← The Wolf Of All Streets
The Wolf Of All Streets
Crypto Is About To Go Parabolic - Here’s Why | Avery Ching, Aptos Labs
00:54:06
Crypto Is About To Go Parabolic - Here’s Why | Avery Ching, Aptos Labs
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- [00:00]
A
Place. I think those are the kind of key lessons I would say I've learned from my time at Meta in a decade.
- [00:04]
B
Decade at Meta. It's a long time.
- [00:07]
A
Aptos is named after an American city in California, and our roots obviously are from Meta and Facebook. 25,000 transactions per second. That's actually more than all the credit card like Visa, MasterCard and every credit card processor combined.
- [00:22]
B
Yeah, I think Visa does 1700 transactions per second. I use ChatGPT mid conversation and that's the most basic thing I didn't know off the top of my head. Visa's transactions per second, guys. I looked it up, you know, after four years of pain and misery with a contentious regulator and legislative body in the United States, it finally feels like the crypto industry's time to shine. But not only do we have all of these tailwinds from regulators and legislators, we finally have blockchains that can scale for mainstream adoption. It really does feel like everything is happening at the perfect time. I had a long conversation today with Avery Chang, co founder and CEO of aptos, who I've been working with for a long time and looking forward to that partnership further into the future. We talked about everything that's coming from their ecosystem, but more generally from DeFi, NFTs, AI, the metaverse, all of the things we've been excited about for so long in the crypto space. Spoiler 2025 is going to be absolutely massive. Maybe we should start with the state of Aptos coming into 2025. Here you had a pretty wild 2024. I've OB keeping up with the metrics on a monthly basis. I mean, insane growth with wallets, insane growth with network usage, basically insane growth across the board. Maybe you can just give us a quick TLDR on where we're at coming into a new year.
- [02:05]
A
Wow, that's definitely tough to summarize everything real quick, but a couple highlights might be setting the daily mainnet transactions in 2024 four times, I think, topping out at 226 million transactions in a single day, more than 3,700 transactions per second, and no disruptions, no downtime, no increasing gas costs. Just really proving out that Web3 is ready for prime time. And with the right technology stack, you can do almost anything there at this particular time. From a growth perspective, it was great to see Electric Capital highlight Aptos as the second fastest growing ecosystem in all of Web3, the first fastest growing movie go system overall. And then from the numbers perspective, we've seen daily active addresses and monthly active Addresses hit all time highs in 2024 and 2025. I think we're roughly around third or fourth place in the entire ecosystem and I think hit like 1.3 million daily active addresses fairly recently and continuing along with that journey. So from our perspective, we're seeing Web3 adoption really start to take off and grow by leaps and bounds. I think TVL grew by 10x, we saw users growing by 10x. We've seen interest just was just grow massively in the move ecosystem and web3 as a whole. And couldn't be even more excited about the initiatives in 2025 that are going to be underway.
- [03:25]
B
Yeah, we're going to get to those in a bit and I think talk more generally. But I'm curious, when we talk about this user adoption and wallets and all these things, what are people actually using? I take for granted that our audience will understand exactly what's actually happening in the ecosystem, but I'm assuming that there are certain apps or protocols or things that people are really finding sticky and are using over and over and over again and probably some that maybe we had assumed would see more meaningful levels of adoption and maybe aren't.
- [03:56]
A
Yeah. So some of the top applications in Aptos that are driving large number of wallets towards them are actually products coming from out of India. We have Chingari, which is a social media application. We have Kgen, which is a gaming infrastructure company. Stan's driving massive traffic. Aragon is a gaming platform. Just to highlight a couple that are that are meaningfully pushing the numbers out there now. But there's a bunch of others from a user perspective and then from more like a Defi perspective, we're seeing defi really take off in Aptos with protocols like Arie, Amnis, Iconia, Salah, Solana and others trying to build out novel things that can be only done with the Optos stack. Leveraging the most scalable network, the cheapest fees and also the fastest latency. And for traders, tick to trade kind of efficiency is one of the most important things out there and that's something you get out of the box with Aptos. Something that's also not well known is something like Panora, which is another well used application within the aptos ecosystem. Allows you to kind of route orders through different kinds of options in this space. And given the fees are so low, the routing is actually very, very efficient. And so those are things that we're excited about to see like how that develops over time.
- [05:08]
B
In 2025, are you finding that those are users that are Migrating from other ecosystems. Do you find, is there a way to even measure if they're utilizing Solana for one thing and Aptos for another, or Ethereum? Or you find that these people like wholesale basically migrate to Aptos for all of their needs? I mean, it's a question I could ask, I guess any founder, but it's a really interesting one because I don't really have a mental picture of how your average web3 user sort of behaves with so many options in the market.
- [05:40]
A
There is a lot. I mean, I think the best way to kind of measure it a little bit in terms of where these users are coming from is through the bridging protocols. And we're excited to see Layer zero was live on day one with aptos. I think the first integration that was done and we can kind of see a lot of the traffic coming from other networks into the Aptos ecosystem because of that wormhole is obviously another bridge which allows people a window into aptos and then kind of seeing both the flow of funds as well as the kind of users that are transacting in between these networks. That's going to give us an idea that there's just a lot of excitement coming to Aptos ecosystem across the board.
- [06:14]
B
Yeah, that makes perfect sense. Now let's talk about 2025, right? Because I'm assuming that what you're building will give us a good picture as well into kind of what's likely to actually gain adoption in web3 generally, in DeFi generally. So you can, I think, kind of give us the roadmap for how big the space can become in the next year.
- [06:35]
A
One significant thing that happened in 2024 and also kind of rolling out in this year is the onboarding of major stable coins into aptos. So USDT onboarding in December and also USDC going to mainnet very, very soon, probably the next week or two, is something that changes the game for aptos. And so going back to our history and roots, I was at Meta for 10 years before this, was the tech lead for the DM Blockchain and Libra project. And as a part of that process we really start to understand the challenges and use cases of payments across the world. And supporting billions of people, especially cross border money movement to reduce both fees and also time is something that is extremely important to us to help provide financial infrastructure to people around the world. So we're excited to see now these stables come on board. We're starting to see remittance companies starting to use this infrastructure. We'll see A lot more in 2025. And just see that flow of funds happening across different payments corridors is something that we expect to kind of explode from the aptos perspective. And the main reason is because the fees are just so cheap. With aptos, the time is so fast, it's almost a no brainer. Like why wouldn't you use this infrastructure for something that could be done much, much more efficiently than today's Rails? That's just for the payment side. For the infrastructure side. We're excited. Like aptos is both the most scalable, the cheapest, the fastest platform out there. And we want to really drill into what that means from a trading perspective. And so you're going to start to see a lot more infrastructure built around. How do we make sure we can have the best perps, Dexs, spot Dexes, and then leverage this infrastructure for getting the fastest time from tick to trade, as we talked about earlier, into the infrastructure? And so we can kind of build on, you know, what almost feels like a very centralized exchange experience with decentralized infrastructure. And, and when you do that, just unlock so many possibilities about things that centralized exchanges can't do or the limitations or concerns about them. And just having that operate in a decentralized, permissionless way is going to, I think, unlock a ton of value for customers going forward. The final avenue is in terms of real world assets. And we've already seen companies like BlackRock and Flank Templeton issue money market funds on top of aptos. We're in great discussions with large corporations about how to move other financial instruments such as large scale loans or private credit into the Optus ecosystem. And we're also excited about the smaller scale stuff, the emerging markets where you see micro loans starting to play a big impact in how they can access financial instruments that weren't traditionally available at competitive rates. So those areas, those three areas of high performance trading, money movement through payments, and also the real world assets coming on board that are going to really change the game for emerging markets are three initiatives that we're super excited about for 2020.
- [09:20]
B
What specifically makes one blockchain faster and cheaper than another from a technological perspective? I think you're, I mean, maybe in layman's terms, but you know, every blockchain seems to be competing for those effectively two metrics. Of course, the third is security in the trilemma. But you know, speed and cost seem to be the ones that people really prioritize right now.
- [09:47]
A
Right when it comes to speed, I think this comes down to algorithms and protocols and this is where we have a huge edge, just because the protocol was designed for very, very low latency operations in a decentralized infrastructure. And so having our current APTOS BFT consensus protocol and also our pipeline design, we have a pipeline design of data dissemination, consensus, parallel computing, parallel execution, parallel storage, and then also the last phase of proof verification, certification just allows us to kind of like we started the design from the very beginning. It is something that has worked well. And if you think about the analogy in kind of more layman's terms, we have these CPUs in our, in our MacBooks, our phones, which are highly pipelined processors. And that's how you get very fast speeds, how you leverage like, you know, the die, the die sizes and all kinds of things like that to get incredible performance. And so we've done that at the blockchain level. We paralyzed it, we pipelined it, and now it just, you know, a matter of kind of tuning those parameters to get even, even more performance out of it. But that design has been really core to a very, very fast experience. The other thing I think that comes with it is just our experience in building large scale systems. So before I was on blockchain, I worked on data infrastructure and Meta, where we kind of managed millions of machines supporting services, like billions of queries per second across large scale infrastructure. And so just understanding how that works and how to optimize for those kind of workloads helps us to design a system that works in a decentralized context as well. From a cost perspective, this is more about the way that the economics of the system work. And so when it comes down to it, the cost of the system should really be, and this is our belief in the APTOS world, it should be kind of the cost of the infrastructure. So how many machines you have running, how much storage you have, the compute costs, networking costs, as well as the operator costs, somebody to maintain these machines and then kind of keying it to the lowest possible price point to just service those elements and of course, the healthy margin of profit for those individuals, but nothing more beyond that. The protocol is not trying to make money off of the fees, right? Like that's, I think, the key thing. And so when you have an infrastructure that's been designed for minimizing costs for the consumer, because ultimately the consumer cost is going to be the one that drives adoption, right? Consumers are very price sensitive. So having all that in play and thinking about these considerations allows us to have the lowest cost of market, which is an order magnitude cheaper. And so if you go to gas fees. Now you look at the cost of USDT across kind of all the different options. Aptos is, I think on order bank two, cheaper than everybody else, even cheaper.
- [12:15]
B
Than Tron, where we all know the bulk of tether is being utilized.
- [12:19]
A
Cheaper than Tron.
- [12:20]
B
So is that just a first mover advantage on their behalf at this point? And you assume that people will eventually find the faster, cheaper option? Obviously I think people have just been using USDT on Tron as the answer to Ethereum's high fees for so long that it's just going to take time to move them away.
- [12:38]
A
I think there's definitely a bit of first mover advantage for Tron and others out there. But as people, you know, people are, that are very price sensitive, we'll definitely start to find the better options out there in the future. The other thing that's going for us though is that there are certain use cases that can't be, can't work with high fees, right? So like let's give an example. You, you run a podcast, obviously you have a social media presence. If people were to tip, you see on the granularity of a cent or like 10 cents, you have users across the world, like that doesn't make sense if your fees are going to be comparable to that, right? So this is where like aptos being, I think, like, I don't know, a ten thousandth of, maybe a hundredth of a cent or something like that makes it like, you know, a cent tip is not that bad. Like, you know, paying, you know, 1% fee on that is not horrible. And if it's 2 cents, it's like even, you know, it's, it's half a percent fee, right? So those things become much more tenable and we can even drive fees lower over time, I think as we start to optimize the system infrastructure even further. So it's also going to not just be about like, look, customers looking for the cheapest cost. They're also looking for just new products that can be built with that, new, new new experiences that can be possible from those kind of cost models.
- [13:42]
B
There's a lot there to unpack. But it's interesting, you talk about the price sensitivity and this sort of granularity, but definitely applies to payments, but really applies to the trading as you mentioned. I mean, if you dig into especially the early days of high frequency trading, the amount of money that Wall street firms would spend just to have a slightly better fiber optic cable or to be a little closer to the exchange for those fractions of A second edge when algorithmic trading. It's astounding. The math doesn't even make sense to me how much money they would have to be making for what they spent just to gain that fraction of a second advantage. So I would imagine that even for retail traders using it, this is more with those institutional traders in mind down the road, even though they're not necessarily trading on a Dex yet. I assume you believe they will.
- [14:33]
A
I believe they will. I believe that a lot of our trading volume will shift from centralized exchanges to decentralized exchanges over time, mainly because there's a number of properties that the centralized exchanges offer that centralized exchanges do not. In particular, just a lot of safety around asset management, around pricing, around even just transparency and openness of the platform. And then centralized exchanges are important parts of this space. But the closer you get in performance there, and I think we've seen products like Hyperliquid, I think really pushing that space closer. But to do it more decentralized and even more performant over time is where the ultimate points industry is going to go towards. And blockchains are great for moving assets from one person to another. That's what they're really great at. And that's basically trading. So every time we can see that happen as quickly and as cheaply as possible, it's going to provide value to somebody.
- [15:24]
B
You have the unique sort of experience coming from Meta, right, Which is one of the largest, I would imagine, centralized infrastructures on the planet. So initially you were going to build this for them. Right. And we all kind of saw what happened with Libra DM and the congressional hearings and the pushback from the government. And we've had the story here of how that ended up being aptos effectively. But what lessons do you think that you learned from building those systems in a centralized environment that have sort of like given you a lead, building it in a decentralized environment?
- [15:58]
A
I think thinking about scale from the early stages is the probably one of the biggest beneficiaries of that. Right. So a lot of blockchains will kind of work on the assumption and it's not wrong. Just like, hey, we'll start with something that works. And then like, as we see more adoption, we'll kind of grow that product and like add more features to it. You know, at Meta, we've had a chance to take a look at all our lessons learned and say, you know, scale is important from the beginning because it's actually hard to change your designs later on during the. During that time period. And so two Things that we kind of lessons learned were one skill that you should design from the beginning for because it's hard to add later on. Even if you want to make it something that starts off kind of more reasonable in terms of performance, you should have an avenue towards getting to a million transactions per second. The other thing is going to be upgradability because we know these systems are early in their stages. There's a lot left to go in terms of how the move developer experience kind of evolves over time, how the use cases evolve over time and the infrastructure is needed to build that evolves over time. And so building into the protocol itself. How do we upgrade this protocol in a way that is decentralized I think is also key for us. So we have launching governance where users kind of vote terms of token holders vote for upgrades of the system and upgrades. Once that vote is passed, anyone can finalize upgrade and make sure it goes forward on chain. So between these two things, the notion that you need to kind of adapt quickly to new use cases and things you didn't even imagine when you started designing the system that would be used for as well as design for scale in the first place, I think those are the kind of key lessons I would say I've learned from my time at Meta in a decade, decade of Meta.
- [17:27]
B
It's a long time.
- [17:28]
A
It was a long time.
- [17:30]
B
So you were obviously doing something before Libra and DM there. But I'm assuming that it was sort of all leading up to this.
- [17:38]
A
So I would say a lot of my experiences have been fortunately kind of all very useful from different perspectives to work on aptos. So my early days as a student I was doing a PhD in high performance computing. I worked at different, different national laboratories including Sandia, Argonne, Los Alamos. And I think the work there was how do we they have these large, large supercomputers with hundreds of thousands of cores. How do you effectively leverage all these cores networking infrastructure together to do very complex computations around say protein folding or simulating nuclear explosions or things like that in a safe way. Thinking about that as a, you know, starting point for me kind of helped me to think about how parallelism, concurrency can actually really be valuable for any kind of high performance infrastructure. And then when I got to Meta, it was more about, you have these tremendous growth in a product, Facebook growing by leaps and bounds, doubling its user count every year. And not just user count, but the way the user interact on the platform. And now I work in data infrastructure where we try to take these user actions on the website or on the mobile app and then turn them into actionable insights. So a lot of data processing a lot of data to crunch an execution of that data to then drive product insights that can help drive the product to grow. So we processing exabytes of data on millions of machines. And so for that it's like how do you kind of scale out infrastructure to match growth and also how do you kind of build at the bleeding edge of things? And so combining these aspects of high performance computing, parallel computing, supercomputing, as well as how do you kind of scale out data to support large analytics. Now a blockchain base, which is going to be a different kind of database, a decentralized one that is basically built for transacting in assets between users in a way that's very high performance, that requires high reliability, scalability. And then to your point, lastly about security, all these things are meaningful towards where apptos needs to be. And apptos is evolving into.
- [19:42]
B
So we obviously have regime change, right? We've gone from I think what anyone would define as a contentious regulatory and legislative environment to maybe 180 degrees to seemingly when you got the president launching meme coins and such, I think we can say that the governor is off for building in the United States in crypto. A Is that your perception now? After kind of suffering for the last four years and Trump has made comments about blockchains that are made in America, I would have to imagine you guys qualify.
- [20:17]
A
I think I couldn't be more excited for the administration coming in. I mean, Trump launching a coin on during the crypto ball and then, you know, all the, you know, pointing David Sacks as crypto czar, AI czar has been a great steps forward in this process. And I think the rhetoric coming out about how crypto is going to like America's going to be the innovation place for Web3 and crypto. It couldn't get me more excited about the changes upcoming. We are very, very excited to work with partners who are who are leading to that. So AAVE and Chainlink are obviously partners who are close to that and there are partners as well. To your point about being an American chain, Aptos is named after an American city in California. And our roots obviously are from Meta and Facebook and we reside mostly our office, most of our employees reside, of course, in the United States. So it is definitely an American chain and one that we are proud to build in, especially with the new climate and atmosphere supporting innovation within America.
- [21:17]
B
Incredibly impressive that you guys continued to stick it out here through that entire time because almost everyone I spoke to was like, dude, we're out. They left long ago. Or they had an idea and just said, I'm not going to do it, it's not worth it. Right. And you guys just powered through. Even after all the pushback that you saw when you were at Meta trying to launch Libra and dm, you had to know it was going to be a contentious and difficult environment.
- [21:43]
A
Definitely. But I guess I have a fundamental belief that, you know, America does want to lead in innovation about all things. And I think we saw other areas and maybe 5G and other places where, you know, that didn't work out so well. And so I'm always confident that the government kind of figure out like we, we need to have an innovation happen here in the United States. And so glad to see it coming to fruition with the new administration.
- [22:05]
B
So we've had sort of rolling narratives throughout the past cycles of what the future would look like with so many blockchains launching.
- [22:15]
A
Right.
- [22:15]
B
I think last cycle everybody was very concerned with having enough block space and it being interoperable. Right. So all the bridges you were talking about, you know, Cosmos was a huge ecosystem for bridging and building cross. Now it sounds like there's a race on layer one for like the Lord of the Rings, you know, one chain to rule them all. Do you think that with how you've been stress tested with the plans that you have, that aptos could effectively handle everything that needs to be built in Web3? Not now, but maybe now, but in the future?
- [22:52]
A
I would say now. I would say now is the time in which, like, if you look at the traffic that runs across Web three kind of workloads that have happened not just in benchmarks, Wrapdos, but also in mainnet, I would say yes, Aptos is ready for every single workload in web 3 combined and put together. And I'd be happy to go ahead and we could run the experiments and we could try it out if we could get the simulations from other networks put together. But I'm pretty confident that's the case today. So it's just a matter now of seeing that adoption come and to understand why that hasn't happened yet. I think you kind of look at cloud to some degree. Right. Cloud infrastructure, when it was built out in 2006 with AWS, there weren't a lot of people that were thinking cloud was the future for the way infrastructure is deployed. They were concerned. Like when I was at Meta, I mean, we watched very carefully there Were concerns around what happens if we need more hardware and they can't support that. What happens when you need certain hardware types? They don't have that. And what about security for user data? A lot of different kinds of concerns out there. And it does feel like that way for Web3, the recent Trump Coin launch, and then seeing those issues happen around the launch, like, you know, if you try to submit a transaction, it might take half an hour, it might take a day, might never get accepted. I don't know if you tried to buy some trunk point, but, you know, if you tried the experience, it was a. It was definitely a tough one. Right. And so, you know, those kind of experiences show us that while there might be massive demand for this block space, you know, there you need to be doing the protocol that actually works for this. And so that's where, you know, we hang our hats on. We're really excited about what we've done. We've seen that growth in the aptos user base without any issues to congestion. And so it's ready and we're here and we'll see. 2025 is that year where we start to see major, major adoption of infrastructure usage because infrastructure is ready.
- [24:37]
B
Yeah, and obviously we've mentioned it a few times, I'm sure everybody here knows, but that was the Trump meme Coin launch on a Friday night before the inauguration. And effectively there were a lot of reports that there were issues with Solana at the time, which actually had been on a very good run. Since it's sort of history of having downtime or people define whatever happens in different ways. They're still debating whether we had downtime on the Trump launch, but I think very clear that a lot of transactions, as you said, were stuck or didn't go through. So it's semantics, right? It's interesting though, they got the benefit of this massive stress test, right? So I'd imagine that even though that happened to them, they'll take whatever lessons were learned and that might help them scale. Right? So how do you sort of, I guess have the balance between never having that happen so that you don't get tested and know where the problems are and just waiting for something and praying, right? I mean, basically, I'm not saying you guys haven't had those moments at all. It's just highlighted when it had. It's highlighted on Solana a number of times, right? I mean, this is. We've seen it on Ethereum a million times, right, where like one NFT project launches and Ethereum doesn't work in the past. Yeah.
- [25:48]
A
And I think that's what's kind of holding some folks back. Like folks that want to launch large use cases. Right. Like, so if you have, they say, like you had a large social media website and you put, you know, the Web three in the critical path for how user experiences with that, and now that goes down, your whole user base is like pissed off at you. And so that definitely holds people back when they see these kind of events happening in web3 in general, to your point, you know, we build headroom into our protocol and I think the question is, how much headroom do you want to have? And I think I'm pretty comfortable with where we are today. Like, we, we ran an experiment in 2023, end of December, where we ran, I think about 100 plus nodes similar to the setup for mainnet with the latest version of the software. Just payments transactions from one person to another and saw more than 2 billion transactions in a day. And so that's, you know, more than 25,000 transactions per second. That's actually more than all the credit Card, like Visa, MasterCard and every credit card processor combined. And so for that, for us, that kind of show, like, that's enough headroom. Like if we suddenly get a use case that spikes more than all the credit card transactions in the world on aptos, you know, we, we feel comfortable that we can, we are, you know, we're ready for that and you know, we'd be, we'd be okay with that. And, and if something goes beyond that, wow, that would be incredible. But, but I think that's a lot of headroom in place for the next generation of Web3 to evolve in.
- [27:11]
B
Yeah, I think Visa does 1700 transactions per second. And I remember last cycle, everyone saying, well, for something like this, just use the centralized, use the centralized system. It's faster, decentralized systems. Blockchains will never be as fast as these centralized networks. Didn't take very long, not at all.
- [27:33]
A
I mean, I think it just shows that if people are motivated enough and there's, you know, from a technology perspective, it's viable, it will happen. And I think that's exactly what we've been able to show with aptos.
- [27:42]
B
I've kind of long said that stablecoins were the killer app of crypto so far. I mean, maybe outside of Bitcoin, obviously, as digital gold or whatever narrative we assign to it, and being the original blockchain. But you talked about stablecoins coming to aptos. Do you think that that will continue to be at Least through the next year or two where we see the most growth in crypto, like more people utilizing stablecoins realizing you don't need a third party in between to collect a toll, it's going to be slower because that seems where all the growth has really been.
- [28:15]
A
Yeah, I definitely think that stablecoin usage and adoption will grow very fast. It's the one that has some product market fit today. And as we can start to think about the different use cases for where payments roll, like there's, there's cross border payments, there's commercial payments, there's peer to peer payments and the biggest one of those three is cross border payments and that's an area I think we want to see massive growth and adoption in from, from Aptos perspective because that can have the most impact. The other thing I think of those three, like the one that you know is the most painful for consumers is, is the cross border payments because of the fact that the fees are so high and the times are so long and then like the, you know, the money movement across countries is unclear sometimes around like what can be done, what can't be done.
- [28:58]
B
Yeah, I mean we literally lack the infrastructure for me to send 15 bucks to Nigeria right through banking Rails just can't, can't do it.
- [29:05]
A
Exactly. So that's the area where I do expect massive traction in the industry, but.
- [29:09]
B
Also for Aptos specifically and what's going to bring more people into that. But besides the simplicity, do you think that we'll see more sort of mature financial services wrapped into that? Like, do you think that although it was a four letter word last cycle, that having some sort of yield on those, when people are holding them in their wallets is going to be yet another sort of layer to that adoption.
- [29:31]
A
I think yield is going to be important too. Yeah. I mean definitely people, you know, kind of have yield from different kinds of asset classes. Wherever you are in the world is a, is a major thing like for financial kind of democratization. So really, really excited about those areas as well. And that's kind of where the road assets I think really, really fit in. Yield from, you mean you can imagine loans even as from yield? Right? Like we're loaning out money, we're getting yield on that. There's definitely some risk associated with it. But on the whole if you have like pools of loans, you're getting some kind of yield that is, that is, that's reasonable and, and also helping to support those like provide much more competitive rates to those markets where those rates might not be as as competitive today.
- [30:09]
B
Yeah, you kind of in passing mentioned both AAVE and Chainlink, two of the biggest names in the space period, who I believe you are now officially working with and integrating with. So a, I mean, I guess talk about why working with Chainlink and aave, but then I want to get more into a deeper discussion about what DEFI is going to look like moving forward and where its place sort of is in relation to the legacy financial system. But I mean first maybe just talk about what you're doing with the two of them.
- [30:40]
A
Yeah, so both Chainlink and AAVE are integrating aptos. I think a lot is the first kind of non EVM support and so pretty excited about that kind of shows. Like, you know, they looked a lot of logged in protocols selected us and of course those are big heavyweights in the EVM ecosystem. And I think if you tried the experience in the AAVE testnet, I don't know if you had a chance to play with that for Aptos. You know, compared to the mainnet product for different other chains, it is night and day and it is lightning smooth. It is the experience you would expect dealing with any other financial institution that you've ever worked with in the past. And that's pretty incredible and inspiring I think, to see how the experience can just look just like a Web2 financial experience, but yet happening on decentralized platform with high speed rails under the covers with extremely low fees and then with Chainlink coming on board, having that very reliable trusted source of data and Oracles that can now be transacted across the entire aptos ecosystem is a huge win for all the developers and users who are building out in the Defi space there.
- [31:44]
B
Okay, so let's talk about aave. Obviously the blue chip, sort of one of the first major Defi protocols, almost being viewed as dinosaurs because crypto moves so fast at this point. Right. So is what AAVE has been doing in the past sort of the capacity and excitement that we have around Defi? Are they showing what's possible or do you think that there's a lot more that DEFI has to offer moving forward?
- [32:10]
A
I think it's one of those trusted protocols where there's a lot of new things that pop up all the time, but if you want something that is very heavily audited, heavily reliable, very thoughtful from a security standpoint, it's going to be hard to find someone better than AAVE in that space. And they also have very neat new ideas, which I probably can't talk about much, but I think when you can leverage the IC infrastructure, you can do a lot more than what you could just do on evm. And so those are the areas that we're particularly excited about partnering together, not just on the existing product suite, but on the next set of products that the AAVE team is looking to build.
- [32:42]
B
Right. So what does DEFI look like to you in the coming years versus the global financial system? If you ask people, when DEFI first is invented, they say it replaces it wholesale. Right. I would have argued certainly at that time it would be a parallel system, maybe for people who didn't have access to it or were more crypto native. But does it ever, I mean, is it getting to the point where the UX UI is so simple that it could become the plumbing for that legacy financial system or we'll find more meaningful adoption in some sort of way? I'm trying to like visualize kind of where it plays, how much of that system it eats, you know, and what that looks like.
- [33:18]
A
Yeah, it's a great question. I think we have a pretty specific view here. So our view is that as more assets come on board and on chain, whether it's like these money market funds or some of these loans, or it's going to be private equity, that just provides a better venue for trading these assets to a larger market. When it comes to payments infrastructure being happening on chain, that's also going to drive more adoption for DEFI in general. Like, better, like you said, yields accessible to everybody across the board. And then the last piece, of course, the trading aspect, as the systems become much, much more performant, starting to, you know, from a user perspective, looks almost identical to a sex experience. I think that would be another factor here. So what happens to me is that you have a system like aptos which is almost connecting these centralized exchange assets, like centralized exchanges and the road assets into one system where you can actually permissionlessly interact with them, compose these things and things like, again, the composability is something you can't do across centralized exchanges. There's no easy way for us to make a trade on NASDAQ at the same like contingent on trading NYSE or based on some other thing that happens outside in the real world. Those things can all be possible in a DEFI ecosystem that is very powerful, very high performance and then can has massive liquidity on top of it. So that's kind of the future I see. The future I see for aptos and.
- [34:40]
B
For the industry in general, does that TVL and liquidity come from onboarding the huge institutions that already have it or is it going to be something that needs to grow organically within as more apps and more protocols are added? Or is it a bit of both?
- [34:54]
A
It's definitely going to be both. It's definitely both. I mean look, the good thing is that there's a lot of liquidity in crypto from a lot of successes in Bitcoin, Ethereum and others. And so it can come from that direction. It can also kind of come from the broader open the financial system which is starting to see now that this is the future. And I don't think they can really ignore it anymore going forward. And as these infrastructure and technology improves to a large degree, there's no option but for this to actually take off in a meaningful way. And so we'll see things going beyond kind of experimental, dipping their toes into much more serious integrations into what does it mean to be more on chain trading platform?
- [35:33]
B
Yeah, that makes a lot of sense. We've had these other outside of Defi, we've had these sort of, guess we'll call them bubbles, right. In the past NFTs, metaverse obviously DeFi was one of them. We all know, right. We got really excited. Everything with that name goes parabolic. Then prices drop, 90% of the stuff goes away. But there's this couple percent that's left that I think plants the seeds for sort of the future of those buckets. Do you think that those things sort of catch a bit or excitement again? I think gaming was one that we were way too early on last cycle that we're starting to really see start to bubble behind the surface. But are NFTs going to come back? Are we going to be building houses next to Donald Trump in the sandbox in the metaverse? Or were some of these things just complete hype and euphoria?
- [36:24]
A
I think it really depends on each one. Right. Like we can go kind of go line by line on these, you know, you know, NFTs really picking up kind of led to meme coins in my opinion and then led to like these almost like AI based meme coins as today, like in virtuals. So it's, it's a form of like how do you speculate about how something could be valuable with respect to community or a certain product? And I think that, that you know, even the way tokens are today, you know, fits part of that, that piece, that evolution to me it just keeps continuing into different forms for, for a long period of time. When we think about other areas of like the metaverse and stuff like that I in gaming for Gaming and Metaverse, like they're, they're. They're very similar and related in some ways. Right. Like, so games are virtual worlds. Metaverse is a virtual world. Gaming, I think historically has been kind of more about like assets and games being moving to blockchain. And that's nice and it's a good first step. But the real interesting thing for me with gaming is it's not just about assets moving on chain, but the interoperability of those assets across other applications. And so we haven't seen a lot of that lately, but when that happens, I think that'll be truly exciting.
- [37:30]
B
Is that like sending your skin from one game to another? I've got a sword in one game and I can port it to another game or your identity, more appropriately, your character goes from one game to another.
- [37:40]
A
Yeah, I think things like that. But I mean if I gave a different example from a different genre of application, something like Kid Labs, which is building on Aptos, a ticketing platform. So tickets, they're interesting to have on chain because of a variety of different reasons. You get directly connected from the event organizer to the consumers themselves, which is great. But they could also be a loyalty play where I'm pretty old. So I remember in old days if I went to a game like a basketball game or something, if the team won, I might get a free taco from Taco Bell.
- [38:12]
B
Dude, 100 points and you get a free taco. Come on, man. I knowledge too.
- [38:16]
A
Yeah, so, so, so that kind of thing that can be done on chain now as a way to distribute, you know, incentives, coupons, rewards as a part of that platform. You could imagine that happening in gaming or the other kind of vertical within the Web3 ecosystem. So more of that I think is going to drive like, you know, the, the interoperability aspect is something that is not played out yet in terms of value, but it needs to be. And that's where I think we'll will still have traction in the coming years.
- [38:41]
B
Interesting, because maybe that's the interoperability play is not just being able to do generally things from chain to chain. They can handle it. But if there's a game on one chain and you want to port it to something on the other chain, that's where you need it. That's a really interesting something I never kind of thought about.
- [38:55]
A
So just that usage of those assets, but also like the ability for us to kind of use those as networks to kind of bring in bringing other consumers. And also like as you think of these loyalty Plays like advertising and marketing kind of fall very naturally into that once there's sufficient kind of traction in web3. So a lot of it's also just us getting proper distribution. And then some of these old Web two techniques of advertising and marketing and then going back to again how these marketplaces work are usually high frequency trading type applications all playing together in our virtuous cycle.
- [39:30]
B
There's been others, but I think that gives us the gist. We have new ones though, right? So rwa, right. And AI in my mind those are kind of the two biggest that are bubbling right now. RWA I think could be very, very real this cycle. I mean I think last I checked, RWA XYZ outside of stablecoins, there's already 11 or 12 billion dollars in institutionally tokenized assets. Not huge, but it's a real number that's grown very, very fast. And it seems like the biggest players are deeply looking at that. Right? So like I don't think that's a bubble when BlackRock is doing it. Right?
- [40:08]
A
That's right. And I think to your point, like people have been trying to dip their toes in there. That's why it's kind of modest at this point with maybe 11 billion there. But what we're hearing from the institutions and from what we, who we talk to there is a real desire to go beyond now those experiments into, into, into something more, more, more tangible and much more, more deep. And I think a lot of these projects have experimented with more private networks in the past and understand those things are, you know, those are great for experiments but in order to kind of move the ball forward, public permissions networks and those networks that also can support aspects of privacy that are necessary for those high speed transactions are going to be very important for us going forward.
- [40:46]
B
And so that's wrapped. Are private blockchains going to be a thing? Seems like nobody talks about it anymore. It just seems really difficult to be siloed. You know, like I get it if like JP Morgan Coin, they need to use that for their own cross border transactions, period. But that doesn't scale beyond that singular use case.
- [41:07]
A
I we'll see. I mean I guess this is more of a regulation question than anything, but I guess administration in place. I mean I think public blockchains are going to have a lot of advantages over those private blockchains in terms of usability and interoperability as we just talked about. So I hope that most of it moves to public blockchains in the future.
- [41:25]
B
So in my mind AI has been one of those sort of like, we'll see it bubble and then it'll pop and it'll come all the way back down and then a few years in the next cycle it'll be huge. But I'm starting to change my opinion on that. I think AI is moving so fast that, listen, I think a lot of the AI agents that for some of these tokens will disappear, obviously, but I think that is moving so fast that it's now just inextricably going to be like, combined with blockchain technology. So even if the token doesn't work or something, I mean, is it fair to say that you guys are utilizing AI heavily and that's going, that's not going to be removed once it's in there?
- [42:02]
A
No, I think AI is a lot, I mean, to your point, has there been a lot of hyper on AI? Yes, there has been a lot of hyper on the AI and then if you distill it into things that are very practical, there are very good use cases for it. We actually have worked with Microsoft on some early initiatives and some trials around how we could build out AI infrastructure for answering questions about aptos that are very up to date in real time. In the Aptos AI Assistant, we've tried experiments around how AI can actually help developers onboarding to move. Move being a new language. And just in general, programmers are going to be much more accessible to new languages because of the fact that AI can help them translate their code, even if it's not perfect from one programming language to another. They can do that with solidity to move. They can do that with other forms. And now you really lower the barrier of entry from a program, switch from one language to the next. So that's another area that's really exciting to your point around AI agents. AI agents kind of today are much more like rebranded bots. I would say there's not a lot of AI going into those things, but the, the potential is there for sure because as you can imagine, you know, the bots today will trade on your behalf to achieve certain goals and, and values. But, but an AI agent operating your behalf will be able to, for instance, you know, book you a ride on Uber or like schedule a, you know, event that you book a restaurant you want to go to based on your tastes and start to leverage a lot of your preferences in both implicit and explicitly to do things on your behalf. And I think, you know, the, the, one of the first use cases of AI that's going to be kind of obvious is to think about how does an AI agent trade on your behalf at high frequency to kind of make sure you are maintaining certain goals around your financial portfolio or you know, if you, you have a desire to do certain things that you're, you know, you're aping in immediately. That those kind of things, I think is where AI is going to really play a large part in the future.
- [44:00]
B
I wonder if it's going to just mimic people's bad behavior if it's learning from them.
- [44:04]
A
Right.
- [44:04]
B
Because we know that people are terrible at these things. And if you're programming it to behave like you. What gets me about the AI trading, which I think is absolutely the future, everybody's going to have an agent, they're going to be out there. But trading is still generally a zero sum game. So if my AI agent is still player versus player on your AI agent and one of them is going to lose. So there's no way you could just have a perfect trading AI if there's other AI out there competing in the order book.
- [44:32]
A
Yeah. So there are parts that are PvP, as you mentioned. I think those pieces are going to be probably less. I mean, I think they're more as like, you know, maybe you want to keep a certain position in BTC and eth, for example. Right. And you want a certain exposure to that as an overall asset class in your portfolio. You know, AIG could do that for you and it'll trade on your behalf. So it's not going to necessarily balance.
- [44:51]
B
Right, exactly.
- [44:53]
A
So that's the way I think about it is more like, you know, Maybe there's a PvP aspect to it, as you mentioned, but it's going to be like about like what are your goals from a portfolio construction standpoint?
- [45:02]
B
Portfolio manager, it replaces your like ria, basically. Right. You say exactly what you want. You take a model portfolio of some sort and you don't have to have a call every three to six months because it's actively doing it on a daily basis to keep you on target.
- [45:20]
A
Exactly. It can normalize based on like your, your demands how, like how frequently you want to rebalance. I mean, you can imagine with fast enough trading, you could rebalance every couple minutes, which would be. Or every couple seconds as long as you have those fees in a reasonable place and it's not eating into your.
- [45:34]
B
Overhead of your portfolio taxes. Right. But yeah, obviously there's a lot of reasons to do it the way that it's been done, but we could see a lot of those regulations and laws change as well. But I do think that's really interesting because not only can it obviously balance your portfolio to your own preferences, but it should be able to maximize strategies moving forward for there see where you have an inefficiency, see what's underperforming, naturally rebalance into something that has a logical reason to outperform. And that's going to be better than any human.
- [46:06]
A
Absolutely. And you have access to stablecoins, you have access to Forex. And over time and with the right infrastructure that something like aptos can provide you, it's just like very you can operate at very fine granularity because it's so cheap, it's so fast, it's so scalable. And so our job is to make sure that infrastructure is there for you so when this future takes place, you have the best possible experience.
- [46:27]
B
Do you think that AI is also going to be dominant in legacy markets off of blockchain? I mean, we keep talking about this natural marriage between AI and crypto, but it's not like JP Morgan isn't looking at AI.
- [46:39]
A
I think every field should be looking at AI, right? Everything. I mean, even podcasters, right? Like, how can AI help all of us in the podcasting space think about how we can answer questions better or like, you know, come up with questions on the fly based on the responses that are happening real time.
- [46:54]
B
I use chat GPT mid conversation and that's the most basic thing just for, you know, sometimes it's background or a little bit of research, you know, but I, I didn't know off the top of my head. Visa's transactions per second, guys. I looked it up, you know, so.
- [47:07]
A
Using it perfect, right? And so I think every, every field is going to be leveraging AI to its fullest and it's just going to improve us as efficiency for society going forward.
- [47:18]
B
So what do you. I know we're coming kind of to the end of our time. Like, what are you most excited about now coming forward? As I said, it just sort of feels like it's all systems go for the first time ever. For you, for me, anyone in the United States who's participating in this in general, also in the midst of an already existing bull market at the right time of the cycle. I have no idea what's going to happen in the future, but it feels like the stars are aligned right now for an explosion. So what really excites you? I guess shorter term, but also beyond the hype cycles, shorter term.
- [47:51]
A
I think like you said, all the stars are aligned, whether it's going to be politically even the way that infrastructure is coming together. The fact that these systems can scale and provably through aptos to support Internet scale capabilities. These things are all really important ingredients for making these happen. Now I think the next job is just adoption. So and we're seeing this, we're seeing the largest institutions in the world which we will, you know will announce I guess sooner rather than later starting to think about really exciting use cases and bringing that mass adoption into the Web3 space. We'll see, we're seeing now that like you know, the way the Trump coin took off or WLF World Liberty Financial is starting to think about how to bring crypto to the masses is also no area that will push forward with adoption going forward. And I just see this as a huge acceleration of you know, different, different verticals for sure. But especially in the finance space, you know three areas that we care about the trading payments and cross border payments reminiscences as well as the road assets like these are the areas that we expect to see massive growth in 2025. From infrastructure to products to usage that we're here for. We're gonna, we're gonna be pushing as hard as we can to accelerate that coming future as fast as possible.
- [49:08]
B
I guess worth asking with all of that in mind how does the token itself play into the ecosystem and why is it important? Because obviously talk about all the technology for days but there's a token associated to it, right?
- [49:23]
A
So the way I think about plus token is just like it serves three purposes. It's a way to pay fees in the network, it's very cheap, cheapest in the market. It is also a way to secure the network through staking is also the governance piece I mentioned earlier which is the onchain governance to vote for network operates going forward in the future. But what we're going to see also is exciting token launches from the ecosystem in the next couple months where some of the you know, the bigger game, game changers are going to be kind of allowing people to participate in the economy of those networks. And, and they have major plans in terms of growth in terms for, for tvl, for users for new adoption that we're all kind of like very, very excited about for 2025. I can't wait till those plans like materialize into things that we can talk about. But, but I get the breaking.
- [50:10]
B
Can I get like the announcement nod, you know like the breaking news. Can we, can we break it? Because I, I know you guys have.
- [50:16]
A
So we'd definitely love to chat with you guys more about that when those things happen, but it is, we're, we're seeing the, the signs like from our side that crypto is ready to take that major leap forward as an industry. Serious players are looking at it not just as a trial, but as an actual use case. One thing we talk about of course, is the, the Hong Kong Stablecoin which is being considered to build an atos. And that's something that's exciting because a regular stablecoin would be, would be incredible.
- [50:44]
B
If it feels like we're gonna have more stable coins than meme coins soon.
- [50:47]
A
That's right, that's right. That's a hope. Right. So the more adoption that comes, that's supported by governments, regulators, that'll happen abroad as well as here in the US is going to drive this adoption much, much more quickly into the, into the present.
- [51:00]
B
So to all the devs listening out there, all the people who want to participate, what's the best way to check out what you guys are building? Start to get a feel for it, play with it, or even just for your average retail sort of investor enthusiast to start playing with aptos.
- [51:15]
A
Yeah, that's great. I would say download the Petro Wallet, you can use it on mobile, you can use it on, on desktop browser start. And from there there's a bunch of ecosystem activities you can do. You can, you can play with different defi things, you can start to play some games, you can start to look at other products like kit labs and buy some tickets. If you, if you're in New York City, there's a, there's a, there's a ton of things to do there and I would imagine you should go check that out immediately if you want to build, you know, we're welcome to like a lot of new things being built, a lot of novel ideas. Really. How do you leverage kind of aptos's unique capabilities in, in throughput, in cost, in, in also scalability and latency and then also things like we have full features like on chain randomness, which allow you to build really unique gaming speculative type experiences on chain. And then trading, trading wise, I would say like the, the, there's no better place to trade to build trading platforms than on aptos. So those are areas that we're really pumped about. But you know, anything novel that is going to really help bring more adoption, we're excited about. We have a new head of ecosystem named Ash. I would definitely encourage people to reach out to him as well. He's got a very busy job, but he's taking on the Inbound of so many different developers are excited about building stuff, but he can definitely be helpful in the process. And my DMs are always open as.
- [52:39]
B
Well on Twitter and people can find you on X and Avery channel.
- [52:42]
A
That's right, that's right.
- [52:43]
B
Easy. Don't harass him too much in his DMs. Guys. Busy. He's busy. Yeah, go to the other guy. But man, the more I talk to you, the more when I think about just how everything's aligning and then it feels like not only are all the things we needed to line up in the background, but now it's actually ready for the big show. The technology, it just hasn't been in the past.
- [53:06]
A
It is, it is. And it's going to get better. We got Raptor coming, which is new consensus program. We've got block SMV2, which would be new parallelization engine. We've got move 2, which is already helping devs get on board to move much faster. There's a ton of stuff being worked on the tech side to make it much better for devs going forward in the future.
- [53:23]
B
Awesome, man. It was really a pleasure to talk to you. It's been a pleasure to work with you guys and can't wait to see what's coming. I know that I might get an inside line on those announcements, which is really exciting for me and just can't wait to see this sort of play out and for us to, you know, catch up on a monthly, bi, monthly, whatever it is, basis and really just keep the pulse and see what's being built, man. Thank you so much for taking the time. I really appreciate it. I'm glad we got to do this.
- [53:48]
A
I really enjoyed this chat, Scott. Thanks a lot. That's dope.