid (37:37):

So this would include things like, how to have a better withdrawal mechanism? How to have better cover support, i.e., credit protection, because people are really more acutely concerned about that. And that’s something that probably wasn’t a big market focus six months ago. And then, better asset liability matching, which is that point I made about sustainability of a lending business. You can’t fund term loans without call deposits. And so, we just want to get better about matching those up.

Sid (38:05):

But then, on Solana, what we’re focused on at the moment is things like open term loans, active collateral management. These are the types of things that we think is going to be super interesting tooling to bring more CeFi businesses onto DeFi rails. So I think, we recognize that is a core customer set of ours. And it’s like, “How do we build the tooling that means that you would want to run a multi-billion dollar lending business on top of DeFi rails?”

Joe (38:30):

Wow, fascinating. And man, could we use that? If there’s anything that we learned, I think, this year thus far is, self custody is definitely going to be a key thing going forward.

Sid (38:40):

Self custody is king.

Joe (38:41):

Yeah. Well, look, this has been an absolutely fascinating conversation. I have one last question for you. And, we will absolutely hold you to it long-term. You’ve been talking a lot about lending and there’s an interest rate associated with those loans in the United States. And, I think some of the other central banks are following suit. We’ve been raising interest rates. So, how do you think a little bit about competing with some of the broader interest rate markets and something that Maple can actually provide? Does that actually factor in? How do you think about, I guess, monetary policy from central banks relative to the business that Maple’s building?

Sid (39:20):

For a really long time rates on crypto were outside rates in, let’s call it, the real or traditional economy. And that was because there was a lack of liquidity there. Then, what we saw, rates and traditional economies started to go up, but because there was actually more supply coming through, particularly earlier this year, we actually saw rates drop. And so, the delta between TradFi and DeFi/CeFi rates really compressed. Now, we’ve seen with the implosion of liquidity… Liquidity has totally dried up. We’ve seen rates go way wider again.

Sid (39:54):

So rates now blowing out to mid-teen levels, you can probably clear in crypto and DeFi. I’m a big student of financial history. And I look back at the last time that inflation was this bad, which was probably the Volcker era. And, cash rates got up to double digits to break the back of inflation. And I’m interested, because I still think that lending rates in the traditional economy are sub-inflation. And therefore, everybody who’s lending in the real economy is still earning a negative real rate of return. Whereas, in crypto, at least you’re earning a rate that clears inflation. But I’m interested to see, and I wouldn’t be surprised if rates continue to go up in the cash rates and the TradFi economy up to high single digits. And then, in DeFi and crypto that probably pushes them close to high teens. And yeah, I wouldn’t consider that out of the ordinary. I think, people assume that because we haven’t seen that in 20 years that that’s not possible, but I would say, in the 60s, rates were pretty normal low single digits. And in the 80s, inflation was double digits, so.

Joe (41:00):

So basically, to wrap it all up, you’re saying, crypto rates will be clearing inflation, whereas the real economy, likely not so.

Sid (41:10):

Crypto you can’t have that distortive effect of the central bank, where you have people who are lending out at negative real rates, because they’re below inflation. I think, in crypto, there is a demanded risk premium. And, it’s a more pure form of capitalism, I would say, where people are going to price rates so that they can clear a real positive rate. So I’d say, with supply inflows being limited, I’d say that effect is more exacerbated. So I probably expect to see the spread between crypto and TradFi actually widen over the next 12 months.

Joe (41:44):

Very cool. Well, we will absolutely hold you to that. And in 12 months, we will verify that you were correct. Sid, this was a great conversation. Thanks so much for sharing your story with Maple. And, if folks want to find you and Maple online, where should they look?

Sid (42:01):

So you can go to our website, That’s where you can find the web app, any news and updates. If you’re active on crypto Twitter, you can find Mapl @maplefinance. And you can find me @syrupsid, both one word. If anyone wants to reach out, happy to make contact with them.

Joe (42:17):

Great stuff. Thanks, Sid. Well, it was an awesome conversation. It was such a great time hosting The Solana Podcast again. My name’s Joe McCann. I’ll see you guys next time.

Sid (42:26):

Thanks, Joe.

Strata Protocol & Metaplex Ep #68

Noah Prince (Co-Founder/ CEO, Strata Protocol) and Austin Adams (Lead Protocol Dev, Metaplex Studios) sit down with Austin Federa to discuss the integration of Strata’s Dynamic Pricing Mint tool into the Metaplex Program Library.

00:51 – What is Strata?

02:12 – Challenges when launching a token

04:43 – Why is Strata more successful than competitors?

06:15 – Fundraise and the changing use cases of tokens on Solana

08:47 – Changing mentalites around the function of tokens

10:48 – How is Metaplex’s approach different

11:51 – Description of the flow using Strata

13:25 – Mechanisms of dynamic pricing

15:12 – Tools for dynamic pricing / Collusion

19:06 – Metaplex and additional tooling

21:54 – Optimizing Metaplex’s architecture for the community

25:05 – Advantages and drawbacks with metaplex’s architecture

29:44 – Metaplex and backward compatibility

32:39 – Pitch for using dynamic pricing



The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose.

The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.

The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.


Austin Federa (00:10):

Welcome to The Solana Podcast. I’m Austin Federa. Today we’re talking about a new partnership between Metaplex, the NFT implementation on Solana, and Strata Protocol, a toolkit that helps developers launch tokens. They’ve built some new tools to help creators set dynamic pricing for NFT mints and these change the economic incentives around NFTs which will hopefully reduce the botting of NFT mints. We’re joined by Noah Prince, the co-founder, and CEO of Strata Protocol, and Austin Adams, a software engineer and lead protocol developer at Metaplex. Gentlemen, welcome to the Solana Podcast.

Noah Prince (00:42):

Thanks, Austin.

Austin Adams (00:42):

Thanks for having us.

Noah Prince (00:43):

Glad to be here.

Austin Federa (00:44):

Great. So let’s go ahead and start out today with just an overview of, Noah, what is Strata and what are you guys trying to do in the space?

Noah Prince (00:52):

So Strata Protocol at its core is a protocol for launching tokens and managing the liquidity around those tokens. So we have a variety of different auction mechanisms, and we can launch tokens anywhere from small tokens that you don’t really know who the counterpart of the trade is, there’s not going to be much volume, all the way up to large tokens where you want to do a large offering and then eventually put those on a DEX. How we ended up getting into this space is just that our auction mechanisms for tokens also offer a solution for the NFT botting situation. So we thought long and hard about how to keep bots from botting the token launches that we have. And if you launch one of those tokens and then put it as the entry price to a Candy Machine, you get a dynamic pricing Candy Machine.

Austin Federa (01:39):

So let’s talk a little bit just to kind of roll back to what Strata really is trying to accomplish here. You mentioned it’s a solution for launching tokens and providing initial liquidity for those tokens. What are the challenges that people run into when actually launching a token? I think if you look across the space, you’d see that there are hundreds of different tokens run by hundreds of different projects across the Solana ecosystem, the majority of which were not launched with something like a launchpad or basically a protocol to help them go through that process. What are the challenges that people are facing when they’re actually looking at launching a token?

Noah Prince (02:12):

Yeah. So I think token launching kind of comes in a few steps, right? The very first step is the ideation phase, where you’re trying to figure out what your token is, do you have multiple tokens? What are the tokenomics? And somewhat in that same phase is where legal comes in. And to a lot of degrees, that is the hardest spot is where you’re going to figure out what your token does. But a lot of times for people launching a token, there’s this kind of big okay, we know what we want to do, but how do we physically create that token? And then how do we go and do things like auction that token off? I want to sell some of that token to investors. I want to sell some of that token to all of my community, how do we actually distribute that thing?

Noah Prince (02:54):

And then after that, there’s the step where you’ve distributed it, you’ve collected some money for the token that you can use to bootstrap the project. And then you also want it to be tradable on a DEX or on an AMM. And then you go and set that up. So Strata is really there to help with the creation part of the token and for really small tokens, we also manage the liquidity. So if you don’t want to even care about what is an AMM, what is a DEX, who is the counterparty to a trade? We have a way you can launch a token and it’s basically one click. The protocol just takes care of all of it for you.

Austin Federa (03:30):

Yeah. So if you think about maybe a year ago, when someone was trying to launch a token, there was lots of technical components in actually creating and launching that token, but you’d have to go and submit something to the Solana token registry. You’d have to then go ahead and set up a permissionless pool on something like Serum. You’d have to go ahead and try and get it verified to get it actually listed there so it would show up in the list. Someone didn’t have to add it as a custom market and all these things are functionally automated through you guys at this point, correct?

Noah Prince (03:56):

Yep. So for the most part, those things are automated. You still need to go and set it up on a AMM after you bootstrap the liquidity, but yeah, we’re basically making it permissionless to go and do this. So the idea was to make it as easy to launch a token on Solana as it is right now to launch an NFT which Metaplex has kind of done a great job of.

Austin Federa (04:16):

And so there’s been a lot of organizations that have tried to create launchpads or create basically systems of easier onboarding on the Solana blockchain. And a number of them haven’t really gone anywhere, or they’ve been sort of overrun with, I would say very low-quality projects that are just trying to find a quick way to launch a token. What’s the reason you think that Strata has had a bit more success here and not fallen into some of those traps?

Noah Prince (04:43):

Well, I think the first big trap there is talking about projects that are obviously disingenuous, they’re trying to cash grab. They’re not actually a real project. And when you talk about creating something permissionless, you want to get away from that, right? The barrier to entry should be low so that anybody can do it because tech is tech, but we don’t want to be the ones that are creating the list of all the different tokens that we think that people should buy, right?

Noah Prince (05:12):

Equally, Metaplex isn’t doing that. Metaplex doesn’t go out and tell you which projects to buy. There are plenty of Launchpads that have their own lists that’ll tell you who they think you should buy, and there are plenty of Twitter influencers who will tell you that as well. So that’s one way that we’re doing it. And then the other way that we’re doing it is trying to make it easier for these projects that are smaller and maybe don’t have all the idea of how to do everything that’s complicated with launching a token, they just want a simple token. Things like social tokens are like little community chat projects, making it easier for those.

Austin Federa (05:47):

Some of the interesting things you guys have done in addition to the ability to create a new token or sell an existing token bootstrap liquidity is this idea of a fundraise and the dynamic pricing of NFT mints. On the fundraising side, what did you see in the changing ways people wanted to use tokens or the changing use cases of tokens on Solana that really led to the idea of a fundraise being something that a launchpad protocol should build tooling for.

Noah Prince (06:14):

Yeah. Fundraise was inspired deeply by ConstitutionDAO, which if you didn’t see it, was this thing where a bunch of people on Eth just banned together, they said they were going to buy a copy of the Constitution of the United States of America. There was an open bidding that happened. I think they raised like $30 or $40 million and ended up getting outbid, but it was still this example of a community coming together and bootstrapping a ton of liquidity to do something cool. And the idea was that there will be shared ownership of the Constitution, or at least this copy of it after the bidding was done.

Noah Prince (06:49):

And so how you do that mechanically is just, you’re collecting money into a pool that somebody then uses for the bid. And then as you’re collecting money, people are getting a token that represents their share of that pool. And so even after you’ve used the money, they still have the token. And so with the ConstitutionDAO you had the people token. And that’s just one of many ways to launch a token and why a launchpad is formatted like a wizard because we want it to be like a no-code tool where it asks you the questions that you need to answer to get towards launching your own token.

Austin Federa (07:20):

It’s super interesting to think about the implications for some of the stuff for the intersection of real-world assets like something like a constitution and then the intersection of the ability to have full liquidity through something like a token mechanism for this. So I think that’s a very interesting use case for it. And one of the great things I think about ConstitutionDAO when we saw that all happen is it’s still going, right? There’s still a community there. It’s still passionate about this thing that they failed to create, but now is turned into something else which is in a large part, a lot of the story of NFTs on Solana as well, is that they start with one mission and suddenly something changes and Trash Pandas are now fighting plastic in the oceans, and all these other projects are building real community service kind of components into them.

Austin Federa (08:05):

When you’re looking at the idea of a no-code solution here, what was the reasoning for something like that for more complex protocols? I guess the thing that I’m trying to tease out here is there’s an assumption from a lot of folks that if someone’s not sophisticated enough to figure out how to launch a token, they’re probably not sophisticated enough to launch a project on a blockchain. That’s obviously not necessarily the case, but that is part of why you’ve seen launchpads in general, or less code solutions be something that tends to have a lower quality project coming out of it in general. How do you respond to some of that criticism or look at the different ways that we just need to change our mentality around what a token’s meant to be used for?

Noah Prince (08:47):

Yeah, I think there is that tendency, but as a dev, it’s all about tools, right? For me, it’s how can I get something done with the least effort possible that meets all the requirements. And so when you give tools to devs so that they can launch a token really easily, the devs can spend time focusing on the things that matter and not the things that don’t. So part of it is that but also you need this primitive and you need this primitive to be easy because we’re in the infancy of tokens right now, right? There’s just one token. We’re starting to see more complex systems like STEPN pop up where you have systems of tokens where that’s just two tokens, all the way up to things like WOMBO, and BitClout, and Rally, where you have hundreds and hundreds of social tokens. And these things all start to interconnect together, and you can start to do really cool things when you can create systems of tokens. And that’s something that you couldn’t do in the past without this kind of primitive.

Austin Federa (09:43):

Yeah, it’s fascinating. So, Austin, let’s talk a little bit about the interface here with Metaplex NFT initial mints. So one of the things that we’ve observed over the last few months is that the increasing demand for NFT is on Solana. And also I would say real success of projects in building a strong community pre-launch has created situations where there is both a high incentive to bot the launch of an NFT, but also there’s just extremely high demand for these things when they’re coming up for initial mint. Some of that’s driven by expectations that they might be able to flip them, but a lot of this is just organic community demand for a project that they feel very excited and interested in.

Austin Federa (10:22):

There’s been a few attempts to create systems that would either increase the fairness or would try and reduce the incentives for botting. One of these was the Fair Launch Protocol which was created as sort of an extension of the Candy Machine toolkit, but Fair Launch Protocol never really caught on from a community standpoint. So what is sort of different in the approach here that you think is going to be successful in creating better incentives and dynamics?

Austin Adams (10:48):

I think the reason that this will be more successful is we will market it a lot harder than we marketed Fair Launch, but also the mechanics of Fair Launch weren’t really, and they could have been changed they weren’t really a great experience having to wait and then not knowing if you were going to get things. The NFT minter, once that sort of casino-style experience, they pull the lever, they get the thing they know right away, they’re having fun, it’s addicting. With the dynamic price mint coming in we get that addicting and fun feeling while still getting some technical protection against bots and making it a little bit more advantageous for creators. If they’ve created demand, they’re getting rewarded for that demand.

Austin Federa (11:38):

Yeah. That’s super interesting. So let’s walk through, I guess, from both of you, what is the flow that both a creator and a user goes through if the project that they’re trying to mint is using this new dynamic pricing powered with Strata?

Noah Prince (11:52):

Yeah. So the flow right now is a little bit broken up and that’s kind of the point of this partnership, but right now you launch a normal Candy Machine through Metaplex, you grab the ID of that Candy Machine, and then Strata has a UI where you can plug in that ID and it converts it to a dynamic pricing Candy Machine. Now from a user standpoint, this looks pretty much exactly like the usual mint interface that you’re looking, they’re used to, right?

Noah Prince (12:18):

You just click a mint button, but the price is changing. So the price is just slowly ticking down and occasionally it bumps up when somebody purchases something and you can also switch tabs and you can go look at a price history plot. But as a user, you’re trying to figure out at what point do you want to enter, right? At what price do you want to pay? And bots are playing the same game which is an unsolvable game. When do you enter a live market is a question that nobody knows the answer to. So it feels very much like a normal mint it’s just that the price is moving and it’s a game of who flinches first.

Austin Adams (12:53):

That’s the current experience but as I’m sure you’ll get to, we hope to create a deeper integration together that can utilize Strata’s tech and Metaplex’s tech for the entire experience without needing to go from one place to the other but using our new UIs and CLI tools, they can create a dynamic price Candy Machine that also gives us even more bot protections than we had before without having to go from one website to another.

Austin Federa (13:25):

So what is the dynamic pricing set based on? What are the mechanics that go into actually setting what that amount should be and how much volatility do you expect to see throughout the course of a typical 10,000 mint that might sell out in the course of several minutes?

Noah Prince (13:43):

Yeah. So generally, you want to establish what is basically the order of magnitude of the price. So something that’s going to be in the 0.01 SOL range versus something that’s going to be in the 10 SOL range, they’re pretty different and it would be hard for any system to account for that. So generally what you’re doing is you’re setting kind of a range that you expect. So in the case of Divine Dogs, they were one of the very first ones that we did this with, they were minting an NFT that they thought would probably sell for two SOL. Now they’re associated with the gods. And so 3.33 is a magic number for them. And so they actually set the starting price at 3.33 SOL and the minimum price at 1.1 SOL.

Noah Prince (14:24):

And so the idea was the minimum that they were willing to take as a project to get the funding to do what they needed to do was 1.1 SOL and they thought that people would pay up to 3.3 but probably not much more. And so what happened with that was I think the average price ended up being 2.32. But generally, you want the prices start slightly higher than what you think people will enter at so that bots don’t have an advantage to spamming, they’re just waiting for it to fall down and then it’ll hit some fair price and it just oscillates around the fair price.

Austin Federa (14:57):

You mentioned a few things there where it sounds like projects have to do a bit of estimation around what they expect to see. What are the either software or just like human tools that someone should be looking at when they’re trying to figure out where do they start with dynamic pricing?

Noah Prince (15:13):

Yeah. I mean, I think to a lot of degrees this is similar to right now people are just deciding a fixed price for their mint which is even more dangerous. You have no idea if it’s going to sell out for that fixed-price or not. If you’re a really hyped project, it probably will as long as you set it less than 10 SOL. But there’s also a stigma, right? SolBears came out and set it to 10 SOL and people got pretty mad about it. So I think for most projects, this range of I mean, it depends what SOL’s current prices, but right? This range of 1 to 5 SOL is generally reasonable. If you get really far off on the price, it can go above the starting price but we haven’t seen that happen in practice. Usually, projects have a pretty good idea of what they’re going to sell for or at least like a ballpark. They don’t know exactly but they know a range.

Austin Federa (16:05):

Yeah, just because this was one of the first prominent uses of the Fair Launch Protocol where the community of degenerate Trash Panda Minters banded together and actually crashed the price. They all basically colluded against the project owners to mint at 0.1 SOL when the pre-mint tokens had been trading at 3 or 4 SOL on the exchanges and obviously, the price has gone up from there, but it’s a very interesting dynamic when you give the community the tools to set their own pricing, you do open yourself up to a certain amount of collusion which I think is fascinating. No one would’ve thought that in a free market open system you’d be able to get a bunch of degens who are trying to optimize for the most value they can create to all band together and try and basically drive down the mint price of an NFT.

Noah Prince (16:52):

They also got to change their vote in the second half which made it a little less risky to bid small.

Austin Federa (16:57):

Yes. That’s true. So that sort of one-tiered system is part of the dynamics here that you think make it more robust to get something like that.

Noah Prince (17:06):

Oh yeah. I mean, so we’ve done a couple of mints with it now and every single time in the Discords I actually hope that someone proves me wrong because it would be kind of interesting from a psychology perspective. But usually, there’s a band of people in the Discord that are like, “Nobody buy. Nobody buy. We’re going to let the price fall really low, like the bid small.” But because it’s so real-time, what ends up happening is it hits a number that’s really, really good and it’s just like a prisoner’s dilemma. A few people defect and then everybody sees that a few people defect and all of a sudden the faction that was trying to hold back and not buy everyone starts buying and the price starts ripping because it’s the lowest price that they’re going to see.

Austin Federa (17:47):

Yep. Totally. It’s really interesting the way those dynamics play out.

Noah Prince (17:51):

Yeah. Honestly, if your project gets hit by this and the people actually manage to do a prisoner’s dilemma experiment where nobody defects, you have an amazing community, I don’t even know that you need the money. Your community is incredible.

Austin Federa (18:04):

Yeah. It’s worth noting that for the more successful projects out there, they have made many multiples of the initial mint revenue on secondary sale royalties. So it’s kind of this interesting dynamic where you really want to bring the strongest community possible into an NFT project but the same time you need to fund appropriately for whatever your medium-term goals are to make sure you can actually deliver on any roadmap you’ve sort of laid out as a project which is really interesting. So when we’re looking at some of the underlying architecture here and how it interfaces with Metaplex, I know there’s a whole bunch of work on Metaplex that’s been rebuilding a lot of the way that some of these contracts work. There’s a whole expansion of what’s possible on Metaplex coming soon. Austin, how are you thinking about additional tooling like Strata and other types of partnerships that will make it easier for a lot of this work that’s being done to actually be deployed and usable? So the difference between reference implementation engineering and actually production engineering.

Austin Adams (19:06):

I think on a case-by-case basis, we always look at where we can stay generic and composable meaning one contract calls into the Metaplex contracts and the Metaplex contracts stay as this secure core that we audit very frequently and we’re taking care of all that nonsense for the community. But in other cases, we identify a piece of technology that’s really good and the composable way of doing it doesn’t give us the guarantees necessarily that we want. And so we look at a deeper level of integration. The recent gains in shipping velocity that Metaplex is getting are coming more from CICD and looking at ways to improve our software stability so we are not scared to ship.

Austin Adams (20:00):

And I think that’s what Metaplex is moving into as we’re stabilizing and as we’re trying to remain the base infrastructure for NFTs as well as move into some exciting new landscapes. So with this specifically, we do have some big changes coming to canning machines soon. We have some big changes coming to optional changes for everyone coming soon, but this one here falls right in line with our anti-botting work. And so we’re heavily invested in making this as deep of a integration as it needs to be and shipping it as soon as possible, as well as shipping it not just in the contract level, but shipping it in our UIs and CLIs that are coming out or are out.

Austin Federa (20:44):

Yeah. Interesting. So I’d actually love to dig in a little bit more on how you’re thinking about multiple layers of contracts or interoperable contracts that all can, I guess, give optionality in terms of how someone wants to deploy something. What are those different components and how are you thinking about… So classically, every time you have a contract talk to another contract, you’ve created an attack vector. This is most of the hacks that you see across DeFi and on Solana and on other places in Solana are non-validated fields. There’s some ability for someone to inject something into the contract at a point that someone thought wasn’t injectable that ends up creating an outcome that’s not desirable for the users of that protocol or that contract.

Austin Federa (21:28):

That’s like a very standard attack vector. So not to go too far into the security of this because of course that’s maybe a separate conversation, but when you’re thinking about that sort of multiple contract architecture, talking back to one central contract, what are the types of things you are thinking about or the Metaplex protocol is really thinking about from an architecture standpoint to make that secure, stable, but also upgradeable and able to respond to the needs of the community quickly?

Austin Adams (21:53):

Yeah, that’s a great question. So I do believe it does depend on what the contract does in a large part, but generically, when we think about Web 2.0 land, when we’ve all created public APIs that take in user input, we can think about those as if they’re analogous to we’re allowing someone to direct their digital plumbing pipe at our digital plumbing pipe to use the euphemism or the saying that we’re just all digital plumbers. I think I like that. One of the ways that we approach this is just being extremely careful on validating the input and being very restrictive with what specific instructions and what specific things a transaction can do when calling into our contracts.

Austin Adams (22:47):

So for example, with Candy Machine, although it is not as composable as other programs may be, we restrict the specific programs that can call out to Candy Machine and we restrict what they can do. We look at the instruction data using the instructions this far. For those who are non-technical that just means we can inside of the instruction or inside of the program, we can look at the instructions that are coming in and we can validate the input that’s coming in. But for other programs such as AuctionHouse, we actually have purpose-built it to be composed over. And the way that we handle that is by bringing all the things that we want to make sure always stay secure into the contract.

Austin Adams (23:33):

So the token account creation, the mint creation, for example, the transfers, all of those are in the core AuctionHouse transaction protocol, but we’ve created this other system of composability called Auctioneer where people can put their additional logic such as token gating, timed auctions, even dynamic priced auctions via Strata can be done at that layer. So like I’ve said in summary, it does depend on the contract for Candy Machine because it’s such a target for bots. We are very restrictive but we hope to find additional ways to loosen those things to allow more contracts to compose over it while still getting more bot, anti-botting guarantees.

Austin Federa (24:20):

It’s kind of an interesting question here. When you think about on most layer ones or layer twos, the implementation of an NFT is something that’s sort of done, I guess you called it the L1 or L2 level at the protocol level, as opposed to at the application level. Metaplex is a little bit different in its architecture, right? The tokens that are built are fundamentally still SPL-compatible tokens. And they’re built more like an application level. And by application, I mean, it’s not hard coded into the base Solana code. It’s actually running on top of it which is a little bit different of an architecture than you see on something like Ethereum. What are the both advantages and challenges that both of you have run into because of that difference in architecture?

Noah Prince (25:05):

Yeah. So I did a deep dive at one point on composability on Solana versus Eth. Fundamentally, the NFTs on Eth and even the tokens that are on Eth are just following an interface. So it looks a lot like interfaced extension. I’m going to get real deep in engineering if I don’t be careful here.

Austin Federa (25:23):

No, no, no, let’s do it. This is the back half of the podcast.

Noah Prince (25:26):

Cool. Okay. Yeah. So it looks a lot like interfaced extension and classical object-oriented programming. So you think Java is the big example of object-oriented programming. Now Solana actually ends up looking a lot more like functional programming where you’ve got these contract endpoints that are effectively functions that operate over some state and then output a state. And then the next function can take that state and do something with it. Now, a lot of people will tell you when they’re learning functional programming coming from object-oriented programming, it’s scarier at first. It’s like chewing glass. It’s a little bit more complicated, but there’s a lot more that you can do with it. And so like my example of composability actually is the current state of the integration with Metaplex where you talk about how there are different security vulnerabilities with checks, but a token is the absolute interface between us and Metaplex and that’s the only interface.

Noah Prince (26:26):

The single check is whether or not you have the token that allows you to mint this Candy Machine and we just output that token. So we are a function that takes in some SOL and outputs a token. They are a function that takes in a token and outputs an NFT. And actually, they don’t have to know about each other at all. It’s only the user interface that knows about it. So this is how we generally deal with composability on Solana and why I like this model a little bit better, but I am a little bit of a functional programming maxi, so …

Austin Federa (26:57):

Austin, what about you?

Austin Adams (26:59):

Yes. I believe that the Metaplex model for NFTs is actually quite brilliant. And I’ll talk about the pros first and maybe the cons second. I believe one of the reasons for our enormous growth is because our contracts are like APIs. You don’t need to deploy your own contract. You don’t need to manage that. You don’t need to have everything that can be known about your implementation done ahead of time and then deploy an immutable contract. You can iterate and fail and try again and do new things on top of our programs without having to, one, manage the security of the program. Two, without having to really be an expert. And I know that you don’t have to be an expert to launch an Ethereum NFT series because there’s some great tools. But I think that’s one of the reasons people choose Solana. Devs choose Solana, creators choose Solana to run their NFT projects is because the Metaplex contracts were brilliantly designed as APIs whereas they could have been designed in an interface model.

Austin Adams (28:07):

Now the cons of that are the Metaplex development team now needs to look at backward compatibility every single day. Any change that we make we have to micromanage that aspect all the time because we don’t want to break anybody’s use of the system. And through our DAO we need to ensure that what we’re doing is reflective of what the community wants. So another con would be that some people see it as less decentralized, but in reality, because it’s a community project, it doesn’t seem so decentralized when you can build right on top of it and do whatever you need to because we try to keep the protocol light and do less things. I see that we can move into both areas. We can produce an interface-like system while getting these contracts as API feel. And I think that’s some of the backbone of some things that you’ll see coming out of Metaplex soon.

Austin Federa (29:07):

So when you think about something like backwards compatibility, what does Metaplex see as its sort of role and responsibility there, right? So famously for a number of years, Android had like seven different versions of the Android API that Google had to support because folks just would not update their apps. And Windows still has backwards compatibility with stuff that was probably about when most of us were born. What are you guys thinking about when you look at that sort of backwards compatibility and how long or what kind of functionality needs to persist for X amount of time?

Austin Adams (29:44):

So what we try to do is never break you unless it’s security-related. If it’s security-related, we fix it as soon as we can and we announce as quickly and as widely as we can. That hasn’t happened very often and currently, we think that… We kind of take the semantic versioning approach where we will give you a long amount of time. Now we don’t have a rigorous set amount of time yet. We’re very new as a project if you think about it, but we will always provide you a new instruction and deprecate the old instruction and it works perfectly fine for a long time. And it’s very rare. In fact, it’s only happened once where we will remove old instructions. Part of that is looking at our contracts as APIs. And when you look at microservice patterns because that’s how we think about them kind of is our contracts are microservices.

Austin Adams (30:43):

Look at the traffic of your instruction. If you’re seeing it the traffic go down, people have moved to the other one, you’re in safe territory to start announcing that, “Hey, we’re going to start moving on from this specific instruction.” But if you see it holding steady, that’s a good signal from your community that that thing still needs to live or you need to educate and do more work. And that’s how we’d like to see it. I think in the future, we’ll see probably more rigorous guidelines around how long we’re going to keep things out. But right now it’s we’d be nothing without the people using it. So they’re our top priority when we’re shipping new things, we don’t want to break anyone.

Noah Prince (31:22):

Yeah. I think at least how we’ve been approaching it with Strata is that I am very, very bearish on the idea that I’m never going to have to change anything. And so actually every one of our smart contract endpoints, every one of our arguments, every one of our piece of state has a V0 next to it. Some of them actually have a V1 already. And then in SDK land, so like in JavaScript, we wrap these calls with things that don’t include V0 and we wrap them in interfaces such that if we ever have to change anything, we just bump it to V1 at the protocol level, change the interfaces, leave the V0 endpoints around for a while and then like Austin said, watch the traffic and then slowly deprecate them. But yeah, I mean, I think you kind of have to accept that these things are living, breathing things and like most APIs, you just have to version them. Now, a lot of people who don’t have V0 next to their things, don’t worry, you can put V1 next to anything.

Austin Adams (32:19):

It’s okay.

Noah Prince (32:19):

And V0 is just the lack of a tag. It’s okay.

Austin Federa (32:22):

So all of this depends of course, on creators and people launching NFT projects actually adopting and using the dynamic pricing tools. What’s your pitch for why someone who’s launching an NFT project should do it this way as opposed to doing it the way that’s currently done.

Noah Prince (32:37):

Yeah. So one of the big things, I mean, even if you watch Frank, he is talking all the time about how he wants people who are long-term his project. He doesn’t want paper hands. He doesn’t want flippers, right? So right off the gate, you’ve got to acknowledge that having people that are just buying the project to flip it immediately aren’t really good for your project long term anyway. I mean, if you were going to overprice your fixed price mint, you just weren’t going to sell out. And so this will help you sell out which is ideally what you want, right?

Noah Prince (33:09):

Because you’re picking the quantity of the mint so that you have a certain size of community. Now, if you had underpriced your fixed price meant, this actually means that you’re going to get more funding to do what you want to do, right? And that’s what matters is that you can actually execute on your roadmap. Now it’s not like that price discovery isn’t happening, right? It is still happening. If you price your mint at 2 SOL and the NFT is actually worth 10 SOL, it just drives up to 10 SOL on the secondary. But you know who makes that money? People who are flipping it and don’t care about the project. So I would rather have that money go to the team than people who are flipping it any day of the week.

Austin Federa (33:49):

I’d love to hear from the Metaplex side what the pitch is to use it that isn’t just it doesn’t break the network.

Austin Adams (33:55):

Then I get nothing.

Austin Federa (33:56):

Because this is the thing is like one of the things about crypto is we have to assume everyone is a evil self-interested actor at all times who cares primarily about what they’re trying to accomplish from a financial standpoint and isn’t a altruistic actor trying to make the world’s best-decentralized computing environment possible or else all of the assumptions of how blockchain works start to break down. So I think that’s one of those questions that if either of you have something addressing that sort of side of things and-

Austin Adams (34:25):

Yeah, totally. I’ll go with Metaplex’s side of why I use dynamic price mint. So from the Metaplex side, we realize that Candy Machine has been botted so badly and we want to increase fairness for the collectors, creators, and the community. Just like Noah said earlier, we want to incentivize long-term holders, people to be a part of the project because NFTs are showing us they’re more about community than they are really like a financial mechanism. They are a financial mechanism, but they’ve exposed this incredible new, psychological phenomenon.

Austin Adams (35:01):

For collectors, we’ve seen click farms, and bots, and extensions, not even if it hurts the network, but just hurting the experience. So one way that dynamic price mint helps is by making these click farms and botters, I mean, have to think twice, have to actually do some calculation, and have to do it in a fast and real-time manner. So this helps them be able to take part in the project even if they didn’t get into the discords or other things like that at the right time, it’s also going to help us move past this whole allow list trend in the community where you have to do all these specific things to get a spot and then you get a spot and you get a chance to mint, but then you don’t actually get to mint. And so, hopefully, this makes the work that’s required just being a part of the community and having the desire and the funds to mint.

Noah Prince (36:01):

Well said.

Austin Federa (36:01):

Awesome. Well, I think that does it for today. Thank you both for joining us to talk about this new launch of a Stratus support for dynamic pricing on Metaplex and creating new tools for creators to be able to actually implement this. If folks want to read more about it or want to consider using this for their next drop, where should they go to find more information?

Noah Prince (36:22):

Yeah. So for now it’s actually, if you go to and you have a Candy Machine ID, you can launch one directly right there. We also have on We have extensive documentation on how to set up one of these dynamic pricing mints and a YouTube video on how to do one and even do one with a white list. In the future, we hope that this is directly on Metaplex’s documentation and kind of more built as a first-class citizen into the Candy Machine and Metaplex’s new UIs such that you don’t need to be bouncing around from Strata to Metaplex. It’s just there for you.

Austin Adams (36:59):

Yeah. 100% stay tuned on the Metaplex Docs and on our blog, Twitter, radio station. Oh wait, we don’t have a radio station.

Noah Prince (37:08):


Austin Adams (37:09):


Austin Federa (37:09):

Great. Well, thank you both for joining us today.

Austin Adams (37:13):

Thank you, Austin.

Noah Prince (37:14):

Thanks for having us.

Brett Harrison – President, FTX.US Ep #67

Brett Harrison is the President of FTX US, a US-regulated cryptocurrency exchange. Prior to joining FTX US, Brett was Head of Semi-Systematic Technology at Citadel Securities, where he managed technology for the firm’s Options, ETF, OTC, and ADR trading globally. He began and spent the majority of his career at Jane Street, where he led the firm’s algorithmic trading system development.


00:34 – The role of FTX.US’ president

01:24 – About FTX

02:55 – Nontraditional brand marketing

08:05 –  Educating people about Crypto

10:46 – Being at the forefront of regulation

14:52 – Collaborating with other players in crypto

19:03 – FTX’s policy in exchange and crypto

23:19 – FTX and NFTs

26:44 – CeFi / DeFi exchange and Cross-chains

31:36 – Building interconnectivity between centralized crypto exchanges

34:59 – Market hours in crypto?

36:33 – Process of evaluating a token

38:44 – Things he is hopeful for



The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose.

The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.

The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.


Austin (00:10):

I’m Austin Federa. Welcome to the Solana podcast. Today, we have Brett Harrison joining us, who’s the president of FTX.US. We got a bunch to talk about today, including the role of FTX in the markets, his sort of path there, and a bunch of what’s been going on recently in crypto. So, Brett, thanks for joining us.

Brett (00:27):

Yeah. Thanks for having me on, Austin.

Austin (00:29):

I wanted to kick it off. What does the president of FTX.US actually do on a daily basis?

Brett (00:34):

Yeah, for sure. A good question. So yeah, I joined FTX.US exactly one year ago. Little bit of background first. So FTX is obviously the global cryptocurrency derivatives exchange. It’s the second or third largest in the world. Around a year and a half ago, FTX.US, a separate company affiliated with FTX, was started for the purpose of creating a US regulated set of businesses to be able to do things like offer a spot cryptocurrency in the US, but also to satisfy some of our broader ambitions to enable other kinds of investment products for US customers such as US crypto derivatives, stocks, and things like that. My role is to sort of help run the ship over here, hire the team, and put people in the right offices, but also like do everything from think about regulatory strategy and policy to some actual software development in architecture and on some of our products. So it’s sort of a little bit of everything.

Austin (01:25):

Yeah. It’s kind of an interesting role. How big is the FTX.US operations at this point?

Brett (01:30):

We’re around 80 people right now.

Austin (01:33):

That’s pretty sizable for one year.

Brett (01:35):

Yeah, for us at least.

Austin (01:36):


Brett (01:37):

For sure.

Austin (01:38):

You’re at the top of a pretty interesting organization nowadays. When you joined, the pace of excitement and interest in crypto from a mainstream audience was far lower. The presence of FTX was far lower than it is now. There’s many people who are familiar with crypto, who have been for both FTX for a very long time, as both the FTX international and FTX.US as two different entities that play an important role in pushing the concept of a centralized exchange further. Before you guys came on the scene, the role of a centralized exchange was maybe not quite as professionalized as it is now. There’s sort of more of a lot of respect in the market for the speed that FTX is able to execute on and both sort of the pace of innovation that’s come out of that.

Austin (02:23):

But at the same time, in the United States specifically, which is where we’re talking about today, you guys have done a huge amount of what I would call very traditional marketing usually reserved for banks, and telecommunication companies, and these sort of like old Titans of industry in the United States. But this is a very new operation. Walk me through a little bit about that process of saying not only do we see a target opportunity here, but we’re not going to take the path of most other companies, and run a ton of digital ads, and put up select billboards. But we’re going to put our name on AAA, IP, and media.

Brett (02:55):

It’s incredible to see where we are now compared to a year ago, two years ago, and FTX.US were fairly obscure in the United States. Not so much overseas where FTX had already really gained a name for itself as this leading cryptocurrency derivatives exchange. And it was really competing with the other top exchanges around the world that have been trading these derivatives products traditionally. But in the US, we had just started. We’re up against 10 year incumbents in the space and very few people ever heard of FTX. And now we’re on Super Bowl commercials. We are the subject of congressional hearings. It’s like quite amazing to sort of see the way that we’ve sort of infiltrated the crypto ecosystem in the United States, in a way that’s really established our presence as a brand that people trust, as one that feels innovative and fast moving.

Brett (03:47):

So I think just taking it back a bit. So we wanted to be able to get into the US market, and the US has one of the largest retail user bases in the world, maybe the largest retail user base in the world. So the number of people who are traditionally using their phone to trade stocks, for example, for themselves, is just much higher percentage in the United States than almost anywhere else. And so you have this broad class of people now getting interested in crypto, who want to be able to have access to that as a means of investment. But if you think about where crypto has been for the last decade, there’s been a lot of ups and downs and noise. You have exchanges that lose customer funds, or they go down, or they get hacked, or they like suddenly become slow.

Brett (04:31):

And if people are going to invest in this still fairly risky, volatile, asset class, where there’s a lot to learn for people, it’s a very high learning curve. They’re going to want some brand that they feel they’re comfortable taking that leap, and putting their money in, and investing with. And so in the beginning, it was very difficult to acquire customers for us. And then Sam had this idea of, what’s the largest thing that we could do, as fast as possible, and reach tens of millions of people. And it’s not go out and buy Facebook ads. And the conventional wisdom here for us was, “Okay, when’s the last time you saw an ad on Facebook for like Citibank or JP Morgan, and you are like a Bank of America customer? And then you said, you know what, I love this Facebook ad. It’s time to move all my money from my checking account to this other one.” I think it doesn’t usually happen. I think it’s a pretty high activation cost for doing something like that. It’s not like giving some new website a try.

Brett (05:28):

Just plain and simply this is like a serious investment decision. And so we really needed to build that trust for people, and do it quickly, and in a way that really established ourselves as a unique player. And so the biggest thing someone could think of was, well, what if we put our name on a stadium. And it seemed crazy at the time, but then we did it and we put our name on the Miami Heat stadium, the FTX Arena. It was an amazing deal, the right place at the right time, because we got to also work with Miami Dade County on many of their anti-gun violence initiatives. So it was a really good fit. And short time after that, we did two other big deals. One was with Tom Brady and the other one was with the Major League Baseball.

Brett (06:04):

And for those, first of all, Tom Brady being this universally loved and respected individual for just his incredible talent and drive. And then for Major League Baseball for being this time modern institution. I think it, the signal to people was imagine what it took, what kind of due diligence was required for an institution like Major League Baseball to come trust FTX, crypto exchange no one’s ever heard of. And let alone do anything in crypto. That’s how I think we were able to sort of catapult ourselves into the US market very quickly was through this somewhat non-traditional way of doing this brand marketing. And since then, it’s been amazing. I mean, we went from 10,000 customers at the beginning of 2021 to like 1.2 million customers at the end of 2021. So a huge growth in a very short period of time, on the eve of some of our new product offerings that we’re launching. So pretty excited about the growth so far.

Austin (06:56):

What’s very interesting for me on this, apart from just the growth of FTX.US in general, is this is against the grain for, I would say, the last 20 years of marketing. Which is that you really want to focus on identifying your core demographic, activating that core demographic, using them as voices and ambassadors. And this is the way that most crypto exchanges, and honestly, most cryptocurrencies have gone about growth as well. They’ve said let’s put a bunch of resources into the very narrow domain things that are working, and then it will be an organic growth kind of coming out of that.

Austin (07:32):

And you normally see something like branding rights for an arena or a major partnership with MLB or some, or any sports team, something along those lines as being something that a company that isn’t trying to educate customers, but is just looking for general awareness, goes through. Right? Staples Center, UBS, all the big banks have their names on these places. Not because they’re trying to differentiate Bank of America’s products versus Chase’s products, but because they want general awareness. What was that process like to say, “Okay, we’ve got a stadium, but no one knows what crypto is still.” What’s that part two of that strategy?

Brett (08:09):

Yeah. I think we had to rewrite the playbook there. Because we don’t yet know what the right demographic is for crypto, but also we don’t want to pre-select a demographic. I mean, the whole spirit of crypto is to enable people to have access to investment opportunities, wealth creation, control over your personal finances in ways that have typically been difficult for many parts of the country. And if we just sort of start by saying, okay, well, who is the most obvious demographic to target for this? And let’s just run Facebook ads that target them. I think it sort of misses the point. We’re here to educate people, as you said, about not just the investment class, but also the promises of the technology itself. The fact that this will represent a new way of building internet based applications, in ways that allow people to share in the upside of those applications. It’s going to enable for greater robustness and stability by using decentralized technology.

Brett (09:11):

I think these are all things that it’s going to be difficult to teach people over time, but we have to start somewhere. And that starts with a general awareness. And it starts with trust, right? People have to understand that we are a very legitimate company. We are highly regulated, contrary to popular belief. We have, between FTX and FTX.US, we have something like a hundred different regulators. We have 50 different licenses. We need to be able to break through the noise and convey that to people. And that’s why we started more on this general awareness. And now we’re doing some of the other stuff. Like we’re starting now to run some Google ads. We’re starting to go for iOS App Store placements and traditional SEO. And we’re doing that now that we have the product that we like and we’re happy with where it is, although we’re always trying to improve it. And we’ve built that general awareness and trust.

Austin (09:58):

Yeah. So, so you mentioned that you are both in a highly regulated industry and yourselves, highly regulated, by various regulators who look at the industry. FTX has, over the last year, put itself at the forefront of regulation in crypto in the US. You and Chainalysis are right up there together, testifying in front of Congress, and also putting out this FTX policy proposal that came out, was that six months ago or so, as well. What was the decision making process like internally to say, this is something that not only do we want to engage with, but to actually make a decision to be a face of. There are many exchanges that operate in the US. None of them have necessarily taken that as the mantle, as proactively, we are going to put ourself in this position. I’m sure that was both risky, and you saw a lot of opportunity in that process.

Brett (10:50):

Yeah, absolutely. So there’s the part that’s specific to FTX and the part that’s general. Starting with the part that’s specific, we would like to be able to offer an array of different products and services in the US. Some of those has to do with spot cryptocurrencies. Regulation in the US for spot cryptocurrencies are not well defined. And that is because of the two market regulators that exist in the US, and the US is one of the few countries in the world that actually has two separate market regulators not one, the SEC and the CFTC, the lines of jurisdiction over digital spot assets are not very well drawn. That’s not true for traditional securities like Apple and Tesla and US government bonds, which is regulated by the SEC. And it’s not true for the CFTC, which regulates commodity futures, and other sort of broad based index futures, and sometimes security futures as well in conjunction with the SEC. But for actual things like Bitcoin to USD spot markets, it’s not clear.

Brett (11:47):

And what we want to do is help shape that regulation, such that we can safely innovate and offer products that also protect consumers. And in terms of how we influence regulation, do so in a way that doesn’t push all of the intellectual property and all that innovation overseas. I mean, you guys know this too, that so much of the intellectual property, the founders, the CEOs, the developers come from the United States. And then ultimately move themselves to somewhere outside the United States because they don’t feel like they have a safe place to be able to build their business and to be an entrepreneur. We really want to help that. So I think that kind of actually combines both sort of specific and general of what I wanted to say.

Brett (12:26):

Which is that on the specific front, we want to be able to offer all the spot tokens that we think are appropriate. We want to be able to list CFTC regulated margin derivative products in the US for US customers. We want to maybe eventually do more innovative, ambitious things like create tokenized stocks or tokenized treasuries. But then, at the same time, we want to make sure the playing field is great for all crypto participants in the US. And they really want to stay here and work here and build here, because we just think that’s going to be good for the country. Now what’s been interesting for us in this journey of being this sort of public face of regulation and policy, is that what we found is the most effective thing that we can do as a company is just showing up in person. You’d be surprised how many companies, and this is not just crypto, send these large teams of lobbyists and lawyers to Washington hoping to sort of engage in policy discussions.

Brett (13:17):

And I’m not in the room for those, but I imagine some of those come off as disingenuous. Or there are cases where you can’t really get in the weeds of a conversation because the right stakeholders aren’t in the room. The fact that Sam and Zach and Ryan and Mark and I just sort of like go to Washington, and email the Fed or the Treasury or members of the House or the Senate or the executive branch, and just show up and talk to them. And say like, “We don’t have an agenda. We’re just here to answer questions. We know we’re in the education phase.” Same thing with regulators. We talk with the CFTC, SEC, FINRA. It is just great to show up in person and show that we are open honest people who really want to engage in dialogue. It’s been so useful for everyone involved. And I think that’s really helped shift the narrative of crypto being like anti-regulatory or anti-government in some way. And that’s been really helpful.

Austin (14:09):

Do you see this as something that you’re primarily, obviously there’s a lot of upside for FTX in getting greater clarity around regulations and having a legal framework that it can operate in with more definition around it. At the same time you look across at other industries, the credit card industry, the banking industry, agriculture, et cetera. They have very well defined and powerful industry groups at this point. And you often see like a lot of the big banks in the US moving in lockstep with one another. How closely does FTX work with other large exchanges in the United States or other people in the crypto space? And if that’s not really as mature as it is in other industries, why do you think that is right now?

Brett (14:54):

Yeah. Great question. We do to some extent. We do more now than we did before. It’s almost certainly not enough. And partly it’s because this industry is very new, and it’s not super well defined exactly what we need, and there’s differing opinions of how we get there. I also think that crypto has done itself a bit of a disservice in the past by being somewhat hostile to regulatory involvement. And you see this a lot on Twitter. And I think it’s not super productive. We want to be able to create a market environment that allows for all participants to participate in a way that it safeguards them. And to just completely throw away a hundred years of regulatory development to think that we can just sort of do the whole thing better from scratch, with no protections, is almost certainly not right.

Brett (15:44):

At the same time, I’m very sympathetic to the idea that you could, through the act of regulatory requirements, end up excluding individuals for not good reasons. For example, there’s a lot of people who criticize KYC by saying there might be disenfranchised people who don’t have good drivers licenses. And so therefore they can’t KYC with an exchange. And so you’re actually excluding a certain segment of the population by doing so. And I think we are receptive to those arguments. And so we would like to be able to push the envelope forward with crypto and allow the greatest number of people to participate without prejudice. But we have to engage collaboratively and cooperatively with regulators to do so.

Brett (16:27):

And so we are now starting to talk a lot more with the other competitors in the space about what are our shared goals for regulation? What do we think about who should be regulating us? What do we think policies would look like in the areas of spot tokens, of stable coins, of listing procedures, of licensing for exchanges. And I think that we’re making progress there. Because the thing we’ve heard all the time in Washington is, okay this proposal of yours sounds great, but it can’t be just the FTX proposal. Washington’s not in the business of picking winners and losers in industry. We want to see you guys come together as an industry. And so that’s, it’s going to be critical for us going forward. And it’s not just the exchanges. I mean, it’s the protocol tokens, it’s the stable coin providers, the infrastructure providers, miners. Sort of all across the board, I think we just need to come together more as an industry.

Austin (17:19):

Yeah. It’s one of those things where you look at the Web 2.0 industry, and I think it’s probably pretty obvious that they say at this point that their unwillingness to come together around issues of establishing common frameworks for content moderation, common frameworks for when a user should be banned from a platform, those sorts of things have really opened them up to a lot of attacks from Washington about… You see these hearings in the Senate all the time when they’re talking one company, why your policy different from another company? And then there’s a void there, where the regulators and Congress aren’t really sure how to write a law, but they have a lot of ideas about what could be changed. Given the decentralized nature of crypto, there’s one level where it’s like, there are these centralized companies like FTX, like Coinbase, like Kraken, like Chainalysis that are on one side of things.

Austin (18:10):

But then there’s organizations like Solana Labs or the Solana Foundation, which have a very different role and place in the market. And don’t always necessarily have the same incentive alignment in those sort of areas. One of the beautiful things about FTX is, or any exchange, is that it’s a entity which makes money on the aggregate state of cryptocurrency. And so the specific whims of one network is not necessarily of huge concern to it. For example, the shutting out of a certain type of user, based on a KYC requirement, is much less of a burden in the United States or for something like an exchange, then it might be for… Like if you have to KYC every user, that’s not a problem. If Audius has to KYC every user, that actually puts them at a significant disadvantage compared to a competitor like a Spotify. How do you think about both the role of the policy work FTX does within the exchange industry and the wider crypto industry in general?

Brett (19:07):

It’s interesting to think about where we need to head as an industry together. I think a lot about the role of CeFi and DeFi and how they interplay. I think there’s a lot of people online who sort of draw this very bright line between them. And it’s like, if you’re on the left side, you’re a centralized player and you are completely antithetical to the whole point of crypto. And if you’re on the right side, you’re part of the golden club and true decentralization means there can never be anyone who touches anything involving like regulation or identification or safeguards and things like this. And I think, again, these are the kinds of counterproductive discussions I was talking about earlier. I think that we need each other to grow.

Brett (19:47):

The more DeFi grows, the more equitable access to financial markets will continue to grow around the world. And the more the need for centralized regulated players, like FTX, who kind of bridge the gap between the traditional financial system and DeFi, will play that role as well. As far as regulation goes, you’re right. It’s not clear where you go with a project like Audius. And you like it to be such that it’s the same as Spotify, but then you get into these tricky issues of like, well, what is the Audius token? And how does that interplay with who can actually buy and sell that token and interact with the system in some way? You have more ambitious projects, on the topic of music, like can we create tokens for songs where people can receive token distributions for the number of plays that occur? And does that make it sort of like a dividend and a securities offering? Well, I don’t know. And this sort of is very difficult to understand.

Brett (20:39):

But there are two strategies when it comes to regulation for a company like Audius. And so one strategy is to sort of move as fast as possible and try to always stay like a step ahead of regulation. And eventually, maybe the feeling and the ecosystem around DeFi regulation catches up to an Audius and everything is okay. It allows us to do what it does, and it was worth the risk because they got to innovate very quickly and become a profitable business. But that comes with its risks, that maybe regulation catches up to it in a bad way, and says, “You shouldn’t have been doing this all along. And please give me all your profits back from the last couple years.”

Brett (21:16):

There’s another way, which is sort to walk in the front door, and be sort of transparent and obvious about what you’re trying to do, and to try to operate within the regulatory envelope of some jurisdiction, and try to get this properly vetted and allowed to occur. And that has the benefit of sort of establishing clear rules and allowing for other companies to tread similar paths. On the other hand that could slow you down. And if you have one of these competitors, that’s going to run as fast as possible, you might lose to them, even though you’re doing the right thing.

Brett (21:46):

So there’s not really a right answer here. And this is sort of a tricky space for DeFi. I will say in either case, I do think it’s worth it for these DeFi projects for Solana Labs, for the founders and companies involved, and this kind of entrepreneurship, people in the United States should really start going to Washington more and just explaining what this stuff is. I mean, people kind of get what Bitcoin is, but people do not understand what Solana is and why it’s different. And that should change. People should understand what Solana is, what all these other layer 1s are, these layer 2s are. What these different token projects are. Why they’re interesting. Why they’re useful. Why they represent a departure from Web 2.0. Why that’s important. Why that needs to be fostered and why that needs to be grown. I think that would be something that we could continue to work together on, as industry participants, is the education piece.

Austin (22:33):

So changing topics a little, we’ve seen FTX.US try and enter a few different, I would say different markets than are necessarily like the original core. So one of those was the NFT marketplace. I think there’s been it probably mixed success in that. One of the things that I found fascinating is how different NFT culture is from crypto culture. Obviously it’s a subset, but a lot of the applications and the platforms that have been very strong from a crypto trading perspective, in terms of fungible digital assets have not had much success in the non fungible space. And the non fungible marketplaces have either had no interest or no success in moving into the fungible asset space. Talk a little bit about some of the learnings that you guys had in that process and how that’s informing the decisions of where FTX expands into in the future.

Brett (23:25):

Yeah, it’s fascinating. So I personally worked on the NFT marketplace a lot for us. And when we entered this space, we thought there’s not enough competition for Solana NFT marketplaces. There was really only one at the time. And we thought, this is definitely an area that’s ripe for disruption. We were not wrong. But at the same time we did it, six other players did it. And they were able to move a lot faster for a number of reasons. First of all, they were able to really focus all of their energy on the user experience, which was super important. The second is that they were just sort of deeply in that culture and they were able to create, continue creating that NFT culture, in a way that like you have to spend 150% of your time on that to be able to actually really keep up with it and get what’s going on.

Brett (24:11):

And the third was the decentralized nature of it. Whereas most of the trading in fungible assets is occurring on centralized exchanges in a custodial fashion. Just about all the NFTs are trading in a non-custodial fashion. Hook up MetaMask to OpenSea, you list your asset, you’re done. And so I think we were disadvantaged by trying to, although I don’t regret it at all, walk the sort of regulatory path of requiring people to custodian their NFTs with FTX in order to list them. And then we do proper KYC, and we make sure you’re not like transferring an NFT from North Korea or something. So this is what we chose to do. And I think we ultimately lost out a little bit on that, but we’re still very happy to have done it for a number of reasons.

Brett (24:59):

So first is that NFTs have been an important part of our various partnerships, like getting to do this really cool NFT drop with Coachella or for Formula 1. And having that as a platform has been very beneficial to us, even if we’re not competing on Bored Ape Yacht Club. The second is that we have this longer term vision that majority of NFTs will not be in these like art or PFP collections. It will be in things like games. And to do that, you have to really build a platform and your average Tier One AAA game studio is not going to partner with a non-custodial solution. If they think it’s going to hurt their regulatory standing at all. And so we’re kind of building things out from the B2B platform side. With a hope that’s actually going to be where this technology actually takes us. And so it’s been definitely a learning experience for us and humbling in a lot of ways.

Austin (25:53):

So let’s kind of talk about that a little bit. In a future where US regulations relax, and that there’s a framework that allows for a little bit more flexibility and a little more certainty throughout it. We’ve seen over the last few months a rise in cross-chain DEX swaps. Whether that’s enabled through something like Wormhole or whether it’s these organizations that are sort of rolling a bit of their own solution. How do you see the competitive world, between what a centralized exchange offers and what a decentralized exchange, can offer evolving over time? I think in the early days of decentralized exchanges, a lot of people were like, oh, these are totally going to kill centralized exchanges. And we obviously have not seen that to be the case. But for a long time, the moat was described as being like, well, I can’t swap my SOL into Eth on anything other than a centralized exchange, but we’re seeing that change. So I’m sure this is a strategy that you’ve mapped out internally. What does that look like for you guys?

Brett (26:50):

I think you probably give us a little bit too much credit. I’m not sure we’ve like completely mapped out the strategy. I mean, between FTX, FTX.US, FTX Ventures, I think we have various either monetary or intellectual capital investments in a bunch of these spaces. Like FTX Ventures invests in a lot of DeFi and different bridging solutions. FTX itself is benefits and more people trading on our centralized exchange. And so we want to kind of to be able to benefit from the growth of both. I mean, again, we sort of see that, no matter what, FTX is going to be one of the major places to link up with traditional financial system. Like if you want to get Mexican Peso onto a blockchain, you’re going to have to do this going through someone who can actually hook up to a Mexican bank.

Brett (27:37):

It’s just going to be required.

Austin (27:39):


Brett (27:39):

But in terms of like you want to swap Eth for SOL then, yeah, I think there’s going to be a couple different ways to do that. And I can sort of see the benefits and drawbacks of each one. One thing I think is sort of obvious, and I think people understand it but they don’t talk about it enough, is the fact that DeFi still has a long way to go. Primarily because the entirety of the code is sort of laid bare for all to see at all times. Usually if you have a financial application and it has a bug, you’re sort of protected by the network. And by network, I don’t mean network of people who use it, I mean like the actual switches and routers that prevent certain kinds of traffic from getting in. And you have your moat around your application. And if there’s a bug, you patch it and you’re done.

Brett (28:23):

With DeFi, if there’s the slightest bug, your whole smart contract gets exploited, and the funds are drained, and you’re sort of back at square one. And again, I think that the discourse around Defi or CeFi as being kind of incompatible, has probably done DeFi a disservice in terms of its growth. Where probably some slight hybrid approach of building out smart contracts, iterating on them for like a long time, but doing so in a way that’s sort of safe and secure, and doesn’t mean that the first side of a bug means you are going to be drained, until it gets to the point where it’s highly stable. And then you start to relax some of the centralized aspects. You follow the goal of making it completely decentralized, completely open, no intermediaries, and kind of get there over time. But I think the people who do that now would be criticized as being like too centralized. Everyone thinks everyone else is too centralized.

Brett (29:17):

So I think we have a lot that we can do together is what I’m trying to say. Whether it’s us helping with KYC, or it’s providing sort of the regulated entry points into DeFi. Whether it’s helping create sort of these hybrid solutions between DeFi and CeFi, that will, I think, help DeFi grow over time. So we’re trying to foster that innovation in a bunch of different ways.

Austin (29:38):

I would also say that if we are in a place where CeFi versus DeFi is a zero sum game, we’ve all astronomically succeeded as an industry.

Brett (29:47):


Austin (29:48):

That’s still probably a five to 10 year away, before there are no new users left to onboard and instead a battle for who actually has those users’ attention.

Brett (29:57):

Even CeFi versus CeFi is not a zero sum game.

Austin (30:00):


Brett (30:00):

At all.

Austin (30:01):

That’s true.

Brett (30:02):

There’s a story that when ICE listed certain versions of energy contracts, that were being traded on the CME, the day they did that, CME volume went through the roof and the largest trading volume times per day were the times where the two overlapped with each other. And this is obviously because arbitrageurs came into the space and were interested and started trading the two off of each other. I think we cannot just have one centralized exchange. We need a bunch. And we will grow the pie together. And so, yeah, we’re very, very far away from a zero sum nature of crypto, which is why I like crypto so much.

Austin (30:39):

So actually to that extent, I think there’s a built in assumption there, which is that we need multiple centralized exchanges. And that is a, I think, a very valid assumption, but in some ways that comes from a world that predates computerized global interoperable connectivity. And that the idea that arbitrage opportunities should exist between comparable, centralized financial exchanges feels a little outdated, honestly. That the thesis of Solana as one global state machine to settle all of the world’s trades and information, that’s a very compelling, decentralized narrative story, but you can also see the exact same thing where you would have interoperable order books between something like FTX and Coinbase. Is that anything that, are there conversations anywhere about building some of those interconnectivities that you see in the traditional equities world still, within like centralized crypto exchanges? Because there is no NYSE for centralized crypto exchanges yet.

Brett (31:42):

I have actually the complete opposite take to what you’re describing here, which is US equity markets have to abide by this rule called reg, or regulation, NMS, or National Market System, where you have to fill a customer quote at the best price seen on any exchange, any one of the lit exchanges, of which they’re like 15 now. So that means like, let’s say you want to go send an order to NASDAQ and NASDAQ thinks that they are one penny behind the price on BATS. Well then NYSE either has to reject your order or route your order to bats and get filled. There’s a big problem with this. Actually, there are multiple big problems with this, in my opinion.

Brett (32:24):

One is that light is not infinitely fast. And so what is the kind of prevailing quote is going to depend on where you are. Because of those 15 exchanges, some of them are in Secaucus, New Jersey. Some of them are in Carteret, New Jersey. Some of them are in Mahwah, New Jersey. Some of them are in Chicago, Illinois. And so there’s no one place where you can have the absolute truth of what the best quote is. And even above that, the second big problem here is you have to pay a lot of money just to get the market data required to make that determination. And then third, if you’re going to do that, some HFT with slightly faster hardware and market data is going to detect that routing and probably beat you there. And they’re going to profit off that opportunity.

Brett (33:10):

While I think that NMS was well intentioned at the time that it was created, which was somewhat before the real advent of electronic markets, now that we have electronic markets, I actually think that NMS has added a lot of complication, and fixed cost, and deadweight loss to the system of equities, and made things like very difficult to sort of spin up as a new exchange. Compared to, in crypto where there was never like an NMS routing between exchanges, but there doesn’t really need to be because there’s someone whose job it is to arbitrage between the exchanges and keep them in line. And they’re paid naturally for the job of doing that. And so the market forces keep the exchanges in line and that works extremely well, and makes crypto very low cost and low barrier to entry for new participants.

Brett (33:56):

You don’t have to hook up to every single exchange. You don’t need to send your market data to some central thing, which has to display the quotes everywhere. And you can’t accept orders, if it doesn’t look like it’s on the top of the book of that far away aggregator. It means that exchanges can exist sort of more globally instead of all being centralized mostly in New Jersey or something like that.

Austin (34:14):


Brett (34:14):

So there’s been so many benefits to that. And then the other thing I want to say about this is, look, there’s never going to be just one of anything. The only real way to kind of get rid of an arbitrage opportunity is to only have literally one order book. And even on Solana, you have different order books for SOL, USDC. And some of them might be kind of built off of similar primitives, but there’s still going to end up being kind of arbitrage things between this swapping tool and this DEX order book and this centralized exchange, it’s always going to exist.

And so I think we should just thank the arbitrageurs for their service and just be happy with the fact that we can have multiple marketplaces. I think that’s the ultimately right thing for competition.

Austin (35:00):

Do you think crypto needs market hours?

Brett (35:02):


Austin (35:03):

We’ll never get them, but I’m curious if you think it would help or hurt the industry?

Brett (35:06):

No, I don’t. One thing I’ve kicked around in my head at some points is, something like whether one time per day, there should be an auction. Basically like a five second freeze or something, where people can submit bids and offers. And there’s like a single kind of auction type clearing event that establishes an official mark for the day in that crypto. And there’s a lot of different market structure theory between whether an auction type mechanism or a continuous trading mechanism is ultimately better and fair for our participants. And there’s just lots of research in both directions. But that could be interesting to me to have some sort of discontinuous event, maybe once per day. It would help for things like ETFs that want to sort of mark their basket to sort of a day over day performance and they need sort of an official closing mark, and it would be nice to have sort of a single auction event for that. But I don’t feel strongly about that at all. And in general, I think that 24/7 markets are the way that every other market has to go.

Austin (36:05):

Yeah. I agree with you on that. So I put out a call on Twitter that was like, oh, what are people most interested in learning about from FTX, apart from a rundown of all of your cats, which we don’t have time for today. One of the ones is what is the process of evaluating the listing of a token looks like. Obviously replies are full of people shilling their specific coin. But there are also some real genuine questions in there about like, you see Coinbase having taken a very, very sharp turn in what the criteria they use for listing a token is over the course of the last 12 months. How do you and FTX.US think about that?

Brett (36:40):

So we have taken the position, as a company, that we would like to be very conservative on token listings in the US. And that is because a lot of the issues we talked about earlier in the podcast about the regulatory uncertainty around what US based crypto companies are allowed and not allowed to list. And I think there might become a point at which listing criteria becomes clearly well defined by regulators, at which point we will basically take as much risk as it allowed to us. But for now we think about what is our comparative advantage as a company? Is it to list the long tail of 500 tokens? Or is it some of these other things that we’re doing that maybe some of our competitors are not going to be able to do in the short term? So the biggest one for us is listing Bitcoin and Ether futures for US customers.

Brett (37:32):

And we think that has such a greater potential to improve the health of the market. Give people opportunities for hedging risk, and being able to get capital efficient exposure, and to be able to trade the spot versus the future and capture the basis. This is much more important to us than listing that 200th asset on CoinMarketCap. And we’re concerned that some of our actions in the latter might jeopardize our success in the former.

Austin (38:00):


Brett (38:00):

So we’re just sort of, we have different risk profiles in the different aspects of what we want to do. And that’s part of the decision there as well. We’re also moving very much into some non crypto things. Like we’re a student launching a stocks trading platform that’s going to be vanilla US stocks through a broker dealer, all trading through like an exchange that’s not ours. So we have just sort of different ways of thinking about diversifying our product set. And for now, I think as long as the regulatory environment remains this unclear, we’re going to stay on the conservative side of that.

Austin (38:33):

One kind of last question before we wrap up here. With the amount of market volatility we have seen in the last few weeks here, the sort of precipitous drop in the first half of May, what are you excited for and hopeful for about the future of this industry in the United States?

Brett (38:52):

Yeah, it’s natural for these times of great volatility and certain assets dropping a lot in value, for people to sort of turn inward and maybe lose sight of the broader mission. And we have to remember that we are building a generational opportunity for technology and for wealth creation. And many have already benefited from this, but we have much more to go on all the promises that we have. I mean, just think about how one of the main things people have talked about for crypto is creating this kind of global payments network for people to sort of cheaply or freely send money for remittances and things like this. I think we have yet to really fulfill that promise. So regardless of where asset prices go, we have to, as everyone says, keep building.

Brett (39:39):

And we’re just excited for people to continue to push forward and continue to sort of responsibly innovate, and hopefully show people in the United States, especially policy makers, that even though assets can be volatile… I mean, equities have lost more money in value in the last month than crypto has, and people sort of forget that sometimes. But in spite of downward cycles in markets, there’s a real intrinsic value to what we’re all doing here. It’s not just pure speculation. And we need to do everything we can to keep that going, and keep building, and keep investing.

Austin (40:13):

Well, Brett, thank you so much for joining us today on the Solana podcast.

Brett (40:17):

Yeah. Thanks for having me on.

Crypto & National Security Ep #66

Welcome to a special episode of the Solana Podcast focusing on Crypto & National Security featuring Ari Redbord (Head of Legal and Government Affairs, TRM Labs) and Sigal Mandelker (former Under Secretary of the Treasury for Terrorism and Financial Intelligence). Amira Valliani (Policy Lead, Solana Foundation) guest hosts.

00:09 –  Intros
02:11 – Origin Story
05:53 – Correspondent Banks
07:37 – Why crypto resonates personally
09:54 – Use cases of Crypto in humanitarian applications
12:13 – Looking at the opportunity vs the risk
16:06 – Typical Day at Treasury
17:14 – What it takes to stop bad actors in Crypto
24:53 – BitFinex Hack and Large seizures
29:05 – Compliance and self-policing
31:13 – Advice to other people in regulation


The information on this podcast is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose.

The information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.

The information on this podcast is general in nature and is not specific to you, the user or anyone else. You should not make any decision, financial, investment, trading or otherwise, based on any of the information presented on this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisor.


Amira (00:09):

Hello and welcome to the Solana podcast. My name is Amira Valliani and I run public policy at the Solana Foundation. Today we’re talking about an issue that’s really been at the forefront of a lot of people’s minds since war broke out in Ukraine earlier this year. And that’s the topic of crypto and national security. We’ve brought two of the world’s foremost experts to talk about how crypto links with foreign policy and the movement of money all over the world, and they are Sigal Mandelker and Ari Redbord.

Sigal Mandelker is a general partner at Ribbit Capital where she deals with FinTech and crypto. But before this, she was Deputy Treasury Secretary and Under Secretary of Treasury for Terrorism and Financial Intelligence. She’s joined by Ari Redbord who’s the head of legal and government affairs at TRM Labs, the blockchain intelligence company. Before joining TRM, Ari was Sigal’s senior advisor when she was the Under Secretary of Treasury and worked on a range of issues, including sanctions, anti-money laundering and a bunch of other scary and really important issues. Sigal and Ari, thank you so much for being here. We’re excited to have you.

Ari (01:15):

Thank you so much for having us. I will say just to get things started, I’m a huge fan of sort of what you guys do at Solana and the team that’s building with you and a huge fan of Sigal and just an amazing honor to be on a conversation like this with someone that I worked for when she was the under secretary and just really consider a close friend and colleague in the space now. So it’s particularly cool. So thank you for having us.

Sigal (01:40):

Oh, it all goes back at both of you. I loved working with Ari then and I love being in this space with him now. It’s pretty exciting.

Amira  (01:48):

I’m here for all of it. I think it’s going to be a very exciting few minutes. I think the backgrounds are really interesting and you all know that this circle of people who come from government into crypto is growing, but it’s small. And so very specific journeys I think got all of us into this space. I’m curious what got each of you interested in crypto? Why are you passionate about it? Ari, I don’t know if you want to kick us off here. I know Sigal has a particular story.

Ari (02:13):

Sure. Yeah. No, happy to. Everyone has their sort of crypto origin story. And so many times you hear about “I bought Bitcoin 15 years ago.” And for me it was really a lot different. We started to see it 2015 or so in a lot of our sort of large money laundering investigations that actually involve some of the sort of nation state actors like North Korea that we’ll be digging into today. I think we sort of realized even then the power and promise of this technology, but also that if it was going to grow and flourish and they were going to build this new economy, that we needed to stop illicit actors from doing it. And that was sort of as a prosecutor and then honestly getting an opportunity to work with Sigal and the team at Treasury on some policy related issues in the space, I think really, really also got me interested in.

At TRM labs, it’s sort of like we sit in this sort of intersection, because I think we obviously believe very firmly in the potential and the growth of this new crypto economy, but at the same time, sort of understand that trust layer, anti-money laundering national security is critical infrastructure for it. And that intersection that we’re going to be talking about today is really sort of where I see the most work that can be done.

Amira (03:19):

Yeah. I think that’s incredibly important to remember that trust is really important to make sure that the space thrives. Sigal, I’m curious about your crypto origin story. Tell us how you got into it and why you’re so excited about it.

Sigal (03:31):

When I was at Treasury, my job was very much a global job, so I would travel all over the world. In those travels, I would often meet with senior government officials from heads of state on down, central bankers, CEOs of banks, et cetera. And along the way, it became increasingly clear to me for a number of different reasons that our banks, US banks had massively de-risked all over the world. It became clear to me because in so many different countries, particularly in the developing world, in emerging markets, in so many different countries these senior officials and CEOs of banks would ask me if I could help them get access to US correspondent banking. We really studied to look at it and study it. And the trend is clear. Like if you start looking from 2012 to today, just as one example, the number of US correspondent, global correspondent relationships is very, very much on the decline.

And so when I left Treasury, this became like an issue that I was very passionate about. How do we get great financial infrastructure and companies out of the US and elsewhere to be able to provide a variety of financial services in the developing world, in emerging markets, where in my opinion, in many respects, we had left them high and dry. And I came to the conclusion personally, that the only way we were going to do that was through disruptive financial technologies. And so I decided to find a place where I could pursue that passion. Along the way, I met our founder, Micky Malka, who has founded Ribbit along with Nick Shalek and some others about 10 years ago. I very quickly understood that really the mission of Ribbit is to change the world of finance and to do so exactly in this way through disruptive financial technologies that we’re going to open up access to many, many more people in a much more efficient way all over the world.

And so a week later, Micky called me and asked if I was open to having a conversation about joining Ribbit. It was definitely a road less traveled for a former undersecretary, but it was a super exciting path to go down.

Amira  (05:36):

I want to stay back on the beat that you mentioned about the drop of US correspondent banking all over the world. It would be helpful if you describe what exactly does that mean? What is a correspondent bank and why were you concerned about that as an undersecretary of Treasury? Why is that important to you?

Sigal (05:54):

For many reasons. First of all, correspondent banking, it basically allows banks all over the world in part to get access to US dollar accounts among other things. And when you don’t have that correspondent banking relationship, when you’re being de-risked, there’s just less access to the US financial infrastructure in many different ways, which means a lot of things. One of the things that it means is that if you think about our various sort of tools of financial leverage, we’re seeing that play out right now in Russia, right? Where sanctions has become a major tool of national security. But if you’re issuing a sanction in a country or a region that has very little touch points with the US financial infrastructure, then that economic leverage no longer actually really works, or it’s less likely to work. It’s more complicated than that.

Also, the US traditionally has been the exporter rate of democracy and American values. We have always prided ourselves in innovation and being like a center for ingenuity. And again, when you don’t have US capital or those kinds of relationships all over the world, I think that’s not only really to the detriment of the US, but also to the detriment of people all over the world. And then they’re just going to go to alternatives. And that’s definitely happening as well.

Amira  (07:14):

One of the things that we’ve chatted about before is, it’s not just a whole for US national security, but there’s a bunch of people out there who when US banks aren’t abroad, they’re still looking for financial services. One of the interesting things about crypto is it offers that.

Amira (07:29):

Sigal, I know you have a really personal story of why crypto and access to financial services are important to you. Now I was wondering if you could tell us a bit about that and why this industry resonates personally.

Sigal (07:39):

Yeah, so it’s really in part because my parents are both Holocaust survivors. During the Holocaust, they were in hiding in a part of Poland that is now Ukraine. They were kids. So they were separate, but they happened to be relatively close to Lviv. And the only way at the time that my dad, for example, could have ate, had access to any food, was my grandfather would go out in the middle of the night and he would steal potatoes. Once he stole a pig ear and brought it to my dad and my dad said “It’s not kosher dad, I can’t eat this.” And my grandpa said, “No, it’s the only way for you to get nourishment.” So when I think about, I imagine what would’ve happened back then if this technology existed and they had access to a phone and they had relatives far away who could actually send them some value that they could use to barter for food, something like that was just totally impossible back then. You couldn’t get anything from your family members who were in another country.

Actually when I was at Treasury, there was somebody who had brought this idea to me of being able to use crypto to provide humanitarian aid, for example, to refugees in Syria. And I thought it was a really fascinating concept. And of course, it’s so prescient today because the crypto community, including very much the Solana community, has really stepped up and used crypto working with the Ukrainian government to do exactly what we couldn’t do in the forties ’40s, which is to provide aid to the government in their fight for freedom, to help people get access to food, medical supplies, and elsewhere. And for many reasons, we could, I know, get into. I don’t think banking is really necessarily set up to provide that kind of access in that way. It’s too difficult. It’s too complicated. Our banks don’t operate in those parts of the world often where people really need that assistance. But crypto is global. It’s everywhere where you can get access to it. In many other respects, it’s just like a really groundbreaking innovation.

Amira (09:31):

It’s kind of amazing, I mean, how much history repeats itself and how much access to these tools they were needed 80 years ago, they’re needed today. Ari, I remember you telling me an example of how the US government I think, maybe it wasn’t, was able to get aid into Venezuela directly using crypto. I’d love it if you could tell us a little bit more about that example.

Ari (09:51):

I think that was Sigal’s story so I’m going to give her that one.

Sigal (09:56):

Okay. Well, this actually happened after I left Treasury, but I think it’s also incredible. So when we had very heavy sanctions on Venezuela because of Maduro and what he was doing in that country, when we had the sanctions program, I made sure, or at least when I oversaw it, I made sure that in the Venezuela context we had the most forward leaning general license for humanitarian aid in particular that we had ever had before. I basically told our team like, “Everything that’s ever been on the cutting room floor, we need to put it in this program because we need to help people who were literally starving to get access to aid.” The other challenge was that it was very, very difficult for the US government to get anything resembling humanitarian aid into the country. I mean, literally, there were shiploads of stuff that the US government had sent and Maduro wouldn’t allow it in or accept it.

I will say that even though we had these very forward leaning general licenses, NGOs would come to us, to me and to Ari, I had a call that Ari will remember at the state department where these NGOs would say, “Look, we know you’ve got this general license, but the banks were all de-risking us. They won’t allow us to continue.” And I said at the time, “Well, tell them to call me. I mean, this is why we had that such a forward leaning general license>” but banks are just very risk averse in that way.

And so fast forward, actually after I left Treasury, what was the one way that the state department working with Treasury and I think with Airtm and maybe with Circle, they were able to get USDC to help something like 60,000 or 80,000 doctors and nurses who are fighting on the front lines of COVID in Venezuela. Again, it’s just like Ukraine. It’s another really amazing use case where our banks weren’t able necessarily, maybe some did, but many weren’t able to get humanitarian aid in. But boom, instantly you could send it in and you could account for it because it’s transparent, so you can audit it. You can make sure that if it lands in the wrong hands, that they can’t use it. So it’s a really incredible tool to allow access to, again, just like Solana is doing to allow access to a very fast payment system or a transfer of value for humanitarian purposes while also ensuring, helping to ensure at least, that it’s used for the right reasons.

Ari (12:14):

I think what’s so interesting is there’s this narrative that crypto with these sort of qualities, decentralized permission list, cross border value transfer at the speed of the internet, somehow it’s only used by illicit actors. But the fact is those are the qualities that allow it to sort of move outside of traditional financial systems to provide aid to people that would otherwise not have access to it. And I think this Ukraine moment in this really horrific situation is this incredible example of how communities, decentralized communities have developed in order to support a resistance movement in a government. I mean, Zelensky talks about Twitter being a tool of the resistance or a tool of Ukraine in this moment. Well, what you see happening on Twitter is communities developing to send cryptocurrency to support movements there.

Admittedly, I think Sigal and I are often talking about sort of the financial crime and the money laundering risks and the things in sort of that space, but you do have to step back and say like, “We have to stop bad actors from using it because it’s so good and there’s so much power and promise of it to do good.” I do think we’re having sort of a watershed moment in Ukraine where you’re having this sort of global event where we’re seeing hundreds of millions of dollars ultimately will flow to Ukraine in cryptocurrency and really arguably sort of the first maybe use case at scale of what the power of this technology can do. I think it’s an exciting moment. Obviously, it’s a moment you never wanted to see, but I think this will be an example that will be able to use as to why this technology has so much promise.

Sigal (13:47):

Yeah. And I would say just to add to that really quickly, what I like to talk about when I’m talking to policy makers and regulators, et cetera, is that you have to stop looking at everything through the lens of risk. Risk is important. We want to mitigate risk, but really what you need to do is start looking at the opportunity and how this technology will enable so much opportunity. Because what we have today are a bunch of developers, innovators, builders, dreamers, right? Who are literally thinking about how to build out a more efficient financial infrastructure for the future that many more people ultimately will be able to access and use.

That part of the infrastructure that deals with illicit finance and investor protection, that’s being built too. So you can do those things really in parallel and therefore really drive out. In many ways more successfully than what we have in traditional finance, the illicit part of it as what we’re seeing is like the vast, vast majority of people in crypto, they’re just builders. They want to grow new things whether it’s NFTs, games, payments, access, Ukraine, et cetera.

So if you only look at things as a regulator from the perspective of risk, then you’re never going to let anything grow. You really have to start talking about how to use this technologies as a great opportunity, including one of the reasons that I came into this space, right? Which is because I thought like this is this great opportunity to build out potentially much better financial infrastructure, which many, many more people will be able to access in the future. And if a portion of that remains in the United States, then the United States will be able to continue to be a center of financial innovation for years to come. If it doesn’t, that’s a different story.

Amira (15:29):

A lot of folks in the audience have never actually been in your shoes or anywhere close to it. I want to take a second to dig into sort of like that Carrie Mathison type stuff, which is like, let’s look behind the shroud and see what it looks like to walk into your desk at Treasury every morning and understand what’s coming past your desk from the risk perspective. Let’s help figure out why regulators might be so concerned and help listeners understand what it was like to track down bad actors when you were in Treasury. So what did that look like for traditional finance specifically? What would you see? What does the process look like? How do you start your days even?

Sigal (16:06):

I used to start my day every day with an intel briefing. Basically with a briefing, where I would learn about all the potential terrible things, terrible things around the world that were happening and potential terrible things that could happen. So when you’re in a job whose title is terrorism and financial intelligence, that’s just the way your day is going to start. You’re constantly thinking about how to protect not only Americans, but people all over the world from bad actors. So that’s how you start. Literally, the framing of your day really starts with hearing about bad stuff that could potentially happen. And then in many respects, you said about your day in part to ensure that that bad stuff doesn’t actually come into place. There are all kinds of different ways in which that happens.

Another big part of my job was also to think about how do we reform, how do we provide much more guidance to the private sector which we did really with the FinCEN guidance in 2019 and in lots of different ways through our sanctions programs, through advisories that we issued to help the private sector also work with us to better protect themselves against being abused by bad actors.

Amira (17:15):

What does it actually look like when you’re stopping bad actors? So you talk on sort of vagueness, but think about a case where maybe you had to take traditional tools of finance to stop a bad actor and what that process looks like. And then how does that actually contrast when you’re thinking about a crypto bad actor? What are the differences in that process?

Ari (17:32):

One thing that we did at Treasury and at DOJ when I was in AUSA is you put together great teams and you reached out to all kinds of different pieces of the inner agency, the executive branch. So when we were prosecuting a case, we would want to ensure that we had a team of the best IRS CI agents and HSI and FBI. It was very similar at Treasury, right? I mean, if you were going to do a sanctions’ designation on North Korea for example, you would want to ensure that you had the right policy people in the room from TFFC, and that you’d have the right intelligence from OIA, that you’d have exactly the right subject matter experts from OFAC on sanctions and FinCEN on money laundering and financial crime. And you would put them all together. And I think this is what, why Sigal was frankly so successful, is that you basically would reach out to teams of subject matter experts. And you’d put these teams together and they would inform great policy.

I think one thing that sometimes is missing is that there’s this sense that sort of like from the private sector that the government doesn’t know what it’s doing and this sense from the government that the private sector just has a certain agenda. I really do think at the end of the day, some of the best subject matter experts in the world are in both places. When you have those public-private partnerships, you’re going to have much, much more success. So to me, it really is about putting together great teams of subject matter experts. I think we’re seeing that today quite frankly. I mentioned North Korea.

For example, you have this hack of the Ronin, Axie infinity blockchain a few weeks ago. And very, very quickly, Treasury essentially identified Lazarus group, a state actor from North Korea as having engaged in that attack. I’m not there anymore. Sigal’s not there anymore. But what I imagine happened is they put together teams of experts from those different places who were using blockchain analytics tools to watch the flow of funds in that attack. And then you saw the designation, the sanction of a specific address for the first ever time associated with Lazarus group. And then you saw those funds flow to three other addresses, and immediately you saw those addresses sanctioned. And then you saw those funds flow through mixing services, which are basically exchanges on blockchains that mix funds and send them out, sort of clean the other side. And you saw those funds flow through a mixer called that was ultimately designated sanctioned by OFAC.

So again, while we’re not there anymore, when I see these actions, I sort of picture a skiff, a secure facility within Treasury a few steps from where Sigal and I sat. I picture this group of true subject matter experts sitting around and laying out game planning, these types of actions. I think that’s as inside baseball as I could do here. But I do think that like the key is great teams, and we were always very lucky to work with great teams.

Sigal (20:22):

Speaking of which, I was also really smart to bring brilliant people to work with me in my front office. And of course, Ari was very much at the center of that. We’re in war mode all the time at Treasury, right? You’re always dealing with really bad actors.

Ari (20:40):

I picture Sigal running when I think of Sigal, in heels down.

Sigal (20:45):


Ari (20:45):

And I remember actually ended up buying shoes that had sort of sneaker styles soles on the bottom because you were so constantly running up and down the hallways of these marble floors, because that’s exactly what it was. You were always in a rush. It was always because the work you were doing was important.

Sigal (21:01):

I lost a lot of shoes that way. One thing I will say when Ari’s talking about Lazarus, the first time that I really understood the power of blockchain analytics and blockchain technology was actually when we had sanctioned a big network. I think it was the first time we sanctioned… I actually included wallet addresses. Literally within a day, maybe it was that same day, I don’t even remember, Chainalysis had put out a piece that literally identify all the different addresses that were linked to the ones that we had sanctioned so that people could very, very quickly know what to stay away from, like what was really bad news and actually protect themselves from interacting. Ideally, we could freeze funds.

I remember at the time saying to a different senior advisor, Leah Bressack, like, “Yes, this is what we want industry to do. We don’t ever see this kind of analysis from the banking industry.” And that was really in part because that capability doesn’t exist in the same way. I mean, sure, we saw lots of SARS and sophisticated SARS from banking, but for somebody, a Chainalysis or now TRM to go out and very quickly publish reports much more quickly than we may have been able to do that really helped immediately track, detect, and deter illicit activity was really quite extraordinary.

Ari (22:25):

Yeah. I mean, it seems so obvious to probably most of your audience and certainly to us, but the ability to follow the money to watch financial flows in cryptocurrency is extraordinary compared to the traditional financial system. I mean Sigal and I both cut our teeth as prosecutors doing bulk cast smuggling cases and networks of hawalas and shell companies and Russian real estate and London and high value art, right? There’s no TRM or Chainalysis for those things. Those are very hard. And in crypto you can follow the funds with great financial crime investigators at US law enforcement and globally can follow the funds using these kinds of tools in ways that were unimaginable before. So yes, you can certainly move money faster in larger amounts in many respects, but you have tremendous visibility. I think a lot of times that’s missing still even from the conversations around sort of fraud and financial crime in crypto.

Amira (23:22):

So let me push on both points because I think this is really textured and no one knows more about this than you two, I think. So there are two people that might push back on what you just said. One is, I would say the folks that I think are especially concerned about crypto’s usage for money laundering. Those people might say, “Yeah, but you’re seeing the rise of privacy focused chains, of blending services, these things just make it impossible to obscure the movement of money. It’s only a matter of time before we see these things succeed.” And so maybe the technology’s working for us now, but you’re the first to say that this tech is early. How are we going to be able to catch terrorists and oligarchs once stuff advances?

Ari (24:02):

Yeah. No, it is still a little bit sort of a whack-a-mole. But it always has been in sort of the cat and mouse game between law enforcement and bad actors. I will say that so many of the big crypto investigations over the last few years involve mixing services, they involve privacy coins. Law enforcement ultimately was able to make those investigations using a combination of blockchain analytics like TRM, like Chainalysis, but then just great police work, off chain police works, subpoenas and search warrants, putting together the pieces.

Amira (24:30):

Is there an example that you can go into on that front?

Ari (24:33):

Yeah. I would say the Bitfinex case is a tremendous example actually. So I mean, essentially what you had there was a 2016 hack of an exchange where the money just sat there in a wallet. And then all of a sudden you started to see it move over the course of years across blockchains.

Amira (24:49):

And for background, for folks who aren’t familiar, tell us what the broad strokes, the Bitfinex hack.

Ari (24:54):

Sure. Yeah, so really just that until recently, right? It was at the time one of the largest crypto hacks. About $70 million of Bitcoin was stolen from the Bitfinex exchange. A hacker breached these cybersecurity and stole about $70 million in Bitcoin. That money basically sat on an account for a while and then started to move in these individuals. They basically used every office station technique in the book, from mixers to privacy coins, to dark net markets and automating transactions which means you programmatically move funds across blockchains in order to obfuscate. Well, ultimately law enforcement used blockchain analytics tools to trace and track those funds through mixers and dark net markets. And ultimately, to be able to seize what grew to be about $4.2 billion, the largest seizure in US history, ultimately sees those funds.

What’s so interesting about crypto, and I think Sigal made this point earlier, is the blockchain is forever. So you don’t just have to be ready for whatever the analytics tools and whatever the investigation tools is when you do the hack and when you start to launder funds. You have to worry about what it’s going to look like five years down the road, what the technology is going to look like. Because law enforcement was able to follow those funds across years and across blockchains, ultimately actually arresting a couple in New York city a couple of months ago and charging them with laundering the largest seizure in US history. So there are definitely powerful, anonymity enhancing tools out there, but I will say that law enforcement is still making a lot of these cases.

Sigal (26:38):

Yeah, I would just add. I mean, like in this very early days, still nascent technology, the reason that some of the largest seizures of illicit assets in history has come from crypto is not because there’s more illicit activity in crypto. For all of the reasons that Ari just mentioned, it’s just in many respects easier to trace and ultimately to disrupt than what you have when people move all kinds of assets through shell companies and like all sorts of different parts of the world. That’s really important because if you just look at the headlines and you say “Bitfinex, largest money laundering seizure in history,” then you may just jump to like, “Oh, of course, because it was crypto.” But no, people are just using crypto for bad things. It’s really because law enforcement now with blockchain analytic firms, et cetera, and prosecutors have all these amazing tools at their disposal.

Silk Road was another example. I mean there was a seizure last year or the year before of a billion dollars worth of, I think it was Bitcoin, that traced all the way back to maybe the earlier days of Silk Road. And boom! All of a sudden, money moved and they were able to pounce. I mean, frankly, if you’re a bad actor, I would say as more of these cases are like coming to a fruition, stay away from crypto. There’s a very decent chance you’re going to get caught.

There’s also this narrative that I think has largely tamped down, but there was a narrative that crypto was going to be used on mass for sanctions evasion in the Russia context. And for a number of different reasons, I just don’t think that, and I think Ari would probably agree, that’s just not going to be the case. It’s not that it couldn’t be used for some, but Russia has been very good at money laundering for a very long time through things like real estate and shell companies and all kinds of different mechanisms that we’ve investigated for many, many years. With crypto, there isn’t like the liquidity to move assets at the volume or scale that they would need to do that. Plus, if they try to, boom, the TRMs and Chainalysis and law enforcement kind of actors would likely be able to, at some point, quickly detect it, plus you have all these regulated exchange who have done really a terrific job working with law enforcement to be able to help trace and track and disrupt this activity.

Ari (29:06):

The only thing I would just kind of add to that, I think Sigal makes a great point at the end there in particular around compliance. I think there’s this sort of sense that, “The wild west” is what you hear thrown around in terms of sort of the regulatory landscape. And at least on what we’re talking about today, sort of that AML national security space, look, crypto businesses that operate in the United States are treated as like any other money service business for purposes of this. When you’re looking at sort of the large exchanges where so much of the liquidity is today, they have robust compliance controls in place. They have compliance officers, they have policies and procedures. They use tools like TRM and Chainalysis in order to monitor transactions. This is not the wild west when it comes to stopping sanctions evasion when it comes to stopping bad guys.

Ari (29:51):

I mean, look, I think the reality is, there is certainly illicit activity occurring in crypto, but honestly, illicit activity occurs in any thriving financial system. Bad actors would not want to use it if it wasn’t working, that’s certainly true of cash. That’s certainly true of sort of anything else. And as we see the growth of this economy, we’re going to see more illicit activity just by the nature of it. But as an overall percentage, it’s going to remain very, very low because I think as Sigal mentioned, it’s not a great way to launder funds. It’s not a great way for illicit actors to move money because we’re watching it all the time. It’s not just blockchain analytics and law enforcement. I mean, the coolest thing is when you jump on some of these Discords or on Twitter and you watch these super sleuths and parts of these different communities develop that are in these like open source tools that are following the funds in a hack. There is a self-policing element too, in this community that has never existed before when it comes to sort of following the money, watching financial flows.

Amira  (30:50):

I think the headline from this episode’s going to be advice from former Treasury officials, if you’re a terrorist financeer, don’t use blockchain.

Ari (30:57):

100%. Never use crypto. Yeah.

Amira (30:59):

This has flown by, and I feel like I have a million more things I could talk to you both about. But in our last couple minutes, maybe any advice you have for your peers who are in your shoes today, talking about sort of the growth of this new industry. What would you tell them? What do you wish you could whisper in their ear? Or maybe you’ve already whispered in their ear.

Sigal (31:14):

Look, what I say is, number one, you have to interact with the technology. You have to meet the entrepreneurs, the developers, the founders, to really understand what’s being built. I mean, I had amazing folks around me in the government, but there’s nothing to teach me to talk to me about this stuff. But there’s nothing like interacting with someone like Anatoly or what have you to really see and envision what the future can look like with this infrastructure. So if you really want to understand what’s happening, get out there, interact with the technology if you can. There’s all kinds of ethical restrictions that don’t allow enough people to be able to do that, but there should be mechanisms to allow you to interact with the technology, number one.

Sigal (31:55):

And number two, be open minded. Learn what’s happening, what can the future look like, why do we think ultimately, why are there so many of us who’ve left government who are investing so much of our time and energy in these technologies because we actually believe that it’s quite possible that this is where the future of finance lies. That’s number one. Number two, if you’re looking at how to regulate it, don’t just put your mind around all the old tools that you know that you’ve come to rely on for the last century, right? This is a fundamentally new technology. It’s transparent in a way that we haven’t seen before. It’s open source. There’s so many different attributes of the technology that can help mitigate risk. And so be open to fresh new frameworks that potentially in my opinion not only, let’s say on the AML side, can continue to drive illicit activity out, but really, really importantly can bring many more people around the world access to the financial ecosystem.

There’s 1.7 billion people, at least as of 2017, who didn’t have access to banking. We got to solve that problem. It’s not enough to go to inter agency or multilateral meetings all over the world and talk about it in five minute interventions, which is often what happens in these meetings. We got to really find the technology that can help solve those. And then US people, they need to really focus on how can they maintain that leadership. It’s not going to be by calling things wild west and it’s not going to be by only seeing things through the lens of old boxes and old frameworks that were built up when we were using the telegram. I mean, not the app Telegram, like those telegrams that they used in the ’30s. And then also, perhaps not the same frameworks that we were using when we were still using the rotary phone. I mean, this is fundamentally new technology. Let’s understand it and regulate it in a way that makes sense in light of the technology and allow it to experiment and grow so that we can build something out really together that can be truly extraordinary.

Ari (34:13):

I think that’s so beautifully said. I share a lot of those sentiments. I’ve been lucky to have really the coolest jobs that you can ever have, so don’t take this personally, Sigal. But I have the coolest job that I’ve ever had now. I think it’s because I’ve just gotten to sort of engage with this incredible community of builders and innovators. And they all understand, I think, uniquely that we’re building essentially a new financial system. I think it’s so important that regulators sort of also embrace that moment, that this doesn’t have to be the same. We don’t have to do what we’ve done before. We can work with the technology. We can work with these builders sort of build something new. I think Solana is an amazing example of this because the focus on speed and the focus on sort of that incredibly strong community of NFT builders and gaming, and really I think all the things that are starting to develop to me are like really the future not just of kind of the technology, but really also compliance and regulation.

The metaverse is not going to be a place that is entirely unregulated. It’s going to be regulated, but it needs to be done in a super smart pro innovation kind of way. I’m so hopeful that these communities that I feel like I have been lucky enough to engage with over the last year or so, that regulators and policy makers are also engaging with them. So yeah, no, it’s an incredibly exciting time. I don’t know, I get up every morning kind of feeling that. I think it’s sort of like, how do we inspire regulators and policy makers to kind of feel that same way.

Amira (35:39):

I’m revved up just hearing you about talk about this. Let’s go.

Ari (35:41):

Let’s go.

Amira (35:41):

All right.

Ari (35:45):

Sigal and Ari, thank you both so, so much for your time. We really appreciate it, and in giving us the inside view of what it’s like to be a regulator dealing with these issues. I think I’ve learned a lot and I think our listeners have too. Thanks a bunch.

Sigal (35:56):

Thank you so much. And thanks for bringing us back together.

Ari (35:59):

Thank you so much. I loved it. Thank you so much.

Sigal (36:02):

Thank you.


Kanav Kariya – President, Jump Crypto Ep #65

Kanav Kariya (President, Jump Crypto) joins the Solana Podcast to discuss his optimism for the future and the many areas in which Jump Crypto is innovating in the crypto and blockchain space. Austin Federa (Head of Communications, Solana Labs) guest hosts.


00:49 – What is Jump?

03:07 – The path to operationalizing crypto

06:00 – Optimism for Crypto

10:49 – Discovering and Building in Crypto with Jump

14:24 – Personal Journey at Jump

16:43 – What’s being built at Jump?

17:55 – Reasons to want to build

19:39 – What does Pyth offer?

22:22 – Criticism about conflict of interest

26:30 –  How Web 3.0 facilitates resource coordination

28:46 – Data contributors benefiting from onchain data

31:01 – Token Plans for Pyth

31:46 – Message bridging

34:48 – Wormhole, stable coins and asset tokens

37:36 – Time synchronization for cross-chain dApps

39:14 – State storage on wormhole for dApps

40:21 – Is Wormhole layer 0?

41:14 – Wrapped NFTs

44:13 – Jump’s position towards NFTs

48:36 – Exciting things in the ecosystem

49:43 – Custom silicon / FPGAs

53:22 – A parallel execution model?



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Austin (00:10):

Welcome to another episode of The Solana Podcast. I am Austin Federa, sitting in for Anatoly again this week. Today we’ve got a pretty special episode I think. I’m really looking forward to this conversation. I think it’s been a long time coming with a few false starts. Today we have Kanav Kariya president of Jump Crypto, or do we just say Jump at this point?

Kanav (00:32):

Yeah, Jump Crypto is good.

Austin (00:34):

President of Jump Crypto, which maybe this time last year very few people knew existed, very few people knew what you guys were doing, what you were building, what your role in the ecosystem has been. So yeah, I guess let’s just go ahead and Jump right into it. What is Jump Crypto and how did it come about?

Kanav (00:51):

Yeah, thanks for having me on Austin. So for context for the audience that aren’t very familiar with us, Jump is historically a prop trading firm founded over 20 years ago in the pits at the CME. Today one of the largest quantitative trading firms in the world. And we started a crypto division over seven years ago. It started as an intern project at the University of Illinois, where we were running a miner in a closet and building some trading infrastructure.

And today we’ve got over 150 people on the crypto team doing a lot of different things. So the way I like to describe our business is spitting it into three primary pillars. One is prop trading, which is exactly what we do on the other side of the house, we build trading intelligence and we scale it. The second piece is building and that’s the piece that I hope we’ll get to talk a lot more about on this call and it’s closest to my heart and closest to the heart of the team.

And that’s in building pieces of infrastructure, really streets and sanitation for the space and a couple of the marquee projects that we’ve really focused a lot of our efforts on have been Wormhole and Pyth. And of course, along the journey, we’ve aligned ourselves with a lot of the major ecosystems in the place, including Solana, Terra and a whole number of others in building a lot of different things across those platforms.

The third bucket is venture, I like to call ourselves accidental VCs in that we found opportunities to add value, or we had requests come in to work with partners over the last six years in various different capacities. And we found that we could be meaningful in those contexts and work with people that were solving problems for us. And that has now grown into the venture division that’s deploying across the space.

Austin (02:31):

I want to get into a lot of the work that Jump is doing as core code contributors and supporters of projects in the ecosystem. But I kind of want to start a little bit with that journey. I would say that the transition from prop trading equities and commodities to prop trading crypto, that feels pretty organic. And there’s a number of firms in the space that have also made that transition. Albeit you guys seem to have made it sooner than a lot of other firms in the industry. What was that process like of going from deciding that you wanted to add crypto to actually operationalizing that? And then we’ll get into some of the journey to actually becoming builders.

Kanav (03:07):

The project started as an intern project at this thing called Jump Labs. There was a research lab at the University of Illinois and was meant to work on cool stuff with the university on working on fun problems. So alongside the crypto stuff we were doing when I was an intern, there was a VR project working with professors at the university to abstract away trading screens. And there was work on some interesting machine learning and networking problems.

And the group has grown out of that. And of course matured out of these things, but we’ve definitely strongly retained that ethos. Now I want to caveat this by saying we definitely didn’t have oppressions in being infrastructure builders. When we started the project in the lab that many years ago. It’s been a very organic and natural process for us. And it’s hard to make the instant leap from prop trading to what we’re doing today, but it’s easy to reason through the steps along the way.

As one of the earliest large trading firms in the space, we had a lot of requests from institutional liquidity exchanges, OTC platforms, and importantly projects that were looking to solve trading and liquidity related problems. And those conversations gave way to us exploring a lot of DeFi projects and a lot of L1 platform projects that shared a lot of the problems they were thinking through on complex financial system design or programming in resource consumer environments, which are very natural and germane to a quantitative trading firm.


And those conversations led to jamming about foreign ideas to implementing governance proposals, to maybe starting to write a little bit of code in them. And then all the way into committing over 50, 70 engineers that we have today in building through the space. And that process involves a few different steps. One, it involves the willingness for the institution at large to be mentally long the space. It requires a recognition and frankly a little bit of a taste of the upside.

It requires flexibility, which of course, prop trading firms just generally naturally just have to have. And then everything else you can just learn along the way, right? We’ve done a lot of things wrong. We’ve stumbled over ourselves a hundred times, but you’ve got to keep digging shots on asymmetric upside and with all the resources that we’ve had at the firm I think we’ve been able to make some good ones.

Austin (05:20):

Going back to you last year, Jump Crypto had sort of a moment where it decided it wanted to make itself public. You wrote a blog post that was laying out. I wouldn’t quite call it a thesis, but laying out an idea of how you view the space and the role that something like Jump could play within it. One of the things I was struck by going back and rereading this is your level of optimism in this post, right? Which is something that you don’t see from many financial trading firms. You see them seeing opportunities to make lots of money. You see them making lots of money. They’re very profitable endeavors, but you usually don’t see optimism contained within it. Where’d that come from?

Kanav (06:01):

That’s a pretty good question. So quant firms today are basically research and development firms, right? So the people that build trading systems, that build the intelligence behind trading systems are generally of quantitative background. They generally have PhDs in either statistics, machine learning, physics, those kinds of endeavors. And the people building the platforms are low latency high performance systems engineers that there are different optimizations across every level of the stack to build robust, scalable, fast infrastructure.

The environment down to the lab five years ago was about exploring this space. It was like, what does this space mean? Right. And it wasn’t about, okay, how are we going to make X billion dollars kind of getting into this endeavor? It was about exploring it. And I think it attracted that kind of people and it occurred that kind of environment.

And the leadership that stays since then has kind of embodied that. And just personally I’m a raging optimist, I believe in technology, I believe in the future, I believe in building towards something bigger. And thankfully I think the firm has shared those ideas and I hope I’ve been able to shape a lot of the culture and behaving that passion.

Austin (07:10):

Where do you think that optimism in yourself comes from? There’s a lot of things you could have gone into coming out of school. What about both, something, an organization like Jump, which is undoubtedly a great place to go work. But you stay there for a while now, you’ve worked your way up, you’re now in charge of the crypto division. Where does that sense of optimism in you come from and what makes Jump the right place for that?

Kanav (07:33):

I feel something for Jump because they had a cool internship program and they had a lab on site and they were working on really fun problems in a well resourced environment, that just made it fun and attractive. And after I had the opportunity to intern there for eight to 10 months, I kind of got a sense for the possibilities that existed. And this is the flexibility that the whole space had. And it was like, you come in, you get to make a lot of bets, you get a lot of resources. And if you make good bets, you get more resources and then you get more resources. This is the only place I’ve ever worked. I think it would be rather unique to have that kind setup. And again, no, I wouldn’t say it was a passion moment to come in to Jump and know that I would be able to build suites and sanitation for crypto. But I knew I would get to do a lot of really cool stuff, work on fun problems with smart people. And where does optimism come from?

Austin (08:25):

Yeah. I mean, you look at a space like this. It’s been through boom and bust. There’s tons of amazing projects being built in the space that end up going nowhere. And especially from the vantage point of a trading firm, right? One of the secret sauce of a trading firm is it can make money in an up marketing, it can make money in a down market, right. And that is the advantage of a professional trading operation versus a more passive trading operation. But again, like those are not usually characteristics that breed optimism. Those are usually characteristics that bleed margins, where you’re optimizing 1%, 2%, 3% here. So you can compound that over a year and it will make a marginal difference. But again, that’s not usually an optimistic space, that’s a very functional space to work in.

Kanav (09:10):

Yeah, it is. And traditionally I don’t think it lends itself to naturally just exactly this. Jump culture has kind of always been a little bit unique. So Jump also has a number of other kind of divisions that work on non-high frequency trading stuff. Historically, since about 2011 or 2012, had a VBC arm called Jump Capital that invests in growing technologies in this space. They’ve had some cool endeavors in the biospace working on automation there in healthcare.

And so the founders have generally been optimist. They definitely believe in the future. They’ve been able to take shots at things that are going on. And even if it’s not naturally germane to the trading business in and of itself, the culture itself lends itself to being able to do something like this, which is a really awesome combination of knowing how to monetize, but then also knowing how to build. Yeah, it’s been an absolute pleasure to be able to soak in from that environment.

Austin (10:04):

Let’s look at the building for a bit. I think it’s pretty open secret at this point that Jump are core contributors to Wormhole and Pyth, you’ve been very heavily involved in that process. Take me back to some of the early days there where you are internal to Jump, and you’re saying like, “Hey, we need to do more than just trade and invest in this space. I think we can actually build.” And especially you’re talking about this from the perspective of sanitation and roads and the very base level infrastructure. Crypto’s been around for a long time. I think most people coming into the space in that time horizon wouldn’t have necessarily looked at and said like, “Oh, there’s very base level features that are missing from this ecosystem.” What was that both discovery process like, and then the process of convincing everyone internally that this was worth dedicating resources to?

Kanav (10:50):

Yeah, the discovery process was very organic. We had a lot of inbound from people looking to solve trading and liquidity problems because a lot of people in the space, even though we were quite kind of new of our trading presence, and as one of the early trading firms that really was trying to make bigger pushes in the space. When you get to talk to awesome founders every day about all the problems that they have and get to build relationships with them, you start to uncover a lot more of the problem space that exists, start to internalize a lot of it.

And once you’ve got the opportunity to sit in that for a little bit, and I’m sure you see this today. We are much later on than we were when we made a lot of those big switches, but there’s still a lot of opportunity, right? When we were kind of ideating on the origins of Pyth, the conversation we had was, look, our whole thesis at Jump Crypto is to be as long aligned with the space as possible, right? We’re trying to get the maximum exposure we can on the space that we think is going to be explosive. And we’re trying to ideate this ways which we put that quote unquote trade on, right? The best way to put a long trade on in a growing space, and the best mode to value capture is value creation. There’s definitely a lot of inefficiencies created by hyper growth, right? And there’s room to capture those inefficiencies. But those are small in magnitude relative to the absolute value creation at play.

And then there’s a value creation capture correlation that you think about there. So if you think about it in that lens and you know that you want to be big contributors to the space and just aim to create a lot of value to both, then you start thinking about what the opportunities are within your realm to be able to engage in that capacity.

Austin (12:27):

But at some point there’s a meeting, or you have a boss who you report to, and you have to go down and sit down in front of him or her and say, “Hey, I want to spend a lot of money to hire a lot of engineers to do something that’s going to be totally public and totally open source at a firm that historically likes to stay out of the news.”

Kanav (12:46):

It was a few meetings.

Austin (12:46):

Yeah, I’m sure.

Kanav (12:46):

And it’s kind of baby steps along the way, or big steps along the way that compound into a complete shift and a big switch of that nature. We had this summit, we called the August summit a few years ago. And we went down to an offsite location and we talked about what being in this space means for us and how we differentiate. And I remember we showed up with these sheets that we went around and distributed to people. We were like, this is the toolkit that we have. This is the opportunity set in the space.

And everyone kind of had their own, things went on, but that was one of the approaches that I’ve taken. And if we believe this is where the space is going, this is the opportunity set that we can tackle. And these are the levels that we have to pull, right? And then you socialize that and you try to convince them people that there is opportunity to be had here and you get buy-in to take a first little step. And once you get the buy-in to take a first little step, and you kind of really show the big medics of differentiation in a native space, you get the buying for the next step.

And then suddenly it’s the entire [inaudible 00:13:47]. You get the whole kitchen sink thrown behind you, and then you are kind of propelling to this part that you want to be at. And that’s the whole thesis of Jump everywhere. You take bets with asymmetric upside and we throw the kitchen sink at things that are working. And a lot of the stuff that we were doing started working.

Austin (14:02):

How is that journey for you personally, going from an intern involved in a few projects now to the Jump Crypto teams over a hundred at this point?

Kanav (14:11):

Yeah. We’ve got over 150 now, hard to keep track.

Austin (14:14):

Wow. Yeah. From a leadership role, and from your own perspective, how has that transition been? What parts of it were easier for you? What parts were harder than you were anticipating? Scaling yourself is often much harder than scaling a company.

Kanav (14:28):

Without a doubt, yeah. I started in the team as an intern like you pointed out, working on software problems. I came back to the team a year later in a formal full-time capacity, working on quant problems, which was to do with predicting crypto markets, building alpha and kind of scaling that piece. And the early conversations with projects where we were trying to solve liquidity problems was an area that I got really, really interested in. And I just kind of went about trying to build that a little bit further.

Over time that led to a transition from engineering and quantitative work to more conversational business development work, just having spent years across all those functions and natively knowing how to live them has been the biggest tool that I’ve been able to build in the toolbox. Now that doesn’t teach you how to manage a hundred people, that doesn’t teach you how to propagate culture. It doesn’t teach you how to scale hiring strategy. Doesn’t teach you how to value the troops when things are low.

I definitely want to make a claim that there are many who are close to a finished product, rather than trying to be good at everything, good at every one thing, we always try to be excellent at a few things. And then by force just propel everything forward. I’d say some of the biggest lessons I’ve learned, the biggest mistakes we’ve made, definitely been in the shape of trying to shove square bags in a round hole. Where in a trading environment it’s like the only people you have on your team are engineers and quants. They’re just smart people that can solve any shape of technical problem you throw them at. When you move that towards sales and marketing and product and everything else, that all kind of falls apart.

Kanav (16:05):

And you need people that are able to natively live within specific sub domains across those functions. And that’s something that we’ve been trying to scale in. I spend basically all my time hiring and trying to focus on making sure our zero to one projects have a lot of momentum. But yeah, it’s been an awesome journey. And of course I have support from a company that’s grown to a 1500 people as the largest quant trading firm in the world and so lots of guidance and help along the way.

Austin (16:33):

Let’s talk a little bit about that work you guys are doing and actually building. So if I understand correctly, the two projects that you are mostly core contributors to is Pyth and Wormhole. Is there anything else that you’d put into that category of engagement?

Kanav (16:46):

That’s the highest level of engagement for sure. We do a lot of things across the big ecosystems of course. We can talk all of what we’re doing with Solana. We’re always trying to get deeper. We built an NFD project on the Metaplex landscape after their investment as an intern project. That was a real fun one. We’ve been core contributors to some of the projects that are coming out on the data landscape today. We’ve worked on a lot of the mechanism design that goes on, on the other one. And there’s a few other projects, but the highest levels of engagement have definitely been with Wormhole and Pyth.

Austin (17:18):

Looking at over that landscape, Pyth high frequency Oracle. But again, Oracles, they’ve existed for a long time. There’s a number of name brand ones that got their start on the ecosystem in the 2017 range. Lots of people have had ideas about Oracles over the years, some of them have worked, some of them haven’t. Similar to Wormhole, bridges have existed for a long time. Bridges are actually the basis of how any L2 works, right? Both of these are hardly new ideas I would say. What about looking at the landscape gave you guys the confidence to say, not only there’s a need for something different, but we can help build something different and better.

Kanav (17:57):

Again, just like 100% organic. In that August summit, we were looking at some of the biggest things we could do. And a big problem that everyone kind of kept voicing to us is that they don’t have access to equities data. They don’t have access to fast data so that they don’t have to have things like clawback mechanisms and all these different things that LPs don’t get direct on every turn, right?

The fundamental thing with financial oracles is that they’re used to settle risk transfer. They’re used to set a price at which two parties exchange value. And if that price is latent or slow or not accurate, one side gets left folding the bag. Now, DeFi, the way protocols are constructed, the side that gets left holding the bag is either the LP that’s contributing to the protocol or the protocol stakers or a key stakeholder in building the ecosystem.

And the takers are able to take all that value. If you are going to build something that’s going to house all of OTC, if we’re building something like synthetics for example, and your protocol stakers are taking the other side of every trade that happens on S-Oil or SSNP, you need to make sure that’s the right price. Otherwise you’re just going to get up the way down to zero. When we were ideating on what the biggest ways we could contribute is let’s contribute our data. And the first idea was in let’s start, let’s go and figure out how we bring together a network of people to build an Oracle.

It was how do we contribute our data, right? And we browsed through the category of solutions. We had all the conversations. We spoke to dozens of investors and builders in the space. And there wasn’t an easy way to slot in high fidelity financial data, into existing Oracle solutions. And so we spoke with some of the founding partners of the Pyth program and came to consensus that there was an opportunity here. And that led to the first step and we just kept building sets.

Austin (19:39):

In your mind, what is it that Pyth offers that other Oracle solutions don’t offer?

Kanav (19:46):

Pyth is a very hyper specialized tool for high fidelity financial data, specifically financial data for settlement of risk transfer, right? If you think about the way the market data landscape looks today, it’s different across asset classes, but there is a class of people that have access to high fidelity, streaming price data that they can legally distribute and make available to a protocol, create like an Oracle program.

One you need access to very fast financial data, which is hard to get and even harder to have a legal right to distribute. You want to make sure that the people who are publishing the prices are the real owners of the data so that you can set incentives for the data to be accurate, right? If you are staking the value of a third party aggregator, their third party aggregator has no skin in the game. That’s one of the other kind of fundamental things that you have to think about.

And third, you need to acknowledge the fact that a price is not absolute. A price for Bitcoin has about 20 liquid trading venues that are distributed across the globe that can often be fractured, that can often have all kinds of different idiosyncrasies. And that being able to accurately determine the price on most relevant venues and build a dispersion is really important. If you think about kind of all those things together, you want very fast access. You want a broad range of access of independent sources, not reporting from the same source.

You want very high liveness and uptime of course, and you want kind of good legal clarity that that price can continue to be distributed because you don’t want the application to suddenly get turned off when the regulator says, “What’s going on?” And those are the kind of key things that Pyth has really focused on very heavily to build that piece of infrastructure and Solana was the perfect opportunity. Before Solana there wasn’t a way to create a high fidelity fast Oracle. There just wasn’t a need for it and there wasn’t a platform for it, right. And so all those things just came together.

Austin (21:49):

One of the criticisms that you’ll hear about Pyth is that because of its structured model here, where the people providing data are permissioned at this point and are also like firms that are professionalized trading operations themselves, that there is an inherent kind of conflict of interest in that system. With any system in blockchain, you have to assume everyone is trying to cheat, everyone is trying to extract the most value possible. How have you gone about setting up incentives to make sure that the users of Pyth and the contributors to Pyth are not at odds with one another?

Kanav (22:27):

Yeah. I think you made a totally fine point there in that we are building for byzantine systems, right? And so that’s the kind of incentive design you’ve got to keep in place. I’ll frankly say I think that claim is a little bit ludicrous for a few different reasons. Once you peel back the onion just a little bit, and I’ll talk through some of the reasons why.

Austin (22:43):

Let’s peel back the onion.

Kanav (22:44):

One, you’ve got to first understand that the amount of value that can be created in actually pulling something like Pyth off successfully is dramatic. And the forms that are building this are now incentive aligned to make that happen. But two, this is an open sourced protocol, it is decentralized, and you can look at exactly what the inputs are, how they’re being aggregated and what their resort in price output is.

Three most importantly, there are about 50 financial firms that are submitting independent price data to this article to construct final outputs. And these financial trading firms aren’t friendly with each other. This is the very first time that a group of highly adversarial trading firms, banks, exchanges, and ODC players across the entire space have come together and said, “Let’s go build a piece of infrastructure.” And one, I think that needs to be celebrated a lot, it’s a huge win.

But two, the trading firm, there are 50 global financial trading firms contributing their proprietary prices directly to Solana on the Pyth program today. We have realized that these 50 comprise of between 60% to 80% of global asset class volumes at this point, given the network of participants that have aggregated around this protocol. When you are that big of market share that you’re covering that kind of breadth, the participants in the protocol themselves are on the other side of each other’s trades almost by definition. And so who’s manipulating the price against who? Let’s kind of just start there.

The system of incentives that set up in this taking protocol, you can read through this on the Pyth white paper has some really intelligent aggregation algorithms that put all this data together, that identify the quality of each of these independent data publishers that then sets out a mechanism to aggressively punish providers that don’t have good prices. And good prices can mean I published a malicious bad price. It can mean I have slow prices. It can mean I published, I had a bug, it can mean anything.

The incentive design mechanism is meant to reward data providers that are not honest, but that have great data. And that’s a fundamental difference in how system designs, we’re not kind of rewarding agreement, we’re rewarding prediction. And so you are rewarded for correctly predicting the price that would come up rather than for rewarding agreement between parties, and which can both have different kind of models and can both work in different ways.

But there is almost no possibility for one collusion across these landscapes, given the composition of the people in the network. And the incentive structure again is obviously explicitly set up to discourage that. Third, all these forms are heavily, heavily regulated. I spoke about 20 years of its reputation and a giant, giant business behind kind of making a lot of this happen. And we’re definitely incentive aligned to make this thing as successful as it can possibly be.

Austin (25:39):

The Web 2.0 world and the rise of FinTech apps has largely taught people that organizations that claim to be on their side often aren’t. There’s very legitimate reasons from a market making perspective that during the game stock run up and squeeze, users of Robinhood and other FinTech applications, their trading was turned off. Now, there’s a bunch of really good backroom reasons for why that might have happened. But the effect is what matters to the retail trader, which is that they were using a platform that they thought gave them equal access to a market, that platform did not provide them equal and neutral access to a market.

I think when people look at something like Pyth, it wouldn’t be crazy to say that, well, the same incentives that made us think that Robinhood was on our side, could also be applied to Pyth. What is different about the Web 3.0 space and the construction of something like Pyth in your view that makes that not something someone should worry about.

Kanav (26:37):

Web 3.0 is fundamentally any means of resource coordination, and it facilitates that by, one, facilitating the export of trust. And the export of trust is actually one of the big reasons why the whole Robinhood debacle went on, right. They basically ran out of margin requirements in order to continue to clear trades on one side, since it was so directional.

And there is this massive web of intermediaries that set up all throughout traditional finance for the express purpose of establishing trust as the FCM, the DCM, the clearinghouse, all the other three letter acronyms. And all of them exist to make sure that when a match occurs on any platform that actually settles into a financial trade.

In crypto the match is the execution. And that’s facilitated by the fact that you can export all the trust of executing a piece of code onto Solana, onto Ethereum, onto the blockchain itself. And that’s unlocked this completely new means of resource coordination, which makes things like Pyth possible. It means that you can explicitly lay out a system of incentives in a closed loop fashion. And regardless of who’s uploading the code, or who’s proposing designs or architecting any of this, everybody is independently participating according to the incentives laid out very plainly by the program itself.

And that means DRW and Jane Street don’t have to trust Jump when they decide to publish prices to pay. That means they look at the program that’s running on Solana that they can read. They look at Solana’s trust model and decided they can or don’t trust Solana as a platform. And then contribute to the platform that then self executes and lives on its own terms. And the fact that we can allow different kinds of state to compose in a trustless fashion is the entire revolution Web 3.0, that’s basically what the whole space has been building for the last 10 years. And that’s what makes Pyth possible, it simply was not possible before.

Austin (28:32):

What does something like Jump or Jane Street or anyone who’s a data contributor to Pyth, what do they get out of it? What is their incentive apart from any rewards that might be generated from contributing data. How are they then going back and using this on chain data in their own operations?

Kanav (28:51):

There’s a few elements. And so one, it is fundamentally a two sided marketplace, right? It has data publishers and it has data consumers. And the other interesting thing like Uber did for taxi cabs, where it created a marketplace where cars could now come online, created this marketplace where data that was once latent came online.

Jump is publishing its own trades to the Pyth network. That is IP that it has the legal rights over, has only just been a cost center so far, and now has the opportunity to get monetized. And that’s the same for all of the trading firms that sit in the network. It’s a lot of people to turn cost centers into potential elements in the marketplace and that bootstraps the supply. The consumers of the data obviously are paying for this extremely created highly robust set of data inputs that then get aggregated. And that creates kind of flows in one direction. And then like your regular two sided marketplace, it accrues value, right?

All the data publishers today in Pyth have some sort of stake of asset interest in the thing succeeding. And there is a set of incentives that then rewards them for the correct participation going on with fees, rewards, all those kinds of things. And all that is in gross detail laid out in the white paper and we can go over some of that. But the off chain applications and some of this stuff is also quite interesting, right?

So if you look at kind of back office systems around the world at forms like Jump, you don’t need microsecond level access to financial data, but you need that for your trading engines because otherwise you’re playing at a disadvantage related to the field. But in order to make sure that your clearing prices have happened correctly in order to make charts in order to do something like a trading view, in order to get on the Bloomberg terminal or to be on a ticker somewhere, all these applications are now easily facilitated by subscribing to something like Pyth, that’s living on an open kind of blockchain area. And so a lot of the off-chain use cases are getting more and more interesting I think over time. The fundamental value is in creating the pricing source for on chain data. And this is kind of like an awesome thing that just falls out of it.

Austin (30:56):

That’s a really interesting way of thinking about both the incentive alignments and the rule that the data providers versus the data consumers play in the market. Are there any token plans for Pyth?

Kanav (31:07):

Yes, there is a token plan for Pyth. You can read all about it on the white paper, no comments on timing or anything of that at this point. And that’s going to be a networking governance decision, but I’m sure in the near future.

Austin (31:16):

Transitioning over to Wormhole, which is the other project that Jump is heavily involved in as a core contributor of the code. When people look at wormhole, I think it’s very easy to look at it and say, asset bridge, multi chain, cool, fundamentally utility. The first thing I noticed when we were talking about this and looking through it is this whole component of allowing different smart contracts on different blockchains to communicate with each other. I think most people understand how asset bridging works. Can you talk a little bit about this whole concept of message bridging?

Kanav (31:51):

Yeah. And this also kind of goes back to your question on, how do you decide that there’s an opportunity here when bridging is something that people have talked about for a while? When we were kind of ideating with everybody else on kind the Pyth’s team and the network on how Pyth goes across chain. Hendrick and team were building Wormhole as Solana Eths token bridge on the hackathon project at [inaudible 00:32:17].

And I called Hendrick and I asked him, “Look, is there a way to generalize this thing so that we can get Pyth messages across?” We’re building this Oracle thing on the best, fast, scalable censorship resistant message bus we can, but we want to get it to all the other ones that operate on a slightly different resolution. And through the course of that conversation, we came to a conclusion that enabling generic message bosses to allow this cross chain composability in a much more high dimensional fashion than just the token bridge word was a massive opportunity set that had to be filled.

And so when we launched last August as a completely generic message bus. And what that means is that any piece of state that is created or lives on a blockchain can be included as a message that then gets communicated to any other blockchain environment. And so if you think about Oracles, you think about a governance board, right? Uniswap passes a governance board on Ethereum, produces workloads on a lot of different chains. The outcome of that governance board has to, in a secure, reliable fashion, be communicated to all the other geographies that Uniswap lives on. That needs to be encoded as a message.

And so Wormhole has outpost contracts on every chain that is deployed, it is deployed over eight chains today. The outpost contract just listens for a message that is sent to that contract and the Wormhole network of guardians attests to that arbitrary binary block. That block can then be picked up, relayed to any other blockchain environment, verified that is coming attested from the homeowner network and then decode to do anything arbitrary and interesting. And so generic message process have really exploded over the last year. We’ve seen so many awesome applications being built on it. And I think we’re just kind of scratching the surface, right? There’s a lot to do here.

Austin (34:04):

When I think about messaging, I think about how a lot of the models right now for cross chain communication of assets are a little tedious and maybe have more risk inherent to them than are necessarily required. A very centralized example, USDC, right? You can go to FTX and you can withdraw USDC as an ERC-20, as an SPL token or across several different networks. And what’s happening there largely is because the mint authority to that is centrally controlled. They’re able to issue new, quote unquote new USDC natively on each layer that USDC is supported on. Do you see the capability of developers using something like Wormhole to make that possible for fully decentralized, both stable coins and just asset tokens?

Not only possible, but already widely adopted in the Wormhole X asset framework, right? There’s over four and a half billion of assets in the token bridge today. And the word token bridge kind of has meant a lot of different things to people at different points in time, right? The old token bridges were bidirectional, state sponsored bridges that sovereign ecosystems would run to communicate to Ethereum, to get liquidity in as soon as possible.

And then if you send that across a different bridge, then you would have like a double wrapped and triple wrapped implementation and just an absolute UX nightmare. When you use something like Wormhole’s X asset framework, you retain complete path independence as you move assets across the ecosystem. Once you’re registered as an X asset, let’s take USD as an example, there’s a couple billion dollars of USD on the bridge today. It flows throughout the ecosystem using Wormhole on the back end, Terra bridge money, uses one more on the back end to expose one of many front ends to users.

When USD flows from Terra over to Ethereum or to Solana to Polygon and then to Avalanche, it retains the same representation on Avalanche that USD flowing from Terra to Avalanche directly or through any other part in the ecosystem would retain. It’s a truly cross chain native asset. It doesn’t fracture liquidity, it fungus seamlessly, and it allows a lot of cool composition.

If you look at something, now like the result in second order effects of this, it’s this theme that we’ve been calling X Dapps, right? So cross chained apps. And we’ve seen kind of the first marquee deployment of one of these apps in the form of X anchor, which is deployed on the Avalanche chain now, right?

And X anchor is just a light set of endpoints that’s deployed on Avalanche. And all that does is it lets you kind of hit some functions that then really assets and/or messages bundled or separately or back to the Terra blockchain and then trigger state transitions on the Terra site. Anchor contracts don’t need to be deployed to every chain. You don’t need to replicate state everywhere, you don’t need to stay synchronized continuously. But you allow for outposts and communications and different chains to then communicate back to the home chain using messages and assets. And now the USD that’s in the X asset standard can be deployed to X anchors everywhere. And it’s a much faster, much more robust getting strategy that has far less communication over.

Austin (37:07):

Let’s dig into just a little bit on like a technical level too. When you’re talking about X Dapps or cross chain Dapps that are communicating via Wormhole, you’re inherently talking about fractured state across multiple L1s or L2, it’s unavoidable when you’re … anything cross chain is inherently working under a fractured state model. How fast does that time synchronization need to be for developers to actually deploy something like an AMM or a club across chain and actually maintain price parody and appropriate liquidity between them.

Kanav (37:42):

Yeah, I’m glad you brought this up. There’s a few different programming models for how cross chain Dapps works, right? One is you try to state synchronize as aggressively as possible. You keep sending messages back and forth. You have allowances, risk limits, tolerances that allow your apps to communicate. And the other is this X Dapps framework where state only lives on one chain and you allow people from other chains to then interact with it.

Now, of course that also comes with its own downsides, right? If you look at something like a club and you’re trying to trigger a cross chain swap using the club from another chain, you are inherently incurring the latency of the two blockchain transactions and the finality assumptions that you want to kind of work with that. The more stateful your application becomes, obviously the more latency and risk constraints everything through. With something like a lending protocol or like a cross chain anchor, things like that. They are less stateful than something like an order book, but order book is probably the most stateful you can get right in the spectrum of applications.

And so any cross chain swap design inherently has to have some additional liquidity back then, that’s like fundamental, right? You can ask people to take risk on your behalf. You can have the protocol take risk on your behalf, but that risk exists. There’s a lot of ways to program around it and create better user experiences, but fundamentally that’s a real problem and somebody has to be compensated with that risk.

Austin (38:56):

For the X Dapp framework, are you looking to actually be able to offload compute to the wormhole level there? Or is it really just … The natural extension of this seems to be that eventually there’s some sort of state storage on Wormhole that Dapps are able to actually access and leverage with some functionally side chain compute resourcing. Are you guys thinking about that as well?

Kanav (39:19):

Yeah. The fundamental cross chain thesis is that there are going to be independent, specialized compute environments that attack their own communities, their own audiences and their own apps. And Wormhole is away for folks to leverage state that results from these autogenous environments and compute the solutions on these environments to compose.

And you can cut that in a million different ways. You can leverage Solana as a state execution machine. You can leverage Terra as your stable coin asset layer and you can represent this third thing as a NFT thing, or you can bundle them all in. But the Wormhole vision itself right now with all the genetic message capabilities that are out there, in the near term roadmap doesn’t need to build an execution layer of its own. It can naturally extend to it. I think you’re definitely kind of pointing to something that’s relevant.

But I don’t know if that’s the lowest hanging fruit given the capacities that exist in current blockchain compute environment. The vision of course is to make people, Web 3.0 users rather than blockchain users or L1 users. You basically want to deploy resources to the most relevant execution environment with the right community, that’s creating the right apps and then expose that to at a higher order to consumers.

Austin (40:24):

Would you describe Wormhole as layer zero?

Kanav (40:28):

I’m rather old school, I think of layer zeros as networking protocols and internet backbones and things like that. I think it is maybe a useful analogy for kind of blockchain audiences given how we’ve very economically can’t use the word L1, so I don’t have an allergic reaction to it, but it’s not my first word of choice.

Austin (40:46):

What would your first word of choice be?

Kanav (40:49):

Interoperability protocol. I’m not that creative.

Austin (40:51):

Yeah. Wormhole is also supporting wrapped NFTs, which is kind of an interesting concept. I think most people don’t think of NFTs as something that’s been bridged and quite frankly, the numbers on Wormhole on bridge NFTs are quite low compared to the success as an asset bridge or a messaging bridge. What was the original idea of using wrapped NFTs? And why do you think it hasn’t caught on as much yet?

Kanav (41:20):

I think cross chain NFTs as a story are just beginning to play out. So there’s about 16, 1700 on the NFT bridge itself. And again, NFTs are also cross chain fungible and composable across environments. They are also part of the X asset framework. And so X assets can mean anything. It can be in rebasing assets like STE, it can be in NFTs. It can be in fungible assets. It can mean anything else, right?

The NFT story started to play out as a result of new other ones trying to access marketplaces that supported one or the other chain, right? And so you get to access as new audiences, you get to create experiences with different communities. You get to access different user bases, but we’re seeing the experiences get a lot richer. So you see something like [inaudible 00:42:00] come out recently, they got featured on Bloomberg for new cross chain staking program where they have in game elements that kind of change based on cross chain NFT staking that are different experiences with different communities. And much like the asset bridge has that kind of globalization and cross pollination of commercial kind of elements. Cross chain NFTs are globalization kind of culture. And incorporating a lot of those elements across games that live on Solana, that live on Terra, that live on other environments and just creating those kind of richer experiences.

And so we’re seeing people make NFTs on one chain, come to Solana, fractionalize them, trade them, put them back in, move them over to OpenSea on Ethereum. There’s all kind of interesting use case patterns. And so it’s definitely been less aggressively adopted than the explosive token bridge or the other generic message applications. But there are still 16, 7,000 NFTs, there are a lot of teams using it for cool and innovative stuff that we just kind of keep up out of the wood works every some time.

Austin (43:02):

Do you think that’s social? Do you think that’s technological? Do you think that’s just like the ecosystem hasn’t matured enough? I think I’m surprised how much … well, I guess surprises maybe the wrong term. People have a lot of emotional attachment to an NFT, in the same way they don’t have an emotional attachment to a Bitcoin. They may have emotional attachment to the concept of a Bitcoin, but I would be upset if I lost my particular Degen ape, even if I got a different one for the exact same value. Do you think that factors in at all to how people view the concept of wrapping an NFT, that it somehow weakens the authenticity?

Kanav (43:39):

I think for a lot of purists, it does. I think it was just so worthy, right. For the most part, people aren’t even going to realize, the large end of this consumers like buying these things, an NBA top shot or air, or any of these other platforms, it’s something on the app for them. And eventually it’s going to be extracted away as we draw to Eth, we draw to Solana, we draw to wallet, connect wallet, and it’s going to be kind of as simple as that. And so we’re always going to have purist stakes, but I think that’s going to remain within our little chamber here.

Austin (44:05):

For Jump Crypto in general, how do you view NFTs? There are obviously firms now that are dabbling and market making and NFTs. Is that something that you’ve looked at and if not, what was the decision not to enter that space yet?

Kanav (44:19):

It just doesn’t take a lot. We are looking at trading opportunities. You are looking about margins, you’re looking about what predictive offer you can have, like what the edge you can have on a traders and then how many times you can apply that edge, right? It’s just as simple as that. And even if you can get a 30% margin on something that trades a hundred million like week one, I mean, [inaudible 00:44:40] now.

But if you have a low volume asset class, even if it has slightly higher edge, and it is harder to predict and more dimensional, this is on a good researching decision. So as that volume changes, we will continue to stay on top of it. And I don’t know if these are trading tens of billions of dollars every day, and have really interesting datasets, I’m sure we’ll be trading them.

Austin (45:00):

If the market hundred X in size, you wouldn’t be opposed to it, it’s just the sizing opportunity issue right now.

Kanav (45:08):

[inaudible 00:45:08] you can’t be the richest man. It’s about identifying if there’s opportunity and executing all native there is.

Austin (45:14):

Looking at wormhole, one of the things I do want to touch on is the wormhole hack and exploit that happened a little while ago. It was one of the larger bridge hacks at the time. It was eclipsed a few weeks later by an even larger hack of another bridge, also targeting stolen Eth in this process. I’m sure that activities and projects that Jump has been involved in have had larger losses of money or similar volumes of money just based on the area you operate in. But this is one that inherently to the nature of Web 3.0 is very public. How is that like internally knowing that your core contributors to a project that suffered this kind of exploit, and also that failure is now a public failure, as opposed to maybe where it would’ve been a private failure before

Kanav (45:56):

Building is hard, building in the open is even harder. And building in a decentralized open space where there’s a large network of participants, consumers, affected people, the stakes we’re playing in, right? That’s the stakes that every DeFi application, that every L1 at every bridge and that everything in Web 3.0 that aims to do something meaningful inherently adopts and has to learn to deal with.

The hack was big punch in the gut, obviously a big financial loss as well. The fundamental nature of smart contracts is that the code and code can have bugs. And this exploit was kind of deep, deep, deep down in the stack, in kind of like Solana instruction verification account check that was missing. The auditors listed our team that has independently been one of the biggest bug bounty finders in the space missed, and code based at the opportunity to be out in the wide for seven months, kind of had unchecked.

The day of the hack, of course really, really rough. Jump is not used to being a public institution. So this was like you said, a very public kind of fallout in nature. I can’t possibly have been prouder of the way the team reacted to this incident. We kind identified it within short course of it happening. We pulled the meeting room together, identified the bug, fixed up a batch, managed to coordinate the guardian network to bring it up, bring it down, announce our intent to refill the gaping 320 million hole within an hour of the incident being reported on, and brought the bridge back up within 18 hours to end to end.

Building bridges and building cross chain is very, very hard. And that’s where the reward for it, building it right, is even harder. You don’t even make 320 million decisions very lightly, and this should hopefully signify you how much conviction and faith we have in the code base in bringing it back up in 18 hours. It should tell you about where we think this whole space is going and where Wormhole is going and where interoperability is going and what a core piece of infrastructure in that realm would mean.

Security continues to be extremely, extremely top of mind. We have a 10 million bug bounty. We have an internal red team that’s basically thinking about breaking Wormhole and our key projects every day. We have multiple audit from [inaudible 00:48:12] with lots of audits going on, pretty intense security review practices, all of which can be found publicly online. And I’m incredibly confident that Wormhole has come out more stronger from this incident. The team has come out kicking and that we’re building one of the best and most trusted inter op solutions out there.

Austin (48:32):

Looking across the ecosystem, let’s say over the next 12 to 18 months, what are you personally most excited for and what keeps you up at night? What do you still have worry around?

Kanav (48:44):

I’m looking forward to a whole bunch of things. So definitely very excited about all the advancements that we are seeing in the succinct proof and zero knowledge space. That stuff is just awesome, it’s magic. And I’m just so excited to see all the things that’s going to unlock for us. There’s a lot of interesting problems in the hardware acceleration space that need to be made to make that possible. There’s a lot of problems algorithmically that are kind of being uncovered there. And I think hopefully this conversation has lent on that we have a big infrastructure mindset. When I say streets and sanitation, that’s kind of what we think about every day. That’s what we’re looking forward to. And on what we can build to and contribute to that.

Austin (49:19):

You said something I got to get a little more info. You said specific hardware to accelerate certain kinds of applications. The only place we’ve really seen this so far across the entire crypto landscape is ASICs for Bitcoin mining. You see GPU mining optimization, but again, nowadays I wouldn’t necessarily even call GPU specialized hardware. It’s really commodity hardware at this point that’s just deployed for a specific application. When you’re looking at the space, where are you seeing actually custom silicon or FPGAs becoming something that it makes sense to deploy?

Kanav (49:50):

Yeah, I mean, definitely for zero knowledge provers, right? So like two verification times have compressed a lot to the point where it’s pretty feasible on most blockchain environments today. But proving itself is still super, super resource intensive. That’s where there’s a lot of simple math operations that can be encoded into Silicon and into FPGAs or ASICs to speed up the process significantly. And that’s where we are seeing a lot of adopt. There’s already a lot of people working on this on hardware acceleration using FPGAs, maybe even ASICs on zero knowledge provers.

It’s a little bit of like it’s tough to say when the right time is because there’s new changes like algorithmically coming out all the time with the new advances in new papers. And so when you spend a whole bunch of time just optimizing Fast Fourier transforms. And then the next paper makes Fast Fourier transforms not relevant. It’s tough to make a decision on when the right time is, but I know there’s a lot of work already going on into it. And it’s a space that we are very familiar with and that we are also excited about. And mostly, mostly positive stuff on the regulatory side.

Kanav (50:56):

As of recently I think there’s a lot of good faith engagement from regulators around the world on setting frameworks and policies for how kind of all this stuff gets put into place. Outside of maybe China we haven’t seen anything very aggressively or handed on cutting off innovation. We even saw India now finally starting to open up. And so I feel more optimistic about the regulatory landscape than I did 12 months ago. We need a new influx of builders to keep coming and building cool experience and leveraging this technology where we’re seeing that happen. We need capital being continued to commit to this space where we’re seeing that happen.

Austin (51:35):

The inverse of that question, what are you most concerned about on a macro level for the space still?

Kanav (51:39):

Asset pricing is of course highly dependent on macro environment and that is unrelated to crypto, right? And there’s just like, it’s its own thing. And so we’ll see price movements on a different time scale. And if you see a very sustained global macro depressed environment, then we’re going to see less capital, less builders and less momentum in the space. And I think that’s probably the biggest overhang we have today.

Austin (52:03):

In the long run we’re all dead.

Kanav (52:05):

In the wrong run we’re all dead. That’s right, so let’s keep building.

Austin (52:09):

Yes. One kind of last question here, I think if you rerun the clock maybe three or four years, the prevailing wisdom in this space was not that traditional financial institutions were going to expand their vision and embrace blockchain and we’d call it Web 3.0 at the end of the day. And you’d have Twitter profile pictures of NFTs, you’d have Jump Trading building software that’s open source for a decentralized environment. And we really have seen that that is what was originally pitched as a forked parallel path of economic development.

Austin (52:42):

It’s a little bit more twisty curvy than we thought it was going to be. And there’s a lot more integration with traditional companies. As crypto has a thesis about it, that it’s moving more consumer, right? Across the spectrum you see more normies getting into crypto in one way or another. Does the existing market of specifically the United States and Europe where you see very few competitors within an ecosystem.

Austin (53:07):

There’s basically only two phone companies. There’s basically only three cell phone companies. There’s basically only four internet provider companies. Across the spectrum you see very non-competitive markets. When you look at the consumer landscape in the United States, do you imagine that we’re going to see similar patterns rolling out there as we saw in the financial industry, or we really are going to go back to that idea of a parallel execution model?

Kanav (53:30):

Yeah. I’ll strongly state that I don’t hold a heretical view of this kind of being a completely forked off parallel path that has no relevance to anything that we do today. I think it’s an amazing technological invasion that gives us tools to coordinate resources in an untrusted environment. And that’s unlocking a lot of magic.

Kanav (53:49):

But that again bleeds in with the rest of the real world, which is also big and has its own dramatic pieces of innovation and with a whole bunch of other stuff going on. I think one of the most exciting things has been kind of the global equalizer that crypto can serve to be. Yesterday we saw Polygon come out with an integration with Stripe. And these are three kids from India that had no early supporting or backing that kind of boosted the network on their own and are now competing on a very, very competitive landscape with people from every single part of the world that are very well resourced, competent teams.

Kanav (54:23):

We see [Inaudible] coming from Korea. We see teams from Australia and New Zealand over the [inaudible 00:54:28] guys. We see people from Berlin and the US and everybody competing on the same, not only the similar consumer markets, but also on the same capital markets. And there are network effects that accrue, but not cannibalistic network effects that accrue. That makes me very excited about where the space is going overall. When we talk about integration points itself, it’s going to largely depend on [inaudible 00:54:52], right? And that’s like an unsatisfactory answer.

Kanav (54:55):

But if you’re talking about financial markets, crypto is already integrated heavily into the financial markets with 15 excellent international venues that are competing, so we already have a fractured environment. That is before the [inaudible 00:55:08], the NASDAQ, the CME groups have made their moves in the space. And they’re clearly not going to be monopolies in crypto, obviously, right?

Kanav (55:16):

If you look at something like a telco and interactions with like cell networks still remains to be seen, whether like decentralized constructions of those kinds of things can be competitive. I mean, building telcos and stuff has such strong network effects and so many economies of scale. And it’s unclear whether a Web 3.0 means of accruing that value to a decentralized organization has the ability to accrue the similar kind of network effects and so remains to be seen. But I’m excited to see it play out.

Austin (55:43):

I always enjoy getting to pick your brain about where these technologies are going and the intersection of a very traditional financial world with this new global system that we’ve all been building. But thank you so much for joining us for spending some time digging into this stuff.

Kanav (56:00):

Thanks a lot for having me on Austin. This was super fun and as always, love chatting, so yeah, we’ll see you again soon.

Austin (56:04):