← The Wolf Of All Streets
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- [00:00]
A
Good morning everybody. Welcome to a slightly delayed Crypto Town Hall. I believe that our co host Dave Weisberger is playing in poker tournaments in Vegas right now, or hopefully sleeping after playing in poker tournaments in Vegas last night since about 7:30am there and I had a recording. So appreciate you guys being patient and waiting for us and all of our amazing guests and panelists for giving us that little leeway to show up. So we got a lot obviously to talk about here on Crypto Town Hall. You know, the market's slightly down apparently on headlines that we're ceasing to cease fire, although I don't know that we ever ceased fire or know what ceasefire actually means. But you know, some structural weakness many people are pointing to under the market, like the Coinbase premium being negative and longs being leveraged once again building up, meaning that, you know, maybe it's ripe for another flush and this was just a little bear market rally. I mean my default is it's summer and go away and touch grass and maybe come back in the fall and worry about it. But we can get into that conversation. Obviously the title here, USDT versus usdc, the stablecoin war just escalated. Probably not going to be the main topic, but if you didn't see, obviously USDT is by far the much larger by total value locked. But actually quietly, USDC has been doing the bulk of transactions on stablecoins and that number, it was around 70% I think, and was from a recent Visa report and in context of open USD launching, pretty interesting. I guess we can, there's actually about 10 more topics, but I guess we can just kind of start with the market. If any of our, any of you guys have thoughts on where we're at, what's happening with the price action, other than hey, we're kind of sideways, feel free to raise your hand, jump in, bail me out and let's get this started. You don't have to.
- [01:57]
B
I'm in the middle of touching grass here, Scott.
- [01:59]
A
Yeah, well, touch grass. Touch, touch your phone button while you're touching the grass, please. Ryan.
- [02:06]
B
It's been, it's been interesting summer, but I mean that's what we're expecting. It's a sideways summer is, you know, we weren't really expecting any breakouts anyways and I'm surprised it hasn't gone lower. So I don't know. I still think end of July is never really a happy time with Bitcoin. So interesting.
- [02:26]
A
That's what Matt Hogan said to me this morning on YouTube. He said maybe the Good news is that the bad news hasn't caused the market to drop. Obviously, Strategy being a seller at this point, Brian, I would love your opinion on that. Maybe that's the next. Ryan. Brian, Brian, Ryan. But Brian, obviously you're my go to for treasury companies. So I think we had an interesting situation on Monday and we haven't actually had the chance to unpack it. So that's probably a good place. Strategy sold 200 plus million dollars worth of Bitcoin and the immediate reaction actually was MSTR strategy, STRC and bitcoin all sort of rose. So it was an interesting, interesting dynamic there. What do you think, Brian?
- [03:12]
C
Yeah, I thought it was a great announcement and just what they needed to do. I think that this will gradually remove one of the biggest overhangs in the market today. I say that because it was a pretty comprehensive release. You know, they obviously upped the dividend to 12% for STRC. They instituted dividend and reserve policies. They also talked about STRC and MSTR repurchase programs, which I think will be helpful. And to me the key line was they said Strategy's corporate objective is for STRC to trade over time in a range of 99 to 100. So this basically tells you that they're going to continue to try to push it to Paris. I thought there were a few items that folks might not like. So there's a BTC monetization program, but it obviously came with guardrails and for good reason. They're also saying that they won't change the STRC dividend rate solely because STRC trades below par, which I think is smart. You don't want to let the market dictate you into paying too high of a price. And then I thought like, the buyback authorizations could have been larger, they were a billion each. But to me it tells me two big, big things. One is they're going to continue to support strc. They actually don't have to do that, I think, which is the big fear and what had led to the discount. And so I think that as they continue to do that and demonstrate that hopefully it drifts slowly back to par, and then this should enable future issuance and allow them to buy more btc. And then the second thing is they can now monetize their multiple, whether it's at a premium or a discount, so they can increase BTC per share regardless of its valuation. And you know, they do that by just buying back shares when they're trading at a discount. So I thought it was a big Positive. I think the, the market generally saw that too, especially for strc. So I think things generally improve, especially if we, you know, hang around here. Bitcoin gradually moves up.
- [05:08]
A
Yeah.
- [05:09]
B
William?
- [05:14]
D
Yeah.
- [05:14]
E
So I was going to say it appears to be a bad thing to having them sell btc, but I concur with everything the previous speaker said. It could be just a bit of a release valve actually. But it's good to contrast the fact that while BTC is doing that, Ethereum does not have to do any of that. The biggest Ethereum holders are still buying Ethereum eth and the validators, they don't have to sell. The miners and BTC have to sell to cover up operating costs because of AI spend that's getting higher. Whereas contrast this to the Ethereum validators, they earn yield from staking with minimal operational expenses. So I think this is good news for Ethereum as well. That's what I'm seeing.
- [06:14]
A
Rand, you were jumping in there.
- [06:16]
E
Yeah.
- [06:17]
F
I just wanted to say it's still kind of the four year cycle playing out, even though it doesn't feel that way because we never really had much of a bull market before that it's kind of like working like clockwork. And one thing that's a little bit different now from the past five cycles I've been through is just the apathy in the market. Nobody cares about anything anymore. And I think that's one of the reasons why we don't see tokens moving. Even the Robinhood announcement. If you look at the different projects that Robinhood integrated in their chain, they barely moved a year ago. Two years ago, a news like that would have had massive consequences. So I think eventually the market is going to, is going to go back to fundamentals. You know, people are going to come back to crypto. They're going to be looking at who has been building over, you know, during the bear market, which assets have been actually growing without the price following. And then, yeah, we should see a, hopefully a slingshot effect around that time.
- [07:23]
A
Yeah, that was one of the big stories today was that Robinhood chain in a week had hit 100 million TVL and I believe 89 point something million of it was their earned 7% earned product on Morpho. Right. So I mean it shows you that that kind of appetite for yield is there and probably on Robinhood it's as simple as flicking a button and saying you want to earn yield for their customers, which is probably less complex than what we've seen in the past. So there definitely are things kind of happening under the surface. Right, for sure.
- [07:55]
F
I mean, I can tell you there's a lot that's happening that's on a fundamental level much, much stronger and more bullish than anything we've seen in crypto before. It's just, again, like nobody's. Nobody's looking and everybody's so burnt out from a sort of failed bull market in 2025 that they're just not reacting at. It'll come back. I mean, I'm pretty confident. Eventually come back.
- [08:24]
A
Always does. Anyone else thoughts there or we can. Yeah, go ahead, Go ahead, Andre.
- [08:32]
D
Yeah, so I think the big signal here is that institutional adoption keeps, like, continues to happen. So it's a. A big differentiator for, I want to say, like the last cycle where we. We were looking for more for kind of the. The underlying economics of all these protocols, whereas now you see, like, the likes of Vanguard starting to open up to digital assets, whereas before that wasn the thing. Right. So it's quite promising. I think as the infrastructure grows, we'll. Price appreciation will follow eventually.
- [08:58]
G
Right,
- [09:01]
C
yeah. My view is we're kind of so many indicators.
- [09:06]
A
Yeah, go ahead.
- [09:08]
C
Oh, I. I'm sorry. I was just going to say I think there's a good amount of apathy in the market and attention is diverted elsewhere, mostly to AI. And so I think, like, you need this major catalyst to come along to get people interested again. To me, that is squarely Clarity Act. So Senate is out right now until Monday. You got a lot of staffers working behind the scenes. I think the news has been light, there's maybe been a bit mixed. So you've had a couple organizations come out in support, or at least move to neutral of the Clarity Act. And then I think you've seen Trump's financial disclosures caused there to be a refocus on ethics. But they come back on Monday, the Senate does, and then I think they go back out on August 7th. So the next month is really critical. If we cannot pass it by then, I think attention will shift to midterms, and then you'll see a recomposition within Congress. It'll be much harder to pass it. And so I think that is the big thing that could cause a lot of folks to really come back in. And so this is what I'm watching. And if anyone has heard any news or has any inklings either way on how this could go, I'd be very curious.
- [10:17]
A
I think the odds are so slim, but I would love anybody else's opinion who might be more bullish. On it. Haven't even heard them even have a conversation yet about the ethics clause, which is what is holding up the entire thing behind the scenes. I mean, is there really a world where you get a report that Trump made two point something billion dollars on crypto in a year with his family and there's seven Democrats in the Senate who are going to vote for a bill that does not have a clause that prevents that. I would love somebody to take the other side of that because I just can't see it. David, I think you were lifting your mic.
- [10:50]
G
Yeah, I think the letters that come to mind are NFW on that. I think the other thing that's interesting looking at the Senate is that we've got Mitch McConnell. People are speculating as to whether he's brain dead and he been generally had been a pro, pro crypto vote. So you know, we may be seeing the Senate kind of shift further away from the Republican Party depending on how a special election goes in the Senate. And obviously that's going to have an impact as far as, you know, the prospects for this passing as well. Meanwhile, some interesting data coming out of Andreas and Horowitz showing that crypto wallet counts are down from a peak back in 2024. And you know, the offset on all this is that prediction market volumes are spiking. So what do we need do to get crypto back to being the speculators venue of choice?
- [11:49]
A
If we're counting on it to be speculation, I think we're in big trouble now.
- [11:53]
G
Okay, then the builder then the builder's venue of choice.
- [11:58]
A
Yeah. Anybody else thoughts there?
- [12:01]
B
Was it ever not the speculators arena? I felt like crypto has been a casino from from day one. Whether it be like pre mining to ICOs to NFTs, the whole thing has been just one speculation spotlight after another. Now with the prediction markets it's taking it more mainstream gambling now I think we just need better interfaces.
- [12:31]
F
But that's probably because it's the same people that have been in the crypto industry so far. We haven't yet gotten the opportunity to onboard a new class of users and builders which is finally what hopefully regulation and the US being open for crypto business is going to enable. Like I can tell you, a lot of my friends that are building companies wouldn't touch crypto just because of all the uncertainty around what that meant around all of the stigma around it. There was a lot of people talking about institutions and finance moving on chain but nobody really built it until now. So actually my view to Be honest is, I think crypto four years from now is just finance. And it's not going to be as degen and exciting as it is today, but it's going to be trillions and it's going to be much bigger. But it's also going to be a lot more boring versus what we've been through in the last decade.
- [13:30]
A
Yeah, I thought it was hilarious. If you guys didn't see it, I don't have it in front of me. But Vlad Tenev, the CEO of Robinhood, just at that point, obviously they're developing, developing Robinhood chain as very serious RWA lending. And then he had a tweet that said, you know, we built it for rwa, but it's great for memes too. I don't know if you guys saw that, but I thought that that was really funny that even he was sort of saying, hey, come on guys, you know, do something. You know, remember when base launched and like all the Brian Armstrong memes went crazy bald and such. So I think that was a, a hat tip to the fact that he's aware that there's still that side of it and it's not going to all just be, you know, RWA and lending. I guess we can move on to the topic. Up top. USDT versus usdc. The stablecoin war just escalated. I was pretty surprised by the visa report that said that the strong majority of actual transactions were happening on usdc. Did anybody else see that and have any thoughts? I can just continue to give mine endlessly, which is. Ryan, you always bail me out when you're touching grass. I appreciate it.
- [14:39]
B
Yeah, you know, I've got a great view right now. So throw in here the STR or, sorry, USDC versus usdt. I think USDT is so used over in Asia still, especially on Tron. So I think we lose sight and we become very myopic in our USDC universe here in the US and we forget there's other networks, other markets and millions of people using different types of crypto around the world that are outside the purview of the U.S. so, you know, Tron is still alive and healthy with USDT now here in the U.S. you know, we, when it comes to, you know, payment to payment, I still haven't heard a single person say that, oh, you can, you can zell me or you can send me usdc. Unless it's like my immediate crypto circle the everyday person is scratching their head about. You know, once again, prediction markets think it's a new gambling arena, but when it comes to usdt, usdc, like it doesn't seem like any non crypto cipher punk person is using it or degen onchain gambler.
- [16:00]
A
Interesting point. Yeah. I have to wonder what Visa's methodology is and what transactions they're looking at then. Right. Which wasn't in the reports when I read it. So kind of hard to dig into that. But yeah, I mean I. I don't know what the percentage is now, but there was a even in within last year certainly that over 50% of USDT was moving on Tron. I know that was true. I don't know if that's true now, but I would imagine Visa maybe to your point, not really looking at what's
- [16:27]
B
happening on Tron, I think we do become very myopic in North America. But it is. But I'd say Tron is an amazing like once again an amazing example of how a chain can get a single use case and stay alive and floor and even flourish in certain communities with the network effect around a single use case. And we saw that with polymarket and we see that with USDT on Tron. Some of these chains will never die because they have a good single use case. That just caught on.
- [17:03]
A
Yeah, I think your point was the best. You still just don't hear anybody in the United States saying hey, let me send you X stablecoin. Right. I wonder how things like payments on X and such are going to impact that. Not really sure. But yeah, it's a really point well taken thinking through other topics here. Anybody else? Okay, go ahead. I see a hand. Go ahead. Brian.
- [17:30]
C
I was just going to say this debate on or discussion around Tron and USDT kind of dovetails with the prior question on how do we get people back into crypto. And to me I think we Trojan horse our way in via the large institution. So behavior changes really slowly. And crypto obviously has a steep learning curve. You got to get people to download like a Metamask browser extension, write down their seed phrase onboard, do a sex, send themselves stablecoins. But I actually think like especially if we can get clarity passes. But I think the horse has left the barn, this will happen anyway as these large institutions come in with this massive distribution and they abstract all the more difficult parts about digital assets behind it. They will probably own much of the stack and be able to still extract some rents. But then you get people interacting on chain and I think slowly things start to move toward these public open chains and then you can start to disintermediate those intermediaries via more Defi like applications and make Defi ubiquitous. And I think at that point like people will start to be talking more about, hey, send me some stablecoins to
- [18:39]
F
my
- [18:41]
C
crypto wallet, which is now linked onto my iPhone or automatically included in my Chrome browser, things like that.
- [18:52]
A
Yeah, I was having a conversation with Matt Hogan this morning and he was pointing out how quietly how well Defi is actually performing right now. And interestingly, since sort of the Drift and Kelp DAO hacks, it seems that actually that sort of put in a floor for Defi because we're seeing kind of exactly what you just mentioned, which is I don't think it's your average crypto person anymore. Institutions are actually quietly building on this stuff and it's boring. But that's where all the interest is going to come from in the future. I think that kind of harkens back to the Robinhood chain.
- [19:25]
C
Converse.
- [19:25]
F
This space was downloaded via spaces down.com visit to download your spaces today as well.
- [19:31]
A
I mean Brian, I know you likely favor Solana, right? And so maybe you can speak to specifically what you see there.
- [19:40]
C
Yeah, I mean we like Solana, obviously like CSO at Solana, treasury company Upexi. We really chose it because we think it combines two very unique attributes. One is it was a first second generation smart contract blockchain, meaning it was hyper performant and included things like parallel transaction processing so it could support mass usage. But then number two, it was very early so it launched in 2020. So it has this really great network effects and a lot of users, developers and dapps. And I do think that there are more and more attempts to create new chains. Like I saw some news that BNB is creating a new chain come out this morning and there are other chains that are just as performant, but I do think that in general they have like five daily active users or they go down periodically. And so our view is that you need something that is both hyper performant and highly used. And so that's why we chose to be backed by Solana. And I think that Solana's goal is what it calls Internet capital markets. It wants all of the world's assets to be on chain accessible to anybody 24 7, 365 with just an Internet connection. It's doing a bunch of different things like moving toward this alpenglow upgrade that'll make it even more performant. Multiple concurrent proposers that'll make it even more performant. And I think it's, you know, I think it has like a 97% market share of spot trading of onchain equities. And so I think it's starting to move in that direction. I like to talk about it as the horse has left the barn with us upgrading our antiquated financial infrastructure. Everything was created 50 plus years ago and is slow and expensive and we can upgrade that using blockchain and Internet based Rails. And so our bet is this occurs on Solana and Solana is hyper focused on that as its North Star.
- [21:37]
A
That was a great summary. Anybody else specific thoughts there on how this will accrue, what chains that will happen, those things.
- [21:46]
B
I still think a stablecoin based chain where the gas token is a stable coin and then you have the large banks basically backing it, you get the blessing of the government as a main transactional chain. I don't know, I still don't see any one of these individual decentralized products ever becoming like the main transactional chain in North America. We're too tied to watching the government to see what they're going to bless for institutions. I don't feel like institutions are going to move unless all the banks get behind one stablecoin backed blockchain.
- [22:30]
A
Which is interesting because you have that announcement from open USD from last week. Right. The 140 company consortium. Which is funny because if, I don't know if you guys saw the Samsung news but their logo was on it and they were like we have no idea what this is. Which was like kind of the most hilarious part. But clearly like the, the corporate move is what's coming.
- [22:51]
C
Yeah, my only pushback and I think like corporations will probably want to try to own the host stack and obviously they've got billions of capital, billions of users so they are in the advantage position. But I also do think it's hard for like JP Morgan to move over to Citi and say hey, build on our Onyx or Connexus chain. I think that we tried corporate chains for five years and they didn't really catch on. I think you get a lot of benefits from doing things on a public blockchain like utilizing their existing distribution and as well as composability. And then I do think we're seeing a lot of announcements from public companies that hinting that they're building on public chains and that they want to meet users where they are and meet users where they want to be. So we're hopeful that this happens on public blockchains. Although like that is a key question for sure.
- [23:46]
A
Yeah, I think it's a Valid one, actually. Kind of a great time, I think. Rand, since I have you here, I invited you, obviously. You and I had a conversation recently which will be coming out on my YouTube, I think this weekend, and actually blew my mind what you guys are building over at Zama. And I think that there's a huge element of all of this conversation that speaks to exactly to what you guys are building and why it matters. Because none of this is happening without proper privacy. Right. And with everybody able to see our transactions, maybe Rand, maybe just start if you could, since I invite you to introduce yourself and tell me what you guys are building, what Zama is, so people can understand it.
- [24:24]
F
Sure. So maybe just a very quick background. I've been a developer since I was a teenager in the 90s, did a PhD in AI 20 years ago, and then built one of the first AI companies focusing on privacy, which got acquired back in 2019. I've also been in crypto since 2013, and for the past six years, I've been building my current company, Zama, to bring confidentiality to. On chain finance on public chains like Ethereum and Solana. So the high level is that we, we want to enable people to use Ethereum, to use Solana, to use base, and all these chains with the confidentiality that they would have in tradfi today. So think of this like HTTPs for blockchain transactions.
- [25:19]
A
Sorry, I glitched there. Yeah, perfect. So, but maybe let's talk about why that's so important and what the problem is that it's solving.
- [25:27]
F
I mean, if you think about it, right when you, when you are doing financial transactions, the base assumption off chain is that this is private. When you make a payment with a debit card or when you make a wire to someone, sure, your bank can see your bank account, but your neighbor cannot. For some reason, we were brainwashed into thinking that allowing people to see our transactions on chain was okay, but it's actually not okay. I went in the street the other day, I walked up to a random person and I told them, hey, can you actually show me your bank account? They look at me like I was a weirdo. It's weird. Asking people to show you their transactions is actually weird. So I think the same thing is true for blockchain. And the more money people have, the more this becomes a problem. If you're a company, you certainly don't want other people to know how much debt you have, how much revenue you're making, how much you're paying your suppliers. I mean, if you and me are doing a deal and have to pay on chain. Do we really want everybody else to know what a deal is? Probably not, because everybody's going to want to have the best deal as well. If you're a fund, if you're a vc, you've invested in early stage crypto companies and now you hold a bunch of tokens. Everybody know how much you have, you move them, the market front runs you. You're losing 20, 30% of your funds RR because of front running. This is insane. It makes no sense. And we think that this is okay because we didn't have a choice until now. And so the people that came on chain are specifically the people who didn't care. But the majority of the people are not on chain and those people do care. And they're the ones with the trillions that they want to actually tokenize and bring to blockchains. So I think, you know, confidentiality doesn't bring trillions on shame, but it's a condition without which it will just never happen in the first place.
- [27:28]
A
I think that's well stated. And so how do you actually solve this? I remember you telling me about fully homomorphic encryption which obviously like way over my key brain to understand
- [27:40]
F
it's a bit of a mouthful. I've been trying to find a different way to call that, let's just say FHE for short, fully homomorphic encryption. The idea about FHE is that you can compute unencrypted data without decrypting it. So for example, your balances on chain would be encrypted. The transfer amounts are encrypted. So if you look at the actual on chain data, you're just seeing some random encrypted number. But the way it was encrypted still allows the blockchain to run a smart contract on this encrypted value and to make a transfer of money. So from the outside you only see a random number of tokens moving around. But in practice you actually did move money. So that's why I see this a little bit like HTTPs for financial transactions. When you put your credit card information on e commerce website, you're not just sending it, you're encrypting it before you send it. And this is kind of the same idea for any kind of activity you want to do on chain.
- [28:47]
A
Yeah, that makes perfect sense and a lot easier to explain than the actual terminology. We've seen so many different, I guess, ideas for privacy, tech, right, zk, mpc, tee, all these things. How is this different? Where does it Fit and I guess, what can you do that they can't?
- [29:09]
F
I'm a very pragmatic guy. I want to be clear that if there was something better than what we're using now, we'd just have used it. Because ultimately nobody cares about which technology does the job. As long as it's secure, as long as it gives composability so that you can actually use it with smart contracts, as long as it's post quantum, you need those properties. And today fhe is the only technology that actually allows you to have all of that. It's secure against quantum computers. It allows you to have composability. So your confidential assets, let's say your confidential usdc, you can put them in morpho to earn yield on it. You can swap them on dexes against other confidential assets. You can use all of what makes blockchain blockchain without actually revealing what you're doing. Other technologies all have a problem somewhere. Teas. I mean, teas, honestly, just not secure, period. There has been 47. 47 exploits of tees in the past two years. 47. Like, I wouldn't touch this with a stick, honestly, at this point. Zk, great technology, but it suffers from two main issues. First, it's very hard to make it composable. You can send money privately with zk, but you cannot use ZK for confidential swaps as easily as you can use fhe. The second issue with ZK that we just discovered with zcash is you cannot actually audit the shielded asset supply. So you actually don't know if there was ever a bug and someone minted an infinite amount of shielded ZK tokens, you would never actually be able to prove whether or not this was the case. Fhe is fully verifiable and auditable. You can always make sure that the amount of shielded tokens corresponds exactly to the amount of tokens that went into the system. And you see those kind of differences. Composability, auditability of the supply, programmability. They're the post quantum security. They're the things that institutions care about. You know, someone who's just a degen trading meme coins might not care about it. But people with money, like big money, the kind of money we're talking about when we talk about trillions moving on chain, they care a lot about those things.
- [31:35]
A
So I think the kind of sentiment is that there's this massive battle then for like, who will be the one to rule them all for privacy. And zcash has obviously had a huge narrative of Late. So I guess, how would you say zcash actually sits versus what you guys are doing in Zama?
- [31:53]
F
Well, I can tell you, I think there are only three privacy protocols that are actually interesting that will exist in four years. So I think zcash has a place. But zcash is not trying to compete on the confidential on chain finance. Zcash is trying to be encrypted Bitcoin. And I do think honestly that there is a space for encrypted Bitcoin, just like there is a space for Bitcoin without smart contracts. On Bitcoin is just Bitcoin. So I think zcash will continue to have value in that sense. And personally, I'm going to probably continue holding zcash for that. Where it becomes interesting is when is when you look at privacy protocols that enable on chain finance. And today there are really only two protocols that people are looking at. There is Canton for private chain type of approach, and then there is Zama for public chain confidentiality. So the two are kind of complementary in a way that we don't address exactly the same use cases, but we're both trying to address confidentiality for on chain finance. I think Canton is like, everybody has its own chain and then you have those chains talking to each other. It's a little bit like intranets in companies. It's secure, it's private because you run it within your own organization and you can connect it to other people's intranets to exchange things. Zama is trying to be HTTPs on the Internet. We have one global public network, Ethereum, Solana, and you need confidentiality on top of that through encryption. This is where FHE and Zama really comes in. It's like HTTPs what it enabled for e commerce on the Internet we're trying to do for public blockchains.
- [33:34]
A
I mean, also. Yeah, you're not a layer one or a layer two.
- [33:37]
B
Right.
- [33:37]
A
It's like your stack kind of sits on top. There's no chain, no bridge.
- [33:42]
F
Exactly.
- [33:42]
A
Interrupt you.
- [33:43]
F
Exactly.
- [33:43]
A
Yeah. Soon that's where you're kind of going like. So, you know, I would imagine for builders, that's a very different proposition.
- [33:51]
F
Absolutely.
- [33:52]
D
You know, we.
- [33:52]
F
We want the money to stay where the money is. And that money is on Ethereum, on Solana, on those chains. We don't want people to have to move it to a new L1 where you have to rebuild everything. In fact, we even go one step beyond that. We want people to be able to use their confidential assets with existing financial products on chain, with existing DEFI protocols. If you have usdc, you should be able to put your USDC in Morpho without people knowing how much USDC you're holding. If you have tokenized the Tether gold and you want to swap it for something else, you should be able to do that confidentially on any Dex that you want to use on Solana without having to worry about anything. If we do our job right, people don't even know we exist because we're going to be woven into what it means to do a transaction of public chain in the first place. We're just going to be the encryption layer on top of Ethereum, on top of Solana. But people are going to be using Solana, they're going to be using Ethereum, they're going to be using USDC, USDT, Morpho, HyperLiquid. Zam is just here to secure and make all of that confidential.
- [35:01]
A
This has reminded me that we were talking about obviously the EARN product on Robinhood chain and sort of this, you know, the yield is obviously back. You guys can do that on a token that nobody can see, which was basically impossible before.
- [35:16]
G
Right?
- [35:16]
A
You have confidential USDC vaults now?
- [35:20]
F
That's correct. We just launched the first vault in partnership with the Steakhouse and Morpho. So, you know, Steakhouse has the prime USDC vault on Morpho, which is sort of like the, the vanilla USDC earning vault for LPs. We created exactly the same thing, same strategy, same risk. Prof. But you can actually deposit confidential USDC into it, meaning that when you enter the vault, nobody knows how much you contributed to that vault. So people can see that the vault has, I think right now, 12 million, 11 million TVL, but nobody knows whether you put in $1 or a million dollar or $10 million of that TVL. And if you think about this from a pure asset management's perspective, if you're a portfolio manager, if you're a pension fund, if you're a fund and you have to manage a portfolio of assets, you want to be able to move between strategies, AKA vaults. You want to be able to move between assets, whether they're RWAs, utility tokens, Bitcoin, but you want to do that without people knowing your positions. And that's exactly what we're going towards. This vault is just a first proof of concept that you can actually have active portfolio management on Ethereum using all of the cutting edge, best, more secure strategies and vaults, but with confidentiality.
- [36:46]
A
That's really fascinating. This huge unlock.
- [36:48]
F
I would say the point is there's no downside. Think about it, right? So if you can have the same yield, the same curator exposure, the same vault on Morpho, but with confidentiality, then the question becomes why not, why not actually shield your balances if you can have exactly the same access to on chain finance?
- [37:11]
A
I guess the elephant in the room then is that this is for institutions and it feels like compliance and privacy would be somewhat opposites, right, because regulators, et cetera, probably demand a lot of transparency and a lot of this is obviously hidden, I guess. So how does that work? You know, to get institutions to put real size on chain and they still have all the compliance they need, but it's private.
- [37:39]
F
This is actually where fhe and the program, the programmability that comes with it is really strong. The fact that we can compute on the encrypted state on chain directly means that whenever someone issues a confidential asset. So let's say for example, I've got a confidential USDC contract. I can build into the smart contract code itself in solidity, just smart contract on Ethereum, I can build my compliance rules and those rules will apply to the shielded assets in my contract. So for example, I could say the user should be able to see their own balances obviously, right? You want to know how much money you have. But I could also say me as the token issuer, I authorize a third party compliance officer to see the activities of people using my token. So it's up to the token issuer to decide what compliance means for the asset they've issued. The Xama protocol itself doesn't actually tell you how to be compliant, which is give you the tools so that you can program compliance at the token contract level.
- [38:57]
A
Really so interesting. I just realized we I kept you and kept asking questions for a really, really long time, so appreciate you sticking around. I just had one last thing. I was wondering like, can you put some numbers on this? I mean, how big is this, how fast is this growing?
- [39:13]
F
I mean, I can't tell you really how fast this is going to grow. I can tell you what I'm aiming for. My bet is that in four years finance is going to move on chain to the tune of trillions. Honestly, if nobody here believes that on chain finance is going to be trillions, what are we even doing? We have to assume that finance is going to be trillions on chain in the next few years. When that happens, I think most of that is going to be encrypted. I think most of it's going to be confidential because if you're not encrypting your money on chain, you're actually losing money to other people. And the growth of confidentiality is going to follow. The growth of RWAs, the growth of stable coins, the growth of just finance moving on chain. It's probably going to be growing over the next 12 months, but I think it's going to be explosive over the next four years. It's really one of those things where all of a sudden there is a whole network effect of liquidity happening and it just. Yeah, I think 95% of financial transactions on chain in four years are going to be encrypted. And I'm certainly, you know, doing everything I can to make sure Zama is the technology that enables that.
- [40:29]
A
I appreciate you taking so much time and where can people. Is it at Zama Z?
- [40:35]
F
Yeah, the the X handle is just at Zama. And if you want to try out the morpho vault, you can just go on app zama.org wallet connect and then take it for a spin.
- [40:47]
A
Fascinating.
- [40:48]
G
All right.
- [40:48]
A
We brought that. So thanks to everybody. We brought that right up to 11:15 when the show normally ends. Sorry we started a little late today, but we'll try to prevent doing that in the future. That was great. I appreciate everybody for joining everybody. Give everybody on the panel a follow. They all deserve it. And otherwise we will see you back on Friday. Thank you, everybody. Thanks, Rand. Appreciate you guys. Bye.
- [41:25]
F
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