Transcript
A (0:00)
Incumbents struggle to sell to startups because they're bound by the rules of P.
B (0:04)
And L. I think taking a more crypto native approach is actually better, regardless of whether you want to offer the product to a crypto native audience or to a more traditional audience.
C (0:13)
Where you see autonomous labs and autonomous science being adopted first is probably more of a function of the market that it's operating in.
A (0:21)
If you attract all of the new companies at formation and then grow with them as your customers become big companies in their own right, so will you.
D (0:30)
As the year winds down, our investment team looks ahead. Our 2026 Big Ideas highlight the problems, opportunities and shifts we expect builders to take on next this episode is about three big ideas about new Rails. Not incremental improvements to existing systems, but foundational primitives that make entirely new markets and workflows possible. You'll hear how programmable money evolves beyond basic stablecoins, how autonomy starts entering scientific research through labs, and distribution itself becomes a strategy when startups sell to other startups at formation. We'll start with the rail that's already visible. Stablecoins going Mainstream Guy Willett argues that stablecoins are only the beginning. The next phase is on chain credit origination and new synthetic products that are easier to scale than simply copying traditional assets onto a blockchain.
B (1:19)
Here's Guy My name is Guy Willette and I'm a general partner on the crypto team here at A16Z. This year my big ideas are origination and purpification. In 2025 we've seen stablecoins go mainstream with increasing outstanding issuance and payment volume. And one of the things I've been thinking about is what the most important second order effects of outstanding stablecoin issuance will be. I think a lot of the existing stablecoins look effectively like narrow banks today where they hold user deposits in fiat or perhaps in treasury bills. I think it's very unlikely in the long term that we scale on chain finance exclusively through Neurobanks, and so I've been thinking much more about how we can facilitate credit and capital formation on chain. There will be a sort of new role or entity that's very important, which is something akin to a private credit fund helping to facilitate loans on chain. If you look at the way things are maturing on chain for crypto, you see I think a very similar market structure to what's happening in the traditional financial world after the Great Financial Crisis, in part because of Basel iii. There's a lot more non bank lend entities like Large private credit funds that have significant equity capital. So banks are doing much more lending to credit funds who are making loans to end depositors. This is very similar today in crypto to how I think stablecoins will effectively end up lending to curators or to asset managers who will end up making loans to end users. And one of the things I'm spending a lot of time considering is how we move credit origination on chain. So instead of originating a series of loans off chain, a credit card receivable for example, then tokenizing that, that potentially securitizing it, and moving that on chain as a copy of an off chain asset, how we originate credit natively on chain. And I think this is important specifically because it can drastically reduce back office costs like loan servicing, which in many cases can take 1 to 3% of the outstanding credit facility itself every year. So it's incredibly expensive. But I also think doing on chain origination will allow for much more composability between different defi projects. In a very similar vein, when we think about how to move traditional assets on chain, lots of people focus on tokenizing those assets, meaning creating an on chain record or copy of the existing asset that exists off chain. We've seen many more perpetual futures projects purpefy or create a perp related to an off chain price feed or an off chain asset. So instead of tokenizing something like an equity and putting it on chain, you could create a perpetual future for that equity. This I think is interesting in the US and in Europe and in robust capital markets. But I think it's particularly interesting for emerging market equities, things like the Indian equities market for example, where existing derivatives like zero day options often trade more notional volume than the underlying spot. So I think there's already pretty good product market fit for derivatives on these underlying assets. And we could see a lot of those move on chain and in the coming years. Stablecoins have gone mainstream today. But I would argue we need more than simple tokenization of fiat dollars, fiat currencies. And I think there are a couple of reasons for this. The first would be I think we need a better way to facilitate credit on chain than minting stablecoins and then using those stablecoins for loans. I think in many cases stablecoins look like narrow banks and we need some way to do credit on chain. And so I think there's an interesting opportunity for curators that today operate on something like Morpho or private credit funds, someone like Apollo that has put acred on Chain take more of an active role in helping to manage the existing stablecoin collateral. An interesting form of this is there are lots of call them synthetic dollars because they're not strictly speaking stablecoins today. But that means a dollar representation backed by off chain traditional assets, where the normal token itself is fully collateralized by fiat dollars off chain, but the staked representation of it then would be collateralized by higher risk and higher yield credit assets. And Athena popularized this idea initially a synthetic dollar that is backed by a cash and carry trade, a basis trade for perpetual futures. But we're starting to see this proliferate into other asset classes and into other structures, things like currency, cash and carry trades, synthetic dollars that are backed by physical infrastructure akin to solar panels or batteries or GPUs. I think emerging market equities are perhaps a more interesting asset to bring on chain than let's say US equities because they have a fundamental product value proposition as opposed to simply access. The thing that most excites me about putting US equities on chain is allowing global access to, you know, traditional American financial services and assets. But when we think about an example like the Indian equities and derivatives market, in many cases zero day options trade higher notional volume than the underlying spot assets do. And so I think there are many places where users and retail investors are actually more interested in trading derivatives. And those derivatives could be made much more efficient and given much greater access by moving on chain. So I think the idea of perpification is very interesting. And just to say what that means, very literally, that means to make a perp or a perpetual future out of what is today an existing spot asset. So a perpetual future is a derivative that allows an end user, an investor to tune their leverage limits in a very intuitive and simple way. And there is a perp price that trades against a mark price. And when the two prices diverge, there are fees or the funding rate that are charged to the holder of the asset. And I think purplification is interesting for a wide swath of traditional assets because it's much easier to create a synthetic representation on chain that can scale to very high notional volume than trying to tokenize existing assets basically copying them on chain. And so to say it in briefer terms, I think the idea of creating synthetic representations of traditional assets on chain is more easily scalable than creating literal copies of those assets on chain today. So specifically, when we think about the credit markets, lots of people are interested in tokenization today, but I don't know that tokenization brings as many benefits for credit assets as people would imagine. I'm much more interested in native on chain loan origination because I think it can significantly reduce the back office costs that are traditionally associated with creating basically asset backed securities or other forms of credit assets. I think taking a more crypto native approach is actually better regardless of of whether you want to offer the product to a crypto native audience or to a more traditional audience, because you're going to have much greater back office efficiency in many cases. And a lot of these details are still being figured out, but I think there is great potential there when we talk about synthetic dollars on chain, meaning a token on a blockchain that is pegged to a dollar denominated representation but is collateralized by some underlying set of financial assets or in many cases a specific structured product. I think there are a lot of opportunities to take things like currency, cash and carry trades or traditional infrast financing for things like GPUs or solar panels or batteries and reflect those on chain. And really this looks very similar in a crypto native sense to how traditional trading strategies have been turned into ETFs in existing markets, providing greater access and legibility to users. I think that will happen much more on chain. I think there's a real opportunity for builders to create, let's call it a synthetic dollar factory to take these existing these interesting trades or investing products and peg them to a dollar, offer them to existing investors and help collateralize stablecoins with those synthetic dollars.