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- [00:00]
A
Hey, everyone, before we get started, a quick note. This conversation was recorded as a sponsored interview at the Aptos Experience event in New York City. We're grateful to aptos for supporting this episode. Now let's dive into the conversation I had with Aptos CEO Avery Chang.
- [00:17]
B
So even on, like, what we consider today to be decentralized, exchanges have a centralized component to them. And that could be. For example, you start off with an order flow that begins on chain, but then gets fulfilled off chain somewhere, like an order matching system. We don't know what's happening in the order matching system.
- [00:33]
A
Avery, since we just want to make sure everyone's on the same page, why don't you give a general description of.
- [00:39]
B
Aptos for those who don't know? I mean, we have a lot of newbies in the room, which is fantastic. Aptos wasn't. I mean, we've been in main net for three years, but it actually started a while back in 2018. Many of us were at Meta, at Facebook, working on building out the new payments infrastructure for the world. And you may have heard this as Libra and Diem. The idea was to put together a consortium of MasterCard, Visa, Facebook, PayPal, Uber, Lyft and others and build out an infrastructure that could support all of their needs for billions of people around the world. I was the crypto leader of that project, and I got to work alongside many wonderful folks who are still up to us today. And it was a really great time and experimentation for us. And I think we learned a couple of interesting and valuable lessons. First of all, being early is the same as being wrong. We were definitely too early for the space, and both the country and also the world wasn't ready for that kind of a vision and product. But it also gives us a tremendous amount of opportunity. We left Facebook in the end of 2021, did a big fundraise with a lot of the founders and backers of Libra, including ACC&Z, Kitty Hahn and others, to raise our first seed round for $200 million. We raised another. Another series A round following that, led by Jump Crypto in the summer of 2022. And our mission has always been the same. How do you kind of build the decentralized Internet for everyone around the world? We're really excited about scale. We're really excited about making things very fair and democratized out there. And Aptos recently has really taken a focus point on how do we build what we call the global trading engine, where assets move freely, where trades happen as seamlessly as on centralized Exchanges, but with the transparency that only decentralized exchanges can bring, and that being the basis of asset movement, whether it's going to be stablecoins, RWAs or the net new products in the space that we have yet to discover, that can happen only on a decentralized blockchain. And so we're really focused on having a new language called MOVE to do that blockchain infrastructure that is world class. And I think earlier Sasha kind of remarked on the next generation features that will match and exceed the performance and feature set of centralized exchanges in a very short period of time. So we're very, very much focused on being the financial infrastructure, the global economy in a fair and democratized world.
- [03:03]
A
And I also wanted to ask, because there are so many L1s out there, how would you distinguish Aptos from other L1s?
- [03:11]
B
So I think there are a lot of L1s out there and there's a lot of, if I give it a good analogy, there's a lot of cloud providers out there as well. Right. But what separates us from others is this clear focus on our ability to trade assets as fast as the Internet and have a competitive product that kind of goes beyond just being general purpose infrastructure. We don't build for just kind of infrastructure sake. We're building for a purpose. And that purpose is going to be first of all, building out the global trading engine and seeing projects like Decibel on top of it, which are full stack exchanges and provide better experiences and also better transparency than what any centralized exchange can do, including nasdaq, NYC and others. And the other thing we're really focused on is what we think is a huge opportunity for decentralization in the cloud computing AI space. And our first foray into that is Shelby using the technology we built for the global trading engine, which it turns out is really great for Deepin, but we'll do more products to follow. So two thesis is really on global trading engine and decentralized cloud.
- [04:17]
A
And so if you were to kind of project out, I don't know how many years, but some number of years, if aptos becomes a big success, then how would everyday life look different or what would life look like for people that are using aptos? Like what new things would they be able to do or you know, how much faster would things be or cheaper or whatever. So just maybe paint a picture of like what life might look like for aptos users.
- [04:45]
B
Yeah. So I think this is a really important question to ask and a question that's not asked very often. My ideal state of the world is one in which the economy is having unchained. You know, we're getting, we're working our jobs, we're being paid in crypto, either stablecoins or native coins. That money is rolling to our accounts. It is earning yield automatically. It is also like allowing us to be paid more frequently because it's so cheap and efficient to do so. We take that yield and now we have AI agents acting on our behalf to invest in products using the feature set of decibel and other trading infrastructure to automatically have portfolios constructed on our behalf. If you remember like a couple years ago there were you know, many of these robo traders that happen that kind of invest your on the equities market for you but but they're not that sophisticated. Crypto can have your portfolio rebalancing, you know, every minute, every 30 seconds as long as it's cheap enough and fast enough and then you know, off ramping into fiat. That would happen through credit cards or other methods. But in the future of course like after some time that all just kind of stays on chain. And now our entire economy, from the way we get paid to the way we borrow, the spend as well as invest is all happening on decentralized infrastructure that is fair and accessible to all.
- [06:08]
A
Right, so now I'd love to hear a little bit more about you and your experience. What were you doing before you got into crypto? Then how did you get into crypto and then after that how did you come to aptos?
- [06:21]
B
Yeah, so before I was in crypto I was working on data infrastructure at Meta and so actually a lot of us actually were, several of us from the team came from that team. And what we were doing was taking a lot like when you go to Facebook or Instagram and you click on a link or you add a comment that flows into some servers and the servers then process that data. And then what we do is take that data and then process it some more and analyze it to get analytics for the products, to drive new product insights, make recommendations for products as well as recommend friends and businesses to you. That processing is a huge amount of data processes over like 1.5 exabytes a day when I was there, over hundreds of thousands of machines. Very exciting, fun work. We helped enable a lot of work for ads and for growth and for recommendations. And then I think in 2018 Facebook decided to embark on this ambitious mission for Libra and Diem. And I don't know what to say. The mission was just too big and too bold to ignore so that was my first foray into the space as the lead for the crypto team. It was kind of my responsibility to figure out what to do next after we realized that Diem and Libra wouldn't ship internally. And so we worked very closely with the Facebook team to explore different options around how we could leverage our tech stack in different places of external communities or also look for internal use cases as well. It turned out that the best are option for us was to take this technology out and to raise external funding and to then kind of build interesting products around it. And ideally the large enterprises, the Facebooks and others of the world could leverage that infrastructure so they couldn't ship it themselves.
- [08:02]
A
And so last winter the previous CEO Moshe stepped down. And you have taken it over since then. What has your. What you know, what have you done differently since that time? How has your vision been differed from what occurred during the first three years?
- [08:20]
B
So during the first three years I think we took a very strong bet on building the best infrastructure on the planet. I think we accomplished that. What we didn't realize, I think was that how hard it was for people to think of what to do with that infrastructure. So we have a lot of great technologies. We have block stm, we've got this really fast and performing blockchain, it's super cheap, but kind of often remember stablecoins weren't yet a thing and also there weren't a lot of obvious use cases. And so the beginning of this year we really stepped back and said what are blockchains good at? What should blockchains be used for? And I think the kind of really obvious answer came to was trading assets and seeing the way that crypto exchanges have gained $50 billion of revenue per year, growing very, very rapidly, yet all this is happening in centralized enterprises as opposed to decentralized. It became pretty obvious that there is a meaningful value add for people to trade on decentralized infrastructure as opposed to centralized infrastructure. I think that was the first insight. The second insight was that you see the rise of AI, you see the rise of cloud infrastructure, and recently we could see how OpenAI deals with Oracle, with AMD have really transformed the cloud market. And so decentralization has a lot to offer here as well. We can offer cheaper products, faster products and kind of build into and support those workloads into the future. And that's a growing industry, $300 billion a year, growing 30% year over year. And also we found a great partner in jump crypto to build alongside this infrastructure. So we've taken some serious bets in the product space. One is going to be along the trading infrastructure. We believe trading should happen on chain. The that should be the future. That's the future I want to live in. The other bet we've taken very hard is that cloud infrastructure is going to be the next big wave of decentralization usage. And we believe that can overtake the centralized providers over time.
- [10:10]
A
I was going to ask about Shelby. It's one of the new products that you launched this summer and it's for high performance hot storage. Explain what that means. What are the best use cases and applications for Shelby?
- [10:22]
B
So Shelby is really the first product of its kind. It's the first decentralized real time storage that can support almost anything you want to do out there. You know, in the past decentralized storage has been used for like data availability kind of archival storage. Shelby says, well, what if you could have the real time infrastructure kind of built on the real time blockchain? And this is good for a couple of different use cases. So the first and obvious use case is AI. There's a tremendous amount of training data that we produce. Whether it's sensor data or data that is coming through the way we use social media or the content we create, all that data has to be stored somewhere and needs to be then trained upon and used by different kind of NEO clouds as well as even centralized clouds out there. And Shelby provides a perfect fit for that and actually saving on the egress fees tremendously. So that's use case number one is AI. The second use case that's interesting is around creators. Creators today use different platforms like YouTube, TikTok, Instagram and others. And those platforms are great, but they have their own biases when it comes to the algorithms. They have pretty high take rates. And this is an opportunity for creators to really, you know, drive the platform the way they want to drive it. They can have their own content, own their own content, dictate which ads are being served, and also have the full control over how the content is used with their permission. And the third use case is around enterprises. We've had conversations with many large players about the enterprise's bills being very expensive. Many of the Octosity ecosystem members here as well as the larger folks like folks like NASDAQ and others that are thinking about like a lot of their services from beyond the exchange are in actually exchange services that power more than 50% of the revenue today. And they're powered by cloud and those cloud expenses are quite expensive because they're deployed around the world. They're having data moved from state to site to site. They're supporting really fast real time access to that. And I think that's where Shelby can also support. So these three use cases around AI creators as well as enterprise grade storage I think are massive opportunities for this space.
- [12:22]
A
So this morning you also announced watchy, which is a decentralized operating system for media built on aptos and powered by Shelby storage layer. And you're building this with the team at nbcu. How did that come together?
- [12:35]
B
We've been very fortunate to be working with NBCU Universal for many years now. They're an amazing team of innovators who is thoughtful about the Web3 space and of course their content and their reach is pretty much as unprecedented. They're the number two, if not getting close to number one content provider in the world. They've got theme parks everywhere and their properties are very disjointed in some sense. And blockchain is a great way to unify them with identity, with payments, with loyalty. And we've just been very fortunate to collaborate and ideate together into many different experiences. If you actually go into the Coney island playground, you can see an experience that's happening at their parks real time today where you have scavenger hunts, you have games you can play and there's a lot to do from a theme park perspective. But it unifies your loyalty across all the different product suites between their theme parks, Rotten Tomatoes, the movie theaters, and also helping to re engage people the theme park because there's so much fun things to do there.
- [13:36]
A
And so explain a little bit more like what Watchy is like. It's this decentralized operating system for media. And I understand, you know, Shelby is easier to understand because it's decentralized storage, file storage. So it makes file storage more resilient, more redundant. But what does it mean to have a decentralized operating system for media on top?
- [13:57]
B
So I would say, I would describe watchi as kind of this platform layer for content above Shelby. Shelby is its core is a decentralized storage infrastructure like an S3 from Amazon, but it's not necessarily meant for content storage. And so watchi starts to define a lot of the content primitives you might want to have around digital rights, even encryption around the content being played in different venues. Rules for how you might want want this content to be shared across different platforms. So not only NBC, but maybe Disney, maybe other places, Hulu and others. And so it's just a layer above for the Content platform in which we already see tremendous amount of use cases for.
- [14:39]
A
Oh, okay, right. Because I have a publication, I know exactly how I, at least at Unchained would use this. All right, so just talk a little bit more about your longer term vision for watchi. Like the way that you described, know what it would look like in a few years with aptos? Like what would it look like once Huachi is more widely used, more widely developed? Like, what problems would it solve for people?
- [15:02]
B
So today the technology is, I still think, underdeveloped. And a lot of the use cases of blockchain have mostly been around speculation of assets in crypto markets. But the future we described here earlier today with Sasha and team is actually much more larger than that. So the future we described is around what we call namespaces. The ability for us to have these kind of centralized exchange type workloads happening in different data centers and different locations, but tied together through a very high speed fiber Internet that is faster than any blockchain today. And so within those namespaces you will get 10 milliseconds of latency, which is incredibly fast, just as fast as centralized exchange, if not faster. And across namespaces you'll get 50 milliseconds, which is fascinating blockchain out there. And so with this kind of technology you can rewrite the world and in fact the entire Internet on top of it, to scale out to the world. And not just the world, but the future is really about us also having agents deploying on our behalf, trading assets on our behalf, paying bills, kind of conversing with each other through transactional means. And that's exactly what this technology will unlock, which is everything can happen on chain.
- [16:12]
A
All right, so now we'll talk about another recent product that launched on Devnet that was in August and then the mainnet launch will happen in Q1. I actually met the product manager for it right before coming on stage. So what are the main features of Decibel, which is this product, and how do you see it fitting into the Aptos ecosystem?
- [16:33]
B
Yeah, Decibel is really the product that takes advantage of global trading engine from ground up, designed in tandem alongside how we think about the Aptos vm, the blockchain, and even the future designs of aptos. And this kind of goes back to our thought process around what do we want to change in the world. We really want to change the way that trading of assets is done. Even if you think about today's world, if I trade on Robinhood, that trade could get front run. It could be sent off the citadel. And we just live with those systems because we have to. But a future world of trading could imagine where everyone has equal access, equal rights, right? So, Laura, if you trade and I trade, neither of us has an advantage over each other. And that's what Decibel is trying to bring. It is the first fully decentralized full stack, spot and perps exchange that brings you the performance of centralized exchanges, but yet with the fairness, democratization and composability of blockchains. And that's not easy to do, right? Like that's something that's never been done before. And that's why we're doing it, because we believe that this product must exist. You know, if you think about kind of the spectrum of trust in the system, we have centralized exchanges which we must trust inherently because we have no choice. We have things like a hyper liquid which seem to be better, but they're still closed source. But there's this missing piece of fully decentralized, fully on chain in which, you know, everything is well known, everything is understood and there's no questions about it.
- [17:59]
A
So I am so curious because obviously we just had a major news event involving perps in the crypto space and obviously this isn't live on mainnet, but if it had been, what do you think? How do you think it would have kind of operated differently from what we actually saw last Friday?
- [18:19]
B
I think there have been a huge bunch of differences. I think so. Once, basically when that event happened, almost the first thing I posted to our team was like, I wish Decibel is live and I wish it had the traction of Binance because everything would be much, much better understood. I mean, look, there were a lot of theories going around what happened on last Friday. Was it somebody arb ing between the Athena de peg or perceived dpeg on Binance versus other exchanges? Was it some other kind of market liquidity being pulled that caused a lot of problems and auto liquidations and deleveraging? You know, it's hard to say because only the exchanges have that data. We don't have that data. And that's something the public doesn't have access to. But if it was on chain, if the rules are well defined, people will be able to see exactly what happened. They could see which merch markets withdrew their spreads, when they withdrew their spreads, how tight those spreads became, how far apart those spreads became. That would be very obvious. We would know exactly who was arbing between different kinds of assets, where we'd see the arbiting that happens and we could trace back those addresses to previous trades. And we exactly know like, you know, kind of the chain of events that happened that led to a lot of assets, you know, wildly swinging around and still swinging around today to, to some extent. Right, but, but the issue that we have today is also that this is just very opaque black boxes that aren't available. And a lot of that trading happens today on centralized exchanges which aren't going to share that data because it's kind of proprietary to their, their particular product. And also it's just part of their business practices. But in a decentralized world where all that trading happens on chain, it's all transparent, it's all fair. And also when we think about like who kind of profited most from those trades, we don't know. Right. We don't know that data is all kind of private. Where again, if it was decentralized, you have an idea of where the, where the money went.
- [20:06]
A
And when you say fully decentralized, you know, you're, you're saying that as in like the existing perp STXes don't fit that definition. So what does that mean exactly? What aspects do you feel like are not decentralized now that could be more decentralized and at launch, what will decibel do differently?
- [20:31]
B
Right. So even on what we consider today to be decentralized, exchanges have a centralized component to them. And that could be, for example, you start off with an order flow that begins on chain but then gets fulfilled off chain somewhere like an order matching system. We don't know what's happening in the order matching system if those orders are being fed to another centralized exchange, if they're being processed by what machine, if someone is sitting in the back, you know, literally taking orders in the back room, we don't know because it's all just, it's all centralized and it's all a black box to us. But you know, there are steps forward. So some of those folks are doing those kind of off chain order matching and then publishing those orders on chain. Eventually once they're matched, that's a step in the right direction. But for decibel, we're taking, I think, the really, really hard approach of saying when you submit an order, that order is going to be shown on chain, that order is going to be matched on chain with a matching algorithm that everyone can look at and take a peek at. And also the results of that will be published on chain. And that's really hard to do. When you think about evm something EVM was never Designed to do. DZM is designed as a general purpose blockchain language for constructing kind of any kind of application, but not specialized for trading. That's our advantage when we have move. MOVE is a language that we have built specifically for secure asset management and now augmenting with being the best language for trading in the future. So there's a lot of things I think you'd see differently, but mainly around the transparency aspect, understanding what happened in the system and understanding that no player is getting advantage over the other.
- [21:59]
A
Okay, and then this is my last question on this. I know I'm asking a lot about this, but obviously this is kind of the area of the moment that everybody is talking about in crypto. This is a very, very competitive space in crypto right now. So, you know, it's like once everybody saw Hyper Liquid just kind of taking up all this oxygen. Clearly CZ is thinking a lot about Hyper Liquid now these days, you know, and then there's like all these competitors that are kind of coming out and you know, we already saw like obviously Aster is, you know, getting some attention lighter. Like there's just so many of these. I'm even getting pitches for more things that are coming out. So, you know, when you guys launch, how are you thinking about like your strategy? Is it like a simple, you know, kind of like points and airdrops and like whatever? Like how are you thinking about how to compete in this atmosphere?
- [22:52]
B
Yeah, it is becoming a competitive landscape from a product perspective. Absolutely. But I think when you look between the products, there are huge, huge differences. And talking about Aster and Lighter, Right. A lot of those products both have those kind of centralized components I mentioned in the background. So they're not completely decentralized. Hyperliquid, as you know, is not open source code and there's a lot of influence from the foundation. So again, step closer from centralized exchanges, but not where we want to be. As far as we know, Decibel is the only one in this space which is kind of playing in the fully decentralized, but yet able to match the performance of centralized exchanges out there. And so from a product perspective, we think this is a huge differentiator. It's going to be multicolateral. It's going to have a lot of other features that are very different and distinctive. So again, very, very distinctive product from the others when you kind of compare. And then from the go to market standpoint, there's a lot. We want to be as innovative in the go to market as we are in the product space, but that's probably something that the team is not ready to share yet. But I'll just say overall, you want to incentivize long term token holders alongside those product users, right? Like those two need to be aligned together. And I think as long as the tokens design that way and there'll be a lot of interesting kind of mechanics to make sure that works well, it's going to do really, really well.
- [24:12]
A
Okay, I had a feeling you weren't going to answer that, but I tried, you guys. All right, let's talk about stablecoins. So USD 1, which is the stablecoin of World Liberty Financial, just deployed an Aptos that happened last week. So I don't know how many of you listen to Unchained or any of the shows we have on our channel.
- [24:32]
B
But great show by the way.
- [24:34]
A
Thank you. On the chopping block, which is like a bunch of VCs, they are kind of negative on World Liberty Financial. I don't know if you guys noticed that in this recent show, but Haseeb Qureshi of Dragonfly Capital, who's the moderator, he called Moral Liberty Financial the garbage that got in your living room, which is kind of funny. So I just had to ask, like, if there's this perception about World Libby Financial, why did aptos decide to partner with them?
- [25:02]
B
First of all, Haseeb is a close friend and investor in aptos. But secondly, I would say like having met the World Libby team over and over again and our experiences with, with both the Zachs, chase, Donald Trump Jr. And others, we felt a strong synergy in the sense that their mission is really how do they bring crypto to America and to the masses in a way that is easy to understand and that is very well aligned with what we want to do as well. And I think they are really strong, related and connected in many places that can be helpful from a networking and business standpoint. They're excellent and amazing marketers. They're really trying to change the space and we build a great product in tech. So when you think about that combination, it's actually a really, really strong one.
- [25:48]
A
All right, so you know the other space in crypto that's so competitive right now, like kind of crazy is of course stablecoins. And you know, we've got like so many stable chains that are launching, we have like a whole bunch of different coins now all of a sudden companies themselves can create their stable coins via open issuance, which is a bridge product. I just did a pot on that. If you want to Check that out. But you know, this is, this is heating up. Maybe not as much as per Dex is, but very close. So I'd love to hear more about your vision and your strategy because clearly that's like how you know like users are going to be onboarded. So yeah, how are you thinking about that?
- [26:30]
B
Well, the great thing about stablecoins is we've been thinking about that since 2018 with Libra and Diem when we tried to launch a stablecoin from within Meta, it was obviously a little bit too early. But with this year's regulation changing with Stable Clarity, Stable ingenious acts going through, obviously a lot of excitement with the Circle ipo. Also moving things forward, we're very fortunate to work closely alongside many of the largest stables in the world. USDT, USDC, PYUSD, so on and so forth. USD 1 of course. And what we find is that while it seems on the outside that these all seem like very much overlapping products, the reality is they're all used in different use cases and they kind of all have their kind of fits within different geographies, different places of the world. So for example, USDT used very heavily outside the US USDC thinking of almost this regulated kind of US based currency and then PyUSD having access to PayPal's customers, USD1 being the administration backed currency. So they all kind of have their niche and we're happy to have them all in aptos. We're very excited to have them all as partners and it helps enable our ecosystem, the people in this room, to build out unique products all across the world, across different use cases and across different geographies.
- [27:44]
A
So the stablecoin sector can be broken out into multiple different subgroups. So how are you thinking about attracting different stablecoins to aptos? Are you considering those different subcategories and how you'll appeal to those users?
- [28:02]
B
Well, I think the easiest sell for aptos is just that whatever stablecoin comes to aptos, we immediately become the fastest, most performant and cheapest version of the stablecoin across the world. Right. So in USDT we're less than 1/100th of a cent to transact with and you're going to get this sub half a second latency which makes it useful for almost everything in the world that existing payments can't do. You can use it to do micropayments, microtransactions, reward social apps to users. You could replace likes with like paying like a fraction of a cent. Like all these things become possible when you pair up a stablecoin on the fastest infrastructure on the planet. So it's actually a quite easy sell for us.
- [28:48]
A
So this morning you also had a new announcement that you'll be supporting Reliance Geo's Geocoin efforts. For those that don't know, because this was also news to me, JIO is the largest telecoms company in India. It has more than 500 million users. Tell us more about this partnership.
- [29:05]
B
Yeah, this was a really cool one. We started this actually last December, so it's been a while. But with the large enterprises it does take some time typically for them to move forward. And to their credit, JIO and Reliance have been like amazing partners for one of the largest companies in all of Asia to move this quickly and to like push this hard into the space, you know, from the top all the way to like the kind of people implementing the products. They've been fantastic partners. And we had Pavas up here to talk about his role in kind of driving this forward. It's not just conversations that happen within India with regulators and government officials, but even outside to their partners worldwide. And Geocoin is like the first, I think of many big efforts. They're going to have to bring blockchain forward in the world and they're taking a very innovative approach from the strategy side to say that blockchain will be the core of a lot of their products. Whether it's going to be loyalty based products, cross application products, but they're going hard in blockchain in a serious way. And actually they tried some other chains, didn't work out so well. And then they came to aptos because they knew we're the only ones that could support 500 million users across the world transacting at tremendous amounts of volume. And India is a place where, you know, the fees really matter because of the scale that they bring to the table. They're just really perfectly suited for what aptos brings.
- [30:24]
A
And so what is that product exactly? Is it similar to like an M Pesa type thing but it's like with a crypto token.
- [30:31]
B
So today it's integrated to the browser and so browser will provide rewards to their product through the Geocoin and geocoins will kind of be the, I think the centerpiece of a whole bunch of new products we built after that. But I probably can't speak much about that. I think that's more for palace to share.
- [30:47]
A
Okay, well talk a little bit more about the Asian region because you know, obviously that's the part of the world with the biggest population. So you know, how does aptos think about that? And like, how are you considering expanding in that area of the world?
- [31:03]
B
So we were just on the ground in KBW in Singapore last couple weeks where we met with a lot of our partners. And we're pleased to see not only is the regulation moving forward in the US but other parts of the world as well. We actually have the Lotte team here who we met, who is moving forward. Their voucher program already deployed to millions of people, but they're thinking about the next steps, like, what about hotels? What about stablecoin payments for hotels? What about stablecoin payments for the retail applications in their stores? And so to see those large enterprises, they are the largest retailer in all of South Korea, moving forward and seeing great outcomes with early expectation with blockchain and, and relighting bigger, bigger efforts. Like, that's huge for us. When it comes to Singapore, obviously there's a home of a lot of the exchanges. And the exchanges we have great relationships with, both for listing our projects, but also for thinking about how we collaborate on projects like a decibel to support the transition from kind of off chain centralized exchanges to on chain infrastructure, which many of them are supportive of.
- [32:01]
A
Surprisingly and just out of curiosity, not that this is, you don't have to give a long answer, but because there's been this whole, like geographical, you know, competition, I guess you could say, where when the US was kind of anti crypto, suddenly like every other jurisdiction in the world was pro crypto because they were trying to track this industry. Now that things have flipped in the US like, are you noticing is there like a certain place that builders prefer to build or like which communities do you feel like are does make me.
- [32:36]
B
Feel bad being in the California Bay area, but I mean, I think it's pretty clear that now that the capital markets are really coming into the space, I think regulation gave them a lot of clarity around. This is a safe space to play in. And all the IPOs and DATs that have been kind of formed also, you know, started to make New York. I think that the crypto hub, again, it is a tremendous place to build. I think I have to say, New York, hands down is the number one city for crypto in America.
- [33:00]
A
Oh, wow, Nice. Okay, let's talk about Defi. Defi is, as Eric Voorhees once said, the shining city on the hill. Clearly we're in this phase where it's stablecoins and perps and whatever, but everybody knows you're all building toward a world of DeFi so Aptos was the first chain that AAVE deployed on that was a non EVM chain. Kudos to you. Why do you think they chose aptos and how has the integration gone?
- [33:32]
B
I mean, AVI is a longtime story builder in the EVM space and that's why they have so many assets under management. They're very well trusted. I think they just saw a synergy between what APSYS is trying to build, like very much enterprise grade secure software. They care a lot about security. We've seen that. We've done so many security reviews with them auditing the code over and over again and then deploying very slowly and then kind of ramping up like is I think shown a strong testament to the way they think about their brand, their reputation and ultimately protecting the user in this space. So I think they saw the same synergies in us. We were very thoughtful. We care a lot about user funds. We want to make sure that the blockchain itself is extremely secure. It's why we built move, it's why we have extensive testing and security processes, I think that, that are first class in this space as well. So a lot of strong synergies around how we think about a safe, open financial world that I think AAVE and aptos work really well together. And if you try the experience, if you try aptos with aave, you'll see it's just the snappiest, best experience you can get with AAVE out there.
- [34:38]
A
Okay. Yeah. By the way, guys, it is a big compliment because Mark Zeller of the AAVE Chain Initiative came on my show last winter and I think I asked him like, oh, why aren't you guys on Solana? And he just was like, oh, I look at that chain and I just don't see anything worth like putting our effort into it or I don't even remember, but it was like spicy language. So it is a big compliment that they chose aptos. But anyway, okay, so aptos has a multi token strategy. You know, why is that? Like, what did you learn from the aptos token launch? And token launches since that.
- [35:13]
B
Yeah, I could see why you frame it that way, but I don't think of it that way at all. Like, I think aptos is the base layer token. It'll always be the base layer token for the Aptos blockchain, but as we know, ecosystem projects need to build on top and launch their own tokens that are specific to their particular products. The other tokens being launched I think are going to be similar. Right. They're Just product tokens that are somewhat distinctive and they have their own mechanics that support their products. And what you want to do as a layer one or any blockchain is actually have a very strong ecosystem being built. Like if you think about the U.S. even the U.S. is A. You know, the government itself has tremendous amounts of debt, but yet there are so many thriving industries here. Facebook's and Google's and Teslas all built on top of this infrastructure. And I think a blockchain is very similar. You want to have, you know, a very strong base, that's Aptos, but also many strong industries built on top of it.
- [36:11]
A
Okay, so let's go back to your vision of Aptos as this global trade engine. Because we just experienced this Black Friday issue. I was kind of curious if you could just talk about for the Black Fridays. So you already talked a little bit about how you thought things would have gone differently, but how do you envision Aptos building in the future to prevent some of the issues that we saw on Friday?
- [36:44]
B
So, I mean, definitely a lot of people got hurt that Friday and definitely feel for them. And it was a tough day for many people. From our point of view, the best we can do is to really build for the future in which a lot of that risk is very transparent. So if there's a risk, you might get auto deleveraged because of your position in the book and also where others positions are. I think those things should be very transparent. I think people should know not just within that product, but across the industry. And so as a whole, we have to see a lot of this volume transact on chain as opposed to off chain so that we can have those metrics, we can convey that risk. Because all this is interconnected together. We're not like one, there's not like one exchange, it doesn't affect another. They're all interrelated. So it's going to be, it's going to take some time, but I think the future has to be that everything moves on chain and that's where we can start to kind of move around these problems and make sure that risk is well understood, risk management is put in place, and also that everything is fair and accessible so that there's no one with an advantage over another.
- [37:55]
A
All right, well, tell us about your experience that day. I'm just curious to hear. Yeah, how did you hear about what happened? Like, what were things like with Aptos team during that time?
- [38:06]
B
Yeah, so I think there was kind of a small war room of folks that gathered during that day and we started to share notes on what we saw and observed in the market, kind of debating different theories and kind of trying to understand, you know, what made the most plausible sense. But again, you know, and, and I think, and then one of the biggest messages I shared with the team is we need to accelerate decibel. We need to make sure that products like this are out in market so they can, so you can provide much more transparency and kind of trust for users who use these products that they're not just gambling away in this kind of closed source casino. So that was kind of my immediate message. But the other thought was, of course, let's understand what's going on, let's see if we can reach out and help people. Let's make sure that any positions, if we have any, are kind of not, know, not at risk. And I think the team, you know, responded well and I think, you know, we're very, very motivated to build out what was necessary for the products of the future.
- [39:05]
A
Okay, so I have one non aptos question which is just do you like, look at that ding and feel like there are lessons that the crypto industry overall should learn? Like not even just for your team, but like things that you feel like when you think about them? It's, you know, it's stuff like that should be done differently in crypto or. Yeah, how do you, like, what do you think the industry should take away?
- [39:27]
B
I think there are a lot of lessons learned, but I think there are some interesting open questions as well. Like when you think about what would happen if it was on centralized markets that are regulated versus these unregulated centralized markets, you know, what would happen is circuit breakers would have been triggered, trading would have been halted, regulars would have stepped in and did a lot of investigation to figure out what happened next. In a decentralized world, that'll probably won't happen and that'll probably be very difficult to happen. So I think that the best thing we can do is going to be provide that level of transparency and openness. So when people get into positions, they know exactly the risk they're taking that exactly the rules that they're participating with the system right now, again, those rules are kind of black boxes and I don't know that there's a clear answer about how do we fix this. But I do think that there's a lot of work that needs to be done to address the regulatory components and that's, I think, work I'm excited to work on with kind of our role in the CFTC to push for, you know, responsible protections for consumer safety.
- [40:29]
A
Okay. And I'm going to ask you a conspiracy theorist question. I saw some people saying that they thought that potentially this was a coordinated attack because the three assets on Binance that dropped precipitously were all ones where basically the pricing mechanism, like Binance, was in the process of changing that. What do you think of that theory?
- [40:54]
B
I think it's exactly why these things need to be more transparent and open. Like, we don't know. And unless they publish that data, we won't know. And even if they publish that data, we still won't know. So it's something that I think a very small number of people know in the world and we'll have to wait for them to come and see.
- [41:11]
A
Okay, I just had to ask because I was curious what people think. All right, so I guess just, is there anything about your plans for Aptos, your vision or anything that we didn't discuss that you would want the audience to know?
- [41:25]
B
I think it's important, as we did the early part of the year, to reflect a little bit on what you want to see in crypto. What do you think the futures industry is? Is it going to be a huge speculation game for different tokens? Is it going to provide actual value and utility to customers? You know, we're trying to do the latter. We're trying to really build out a vision for the world in which, you know, it's a safer world for you. It's a. It's a more productive world when it comes to your asset management. And also that, you know, this is an Internet that people have more control over whenever there's creators, whether it's your data that's being trained with AI or whether it's your, you know, your life savings. So, you know, there's, there's a lot of builders out there that have different kind of goals and expectations, but this is what we want to do. We want to change the world for the better. And, you know, we'll need all your help in making it happen. But that's our. That's our goals.
- [42:20]
A
Okay, great. Well, thanks, everyone, for joining us. And thank you so much, Avery, for answering.
- [42:24]
B
Thank you so much. Laura Sat.