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- [00:00]
A
There's been these stories about like ice cream shops betting against the weather for, you know, because sales of ice cream are very closely correlated to Is it 90 degrees or is it 60 and rainy? And you know, this, this feels like on one level, oh, like we're financializing everything. On another level, like, yes, we should be. This is, this is exactly how efficient markets.
- [00:28]
B
Introducing RealFi, a smarter stablecoin that's backed by real world assets. Launching August 2026. Join the testnet now at RealFi Co Austin Federo. Welcome to Markets Outlook.
- [00:39]
A
Thanks for having me.
- [00:40]
B
Thanks for being here. It's wonderful to see you again.
- [00:42]
A
You too.
- [00:43]
B
All right. I usually start the show by asking folks, you know, what they're watching this morning, but some big news broke yesterday concerning you and 00. So I'll let you talk about it and, and talk to me about the reaction online. Is it the reaction you expected to get from people? A lot of people saying, like, finally we have this infrastructure that's going to catapult us into the next generation of financial markets. But I'll let you tell me about the reaction.
- [01:08]
A
Yeah, certainly. So what we announced yesterday is a really exciting thing with Kalshi and Kalshi Research, which is that we're bringing fast market data feeds from the world's largest CFTC regulated prediction market to Double Zero Edge for the first time. And, and what this really means is right now the way that every trader, whether they're in a retail trader going in through the app or they've got an AI agent that's doing stuff for them automatically, they're going in using the same type of technology that you use to get updates from Facebook or notifications of new tweets. It's not the type of technology that Wall street uses. And it's technology that was never really built for high performance finance. And the rise of prediction markets especially, especially Kalshi, has gotten us to a point where this is core financial infrastructure not just for traditional finance, but obviously new finance as well. And so what Double zero announced with Kalshi yesterday is that you can now get full layer one and layer two data for the entire Kalshi sports category book as well as the crypto perps book delivered over multicast. And so what this means for traders is they can watch every single instrument in every event contract that's trading on sports as well as crypto perps in real time. They've previously had to sort of pick and choose what they wanted to watch. This is all also delivered over a low latency Global fiber network. So it's much faster than the public Internet where most people are consuming data today.
- [02:31]
B
You mentioned that, you know, Wall street has been using this type of infrastructure for a long time. Why do you think, and I say, why do you think it took so long? Because things feel like they move the speed of lightning in this industry. But why do you think it took so long to bring this infrastructure over to crypto?
- [02:47]
A
There's kind of two or three different reasons for this. So primarily this infrastructure is very hard to build and it's actually like a skill set that is not common among Web2 engineers. Web2 in the cloud revolution was incredible for social media, web apps, Uber doordash, the types of things we use on our phone every day. Slack. But financial infrastructure operates in a very different way. If you go to the data centers that the New York Stock Exchange runs in, it looks nothing like the type of environment that Facebook is hosted on or your average Web2 application is. And so there's a real technology and skills gap. And the second one is, for a long time, new finance and crypto and production markets was sort of a weird thing outside of the traditional markets. These were markets created by people who were believing in an alternative to the traditional financial system. And as such, you know, it didn't make sense to invest in the type of professional infrastructure that you see in Wall street and traditional financial markets. But as we've seen, prediction markets especially become really key components, not just of traditional finance, but this whole category of new finance as well. There's all these new opportunities, and quite frankly, the TAM is big enough, the pie is big enough, the market's big enough that there is now a demand for the same type of high performance data that you see on Wall street for equities and commodities.
- [04:10]
B
All right, we're going to take a quick break. When we come back, ships on chain and more with Austin Federa. This episode is brought to you by RealFi. Most stablecoins leave capital sitting still. RealFi is different. It connects on chain capital to real world markets like US Treasuries, money market funds and private credit. Real transparency, real impact, real fi. Launching August 2026. Join the testnet now at realfi co. Welcome back to Markets Outlook. This is brand new Rails, our weekly look at the latest developments in tokenization. It's brought to you by Real Fi. Most stable coins leave capital sitting still. Realfi is different. A smarter stablecoin backed by real world assets like US treasuries, money market funds and private credit. Launching August 2026 join the testnet now at RealFi co. All right. This week tokenization has moved from Wall street and gone out to sea. The world's commercial ships are worth an estimated $2 trillion. But the market that finances them, about $680 billion in bank lending, leasing and export credit is closed and relationship driven controlled by a small circle of ship owners, banks and specialist lenders. Abu Dhabi based ADI chain and Dubai's Shipfinex want to route that market through blockchain rails. Shipfinex sources the vessels and structures the deals and ADI chain tokenizes them and settles payments in stablecoins. Including a Durham backed ST stablecoin licensed by the UAE Central bank ship finance has earmarked around 35 vessels worth roughly $500 million. As candidates I asked CEO Captain Vikas Pandey why an asset class that moves 80% of global trade has been so hard for investors to participate in.
- [05:51]
C
So anything we eat, anything we do is basically coming through the oceans. But sadly these assets are only owned by a very less than thousands people, some thousands of people in the globe who own these asset class and these are primarily income generating assets and it's not accessible to anyone, not even maritime industry people. I've been a master mariner, I was captain, I have sailed 13 years earned money but I could not invest into this asset class and thanks to blockchain that which has allowed and given an infrastructure for not only decentralizing it but more or less making and giving us a technology which can democratize or fractionalize the assets. So we are fractionalizing this asset class and allowing anyone and everyone in the globe to be the participant in this industry by investing into this asset class with just thousand dollars.
- [06:47]
B
Worth noting for now that this is aimed at qualified investors. No maritime asset tokens have been issued yet and shipfinex doesn't yet have the green light to do so. Its regulatory clearance from Dubai's virtual assets regulatory authority is an in principle approval. That's a wrap for this week's brand new Rails. We'll see you next week as we continue to explore how blockchain technology is reshaping capital markets, liquidity and investment opportunities. All right, let's get back to our conversation with Austin now. I saw this question on X earlier and I want to pose it to you. The question was, you know, does faster data help the professionals at the expense of retail traders?
- [07:23]
A
So this is one of the great things about 00 in the traditional financial market. If you want to get a super fast feed from the New York Stock Exchange or Nasdaq. You're talking about hundreds of thousands of dollars a month and you're talking about huge amounts of physical infrastructure budget to make that possible. 0, 0 edge really levels the playing field. So any trader anywhere in the world can subscribe to this low latency feed and you will be getting the fastest feed from Kalshi and the same speed of feed that the big boys are getting as well. And so one of the beautiful things about software and blockchain and this whole category of new finance is we're removing middlemen and leveling the playing field. So yes, the folks at the big trading firms may still have quantitative models that are more advanced than maybe what a trader has. But the beauty of prediction markets is if you have alpha, you can trade on it and you're no longer at a speed disadvantage relative to the big traditional market players.
- [08:16]
B
Prediction markets have really kind of stolen all of the narratives away, stolen all of the spotlight. I would say for, for the last year I would love to just like zoom out a little bit and, and hear how you're thinking about prediction markets and how they're going to continue to evolve. Like I said at the beginning of this interview, to bring us into that next era of financial markets.
- [08:39]
A
I mean, prediction markets are an incredible financial tool and I really think of them as core financial tools. The same way that perps are a financial tool, the same way that hedging is a financial tool. And really what we're looking at here with these, these things is these are, these are market people want to trade. These are markets that are very different than what you see in the traditional space. So I love these stories of five guys in a telegram group that are just as accurate, if not more accurate than Bear Stearns, Goldman Sachs at predicting what inflation is going to be, what CPI is going to be, these sort of big macroeconomic questions. At the same time, you're seeing small and medium businesses as well as retail traders being able to access the type of financial products that were typically only available to very sophisticated traders or large firms. Crop insurance is a weather prediction market. At the end of the day, when you think about these types of things. The jet fuel futures market that airlines use every day to hedge their exposure to volatile oil prices and volatile jet fuel prices. There's no reason that that should be something that only large financial act can engage in. There's been these stories about like ice cream shops betting against the weather for, you know, because sales of ice cream are very closely correlated to is it 90 degrees or is it 60 and rainy. And, you know, this, this feels like on one level, oh, like we're financializing everything. On another level, like, yes, we should be. This is, this is exactly how efficient markets work. And if we can find new ways to support businesses, the same way that when Square and Stripe came into payment processing for small businesses, we saw lending suddenly become available to a mom and pop coffee shop where it used to only be available to a company the size of Starbucks.
- [10:31]
B
You said something important there, access. And that's something we've been speaking about in this industry for a really long time. And we've attached that narrative to different products and different innovations. And I just want to hear from you. I mean, you've been in this industry for so long. When you thought about access, let's say five years ago in crypto, did you think we would be talking about it the way we are now, really at this, like, amalgamation of what has been being built in crypto for the last decade now emerging with tradfi?
- [10:59]
A
Yeah. You know, a core thesis that I had when I got into crypto in 2017 was that over time, traditional markets would actually look more like crypto. It wasn't the crypto was going to mature. It was that traditional markets were going to have much more different characteristics similar to what we saw in early crypto markets. I think that thesis has played out. And so with access comes disruption, and with disruption comes volatility. And you see equities trading, like people would have said meme coins trade a few years ago. And that is a function of access. And I think access to financial markets is both good and bad. I mean, we have to learn how to adjust. And that's a learning process anytime a new technology comes on the market. Electronic trading completely revolutionized Wall Street. It changed the entire way that everything works. Pretty much every trading firm had to rebuild themselves from the ground up to focus on a new level of infrastructure that was necessary for that advantage. The access you see here in prediction markets, in this whole category of new finance, I think, is a net good for markets. It probably requires some types of adjustments, both from traders and from the professional markets and from regulators that oversee these markets. But access is a net good.
- [12:14]
B
And Austin, the last thing I'm going to ask you, you know, as we head into the last half of the year, everyone is looking for those catalysts, those milestones. What's the big one you're looking forward to?
- [12:25]
A
You know, I think when we start to see more and more venues coming on to double zero edge and we start to see better market data permeating throughout new Finance. We can solve a lot of the existing problems in new finance. I go Back to the 1010 flash crash a lot because this was a moment where market makers and traders just didn't have confidence in the market data that they were getting. We saw multiple percentage points, deviations where assets were trading between different exchanges. This is the type of thing you would really never see in traditional finance. And so it showed me that there was still a really long way to go to bring these new finance venues up to the level of both performance and reliability and data access that you see in traditional finance. But even without that, new finance is eating the world and I'm excited to see where it all goes.
- [13:12]
B
What's the biggest challenge that still exists for new finance?
- [13:17]
A
A lot of the operators in new finance today, especially in crypto, but also in the prediction markets, haven't necessarily woken up to how serious traditional finance is taking them. We all been talking for 10 years about how we want tokenized equities, we want markets that trade 24,7. We want to merge these two worlds together. But that requires a dedication to performance and infrastructure and a seriousness in terms of thinking about reliability, resiliency, failover, these types of things. That just hasn't happened yet in Web two. I mean, when was the last time you saw a NYSE or NASDAQ go down on a big trading day? Well, it happens fairly often in the area of new finance. And you know, that's a, that's a real thing for these companies and these projects to work on improving. We, we're doing our small part with better access to market data. But it's a journey that this entire category is on because we have lightning in a bottle. And every time you have a real spark and a real moment, there's a whole bit of growth that comes with that as well.
- [14:16]
B
Austin, it's always a pleasure catching up with you. Congratulations on the launch and thanks for joining the show.
- [14:22]
A
Thanks for having.