A (3:13)

That's amazing. And talk about pioneering in this space. We talk about a lot here, a lot of podcasts around blockchain. The fact that you were able to do that and totally get it. People change comes slow sometimes, but cash was king. And unfortunately, that's really the only way we could get, buy and sell Bitcoin. But for that broader adoption, I'm glad that you had that vision to think ahead and start building that infrastructure and how we can get people to adopt this technology, this currency. So I appreciate that. Mitchell, as CEO of Sonic Strategy, the crypto treasury for the Sonic Blockchain, you're spearheading token accumulation, validator infrastructure, and defi participation. How does this model differ from traditional crypto companies, and what opportunities does it unlock?

B (3:56)

Yeah, so I guess when we talk about traditional crypto companies, in kind of the broader sense, that could encompass a whole array of different businesses. After the Bitcoin ATMs, I built a crypto exchange in Canada, which we sold into a public company. And then more kind of 2018 to 2021, I built another crypto exchange called Netcoins. And operating a business like that is complicated. We had about 70 or 80 employees in the company. You're dealing with, you know, banks and payment processors and compliance and, you know, marketing and all the different aspects that you would deal with with a traditional business. And with this type of business, it's a lot simpler to run, I would say, compared to a more of a traditional company where we're operating infrastructure, we're running these validators that are securing the network, and we're deploying some defi strategies to increase our yield, and we're accumulating tokens, and we're kind of acting as that bridge between the traditional market and the crypto native market where investors can come in, they can buy our stock and get direct exposure to this ecosystem in more of a holistic way without kind of taking on the operational risk of a larger scale crypto business. And we see this as an important piece of, and kind of the evolution of the crypto space in general. Like when we started the Bitcoin ATMs and we were dealing just in cash, that was a great bridge and it was a good starting point for kind of where the industry was at. And then the second kind of stage was building out the crypto exchanges where we had cooperation from banks and we had cooperation from regulators and payment processors. And that kind of enabled people to come in and connect their existing banking infrastructure to get exploded to crypto. But there's still this large pocket of capital that are invested in equities and, and that's kind of the last pocket, pocket of capital that hasn't really been unlocked and is becoming unlocked right now and getting exposure to the crypto market, but more in a traditional sense where a lot of people still don't trust exchanges. They don't know exactly how to secure their own crypto and they don't want to be bothered with seed words or trying to find the best way to get yield. They just want to call their broker or log into their traditional equity investing accounts and be able to buy a stock and know that that stock is regulated and audited. And you know, the, it's, it's just in the existing infrastructure. So that's kind of how we're positioned right now. And the oper complexity of a business like this is much simpler than a traditional crypto company.

A (6:19)

I'd say that's amazing. I like talking to people, entrepreneurs, founders that are visionaries in this space. And it started out, you had that vision early on. Not only did you build one, but you built two crypto exchanges in Canada, which I thought was pretty cool. But your platform, as you said, is like a bridge from the traditional TRADFI to that crypto native environment. Building more adoption. And you did mention, I'll highlight, you know, while crypto has penetrated most traditional investment markets and verticals, you're working to get adoption around equities as well, which is certainly amazing. So thank you. Mitchell. The Sonic blockchain offers lightning fast throughput and developer incentives that rival Ethereum and Solana. From a technical and ecosystem perspective, what makes Sonic uniquely positioned for growth and how do you see it evolving?

B (7:05)

We've been investing in this ecosystem for a few years now, both personally and in another company that I was part of as early as 2020. And so we've got to know the team that's been building this blockchain. They had another project or kind of the MVP of this blockchain was called Phantom. FTM was their ticker. And back in December of last year, they did a full chain upgrade to Sonic. And now with this upgrade, they can handle about 10,000 transactions per second, whereas something like Ethereum can handle to about 15 to 20 transactions per second. And those transactions are final after about 200 milliseconds, whereas with Ethereum it can be 10, 20, 30 seconds or even longer. And then there's other blockchains like Solana that are. That are fast. But Sonic has kind of gone one step further and they've built in some really cool innovations where they've got a program called fee monetization, where 90% of the blockchain fees that are generated on chain buy an application actually go back to the application. So that structure is a little bit more like the YouTube business model, where the content creators that are driving the engagement and the ad revenue get a percentage of that revenue back. So that's a really cool innovation that we like that's driving a lot of adoption and bringing a lot of developers over to the blockchain. Also, the fact that it's compatible with Ethereum in the industry, we call this EVM compatible. So basically Ethereum was built in a specific language, and the majority of the kind of activity that's happening on chain right now is still happening on Ethereum. Solana has been taking some market share from that in two different programming languages. And so for an application to move from Ethereum over to Solana, they need to completely rebuild their application in a new language, which is a bit of a barrier. And so Sonic is completely compatible, but offering those faster block times, higher throughput and cheaper transactions, and overall just a better user experience. On top of that, there's a fee subsidy program that Sonic is rolling out where essentially the application or the wallet can subsidize the on chain gas fees for the users. So anyone that's used Ethereum would kind of be familiar with this pain point. But right now, if I were to send you $100 of USDC or USDT a stablecoin on Ethereum, I would actually need to send you a few dollars worth of Ethereum as well in order for you to be able to move that Ethereum out of your wallet. So that's a Big friction point that a lot of people don't like and it's not the best user experience. And with Sonic they've made it so that the application or the wallet can actually subsidize and pay that fee to take that pain point out. They've also innovated in a few ways where one thing that they call account abstraction, which basically removes the clunkiness of onboarding a user into Web3, where you'll be able to register with your email or log in with your Google your G suite and kind of remove that need for writing down and recording seed words. So a lot of the kind of clunkiness that has been in Web3 and hasn't really been worked out over the last 10 years is being solved by Sonic. Additionally, their co founder is a gentleman named Andre Cronier and he's known as the Godfather of Defi. He's actually responsible for a lot of the primitives that that are used across all of the Defi projects and across multiple blockchains. He's been founder of multiple multi billion dollar blockchain projects over the years and he's actually coming out with another project this fall called Flying Tulip which is basically a full on chain decentralized exchange that'll compete directly with the largest centralized exchanges in the world where we'll have on chain spot trading, we'll have perps of borrowing and lending options and a few other features on there that'll all be built on Sonic. And so Andre, he's had successful consumer facing applications over the years and he's had this vision for this kind of all in one defi exchange that would be a fully on chain. But he says that the infrastructure, the blockchain to actually build something like this didn't exist. So he had to go and build the blockchain first and now he can build this consumer application with a seamless user experience. And so we think that'll be a big catalyst for Sonic in the coming months here.

A (11:17)

That's great. You have a lot going on. But if I could, I'm just going to highlight some things that I thought were important and maybe important for our audience is you've always continued and still continue to invest into the platform taking the clunkiness out of web 3 as you said. But the fact that the platform can do 10,000 transactions per second and the transactions are completed in less than a second, I think you said 200 milliseconds compared to some of the other platforms is amazing. That really excites me. But you're incentivizing developers in the community to join. And I think that's a big part of it. Obviously faster adoption, better adoption, long term sustainability. And your platform offers that compatibility between networks. And I think that's really, really important, especially if you want people to make this easy. So they will adopt this Web3 ecosystem that we now have. And the lower transaction or gas fees is also important. So just highlighting some things that I think would be important to my audience. So I appreciate that. Mitchell, the last question of the day I have for you. Looking ahead, what do you envision for the future of DeFi and institutional crypto adoption? How will Sonic's strategy and your leadership play into that broader movement, the future.

B (12:20)

Of DEFI in general? I think that the entire world is going to continue to move on chain. We're seeing the first very successful example of real assets moving on chain is stablecoins. They're gaining adoption at a crazy pace where they're actually, you know, becoming central and pivotal key piece of the existing financial system. We've got hundreds of billions of dollars of, of stablecoins on chain and essentially, you know, it's just more efficient to move US dollars on chain than in the traditional banking system. And basically it breaks down borders. And so that's the first good use case. But where I see this going is having equities on chain, having insurance on chain, having real chain, basically borrowing, lending. Everything that we see and use in the traditional financial system will come on chain. And there needs to be a blockchain that can kind of support that mass adoption and handle the throughput. And you know, right now Sonic is building in that direction. Obviously it's a competitive space and there's, you know, there's some other great tech out there, but ultimately it's a, it's a technological race that, that we think Sonic is well positioned for. And where we see our company kind of fitting in here is we're taking that directional bet on Sonic and our investors are buying our stock and investing with us to get that direct exposure to Sonic. And right now, Ethereum being the leader, they're sitting in around a 500, $550 billion market cap. Solana being number two, is sitting in around like $120 billion market cap. And right now Sonic is kind of flying under the radar, sitting at about $1 billion market cap. And so the winner of this race that does get the adoption, there's still massive upside even compared to, to where the leaders are sitting right now. And you know, we're kind of here to help our investors get that wouldn't want to go and buy the underlying token themselves. Get exposure to it in this early stage where you don't usually see these types of products or say an ETF for a specific blockchain or token until you're kind of in that $100 billion mark. And so we want to give more traditional investors exposure to this before it goes through its first massive stage of growth.

A (14:33)

Exciting news for that. And you're doing so much. And again, I think you're one of the pioneers just highlighting a few things I definitely see. I agree with you. The future where the world does really adopt this and everybody will be moving on chain with the faster adoption with these stablecoins. And we're seeing that especially in the recent administration. We're seeing just a strong adoption in this space. Obviously that means faster adoption, Trading without borders, a lot of great things out of this. The fact that you highlighted adoption really include those real world asset industries like real estate. I think that's important as well. And I honestly think in the next five years this will kind of be the the norm as far as transactions and people just having a Web3 wallet. And that's kind of where the future is. So I appreciate that. Mitchell, it was certainly a pleasure having you on today and I look forward to speaking with you real soon.

B (15:21)

Beautiful. Really appreciate your time.

A (15:22)

Bye for now.