← CRYPTO 101
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- [00:00]
Bryce
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- [01:24]
Brendan
All right, ladies and gentlemen, all of you good wonderful citizens of Cryptn Nation, welcome back to another episode of the Crypto 101 podcast. I am super pumped. We have a guest joining us today who's already been on the show back in October of this past year, October of 2024. This is the Redstone co founder, Marcine Kazmier. Check calling in and gonna have a great talk with us. Marcine, how are you doing today?
- [01:54]
Marcin Kazmier
Yeah, I'm doing fantastic. Business is growing, a lot of challenges and interesting use cases on the horizon. Pumped about this conversation. Thank you for having me.
- [02:04]
Brendan
Absolutely. Thanks for, for joining us, for staying up late. I believe you're on the other side of the world and so we're over here just getting the day started. Brendan, how are you doing man?
- [02:15]
I'm doing good as well, Bryce. You know, enjoying some of the volatility, preparing a little bit for the day and overall just good and happy to be here.
- [02:25]
Love it. Well, Redstone is playing a really important role in the crypto industry, particularly as it comes to real world assets or this whole theme of tokenization. And so Marcin, we want to have you jump into really like the core message, the core mission, the vision that you guys are building at Redstone. Why did you decide to build this protocol and this platform?
- [02:52]
Marcin Kazmier
That's a good place to start. We started Redstone to create the most scalable and builder useful Oracle platform out there, delivering reliable, secure and diversified data feeds. And what I mean by that is the infrastructure we've been building since late 2020, early 21, is ready to support thousands of blockchains, almost infinite number of assets and all the builders that are out there, right. So by principle, it's just that we are ready for the mass adoption of the blockchain technology globally. We believe that ledger, that technology is fundamentally better than the financial system that was created like years back and is very much segregated and detached from each other. The US financial system is different than European one. And in Europe you have Poland where I call from, where we have Zloty, which is another currency and we have our own banking system and you go to, I don't know, Singapore or Japan and they have their own banking system and all of those systems do not talk with each other like efficiently. So our belief is blockchains are just ultimately more efficient. And in those blockchains you just need to deliver accurate data feeds. Because blockchains by nature don't have access to real world information from the Internet or from day to day basis like what's happening in the economy or governments and whatsoever. And we want to be this critical infrastructure that is enabling that for all the builders so that you can build informed smart contracts, defi applications, composable finance and all the other juicy and beautiful stuff that the blockchain technology gives you.
- [04:40]
Brendan
I love it. And so you're really what I would call the connective tissue between a lot of defi. And it's important because, you know, people might not really be, you know, familiar with the Redstone platform because it's not maybe as front and center as something like Uniswap, where people are on the front end using it day in and day out, but it really is a lot of the infrastructure. And so, you know, are there areas of Redstone where the user or the consumer is really going to be interfacing or are you guys going to just be interfacing with other protocols, other developers and so on?
- [05:17]
Marcin Kazmier
Really good question. So we are the, let's call them silent nights of making sure that the protocols are secure and the funds of the users that they deposit are priced correctly that no wrongful liquidations are happening in DEFI markets. Because primarily right now, at least Oracles are used for making sure the liquidations happen when they are supposed to. So when a position hits the liquidation threshold and everything in DEFI is without bad debt because this is very contiguous and can spread across other protocols and can cause also a domino effect out there. So we can say that we behave like the knights. So making sure that everything is very much secure and according to the book in that sense, talking about the user facing aspect. In example, we did launch a token since we chatted last time. So in March of this year, 6th of March, we launched RET, which is the primary token for the Redstone ecosystem that allows users to stake it on eigenlayer avs and secure the ecosystem of Redstone. Right. So making sure the data feeds that are delivered by data providers in the system are up to date accurate and in the case there is any malfunction they can be slashable as well. We have a couple of ideas for user facing products too. Can I share the screen over here by the way?
- [06:47]
Brendan
Yeah, of course. I believe those permissions should be enabled on the bottom of your screen. It should say share, feel free. And yeah, if people are following along on Spotify or Apple with no video, hop over to YouTube and you will be able to check out some of these cool graphics.
- [07:05]
Marcin Kazmier
Okay. Can you see that?
- [07:07]
Brendan
Yep.
- [07:08]
Marcin Kazmier
All right, so for everyone who's listening on you know, Spotify, I'm presenting app.redstone finance which is essentially like a user facing interface for the data feeds that we deliver. Specifically on the push model you can see that we deliver altogether 522 unique like tickers in the push model. And when you go to the pull model you're going to see that it's 256 in production used right now and data feeds. So all the tickers that we have configured but not all of them are actively used. Right. We have over 1,300 over here and if you go to the push model, so maybe quick reminder, push versus pull in simplistic terms, imagine you have data of chain and push model is pushing it onto the destination blockchain in intervals. So an example here you can see BNB chain, you can see the address where the updated feed is being done. So in example, let's take this one, it's Vibil, which is the tokenized T Bill Market Fund by Vaneck. And Redstone is the sole Oracle delivering that price feed on bnb. Chain to that contract and you can see the latest answer was $1. And the deviation threshold upon which the next update is going to happen is 10bps. So 0.1% and it updates every 24 hours regardless whether the deviation threshold is met or not. Right. So those are the two major conditions for the push model. And if you go into specific feed over here, you're going to also see historically how it has been behaving. This one is, you know, tick bills, so nothing spectacular, it just holds like $1. But on other fees like BTC would see like more volatility. So this is one of the aspects that let's say users can go and play around to see historical data to look on the networks that we support. Right now there are 66 in the push model and 110 across both push and pull all the cryptos. So they can select a specific one to see how it's configured across the chains. But one thing I want to show you that is a feature we haven't announced yet publicly. So giving you guys alpha is if you go to send update transaction, you've got a note that update with metamask. With metamask transaction, if you click that, you're going to be informed that besides the regular deviation threshold and heartbeat, you as a user can update the feed right now. So you can essentially ensure that at that particular moment when you click push on chain and update, you would, you would get a metamask notification to execute the transaction. You have to pay gas for that, right? Because you interact with the blockchain, so you update the state on chain for the freshest data. And the reason you can do that is because every single package like this has a unique signature to that. So if you were to an example, click push on chain and then try to tamper with the data that is within this package, the signature is going to change and the on chain validation of the signature is going to revert because it's going to be changed. Right? So as long as you are just the messenger, let's call it the pusher, then everything is all right. And the reason we created that, there are two major ones. The first one is to showcase the user that they can update the on chain themselves so that they can interact a bit more with our infrastructure, which is, you know, predominantly B2B focus, but to give them at least an idea of what's happening in the background. But two also, if you don't want to trust fully that we keep delivering according to those parameters over here you can create your own relayer that you know would do 0.3 deviation threshold or, or in example 0.7. Right. So if you are afraid that we are going to miss 0.5%, you are free to set up your own relayer that is going to update on chain every 0.7% so that in very unlikely case that Redstone fails, you have a backup in a sense. And here an important note, Redstone has never ever had a single hiccup in a sense of mispricing event downtime or not delivering according to those parameters over here. So that would be the quick demo.
- [11:44]
Brendan
Wow. It almost seems like, and I don't know if this is a crude analogy, but similar, but like a chainlink 2.0 or something where it's kind of connecting a lot of these disparate value pools and securing so that there's no spoofing or tampering in between the communication channels. Is that a helpful way to think of it or a hurtful way to think of it?
- [12:10]
Marcin Kazmier
Well, it depends who is the listener. Right. From my perspective, comparing to Chainlink specifically, they have their own, they call it dawn decentralized Oracle Network. So only whitelisted addresses and whitelisted providers can deliver on chain. So the issue that we see in that is if those fail, there is no proper backup plan to that. Right. Because no other person has has access to the actual data and delivery on chain. And over here with such a system, you can always configure your backup systems as you want. So imagine you would in fact configure for, let's call it btcusd like one of the kinks of the price feeds on BNB chain. We push it every 0.1% and we pay gas for every single update on chain. So this is, let's call it fairly expensive to maintain. But if you want to have a backup, but don't want to incur the cost ongoingly, you can just set up 0.2 over there and only the moment we start missing your system will activate and keep track of that. It has never happened historically, but we believe black swans are real and they happen. People try to neglect them and try not to think about them, but you have to be ready for that. And from the principles we create a system that is just extremely, extremely robust.
- [13:32]
Brendan
Yeah, you know, it's fascinating how Redstone is able to be compatible with so many different blockchains and projects. And I think what that really empowers you all to do is to help out and bolster a variety of other crypto verticals. You know, usually when we look at crypto projects, they are kind of hyper focused in on a niche. But Redstone is almost uniquely positioned to help out a number of industries just with what you all do at a base level and how flexible you are. And I've seen that one of the big areas that you all have been involved with here recently is the RWA and tokenization space. And RWA stands for real world assets. And this, this industry has been one that's just a common reoccurring trend on the pod. But you all again have been getting more and more involved with it. What role do you all play in that tokenization side of things?
- [14:28]
Bryce
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- [15:47]
Marcin Kazmier
Yeah, so I hope you don't mind that I do a live demo this time because actually I like to brag about the visual, visual aspect of our platform. So as you were mentioning, we play a big role in RWAs and one of the major aspect of it there is Securitize, which is the biggest tokenization platform in the world, decided to pick Redstone as the official primary oracle for all tokenized assets they offer. Therefore, we are the official oracle for blackrock, Biddle, Hamilton Lanescope and Apollo Accredit. So those are like the four major funds that Securitize tokenizes. There's also kkr, some stuff happening on Mantle and some that are in the works right now. And we will be providing price feeds ongoingly to new and new assets. And there will be a very, very good question. Why do you need an Oracle in the first place when you tokenize something when you have a real world asset on chain? And answer is pretty simple. What Securitize does is they do a token representation on chain of a specific asset. So imagine you have a fund like let's call it a T bill. You have one T bill and you give it to Securitize. What they would do is they take a custody of that T bill and they give a token representation on chain. Imagine on Ethereum specifically and then that token representation on chain is living over there. The issue is that token on chain has zero information about the price of the asset that is in the real world. Right. And T bills accrue value. Usually it's like daily. So specifically for Biddle it's like a daily accrual. So if you see over here like Bidl, Ethereum, dairy accrual, it's not going to show just one, it's going to show the accrual over time. Right. Specific percentage points that it accrue every single day. Right. Because if you would put like a magnifying glass to what I'm showing over here is an example over here. Jun 10 at 8am 50 I believe it's CET or UTC. I don't remember exactly like what it was the configuration over here. But every single day at the same, at the same time it's being updated on chain so that the protocols have an information what was the actual yield accrual over the past 24 hours. And as you can see even over a course of one month there has been pretty decent variability in that sense. Right. And then specifically Biddle by BlackRock is also different across specific networks. So Biddle on Solana, Biddle on Ethereum, Biddle on other networks have different asset class, which means they're not like fully fungible to each other like one to one. Yeah. So as we progress with real world assets, we keep on delivering the price feed aspect over here and we already are talking about enriching the information with some other data such as volume or maybe information about how many new users onboarded to this specific asset. It's just a matter of what people actually want to use. Because the premise I told you about in the very beginning, like being able to support all the builders out there, is being executed in the sense that we deliver what people ask for and what they need, not necessarily to deliver everything out there, because then we are just going to get distracted and people will also ask, okay, what can I do with it? And if we don't know what you can do with it and you don't know what you can do with it, that is a problem. But if you come to ask and ask us, hey, I have this specific problem I would like to solve, then we can bring you a tangible solution.
- [19:37]
Brendan
Yeah, you know, it's so cool that we're at a spot now where BlackRock, the world's largest asset manager, over $10 trillion in assets under management, they're coming in, they're partnering with the crypto industry and you all are able to be a service provider and even involved in that process. I guess I got two questions for you in regards to that. Like, what is that like? And how does that conversation even initiate? Is that where, like, they're seeking you out or is that something where you're seeking them out?
- [20:06]
Marcin Kazmier
Yeah, that's a really good and viable question. I stopped sharing. I can come back any moment. But I believe that's not related to the platform itself here specifically, our gateway was securitized. So the story of Redstone is that in 2023 and 2024, we brought a lot of innovation to the defi market. In example, we were the first Oracle to create price feed for USDE, for Athena wee for EtherFi. We were helping Lido to spread across many blockchains. Back when liquid staking tokens were hot, like, you know, 2022. I remember those days very well, very vividly because that was also the moment that they asked us to use liquid staking token instead of liquid staking derivative. Maybe you remember, initially they were called lsds, and then it turned out that derivative is a pretty problematic word in the, let's say, regulatory aspect. So liquid staking talking was just more friendly and better for them to utilize.
- [21:12]
Brendan
So now that you have this partnership with BlackRock, there's been other, I guess you could call them like financial providers. There's been other asset managers getting into the space. Does this kind of open up the door to a bunch of other, you know, tradfi names that can kind of join in in a similar manner? Are you already talking? I mean, I don't know if you can even mention this. I'm not sure what you signed, but are you already talking with like other big asset managers and tradfi institutions about doing similar things or maybe even doing different things where they want to come in? I know me and Bryce were talking earlier today and this is away from the topic of tokenization but like JP Morgan, Deutsche bank and bank of America are all looking into stablecoins and you know, now that we have BlackRock and I believe Vaneck and Apollo already working on chain with Solana, you got to think that there's other big names like that out there that want to get a piece of the, the pie.
- [22:10]
Marcin Kazmier
I cannot comment on that.
- [22:13]
Brendan
Okay.
- [22:14]
Marcin Kazmier
No, I'm just joking. Come on. Like, honestly. Okay, being, being like transparent. I was surprised how what word to use easygoing. Some of those traffi people have been because many, many times a person that is leading, let's call it the digital asset sector is a guy that is or lady that is, let's call it 30, 35 year old. So those people also were growing up getting the first, let's say digital revolution happening, like you know, going from cash to Internet money, the first one. So let's call it credit cards and regular Internet banking services. So they understand also the shift that is happening out there and they can use a lot of analogies over the, over the years and they are still, let's call it, hungry enough to embrace the next challenge that is going to take again, let's call it 10, 15 years altogether to properly embed into the broader economy and the system. Right. Because it's baby steps. Right. In Poland, in example, we've never had checks and I believe in the States it's still a thing. Right. You can write a check, right?
- [23:29]
Brendan
Correct. Yeah.
- [23:31]
Marcin Kazmier
So this is like I don't even understand exactly how this financial construct works, to be honest and how not to make sure it's not tampered with and those kind of aspects. But answering your question, yes, majority of big serious financial institutions right now look into blockchains and the reasons are simple. One, fundamentally it's a technology that decreases the cost as I mentioned in the beginning to the biggest financial institution globally. BlackRock is very active over there and Larry Fink many times mentions Bitcoin as a very interesting asset class that gives a good exposure for diversification in the portfolio and so on. There are new ETFs being discussed. So we have the Bitcoin and Ethereum one. Probably soon we are going to see Solana and other coins out there which some people would say, hey, this is against the decentralization nature of blockchains. But I would say look, it's adoption. I mean if people want to trade ETFs, why wouldn't you allow them to do so? Right. Those that truly care about decentralization would always go to the on chain rails, right. And let's say self custody and whatsoever. But those that want just to have the ETF exposure, fine. I mean let them have it, let them cook. So vast majority of those big players are already in talks and I can tell you like every week I have call with a new institution trying to understand where they are in the cycle. So if they have a specific project they want to implement and they are working on it, or they right now want to explore what's possible, what's in the, let's say wider spectrum of solutions that we could offer. But there is one caveat. In crypto people have adhd, you say in English, I believe like they, they do, yeah.
- [25:27]
Brendan
Short attention spans.
- [25:29]
Marcin Kazmier
Exactly, short attention spans. And they do expect things to happen overnight like they expect. If a product works, let's make it 10x within a week, let's make 10x leverage, let's make distribution like globally immediately and let's go and don't care about legal, don't care about the second order effects over there and whatsoever. And this is absolutely not the case of the big boys of the big institutions. They take it step by step to see if nothing is going to break in the process and then they can encourage and showcase to the management, hey, this is actually working. You should dedicate like additional budget, you should dedicate additional like team to make it grow and expand as we progress. And the beautiful part is I believe in the next two, three years we are going to see a lot of innovation and breakthroughs happening in the on chain environment. Because I see some of those bigger projects being starting to be implemented right now and the effects of them are going to be again in 8 months, 20 months, 30 months and whatsoever.
- [26:34]
Brendan
I guess my question there is do you think it's going to come on, you know, Ethereum or Salana? I know you guys work with both and you know Ethereum is really, you know, the kind of the, the backbone of a lot of this institutional level of defi. But Salana is where a lot of the consumer adoption and you know, crypto traders went. Where do you kind of see that breakdown? And even if people come, you know, ask, you know, your council and your advice on building a, a solution and you say all right, you know, Salana is Going to be the right way to push you for this kind of application. Ethereum will be the right way for this kind.
- [27:07]
Marcin Kazmier
You give me a hot potato. Let me first, like turn the tables. What do you like guys better, Ethereum or Solana?
- [27:14]
Brendan
It's a good question, I guess for me, I like them both, you know, kind of like for different reasons, I guess. Like I like, you know, some app, some of the defi applications using them on Ethereum, but I don't really go out and do much of the the L2s that much. But then for meme coins, of course, it's all on Salana, so you got to have a Solana wallet and Phantom. What about you, Brendan?
- [27:39]
Yeah, I was going to agree. I like them both for different reasons. I think that if you want the security and the legacy, then you have to go with Ethereum. It has been the household name, a little bit stronger, more secure, I think, than Solana. And that's where you have like pure reputation. But you're going to be sacrificing scalability. I think Bryce is right. When you start getting involved with some of these more like fun meme coins, even things like Deepin, that's where Solana starts to dominate. And they also have more scalability. So I kind of view them as great at different areas and I think that's why we see projects kind of split now. The unique thing is that up until recently I've noticed that Ethereum dominated the tokenization in RWA space. But now we are starting to see that Solana is, I don't know if taking some market share is the right word, but it's getting involved and really stepping its feet into that industry where previously, you know, I'd say a year ago didn't have a giant presence and now it's been building that up over the maybe last 12 to 18 months or so. So I don't know, I think when people come to me, I say, you know, what's your approach? Are you like a very serious, methodical, secure person? Well, then maybe look at Ethereum. If you like being a little bit more risk on. You like new tech, you like scalability, you like some of these maybe more volatile ideas, then I think go with Solana. And there's not like one's horrible one's, you know, amazing. I don't know, I see them being both significant players in the same way that if you look at most modern companies, there is a competitor to everything, right? For Walmart, there's Target for, you know, you look at the auto industry and there's a million different players. There's Home Depot and then there's Lowe's. Like there's Microsoft and then there's Apple and I kind of view it the same as Ethereum and Solana.
- [29:36]
I feel like Ethereum is maybe more like Gucci and Solana is Walmart. Yeah, that should, that's the comparison. But what do you think Marcin? I. I like Brendan's setup there.
- [29:48]
Marcin Kazmier
Wow, those are. Maybe I'm going to steal it. Ethereum is Gucci and Solana and Walmart. Wow, that's a good one. Okay, so here's my. The reason I asked you that question is because you're going to realize probably three years ago or two years ago even you would probably answer differently, right? And Solana has shown pretty. At least I would answer differently in a sense that I would two years ago, I would say because of the FTX connotation and some of the, let's say, uptime hiccups of Solana. It has a lot of excellent value proposition to the end user when it comes to ux, when it comes to speed, when it comes to gas cost. Those things you cannot deny they are present and they also have very good defi infrastructure in the sense like there's Camino, there's Drift, there's Jupiter, there are many other protocols out there that are very well structured that are offering good yield and good strategies out there. But two years ago, still those kind of FTX and uptime hiccups would be also part of the evaluation of Solana, let's call it. And now because there hasn't, there's been a pretty long period right now with Solana not having any issue with the hiccup. FTX situation is being resolved. And honestly I don't follow it that well, but I think even people who had money over there ended up getting more or like the assets that FTX hold it are more than the payouts that they have to do. Sorry, I'm not an expert over there, but it ended up not as bad as people assumed in the very beginning. And also Solana has shown a huge, huge consistency when it comes to building. So throughout even those lower times they kept on building, they kept on encouraging new people, they kept on shipping good conferences like you know, Solana. Breakpoint is also known for being very well organized and it also shows that you can attract the regular people that do care about those kind of aspects Nowadays I would say they are being compared more and more. Not like that Ethereum is D chain and Solana is like one of the competitors. They are chosen for different reasons, but for institutions specifically, they in general prefer Ethereum. At least that's my experience, because it's been bulletproof and those kind of huge institutions like a lot years of resilience, years of working without any hiccups. There is a reason a financial, let's say railway in traditional finance hasn't been updated much over the past decades. Because if something works and it doesn't break, let's keep it right. This is the kind of a mindset on traditional finance institutions. That's also the reason before crypto we had fintechs that were popping out and they were disrupting a lot of those big banks and big players. And now we have, let's call them crypto fintechs that are utilizing that kind of railway. Having said that, they look at Solana as the potential go to market and distribution ground. Right? Because they also acknowledge Solana has its momentum. It's got a lot. Okay. And now a contrary aspect are the Meme coins. So I've also heard some of the institutions don't like that the general public associates Solana with Meme coins. And then next to it you would have very serious traditional product that is tokenized, which from the portfolio diversification perspective actually does make sense. Right? So you can create interesting constructs like let's call it 3% to casino called the meme coins and 90% to something reasonable and 7% to some interesting strategies. I'm just giving an example over here. But having those assets and availability on the chain from the logical perspective makes sense. But from the PR and branding perspective, it's not necessarily what those institutions are looking for.
- [33:57]
Brendan
It's almost like the early days of the Internet, right? I mean, you know, people were like, oh, I'm never going to put my prestigious, you know, louis vuitton.com on the Internet because somebody could type in the same URL, you know, Walmart.com for instance, or you know, something really bad or something, you know, that's, you know, objectionable by many people's taste. But it's all on the same Internet. And kind of in the same way it's like you could go and you could find high quality assets on Ethereum or Solana, but you could also find, you know, low quality assets there. That's because it's a free market. It's because it's kind of a permissionless technology and it's pretty much what you would expect anywhere where. Anywhere where the technology is also being used for Good. It's going to be used for, you know, other things. But I kind of, I kind of want to zoom the conversation in to just like the everyday user, right? I mean this is crypto 101. So a lot of the people who are watching are just maybe the everyday investor or the, you know, the retail trader or whatever. How can they kind of, in your opinion, best I guess you could call it, capitalize on this opportunity. Right? We're kind of at a cool inflection point in the market where there's a lot of upside opportunity and, and being a part of an industry that is growing from, you know, $3 trillion to potentially tens of tens of trillions or hundreds of trillions of dollars, how does the everyday investor kind of get some upside here?
- [35:27]
Marcin Kazmier
Trillion dollar question is it? I would say the easiest way to interact in the beginning is via yield bearing stable coins. Because this is very simple. You have $, let's call it regular $, you on ramp into USDC USDT P Y USD by PayPal or any other stable coin and then you look for yield strategies. The most simple one I would probably say is providing liquidity on AAVE or other robust lending market because this is very simple. You just click lent and that's done. Then you could look into some interesting products such as Atena, right? Like you know, just mint USD and then stake it for S USD. This is very simple for regular person. But then if you want to embrace the RWA revolution, I would say acred. So the tokenized private credit fund is very, very interesting and this is one of the reasons we went to launch on Solana. So Redstone launched on Solana in May and we enable RWA revolution over there. So we are the oracle providing ACRED and Sacred which are the tokenized private credit funds.
- [36:45]
Brendan
And you're saying Acred like a C R E D is the name of the token Acred. There we go. Okay, so he's got it pulled up here. For those watching Acred a C R E D and then Sacred S A.
- [36:59]
Marcin Kazmier
C R E D. Exactly. So let me break it down for anyone who is willing to read it later and is listening right now. Now you can go to blog Redstone Finance and go to one of the most recent blog posts about Sacred. And to summarize the story over here, it's a pretty long article going into the private credit and how it works in the under the hood. But TLDR is you've got Apollo who is like a huge traditional finance player with right now in the article we write $500 billion, which is actually inaccurate because later we got the latest data and right now they're at $750 billion in asset under management. So you can see how quickly they scale as the organization. And they have a traditional diversified credit fund called adcf, right? And this is without crypto. This is like some regular stuff they do every day. And in a simplistic way, what private credit is, is lending and borrowing between people who cannot do that in the banking infrastructure. In simplistic words. You can think of a guy that wants to build a railway between three factories in let's call it Arizona and bank wouldn't give him, you know, the credit to do so. So such a person would go to Apollo and Apollo would facilitate such a borrow land with some of the people who want to lend the money and get higher yield than they would do going into the T bills or any other financial product. So this is like the traditional finance word. And now what securitize does is they tokenize that fund. So they tokenize diversified credit fund by Apollo and you get acred, which is this Apollo diversified credit securitized fund, which is the tokenized version of that fund. So that people who have USDC and actual stablecoins can have exposure to that. And this fund historically has been giving somewhat between 5 to 11% in terms of the yields. Because private credit depends on what kind of credit deals are made under the hood, right? Like what are the rates between those who borrow and lend and how many of the defaults you have. So how many people are not able to pay back the loan and the interest that they are supposed to to the lenders? Right. And this accredit is launched already on Polygon, Solana, Ethereum and some other blockchains. But the issue is accredit is a security. And as a security it cannot be transferred between wallets from one wallet to the other. So you cannot use it in defi. Why? Because in order to use something as a collateral in defi, it has to be qualified for being liquidated. And liquidation is nothing else than closing a position, taking an asset from an owner and selling it on the market, for example, so that you cannot do with a security, therefore, at least yet. Yeah, we are talking about, you know, nowadays, therefore, securitize created a construct called sacred, which is a vault, a very simple vault with a mechanism that you put in acrid and then you get sacred that you can already use in defi. So sacred can be put as collateral in example into morpho, drift Camino. All of those are secured by Redstone price feeds. As I was explaining before, we deliver the current price of acre on chain and then on those markets. So I'm going to scroll down a little bit because I think this is a pretty good representation. So you have acred on Solana. You can deposit this acred on Solana to get Sacred from Sacred Vault. This sacred is being brought to Drift as collateral. So imagine it's $1 million worth of sacred and imagine there is, let's call it 70% liquidation threshold and you, to be on the safe side, you borrow 50%. So you would borrow 50. Sorry, 500,000 USDC, right. And then with this 500,000 USDC, you would go to securitize again, get acred, go to sacred Vault, Mint Sacred, and then get again the loop over here. And you can repeat that, let's call it five, six times, to increase your exposure to the Sacred as the product. And the risks that they are taking over here. One is the platform risk, naturally. So if Drift is getting hacked or security access problem or hiccup, that's a risk that you're taking. And the second one is that ACRED as the tokenized fund might have downfall if you go on Redstone platforms. I'm going to share the screen again for acred specifically on our website. You're going to notice quickly that in general it goes upwards like as the fund, but there are moments where it's stagnant between the days, so nothing changes. Or sometimes it's actually going down. Right? Like slightly. Right. So if there are some of the loans within the acreage product going default, then it's going down. Right. That's the reason you shouldn't go crazy with the leverage that you're taking over there. But technically it's a pretty secure product because it's delivered by Apollo, which is a huge trust and it's a qualified institution to offer such a product. And with this looping, in the example that I shared with the listeners, you can transfer the 5 to 11% yield to somewhat between 12 to even 17%. So you're still having exposure to traditional finance product, but with the loop that gives you just better rate at the end.
- [43:07]
Brendan
Wow. And with this loop, I mean, does it every time you loop, does it like lever up and compound a bunch of risk or is it something that is not necessarily compounding risk?
- [43:21]
Marcin Kazmier
Depends how we look at that. You're not compounding the platform risk because you're still using the same platform. Right. So you're accepting still the same you are increasing the risk of your loss when things go south within the ACRED product. So imagine ACRED for simplicity. Imagine ACRED is constructed via a thousand loans and all of them would be in the railway industry in the US or even in Arizona. Excellent. And now you have an earthquake in Arizona. This is going to be a killer for the product.
- [43:56]
Brendan
I mean, ACRED market risks like anything, right?
- [44:02]
Marcin Kazmier
Yes. But here you accept that it's Apollo, that is, you trust Apollo, that they constructed the product in that way, that you are not going to have cascading defaults and the dominant effect. Because this is the job of Apollo. Apollo would Never allow for 1,000 loans to be on railway on Arizona. They diversify it a lot. One is in the aircraft industry, one is in the railway, another one is in the. In the ships, let's call it industry and so on and so forth. Right. So there is a very diversified portfolio. So if one of them is going to default, it's not going to take another one down, right?
- [44:38]
Brendan
Yeah, there won't be those. The systemic risk like everybody remembers watching the big short where the CDO is the CDO squared and one falls and the whole thing is falling because they're all the same loans in a sense. And so it sounds like this, this is a whole new world, right. It's a whole new world of bringing securities on chain. And it's just the beginning. This is not the end form of where this is all kind of going. This is the very, very nascent form of what this all looks like. And I think you mentioned earlier, you know, Larry Fink, right. Founder CEO of BlackRock, has come out and said like tokenization is the next step, it's the next future here for where finance is going. And you're going to need platforms like Redstone to secure the data and to connect everything, like we said. So Marcin, we really appreciate you coming on, kind of painting us this picture of. Really? Yeah, like the, the crypto revolution that we're having here in Defi. And where can people kind of stay in touch with your journey? Are you mostly on Discord? Are you mostly on X? And we'll put that in the show notes for listeners.
- [45:44]
Marcin Kazmier
Yes, I'm most active on X. You know, previously Twitter, my handle is Marcin Redstone. So very much associated with the brand. I am very proud of what we are building at Redstone. So you know, it also actually I was changing my handle a couple of months back in the previous show. I might have still had Marcin Kaz, which is related to my surname. But there was like one free in the end and it was hard to remember. And then I was like, okay, I need to change it. And my question was to myself, if I pick Mars and Redstone, am I confident I'm going to keep it for the next couple of years? Because you shouldn't change your handle too often, right? And I was like, yeah, for sure. Yeah, let's go, let's do it. Absolutely, yeah. This also shows like the commitment to what we are building at Redstone. We are very much long term builders. Another aspect that is showcasing we're serious is we are very public people in the sense that we are not frogs, we are not anons, we are none of those pretty weird concepts out there. You can Google us, you can see our linkedins, you can see what we are doing in a sense that we are even if things go south because there is a way that we are going to make a mistake. So there are going to be some liquidations because of our infrastructure whatsoever, but still we are going to be taking responsibility what's happening out there. So if anyone wants to follow our path, I recommend following Marcin Redstone and RedstoneDeFi. Those are the two major platforms out there. And I will do the shameless plug at the end because this is a product I'm extremely proud of which is Redstone Bolt. It's the fastest Oracle on the market right now and I'm going to repeat it. The fastest Oracle on the market. The reason I'm repeating it is because we deliver price feed to Mega eve specifically on testnet every 2.4 milliseconds. And to give you perspective, one second has thousand milliseconds so we update more frequent than 400 updates a second. So when I'm talking about it, we've already sent thousands of updates on chain and the reason we do so is this is the infrastructure that is going to be ready to allow the most efficient trading bots and those kind of algorithms that are present already in traditional finance. You probably know the book Flash Boys. So this is exactly what we are doing on chain right now. Like we are fighting for every millisecond or soon even every nanosecond which is below 1 millisecond which for regular human brain is impossible to comprehend. But this is a kind of inefficiency that we are striving for. And to give you an attempt of visualization, there is a great platform by Envio that tried to visualize the speed of Redstone bolts. It's called OracleWars XYZ. And over here you can see like every, let's call it half a second you've got hundreds or dozens of those dots like appearing on the screen. Right. And you can see how the if price is moving. Usually those are like, you know, small changes updated very frequently, but for the bots and high volume, it does matter and it does make the difference.
- [49:11]
Brendan
Wow.
- [49:12]
Yeah, I just pulled that up right now and pretty interesting looking chart there. Yeah, you guys have got a lot of amazing things going on. So we're excited for you guys and we'll have you back on again soon. You guys are developing at lightning speed, so I'm sure six months down the line or whatever, there's going to be a lot new stuff to talk about. But until then, we really appreciate you coming on and everybody at home watching and listening. We, we appreciate your guys time. Come back same time, same place next week. We'll have some more great guests for you. Take care.
- [49:52]
Marcin Kazmier
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Brendan
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Marcin Kazmier
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Brendan
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Marcin Kazmier
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