← The Wolf Of All Streets
The Wolf Of All Streets
Robots, AI & Crypto - What’s Coming Will Blow Your Mind | Avery Ching
00:19:31
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- [00:00]
A
I'm Scott Melger, host of the Wolf of wallstreets podcast, here with Avery Chang, the co founder and CEO of aptos. You guys have built some absolutely incredible tech.
- [00:11]
B
Yes.
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A
Now it's time to get the world to use it.
- [00:14]
B
That's right, absolutely.
- [00:15]
A
So what are you primarily focused on at the moment? What are you most excited about?
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B
I'm most excited about Aptos taking on the role of the global trading engine. And what that means to us is like there's been a lot of promises in crypto for many years, ever since Bitcoin was out there. How crypto would change the world and make the world's economy on chain, as we've seen over time. My background is I'm a technologist. The technology wasn't ready yet, but what we're seeing now is the technology is finally there. You have something like an Aptos that can do payments in under a hundredth of a cent finality times that are well below other blockchains at about 600 milliseconds today and going to get faster over time. And we're seeing the scale that can rival the largest payments networks in the world, whether it's MasterCard, Visa or all of them at once. And so for finally, for the first time in history in crypto, we have a technology infrastructure that can finally address all these use cases and push things forward. And so a couple key use cases we see moving forward in the future. One is trading today's exchanges in the world. You have the New York Stock Exchange, you have the nasdaq, you have London Stock Exchanges. All really valuable for a lot of the, the world's financial markets. But they're all disparate. They're just, they're, they're, they're centralized and they're only accessible to a small proportion of the world's population. We see with blockchain, we can actually build out systems that are going to be one global market, that are going to allow everyone in the world to transact with and that are also going to support the kind of composability, interoperability that wouldn't be possible. Example would be like if you want to take out a loan and then make a trade and then, you know, have upon the trade and do another action. You can string all those things together on a blockchain permissionlessly. That's something not possible in today's environment. And so you start to add up the trading parameters Aptos is building. The infrastructure has already been built around stablecoin as well as the kind of the robot Assets are coming on train, you have a very powerful trading infrastructure that can support the world's economy.
- [02:08]
A
Does that require tokenizing all of those assets to make them available in one system or does it work with the current system and how the assets are. Actually, I think we're going to see.
- [02:19]
B
We'Re going to see a transition definitely from today's kind of off chain assets into on chain. And it does over time require that tokenization. But it doesn't happen to happen all at once. It can happen in pieces. You can imagine. Today we have ETFs which are in some sense making the Bitcoin and others, like other assets, accessible to a larger part of the population. Tokenizing assets is just another form of kind of making those available. And it's going to be happening over time, but we'll start to see even IPOs happening on chain. We'll start to see private credit, private equity happening on chain. And it'll be kind of piecemeal. But as time progresses, it starts to become this avalanche of activity that will produce over time a single exchange or can be a couple exchanges that are global, that are accessible and that support everybody in the world.
- [03:09]
A
I don't think people realize, certainly not people from the United States, how difficult it actually is to access our markets, to access our stock market from abroad. I mean, most people in the world can't even buy Tesla stock.
- [03:21]
B
That's right. That's right. And even, even for today, like, you know, a lot of the people in, you know, in the US even don't invest into equities because it's just, you know, too hard or, you know, they don't have access to banks or whatever it is. Union America, there's a, there's a relatively non trivial portion of the population that is unbanked that is not playing with our financial system. But you're right that worldwide is far worse. And so the value of crypto to kind of make that a worldwide global activity for Missionless is going to really change the way that the world thinks about finance. Not just the way we think about.
- [03:52]
A
The U.S. yeah, the United States. I think we take for granted that we have a functioning banking system and we have access to payment networks like Visa and MasterCard. So I think we've seen adoption all over the world, specifically of stablecoins and other parts of obviously the crypto industry. But now it is surpassing our incumbent systems as well. As you mentioned, I mean the speed of transactions you talk about absolutely blows Visa out of the water. Does people like that's Mind blowing because it was always that we were sacrificing something.
- [04:25]
B
That's right. It's finally ready. The technology is ready. And it came, you know, took this idea from Bitcoin, like, how do you build a permissionless financial system? But it's possible with incentives. It's possible when you construct an economy in a certain way. And now that we see the technology has caught up to it, having a permissionless system with great technology that can support, you know, again, payments at under a hundredth of a cent, that, you know, compared to a swift network that takes one to five days to clear, has 68% of overhead and fees, that money moves worldwide now. You can do things like dollarization that happen globally. Everyone can transact in any currency they like. These financial barriers have been completely unlocked. And when you look forward to the future in the next five to 10 years, we're going to see the global economy just elevated to such a scale that we never imagined was ever possible.
- [05:16]
A
You obviously have partnerships and relationships with some of the biggest financial institutions in the world. Do you feel like right now they're starting to actually care more deeply about the things we just discussed? Like, they can now see it. This is so incredibly fast and cheap. This is a superior way to be doing what we're doing. And are they coming to you then to build out this future? Because I would imagine that they don't want to go the way of Kodak or Sears or Blockbuster. Right. And be replaced.
- [05:47]
B
Yeah. The end of the year's DLM is always a tough one for sure. But many of the financial institutions are starting to see like this change is really happening now. And with all the legislation in Congress, the stablecoin bill, the market structure bills are starting to pass, we've seen a lot of inbound interest around for the largest financial institutions towards adopting this technology today. Already, BlackRock, Franklin Templeton, Apollo, Reverend Howard are all issuing tokenized money market funds on top of aptos. We've seen the growth of stables to a huge degree where USDT, USDE, USDC all have over collectively like 1.1 billions of stables on top of ATOs. And so this is only going to go in one direction. There's no going back at this point in time. And a lot of other institutions like Robinhood have talked about publicly about tokenizing equities, and that's all going to happen as well. So Aptos is definitely here to be the infrastructure for all this change to happen. But we're seeing a lot of that inbound, as you mentioned. From the largest financial institutions in the world, thinking hard about how they can be the innovators in the space, how they can disrupt, and how can they provide their customers superior experience than to what exists today.
- [06:55]
A
You alluded to it, but tokenizing treasuries and money markets seems to be the proof of concept for what can be done, because it seems that's what everybody's focusing on. Is that because they feel there's more regulatory clarity to do that right now, or do you think that it's just a test case for seeing how things will move on chain, how this will actually operate before I guess they start taking larger risks?
- [07:19]
B
I think that you're right that, you know, a lot of this can be early adoption. Like, you know, people want to just understand what's possible, start with not necessarily the largest use cases out there. I mean, I think even at, even at Meta, when we were thinking about Libra and Diem, the idea was to go big for sure, but you'd start with kind of the first use case, second use case, and build up over time in terms of traction and adoption. But the future is, I think, pretty clear to most people that, you know, one day NEO banking will be kind of the clear winner. We'll be paid in crypto. You'll be tied to a credit card. You can spend it immediately, but you can also earn yield. Like today a checking account might earn you, you know, zero percent yield, quarter of a percent of yield if you're lucky.
- [07:57]
A
That's crazy.
- [07:58]
B
It might cost you fees. I don't know, like, but, but you know, ideally you have your paycheck coming into your crypto wallet where it's then earning yield automatically and then only when you spend it a time point of conversion, you know, that's when the kind of money flows out of your wallet. And so that, that kind of future is definitely on the horizon. And we see that with Aptos coming.
- [08:14]
A
Soon, it seems like we've reached this pivotal moment where the industry can actually do all the things that it wants to because we're going to get some legislative and regulatory clarity. You talked about being at Libra Diem, obviously under the, at the time, I think it was Facebook, before it was Meta, Umbrella, a lot of names, but effectively tried to launch a private stablecoin and obviously incredible pushback from the United States government, had to appear in Congress and discuss it, rebranded and eventually you left and created Aptos. Do you think if that was created today, it would have been a very different story?
- [08:49]
B
Yeah, I'm pretty sure today if it was created, there'd be no issues at all. It'd be a different world we live in. So timing was definitely an issue with Libra and Diem. Today the administration is much more supportive of crypto and with the stablecoin and other bills going through, I don't see why that would be an issue at all.
- [09:05]
A
Do you think that that's then the future of stablecoins is it private stablecoins across social media networks and every bank has their own stablecoin for transactions and every platform basically has their own form of money.
- [09:17]
B
You know, for us we're stablecoin agnostic in some sense with the infrastructure that's going to help these things move quickly and support trading of these assets extremely quick. Forex is going to be a huge market in the future and even trading between stables of the same kind of underlying fiat backed currency. So USDT to USDC and back and forth I think is going to grow massively. To your point, every large institution is thinking about issuing a stable. There's a ton of yield out there and there's a lot of incentives and there's a lot of opportunity for people to do that. So I think we're going to see a massive expansion of stables coming in the coming years for sure. But ultimately, you know, I think customers will kind of figure out which tables work for them.
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A
Yeah.
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B
And there will be again the kind of a, you know, a trimming of the crowd.
- [09:59]
A
It's interesting. Then we'll get back to the interoperability challenge because if there's Amazon Coin and Meta Coin and Goldman Coin, if you're going to want to send one from one platform to another, that money has to be able to move freely and that's going to be its own challenge.
- [10:18]
B
That's where the, you know, it's Forex and blockchain can really help a lot. Right. So that conversion happening in the back end extremely fast with dozens of sort of payments. So you can imagine a world where if you pay on Amazon with Amazon Coin, but you want to settle it with USDC or something like that, that can happen with a single transaction on chain, be seamless and also not add any latency to your customer path. So I think that's where blockchain is going to really show the advantage of the interoperability and the advantage of the permissionless nature of it to kind of compose different kinds of programs in the back end to support almost any kind of use case around finance that you need to make possible.
- [10:55]
A
I think you touched on in the Beginning. But maybe the most compelling part for the average person is that this can all happen in one place. It will not be so fractured as it has been now.
- [11:06]
B
Exactly. So again, if you think about the different stock exchanges around the world, if they were, you know, put in one place for centralized liquidity, it's just a much more efficient, effective financial system for everybody. And so the biggest barrier there's been technology to support that. Now that adoptos, we've had some innovations around zapdos, around our new consensus book or Raptor around many different innovations to support all the world's finance coming to one hub, one global liquidity hub. And that can then support, you know, an amazing amount of value for everyone around the world.
- [11:38]
A
You just mentioned Raptor. That's brand new. This is brand new in the most tldr basic terms. What does that actually mean?
- [11:45]
B
It is a huge breakthrough in consensus based technology. The agreements, kind of all the transactions happening real Time supports over 250,000 transactions in a, with a, with the finality time of 750 milliseconds, which is just crazy. That's crazy. Right? So the whole world's financial economy can work on technology like that. With something like a Chardin's we can scale it up to a million, 2 million, 10 million transactions per second in the future. So it's pretty clear that gist technology is here to really replace all traditional Rails, all ways of doing value transfer. And that is going to be something that we all look forward to bringing faster into the future with new tech that we built.
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A
I guess there's a few ways that could play out. Right. So we talked about the innovator's dilemma. Obviously those systems can get replaced, but those are the strongest incumbents there are on the planet. Right. You're talking about the big banks, governments, payment networks. They're not going to go quietly into the night.
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B
Yes.
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A
Two I guess is they adopt it and or get entirely replaced. I mean, you know, how does this play out in your vision?
- [12:47]
B
In my vision I believe that they all, I think a lot of them just adopt. I think that a lot of them are seeing the traction that crypto has. A lot of it's been excitement on different types of tokens but now the real use cases are actually here and they're looking for also ways to innovate and disrupt and move their business forward. Ultimately having a global market is going to be very valuable for the kind of the leaders in the space. And so for the ones that come in early that kind of push things forward. And can, you know, accept and appreciate the value of these kind of new Rails. It's going to be a massive, massive value add for that company. And utility for customers around the world.
- [13:24]
A
Can you give any hints as to who else might be coming or what will be sort of the next big use case without obviously offering specific names or anything that's privileged?
- [13:35]
B
I mean, for us, I think the biggest thing is to see decentralized exchanges kind of take on, you know, this new technology and just build out something that's a product globally accessible. And we're seeing some of the largest partners in this space really, really excited about this technology moving forward in that area.
- [13:50]
A
Yeah, I mean aptos isn't just about big financial institutions though, right. This technology can do so many more things. So I'm imagining, and I know for a fact obviously there are people building out gaming and metaverses and NFTs and AI and all the other things that are so popular and have had their cycles throughout crypto. So what else is being built that excites you outside of necessarily the financial system?
- [14:17]
B
So we're definitely focused on building aptos to be the global trading engine. But the global trading engine can do amazing things on top of it. Right. So one good example is the area around Deepin. So seeing kind of new innovations around crypto to be like, I think earlier we just talked with the Helium folks around how they support kind of global payment plans for cell phones. But there are so many examples of kind of real world utility and assets that need to be coordinated with the blockchain and then have payment rails for it. That's something that I think aptos is the only network that can support that. Most of these even projects today are kind of just doing a small amount of their kind of crypto settlement on chain, but for their kind of full vision of decentralization, you need to kind of build out a full infrastructure on crypto. You need to support all the coordination happening on crypto and then all the payments infrastructure. So if we're kind of providing an application service, whether it's a cell phone plan, whether it's going to be computer infrastructure, storage or networking access or anything you can imagine in the real world being sold that has to have an aligning payments infrastructure. That's where something like aptos is really going to shine and support the largest use cases in the world.
- [15:26]
A
People might ask actually why we need this many transactions and that fast where it's at such a scale now that as we said, it far exceeds anything that's existing I had this eye opening conversation recently with Paolo Arduino, the CEO of Tether and Bifinex. I said, you know, what's your vision for the next five, 10 years? He said, well, we know the robots are coming. There's going to be a billion robots. All of them are going to be powered by AI and they're all going to be transacting with each other both on our behalf and on their own behalf. It blew my mind, but that's, you will need, you will actually need that kind of scale. If AI is transacting with itself and this isn't just humans transacting.
- [16:03]
B
That is completely true. You're going to see a world where price changes that happen in the market are going to have a huge downstream effect. People are going to rebalance their portfolios. AI bots are going to then interact with each other. Businesses are going to change their strategies. So every single kind of price feed update is going to have a massive impact downstream. It just can't happen today because existing systems kind of have broken that line of connection. But when everything can be transacted on chain, when the world's economy comes on chain, it's just a natural evolution that, you know, all these, all these, you know, future transactions that we couldn't do today are going to happen in an on chain manner as well.
- [16:38]
A
So where do you think that marriage between AI and blockchain will be the strongest? Is that really the payments.
- [16:44]
B
Payments and finance. Right. So that we already had the kind of situation where automated portfolio managers were really big maybe five, 10 years ago, helped betterment and others have kind of helped people to rebalance their portfolios and do portfolio management and construction. In the future we're going to see AI really get tailored around the kind of way you think about your portfolio's construction and kind of have rebalance your portfolio almost instantly. Right. Or to be able to take actions on your behalf. You know, if I booked a restaurant today, but you know, that restaurant, you know, reverted my booking because it's no longer available, close is going to find the next booking for me automatically prepay that and figure out all the right things to do. So it's very clear that the transactional need on chain is going to be massive as this vision comes to pass.
- [17:30]
A
Is blockchain really the only payment solution that would work with AI? It's all about unless somebody comes up with something brand new that obviously couldn't work with traditional rail.
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B
It's only two things. You've got centralized infrastructure, you have decentralized infrastructure. If you want a world based system where people can all trust it, I think it's kind of been proven over time centralized infrastructure does not work for that. No one has built a centralized infrastructure that people around the world are willing to trust. That's where blockchain really comes in and that's where blockchain can solve all these problems of a global comeback.
- [18:00]
A
And how much do you think that legislative or regulatory environment, not specifically just in the United States, but internationally, could hinder that progress? Because it sounds like one of those situations where governments will say this is beyond our control and we know that they're going to obviously want to be able to regulate and legislate around those things. To me it just sounds like it's going to move too fast for them.
- [18:23]
B
I think the governments will definitely work together on these efforts. I mean, I think when US moves, others definitely pay attention to it. We've already kind of seen the impact of the push on market structure and stable coins to impact many other parts of the world like Japan. And I just am very optimistic that with government acceptance, with regulation passing, that's going to be supportive of the new world. And with the technology like Aptos kind of being there, support on the technology side and the obvious demand from consumers around having global access to financial products and to payments rails around the world and even Forex and stuff like that, you're seeing like the acceleration is going to be happening a lot quicker than I think most believe.
- [19:07]
A
Avery, I love everything you're building and I can't wait to see our robots transacting with each other while we're traveling to the next conference. Man, thank you so much.
- [19:15]
B
Thanks Scott.
- [19:16]
A
Thanks. That's dope.