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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Joe Wisenthal, and I'm Tracy Alloway.

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Speaker 2: Tracy, here's something that surprised me. Okay, so it's twenty

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Speaker 2: twenty five.

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Speaker 3: I would have thought, you know, are you surprised it's

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Speaker 3: twenty twenty five.

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Speaker 2: I'm surprised we made it this long. I'm surprised.

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Speaker 3: Fair, that's fair.

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Speaker 2: I am surprised, you know. And I think back to

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Speaker 2: twenty twenty one and like the crypto boom of that

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Speaker 2: ear and the stock, the spac mania and all that stuff,

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Speaker 2: that craziness, Like I sort of thought, to some extent

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Speaker 2: that would have been a little bit more flash in

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Speaker 2: the pan because you know, like ninety nine, two thousand,

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Speaker 2: a couple of years later, like people were not talking

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Speaker 2: about dot com stocks like two years later. Because I'm like,

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Speaker 2: I thought it was going to be a repeat of that,

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Speaker 2: all of this retail obsession with options and call options

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Speaker 2: and speculation, etc. I thought that'd be a thing, you know,

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Speaker 2: short phenomenon. A bunch of people lose their money in

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Speaker 2: twenty twenty two and twenty twenty three when some of

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Speaker 2: that stuff busts and then they lose interest and they

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Speaker 2: go on to other things and sort of forget about

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Speaker 2: trading for a while. But I don't think that was

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Speaker 2: an incorrect assumption on my part.

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Speaker 3: I think people discovered that they really enjoy losing money.

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Speaker 3: It is, yes, okay, genuinely. What I would say is

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Speaker 3: this all started in the pandemic, right, Yeah, to some extent,

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Speaker 3: But I think crypto opened the door to this idea

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Speaker 3: that you can have a number on a screen and

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Speaker 3: just bet whether it's going to go up or down,

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Speaker 3: like basically a synthetic number. Almost right, It's just this token.

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Speaker 3: And then what happened during the pandemic is everyone was

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Speaker 3: really bored. Game stop became a thing. Everyone kind of

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Speaker 3: discovered that momentum was maybe more fun to play than

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Speaker 3: boring stuff like value, and I was, you know, it

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Speaker 3: did honestly feel like a cultural shift when it came

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Speaker 3: to the way people were thinking about trading. And I'm

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Speaker 3: not I guess I'm not as surprised that it's it's

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Speaker 3: continued to this day, and if anything, this sort of

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Speaker 3: tokenization of the stock market, people playing options, people playing

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Speaker 3: crypto has become bigger than ever.

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Speaker 2: It's just a cultural shift. It's also like everything has

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Speaker 2: a price now, which I think is very important. Like today,

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Speaker 2: like we're constantly looking at prices for politics right now,

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Speaker 2: We're constantly looking for prices related to geopolitical events on

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Speaker 2: sites like Kelshi or polymarket, et cetera. It has expanded

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Speaker 2: so much so there's crypto, there's options trading there, et cetera.

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Speaker 2: Like we are like drenched in a culture of like

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Speaker 2: there's a price on something, there's a thing that's going on,

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Speaker 2: you can trade it. And I now think, you know,

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Speaker 2: it's gonna be with us forever, because it clearly was

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Speaker 2: not just like a you know, a one year sort

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Speaker 2: of zerp era every on board at home phenomenon.

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Speaker 3: Well, it's not just that you could trade it. You

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Speaker 3: can trade it really easily.

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Speaker 2: Yeah, right.

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Speaker 3: You can just open up your phone some things you

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Speaker 3: can trade twenty four hours a day and just make

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Speaker 3: or lose money as you choose.

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Speaker 2: I love making or losing money as I choose. Anyway.

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Speaker 2: One of the companies that we really associate with this

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Speaker 2: sort of boom and retail participation that era and that

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Speaker 2: of course is robin Hood, the company that was famous

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Speaker 2: for being the first to introduce fre stock trading just

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Speaker 2: kind of mind blowing, and lots of people use it.

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Speaker 2: For many people is their introduction to trading options and stocks,

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Speaker 2: particularly during the pandemic associated with the meme stock there,

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Speaker 2: which kind of still exists. Anyway, we have the perfect

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Speaker 2: guest go on what we're gonna say.

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Speaker 3: I was going to say, Robinhood in my mind like

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Speaker 3: definitely caught the wave of this cultural shift at exactly

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Speaker 3: the right time. But it's also, in my mind like

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Speaker 3: an ode to the importance of user interface. Genuinely, the

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Speaker 3: app is just more interesting, more fun. I guess some

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Speaker 3: people would say, more easy to use than a lot

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Speaker 3: of other things. This sounds like an ad I don't

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Speaker 3: mean it to be, but I remember, for instance, when

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Speaker 3: you know, when you used to make trades on robin

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Speaker 3: Hood and you would get like a little confetti animation

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Speaker 3: every time you did it. Like can you imagine TDAM

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Speaker 3: error trade or like Schwab or something doing something like that.

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Speaker 2: Uh. The one other thing I'll say about them is

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Speaker 2: they're doing phenomenally well. The stock is like back at

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Speaker 2: like basically at all time highs. It's not just a

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Speaker 2: company that offers free trades I think they have like

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Speaker 2: nine different units at one hundred million dollars annual run.

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Speaker 2: Raid Truly, I think it is becoming a juggernaut anyway.

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Speaker 2: Thrilled to say we have its CEO and founder, Vladteneve

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Speaker 2: on the podcast today, so in studio Flad, thank you

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Speaker 2: so much for coming on the Outlaws. Thrilled to finally

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Speaker 2: be chatting with you.

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Speaker 4: Thank you for the warm welcome. It's great to be here.

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Speaker 2: That cohort that came into markets in like twenty twenty

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Speaker 2: and twenty twenty one, that sort of you know, whatever

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Speaker 2: that cohort was, did they behave differently today than say

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Speaker 2: the twenty nine teen cohort or the twenty eighteen cohort?

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Speaker 2: Is there something about them that if you look at

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Speaker 2: say trading in April during the volatility, is there are

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Speaker 2: they different?

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Speaker 4: Yeah, so I should rewinding four five years at this

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Speaker 4: point time ago, there were lots of people that came

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Speaker 4: into the market for the first time in twenty nineteen.

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Speaker 4: In twenty twenty, I think right before the pandemic, I

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Speaker 4: was in New York and I remember that visit because

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Speaker 4: it was sort of like before everything got weird. We

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Speaker 4: announced ten million approved accounts on the platform, which was

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Speaker 4: a crazy number for US, but Robinhood was already quite

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Speaker 4: big even before the pandemic started, So we had ten

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Speaker 4: million approved accounts. It was like pretty clear that we

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Speaker 4: had created sort of the new era of retail investing

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Speaker 4: because before the pandemic we were a Series D company,

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Speaker 4: so like late stage private company. I think the valuation

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Speaker 4: was something like seven billion. We had a few hundred

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Speaker 4: million in annual run rate revenue, and basically the entire

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Speaker 4: industry ended up having to replicate our business model in

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Speaker 4: order to survive, and not all of them could survive

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Speaker 4: as independent entities. You know, tedm Miror Trade had to

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Speaker 4: get folded into schwab e Trade, which was sort of

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Speaker 4: like the leader of the prior disruptive era in retail trading,

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Speaker 4: which was the dot com era, had to get folded

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Speaker 4: into Morgan Stanley to survive as a standalone company. And

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Speaker 4: so we were already I mean, we had already accelerated

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Speaker 4: and kind of turned back the clock. Everyone was saying

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Speaker 4: retail trading and investing was over. Everyone was indexing into

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Speaker 4: et passive was the new thing. So there was a

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Speaker 4: lot of skepticism, but we kind of inverted that, and

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Speaker 4: then you had the pandemic, where pretty much across all

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Speaker 4: of our business metrics, which we already thought were doing well,

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Speaker 4: we kind of increased an order of magnitude. And I

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Speaker 4: think the behavior of customers as a result of the

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Speaker 4: pandemic is a bit of an intricate question because there

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Speaker 4: have been so many things that happened in the macro

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Speaker 4: since then, and we have so many different types of customers,

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Speaker 4: So to like dramatically oversimplify, you could think of Robinhood

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Speaker 4: as having two diametrically different classes of customers. One is

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Speaker 4: the active trader, and these are the folks. To give

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Speaker 4: like a motorsport analogy, right, the active traders are the

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Speaker 4: folks that are like motorheads, Like they care about performance,

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Speaker 4: they care about having like really fast cars. They want

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Speaker 4: to be at the frontier of technology and innovation.

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Speaker 3: Said that people posting loss porn on Wall Street bets.

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Speaker 4: Right, not necessarily. I think some of them are. I

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Speaker 4: think that that's a more general.

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Speaker 2: Can we talk about lost porn later? To keep going,

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Speaker 2: These are the folks that are like strapped into their

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Speaker 2: battle stations and have like nine monitoring the situation exactly.

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Speaker 4: Some of them are incredibly sophisticated and wealthy, and they

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Speaker 4: even have Bloomberg terminals, or it would have been sort

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Speaker 4: of like the Bloomberg terminal customer. And so that's like

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Speaker 4: a higher net worth, very active group, small group, but premium.

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Speaker 4: And then we have to come back to the motorsport analogy.

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Speaker 4: The folks that buy minivans right the mass market, they

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Speaker 4: just want to invest. They want a relatively hands free

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Speaker 4: and sort of like low friction way of investing and

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Speaker 4: saving for the long term. And we have products that

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Speaker 4: serve both of those. So we want to be number

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Speaker 4: one in the act trader market. We're rapidly we're rapidly

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Speaker 4: gaining market share there. But also we want to be

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Speaker 4: the place where if you're a millennial or gen Z customer,

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Speaker 4: you put all of your wealth, so you deposit your

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Speaker 4: bank account direct deposit in there, you do all of

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Speaker 4: your spending with us with our credit card. Of course,

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Speaker 4: you do your trading, but you also have your retirement

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Speaker 4: account your long term passive investments as well. So we're

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Speaker 4: kind of focused on both of these things with two

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Speaker 4: very different customer bases. And I say it's oversimplifying because

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Speaker 4: you also have customers that have both of these behaviors.

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Speaker 4: So a lot of our active traders they also need

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Speaker 4: banking tools, they need spending. They have a passive portfolio,

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Speaker 4: which can be larger elsewhere, but not everyone is an

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Speaker 4: active trader. And so also since COVID, you had a

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Speaker 4: whipsaw of low rates, zero interest rate environment which made

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Speaker 4: stocks and more speculative, higher growth investments more attractive. But

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Speaker 4: then we whipsaw to the highest interest rate environment we've

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Speaker 4: seen in multiple decades, and then Robinhood had to respond

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Speaker 4: very rapidly and aggressively to survive in that environment. And

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Speaker 4: we introduce things like retirement, like the highest apy in

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Speaker 4: the industry on cash, so that you could earn interest

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Speaker 4: while your cash was sitting there, and you know, just

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Speaker 4: a ton of diversification of the business so that our

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Speaker 4: customers who became less interested in trading during that time

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Speaker 4: could could find ways to you know, take advantage of

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Speaker 4: the environment and capitalize with their strategies.

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Speaker 3: So, I know, one of the initial competitive advantages you

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Speaker 3: had was the zero trading fees, but beyond that, you know,

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Speaker 3: I mentioned in the intro that, like, I honestly think

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Speaker 3: Robinhood is sort of a I guess a story about

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Speaker 3: the importance of user interface, and some people would say

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Speaker 3: that's a great thing. You know, users can come on

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Speaker 3: and you can transfer money relatively quickly. It's very easy

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Speaker 3: to set up and execute a trade. You can basically

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Speaker 3: do it without typing very much while you're sitting at

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Speaker 3: a bar or in a restaurant or whatever. But you know,

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Speaker 3: you also have things like the screen itself is very colorful.

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Speaker 3: It photographs well so that people can post those screenshots

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Speaker 3: on forums like Wall Street bets. I guess my question is, like,

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Speaker 3: to what extent would you attribute the success of the

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Speaker 3: company versus old school competitors to that user interface or

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Speaker 3: maybe the gamification of stock market trading, which you really,

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Speaker 3: you know, you played into at exactly the right moment.

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Speaker 4: I reject the gamification premise.

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Speaker 3: You don't think the app is designed really well.

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Speaker 4: I think it's designed well. But I think when I

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Speaker 4: think about so, obviously, I grew up as a gamer,

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Speaker 4: so I'm a bit of a student of traditional gamification,

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Speaker 4: and when you say gamification to me, it means you know,

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Speaker 4: leader boards, social dynamics, and people claim we do all that,

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Speaker 4: but we actually do none of it. I think the

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Speaker 4: reason Robinhood was successful in the early days is that

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Speaker 4: we offered something that nobody else offered, which was commission

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Speaker 4: free trading. And I think the reality is if I

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Speaker 4: look at the design of the Robinhood app and old

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Speaker 4: screenshots of it, I don't think it was particularly easy

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Speaker 4: to use. I mean, it was easier to use than

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Speaker 4: the competition, maybe because we weren't really competing against traditional

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Speaker 4: technology companies that are known for user interface. But I

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Speaker 4: think the reality was that the value proposition was so

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Speaker 4: strong that people could actually put up with a lot

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Speaker 4: of cruft in the user interface to just get the

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Speaker 4: core value, which was commission free trading and investing. I

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Speaker 4: think over time what happens is as sort of like

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Speaker 4: the unique thing we had commission free trading became universal.

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Speaker 4: There was like competitive dynamic where the services that reduce friction,

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Speaker 4: there's just a natural force to make the services less

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Speaker 4: friction full and more easy to use. And I think

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Speaker 4: you kind of see that across industries, and that just

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Speaker 4: comes from paying close attention to the users, looking at

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Speaker 4: their pain points, and having a system where you just

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Speaker 4: like systematically reduce those pain points. Like we literally spend

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Speaker 4: time sitting with users watching them use the product, see

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Speaker 4: the points where they get confused and try to try

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Speaker 4: to fix it. And I think you'll see that in

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Speaker 4: any technology company. But you know, most companies have become

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Speaker 4: technology companies at this point. Any company that's like doing

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Speaker 4: a reasonable job, I think will come to the level

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Speaker 4: where they're actually doing user feedback and iterations on design

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Speaker 4: based on it. If you don't do that nowadays, you'll

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Speaker 4: essentially not survive in the in the marketplace.

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Speaker 2: Just going back though to that twenty twenty one or

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Speaker 2: twenty twenty cohort, you said something interesting, which is that

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Speaker 2: some people trade and they have like a more passive

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Speaker 2: long term book. They're you know, not people do both.

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Speaker 2: The word maturation I don't know, a little condescending, but

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Speaker 2: has there been a maturation of that base in some

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Speaker 2: sense where people who initially got into trading because it

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Speaker 2: looked fun or was exciting, or they were bored, et cetera,

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Speaker 2: those customers over time of like Oh, and also long

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Speaker 2: term buy and hold in indexing is also something that's

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Speaker 2: probably a good idea, Like do you see growth among

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Speaker 2: that cohort in terms of what they're interested in?

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Speaker 4: Generally every person ends up having a need to invest

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Speaker 4: now like.

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Speaker 2: An actually invest not just trade when you say.

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Speaker 4: Yeah, yeah, so not everyone actually sticks with trading becomes

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Speaker 4: an active trader. A lot of people trade more actively

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Speaker 4: at first and then eventually end up doing like more

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Speaker 4: passive investing. Interesting mostly because they don't if you talk

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Speaker 4: to these people, they don't want to put in the

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Speaker 4: time to like spend that they have other things to do,

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Speaker 4: so they prefer all their investments to be hands off.

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Speaker 4: Some people end up trading a lot. And I do

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Speaker 4: believe that it's a skill that you could actually get

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Speaker 4: better at and improve at. And you know, not everyone

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Speaker 4: actually wants to put in the time and effort to

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Speaker 4: do that, And so we serve those people with other tools,

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Speaker 4: you know, retirement accounts. We have a new product that

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Speaker 4: we rolled out called Robinhood Strategies that you just deposit

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Speaker 4: money and it'll invest for you and of course give

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Speaker 4: you the rational.

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Speaker 3: Is that like copy trading or is this different?

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Speaker 4: It's it's a digital advisory product. Okay, so it's a yeah,

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Speaker 4: we have a registerant investment advisor and it will this.

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Speaker 2: Is it the closer betterment or something like that sort

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Speaker 2: of business like the sort of robo.

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Speaker 4: Yeah, it's similar to a robo except there's a couple

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Speaker 4: of interesting elements. One is your fee is capped. It's

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Speaker 4: capped at two hundred and fifty dollars per year if

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Speaker 4: you have one hundred thousand in your account. So most

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Speaker 4: robo products, even though they're lower cost than traditional advisors,

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Speaker 4: get more expensive for you the more money you put

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Speaker 4: in there. And we thought that was like fundamentally broken.

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Speaker 4: As you put more money, the service should get more

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Speaker 4: compelling for you. You should feel like you're getting more

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Speaker 4: value because the overall relationship to Robinhood is much more valuable.

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Speaker 4: So we sort of like inverted the model so that

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Speaker 4: it actually on a percentage basis, gets cheaper the more

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Speaker 4: money you have. And then also we have these personalized insights.

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Speaker 4: Every time something happens to your portfolio, you can read

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Speaker 4: about it and why we made that change, and you

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Speaker 4: can also listen to us explain it via audio, which

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Speaker 4: has been really really popular for our customers.

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Speaker 3: Well, this leads into something that I want to ask

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Speaker 3: you actually, which is you're doing all these different things now,

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Speaker 3: and you clearly have ambitions to be a sort of

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Speaker 3: like one stop shop for everyone's financial needs. How do

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Speaker 3: you actually decide which new products or which new capabilities

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Speaker 3: to expand into. Is it a case of like, Okay,

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Speaker 3: well people are on the platform, they're trading, so maybe

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Speaker 3: they would be interested in some sort of robo advisory service.

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Speaker 3: Or is it you look at the competitive landscape and

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Speaker 3: you think like, well, this company has you know, they're

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Speaker 3: using cobol or something like that, and they can't do

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Speaker 3: what we can do with a new tech stack, and

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Speaker 3: so there's an opportunity there. How do you assess all

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Speaker 3: those different opportunities and then ultimately decide what you want

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Speaker 3: to do.

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Speaker 4: Yeah, basically our business strategy falls into three buckets, and

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Speaker 4: you can kind of align that with time horizon arcs.

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Speaker 4: So we have sort of like a near term arc

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Speaker 4: which we're in the climax of right now, which is

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Speaker 4: to be the number one platform for active traders. If

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Speaker 4: you're an active trader, you know, if you're one of

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Speaker 4: these people that has the six terminals in front of

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Speaker 4: you and you've got your battle station, we want to

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Speaker 4: make it clear that you're at a disadvantage using any

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Speaker 4: other platform. And these folks are at the frontier of

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Speaker 4: technology and innovation. So twenty four Robinhood, twenty four hour

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Speaker 4: Market is an example there. It's not just about better

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Speaker 4: tools and interfaces, although that's a part of it. It's

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Speaker 4: also having things that are not available elsewhere. Twenty four

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Speaker 4: hour market being probably the best example there, and that's

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Speaker 4: become very, very popular. And you're literally at a disadvantage

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Speaker 4: if you're not using Robinhood because if you need to

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Speaker 4: manage your risk on a Sunday night, our platform offers

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Speaker 4: access to equity markets and you know those aren't easily

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Speaker 4: found elsewhere. So that's the near term mark. Then we

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Speaker 4: have sort of a medium five year arc, which is

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Speaker 4: being number one in wallet share for the next generation

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Speaker 4: and that's millennials and Gen Z for now. But we

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Speaker 4: don't want to also get stuck in the millennial and

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Speaker 4: Gen Z bucket. We always want to be relevant to

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Speaker 4: the needs of the next generation as they evolve.

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Speaker 3: Of course, Wait, what generation are you saying you are

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Speaker 3: of Gen XENX.

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Speaker 4: Well, you're in the other direction, Yeah, you're the other

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Speaker 4: gen Alpha.

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Speaker 3: I thought you were saying that you're really young.

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Speaker 2: Oh no, no, no, I want to make sure that there's

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Speaker 2: still financial services that cater to old people.

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Speaker 4: Gen X. I would say it's a simplification. I mean

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Speaker 4: there's Gen X and baby boomers that love Robinhood. I

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Speaker 4: think the common ground is actually less your age and

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Speaker 4: more how digitally savvy you are. Like, if you're comfortable

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Speaker 4: doing digital banking and financial services on your phone, you know,

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Speaker 4: you could be eighty years old and really enjoy Robinhood.

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Speaker 4: But you know, some people, particularly as they're older, prefer

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Speaker 4: to go in person and talk to a human and

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Speaker 4: I think we're a laggard in developed those types of services.

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Speaker 4: So the second arc medium term mark of being the

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Speaker 4: place where you put all of your money, we basically

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Speaker 4: look at a few things there. One is where are

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Speaker 4: people withdrawing to if you take your money out of

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Speaker 4: Robinhood to do something, can we just better serve that

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Speaker 4: within our ecosystem. So you know, for example, a lot

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Speaker 4: of people took money off of Robinhood to pay their bills.

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Speaker 4: So we saw that and we thought that was a

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Speaker 4: great opportunity to just allow them to pay their bills

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Speaker 4: via us. So we launched the Robinhood Gold Card, which

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Speaker 4: you know, in my opinion I'm biased, is the best

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Speaker 4: credit card on the market by a wide margin. Three

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Speaker 4: percent cash back on all categories, which you have to

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Speaker 4: be a high net worth individual to get coupled with

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Speaker 4: a very nice user interface that lets you create virtual

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Speaker 4: cards on demand. You can add your whole family help

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Speaker 4: them build their credit. So that's just an example of

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Speaker 4: how we think about it. But for each of these

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Speaker 4: products individual, I don't think it's enough to come up

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Speaker 4: with the category. I think we have to have a

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Speaker 4: great idea for how we can make the economics better

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Speaker 4: for users and also how to make the user experience better.

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Speaker 4: And when we have that combination, I think that's the

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Speaker 4: ingredient to a successful Robinhood product. I should mention the

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Speaker 4: third arc because that's the long term away and it's

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Speaker 4: pretty relevant here given the event we just had in

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Speaker 4: the South of France. It's called building the number one

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Speaker 4: global financial ecosystem and what that.

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Speaker 3: Means all just that.

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Speaker 4: Yes, so that's a long term mark, so it's going

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Speaker 4: to take a while, like ten years, But basically it

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Speaker 4: involves expanding Robinhood across two linearly independent vectors. One is

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Speaker 4: from US only to fully global and the other is

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Speaker 4: from retail only to business and institutional, and that's where

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Speaker 4: we get into really interesting platform aspects like tokenization.

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Speaker 2: So let me talk to me about equity token here's

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Speaker 2: my question, in what year tell me about equity tokenization.

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Speaker 2: You know, I'm thinking about like a stable coin is

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Speaker 2: a tokenized dollar, right, so obviously a you could do

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Speaker 2: the same thing where you have like a stock, tesla

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Speaker 2: whatever in crypto form, et cetera, and it trades on

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Speaker 2: a chain twenty four to seven. In what year will

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Speaker 2: I be able to trade any stock twenty four to

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Speaker 2: seven on chain?

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Speaker 4: Well, if you are a European customer, definitely twenty twenty five.

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Speaker 4: So what we announce in our event to catch a

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Speaker 4: token in the South of France is stock tokens by Robinhood,

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Speaker 4: which are essentially tokenized US equities and ETFs. We also

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Speaker 4: did a giveaway of tokenized shares of SpaceX, which is

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Speaker 4: very exciting, and that the technology for both is ready

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Speaker 4: right now. It's working for tokenized equities, you can trade

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Speaker 4: them twenty four to five right now, but twenty four

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Speaker 4: to seven is coming over the next few months and

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Speaker 4: will also unlock full on chain capabilities, so swapping, collateralized

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Speaker 4: lending and borrowing anything you can do in DeFi. So

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Speaker 4: the barrier to adoption in the US kind of mirrors

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Speaker 4: what we saw on stable coin. The technology is there,

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Speaker 4: it's available in Europe, it'll be available in a bunch

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Speaker 4: of jurisdictions. It's all just regulatory clarity, which we're hopeful

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Speaker 4: will come later this year. But it's not a technological

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Speaker 4: barrier by any means.

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Speaker 3: Why is tokenization a part of it if we're not

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Speaker 3: really solving a technological problem but a regulatory problem.

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Speaker 4: Well, tokenization solves a lot of problems, but the necessary

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Speaker 4: piece to make it available to the US is essentially

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Speaker 4: a regulatory issue. We just need rules of cryptoregulation and

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Speaker 4: for the private stock side, which is also an interesting

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Speaker 4: element because there you start to really see the benefits

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Speaker 4: of tokenization.

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Speaker 3: What does tokenization do? What does it allow you to do?

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Speaker 4: Yeah? So tokenization takes an asset and puts it on

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Speaker 4: chain and essentially makes it tradable twenty four to seven,

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Speaker 4: just like a stock or a crypto asset would be.

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Speaker 4: So you can buy or sell it on a crypto exchange.

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Speaker 3: But why can't I can buy or sell a stock? Right?

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Speaker 1: Like?

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Speaker 3: What are we doing here?

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Speaker 2: What is the different? What does the tokenization accomplished that

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Speaker 2: you can't just do on a database that you can

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Speaker 2: buy stock com?

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Speaker 4: Yeah? So good? Question, I think the answer is slightly

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Speaker 4: different if we're talking about a customer in the US

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Speaker 4: versus internationally, and I'll explain why. So in the US,

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Speaker 4: we already have a pretty robust financial system. Robinhood exists,

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Speaker 4: right and you can onboard on Robinhood and buy stocks.

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Speaker 4: You can buy them twenty four or five, which is

437
00:24:53,840 --> 00:24:59,439
Speaker 4: pretty good. So there the delta between the tokenized experience

438
00:25:00,119 --> 00:25:04,040
Speaker 4: and what you have currently would be expanding to twenty

439
00:25:04,040 --> 00:25:08,760
Speaker 4: four to seven. And also, eventually when we plug into DeFi,

440
00:25:09,000 --> 00:25:12,480
Speaker 4: making all of the DeFi aspects which are right now

441
00:25:12,480 --> 00:25:17,160
Speaker 4: a little bit more niche but incredibly powerful available. So collateralize,

442
00:25:17,240 --> 00:25:21,720
Speaker 4: lending and borrowing self custody. Self custody is interesting. So

443
00:25:21,920 --> 00:25:26,240
Speaker 4: right now, your stock in your Robinhood or other brokerage

444
00:25:26,240 --> 00:25:29,920
Speaker 4: account is kind of locked into a broker. So let's

445
00:25:29,960 --> 00:25:33,200
Speaker 4: say that broker has issues, you got tech technical outage,

446
00:25:33,600 --> 00:25:37,080
Speaker 4: You're kind of stuck. But if the stock were to

447
00:25:37,119 --> 00:25:42,640
Speaker 4: be tokenized, not only would it become seamless to use

448
00:25:42,800 --> 00:25:45,800
Speaker 4: another broker you just kind of attached to your wallet,

449
00:25:46,320 --> 00:25:48,160
Speaker 4: but the reliability would be much higher.

450
00:25:48,200 --> 00:25:50,199
Speaker 2: I also want to have to worry about losing my

451
00:25:51,200 --> 00:25:55,360
Speaker 2: seed phrase when I have stock in a traditional brokerage.

452
00:25:55,400 --> 00:25:56,800
Speaker 2: Is that something that people are going to have to

453
00:25:56,840 --> 00:25:58,680
Speaker 2: think about if they're trading tokenized equity.

454
00:25:58,880 --> 00:26:03,399
Speaker 4: It's less concerning with traditional assets because there's always going

455
00:26:03,480 --> 00:26:07,000
Speaker 4: to be a process to connect your token with the

456
00:26:07,040 --> 00:26:11,800
Speaker 4: real asset. So you know, it's a big problem with bitcoin,

457
00:26:12,240 --> 00:26:16,280
Speaker 4: for example, because there's no like physical representation. But if

458
00:26:16,280 --> 00:26:19,680
Speaker 4: you have a tokenized dollar or an asset, you will

459
00:26:19,720 --> 00:26:22,280
Speaker 4: be able to there will be a process where you

460
00:26:22,320 --> 00:26:23,760
Speaker 4: can claim the actual real thing.

461
00:26:24,000 --> 00:26:28,320
Speaker 2: Sorry, just to press on this further, I'm trying to understand. Okay,

462
00:26:28,359 --> 00:26:31,640
Speaker 2: So a tokenized equity and it's gonna I think, what's

463
00:26:31,680 --> 00:26:35,919
Speaker 2: the chain. You're using arbitrum like arbitrum at first, but

464
00:26:36,040 --> 00:26:40,160
Speaker 2: not for long. We're actually rolling out our own blockchain. Oh,

465
00:26:40,280 --> 00:26:41,720
Speaker 2: you're gonna have a base competitor.

466
00:26:42,080 --> 00:26:44,040
Speaker 4: Yeah, in a way. I mean it's just a layer

467
00:26:44,840 --> 00:26:47,879
Speaker 4: on top of arbitrum. Then, uh, it's it's gonna be

468
00:26:48,119 --> 00:26:51,600
Speaker 4: on top of etherium. It's a layer two.

469
00:26:51,840 --> 00:26:54,639
Speaker 2: Okay, so you're building your you're building your own ethereum

470
00:26:54,720 --> 00:26:58,159
Speaker 2: layer two. Huh. Setting asaid Europe or the United States.

471
00:26:58,800 --> 00:27:03,520
Speaker 2: Random person who has as some USDC in Indonesia, will

472
00:27:03,520 --> 00:27:05,280
Speaker 2: they be able to interact with this and then have

473
00:27:05,320 --> 00:27:07,000
Speaker 2: Tesla exposure eventually.

474
00:27:07,080 --> 00:27:08,720
Speaker 4: Yes, that's the plan, and so like.

475
00:27:08,760 --> 00:27:11,440
Speaker 2: Right now, if I want to own Tesla shares through

476
00:27:11,520 --> 00:27:14,760
Speaker 2: robin hood, like I tell you my name and I

477
00:27:14,920 --> 00:27:19,480
Speaker 2: presumably give you some identifying information, etc. But in the future,

478
00:27:20,119 --> 00:27:23,199
Speaker 2: in theory, anyone will be able to get exposure to

479
00:27:23,320 --> 00:27:27,120
Speaker 2: these assets without actually having to reveal anything about themselves

480
00:27:27,119 --> 00:27:30,480
Speaker 2: because they're just interacting pseudanonymously on chain.

481
00:27:31,480 --> 00:27:35,639
Speaker 4: In large part, yes, there's some caveats where, depending on

482
00:27:35,720 --> 00:27:40,640
Speaker 4: the jurisdiction, we might have to like KYC, some elements

483
00:27:40,640 --> 00:27:44,720
Speaker 4: of the experience. For example, minting and burning the actual

484
00:27:44,880 --> 00:27:48,840
Speaker 4: physical stocks and turning them back and forth into tokens

485
00:27:48,960 --> 00:27:52,359
Speaker 4: will likely require KYC. But yeah, in the same way

486
00:27:52,400 --> 00:27:56,760
Speaker 4: that you can transfer a token I stable coin on chain,

487
00:27:56,960 --> 00:28:01,239
Speaker 4: you'll be able to transfer token ise stocks identically and

488
00:28:01,359 --> 00:28:04,280
Speaker 4: kind of in the same for the same reasons that

489
00:28:04,960 --> 00:28:09,400
Speaker 4: stable coins have become more popular and have really gained

490
00:28:10,040 --> 00:28:14,359
Speaker 4: mass adoption outside of the US. First, just because outside

491
00:28:14,400 --> 00:28:16,320
Speaker 4: of the US it's much harder to get a hold

492
00:28:16,359 --> 00:28:21,000
Speaker 4: of US dollars. Token ice stocks I think will gain

493
00:28:22,520 --> 00:28:25,399
Speaker 4: a ton of adoption outside of the US before the

494
00:28:25,440 --> 00:28:28,960
Speaker 4: benefits and the technology accruing to the US and kind

495
00:28:29,000 --> 00:28:31,320
Speaker 4: of disrupting the structure here.

496
00:28:31,520 --> 00:28:33,080
Speaker 3: And so just to be clear, if I have a

497
00:28:33,119 --> 00:28:35,640
Speaker 3: token ied stock, I can stake that right and use

498
00:28:35,680 --> 00:28:36,880
Speaker 3: it to do other things.

499
00:28:37,480 --> 00:28:40,400
Speaker 4: You will be able to connect it to all of

500
00:28:40,440 --> 00:28:44,200
Speaker 4: the DeFi capabilities. Now exactly what those are. I think

501
00:28:44,200 --> 00:28:47,080
Speaker 4: we're going to have a developer ecosystem and they're going

502
00:28:47,160 --> 00:28:50,040
Speaker 4: to have to build a whole bunch of things. But yeah,

503
00:28:50,280 --> 00:28:53,400
Speaker 4: you can put it in pools and to collateralize lending pools.

504
00:28:53,920 --> 00:28:59,440
Speaker 4: Staking is interesting because technically staking is dedicating tokens and

505
00:28:59,480 --> 00:29:04,400
Speaker 4: resource is to support the network itself. And so when

506
00:29:04,440 --> 00:29:06,600
Speaker 4: you say staking a stock, a lot of people actually

507
00:29:06,680 --> 00:29:09,080
Speaker 4: mean lending it, which which I think will be able

508
00:29:09,120 --> 00:29:10,920
Speaker 4: to be done eventually.

509
00:29:11,480 --> 00:29:12,960
Speaker 2: But could you stake it.

510
00:29:12,880 --> 00:29:15,320
Speaker 3: To support the network sort of old school as well.

511
00:29:15,680 --> 00:29:17,640
Speaker 4: I think the way that that would actually work is

512
00:29:17,680 --> 00:29:22,280
Speaker 4: you'd have to convert that into the network gas token

513
00:29:23,200 --> 00:29:25,440
Speaker 4: and and you would stake it that way. But I

514
00:29:25,440 --> 00:29:27,960
Speaker 4: think it's a little bit early for us to get

515
00:29:28,000 --> 00:29:28,520
Speaker 4: into yet.

516
00:29:29,120 --> 00:29:32,200
Speaker 3: So you mentioned that you're only doing this on arbitrump

517
00:29:32,240 --> 00:29:35,560
Speaker 3: for a short amount of time, and then you're transitioning

518
00:29:35,640 --> 00:29:41,120
Speaker 3: to your own tech. Why, I guess is my question, like,

519
00:29:41,160 --> 00:29:44,840
Speaker 3: why start there and then do your your own layer

520
00:29:44,960 --> 00:29:46,920
Speaker 3: versus just starting out with your own thing.

521
00:29:47,880 --> 00:29:53,360
Speaker 4: I think that the ambition is to actually make this

522
00:29:53,480 --> 00:29:57,240
Speaker 4: the best chain for real world assets. So we're starting

523
00:29:57,280 --> 00:30:02,640
Speaker 4: with stocks. We're also doing private stocks as well, but

524
00:30:03,360 --> 00:30:06,720
Speaker 4: we want to tokenize everything that people would want to

525
00:30:06,800 --> 00:30:10,440
Speaker 4: make tradable, so you can imagine real estate in the future,

526
00:30:10,880 --> 00:30:14,320
Speaker 4: you can imagine carbon credits, really anything.

527
00:30:14,600 --> 00:30:16,520
Speaker 3: But if you're going to use ethereum, then why not

528
00:30:16,640 --> 00:30:19,200
Speaker 3: start out with Ethereum rather than arbitrum.

529
00:30:19,440 --> 00:30:23,160
Speaker 4: Ethereum is the base layer one, and the problem with

530
00:30:23,360 --> 00:30:29,240
Speaker 4: transacting directly on ethereum is that the fees can be

531
00:30:29,320 --> 00:30:32,520
Speaker 4: quite high. So that that's why Arbitrum, which is a

532
00:30:32,600 --> 00:30:37,120
Speaker 4: layer on top of Ethereum, they've been able to essentially

533
00:30:37,760 --> 00:30:41,280
Speaker 4: consolidate lots and lots of transactions and sync up to

534
00:30:41,360 --> 00:30:45,840
Speaker 4: the base layer one chain at an infrequent cadence, and

535
00:30:45,840 --> 00:30:47,800
Speaker 4: that way you can kind of like split up what

536
00:30:47,840 --> 00:30:50,800
Speaker 4: would be a large transaction fee into lots and lots

537
00:30:50,800 --> 00:30:54,959
Speaker 4: of small transactions and get the costs down from you know,

538
00:30:55,040 --> 00:30:59,120
Speaker 4: high coction, high congestion. You know, Ethereum could be multiples,

539
00:30:59,360 --> 00:31:05,320
Speaker 4: multiple doll per transaction down to like individual sense, you know,

540
00:31:05,520 --> 00:31:06,480
Speaker 4: a handful of sense.

541
00:31:07,200 --> 00:31:10,000
Speaker 3: And I know we've been having this conversation for years now,

542
00:31:10,120 --> 00:31:12,720
Speaker 3: but what happens to the gas fees? What if this

543
00:31:12,880 --> 00:31:17,040
Speaker 3: really takes off and people start using the service en mass?

544
00:31:17,920 --> 00:31:22,000
Speaker 4: Yeah, I mean, the gas fees are very scalable. Part

545
00:31:22,080 --> 00:31:26,160
Speaker 4: part of the benefits of being a layer on top

546
00:31:26,200 --> 00:31:28,840
Speaker 4: of the chain is to some degree we'll be running

547
00:31:28,920 --> 00:31:33,080
Speaker 4: sequencers and we'll be able to handle the gas fees.

548
00:31:33,120 --> 00:31:36,480
Speaker 4: And I think that the goal would be for this

549
00:31:36,560 --> 00:31:40,880
Speaker 4: to be essentially transaction costs or very very low costs.

550
00:31:48,160 --> 00:31:52,040
Speaker 2: You obviously as part of the core company competitive advantages,

551
00:31:52,040 --> 00:31:54,320
Speaker 2: building tech right and building And one of the things

552
00:31:54,320 --> 00:31:56,200
Speaker 2: that you did several years ago is you built your

553
00:31:56,240 --> 00:32:01,520
Speaker 2: own clearing stack instead of you know, using some third

554
00:32:01,520 --> 00:32:04,480
Speaker 2: party company, I forget what it was, you know, could

555
00:32:04,520 --> 00:32:08,600
Speaker 2: you in your vision for Robinhood, could you ever see

556
00:32:08,640 --> 00:32:11,040
Speaker 2: whitelisting some of your own tech? You know, I think

557
00:32:11,040 --> 00:32:15,080
Speaker 2: about like Amazon and eventually it built its own computers

558
00:32:15,080 --> 00:32:16,720
Speaker 2: and then it started selling them, and then it started

559
00:32:16,760 --> 00:32:20,400
Speaker 2: selling its warehouse capacity. As you build up these capacities,

560
00:32:20,480 --> 00:32:23,880
Speaker 2: could you see selling it to other FinTechs or access

561
00:32:23,920 --> 00:32:26,000
Speaker 2: to these platforms.

562
00:32:26,280 --> 00:32:30,320
Speaker 4: Yeah, and I think tokenized stock tokens is a great

563
00:32:30,360 --> 00:32:33,080
Speaker 4: example of that. So I think that that could become

564
00:32:33,080 --> 00:32:37,440
Speaker 4: a standard. If you're another fintech Yeah, and you know

565
00:32:37,480 --> 00:32:40,680
Speaker 4: you're you may not be offering stocks to your customers.

566
00:32:40,680 --> 00:32:43,200
Speaker 4: Maybe you have a big international presence and you want

567
00:32:43,200 --> 00:32:47,400
Speaker 4: to add stocks. You would just be able to integrate

568
00:32:47,480 --> 00:32:50,480
Speaker 4: with our chain and then those stocks would be available

569
00:32:50,600 --> 00:32:54,960
Speaker 4: to your customers. We also have a service called robinhood Connect,

570
00:32:55,520 --> 00:33:01,200
Speaker 4: which essentially took our trading services at were that we've

571
00:33:01,240 --> 00:33:05,520
Speaker 4: optimized so finally for our own first party app and

572
00:33:05,600 --> 00:33:08,960
Speaker 4: made them available to third party developers. So, if you're

573
00:33:09,280 --> 00:33:13,600
Speaker 4: a non custodial wallet provider like a Moonshot or Uni

574
00:33:13,640 --> 00:33:17,479
Speaker 4: Swap or meta mask, you have this problem of how

575
00:33:17,840 --> 00:33:22,280
Speaker 4: do you streamline people getting their dollars into crypto and

576
00:33:22,400 --> 00:33:25,120
Speaker 4: back out to dollars if they want to. So robinhood

577
00:33:25,120 --> 00:33:29,320
Speaker 4: Connect offers, you know, one of the lowest rates to

578
00:33:29,400 --> 00:33:32,320
Speaker 4: do that, just because we've optimized that so much that

579
00:33:32,880 --> 00:33:35,400
Speaker 4: you know, handing that out and giving that service to

580
00:33:35,520 --> 00:33:39,320
Speaker 4: third parties is now easy for us to do. So

581
00:33:39,360 --> 00:33:42,160
Speaker 4: we're going to continue to iterate on that the chain

582
00:33:42,240 --> 00:33:46,320
Speaker 4: will be full fledged developer platform, made available to third parties,

583
00:33:47,040 --> 00:33:50,240
Speaker 4: and we always will continue to look for opportunities in

584
00:33:50,280 --> 00:33:54,560
Speaker 4: the future to have our tech. I wouldn't call it

585
00:33:54,640 --> 00:33:58,680
Speaker 4: white labeled, but at least made available to institutions and

586
00:33:59,160 --> 00:33:59,920
Speaker 4: other customers.

587
00:34:00,080 --> 00:34:02,680
Speaker 2: You know what's really interesting to me. I was thinking about,

588
00:34:02,720 --> 00:34:07,080
Speaker 2: like several years ago, when crypto started taking off, and

589
00:34:07,080 --> 00:34:09,320
Speaker 2: I used to make fun of these people when cryptos started,

590
00:34:09,320 --> 00:34:12,600
Speaker 2: when crypto started taking off, and you'd get these conferences

591
00:34:12,960 --> 00:34:15,600
Speaker 2: and people would go on panels and they say, well,

592
00:34:15,640 --> 00:34:18,160
Speaker 2: we're really we're really interested in blockchain.

593
00:34:17,719 --> 00:34:19,600
Speaker 3: Tech, not baitcoin, but block We're.

594
00:34:19,480 --> 00:34:22,839
Speaker 2: Really interested in blockchain technology, not bitcoin. And I never

595
00:34:22,880 --> 00:34:24,600
Speaker 2: really knew what it meant, and it didn't seem to

596
00:34:24,600 --> 00:34:26,960
Speaker 2: go anywhere, and it just seemed like a way like, Okay,

597
00:34:27,000 --> 00:34:30,200
Speaker 2: if I like worked for like a big whatever, big

598
00:34:30,280 --> 00:34:33,319
Speaker 2: legacy financial institution, I want to sound smart, I want

599
00:34:33,360 --> 00:34:35,600
Speaker 2: to get invited to panels. I say like, oh, we're

600
00:34:35,600 --> 00:34:38,400
Speaker 2: really excited about the blockchain here totally yeah, But actually

601
00:34:38,400 --> 00:34:40,600
Speaker 2: it kind of sounds like maybe they're being vindicated a little.

602
00:34:40,640 --> 00:34:43,040
Speaker 4: Well, you've noticed that I'm not using the word blockchain

603
00:34:43,160 --> 00:34:44,040
Speaker 4: or web three.

604
00:34:44,000 --> 00:34:45,759
Speaker 2: But you're using it, we're talking about the you're talking

605
00:34:45,760 --> 00:34:50,120
Speaker 2: about the the idea of chains. Yeah, and like I might,

606
00:34:50,400 --> 00:34:52,520
Speaker 2: like I'm kind of sitting here at twenty twenty five,

607
00:34:52,560 --> 00:34:54,360
Speaker 2: and it's like, maybe I shouldn't have made fun of

608
00:34:54,360 --> 00:34:56,799
Speaker 2: those people as much as I did, because it does

609
00:34:56,840 --> 00:35:01,400
Speaker 2: seem like chains per se, I think, as opposed to coins,

610
00:35:01,600 --> 00:35:03,000
Speaker 2: are kind of allowed of the action.

611
00:35:03,200 --> 00:35:05,000
Speaker 4: I think you should make fun of those people a

612
00:35:05,040 --> 00:35:08,960
Speaker 4: little bit because people have been talking a lot about

613
00:35:09,000 --> 00:35:11,520
Speaker 4: this stuff for many, many years. There's been a lot

614
00:35:11,520 --> 00:35:14,800
Speaker 4: of talk, including for me and you know, more.

615
00:35:14,640 --> 00:35:17,120
Speaker 3: Recent we're going to put yeah, let us on the

616
00:35:17,120 --> 00:35:17,960
Speaker 3: block it.

617
00:35:18,000 --> 00:35:20,960
Speaker 2: We're gonna put you know, fancy I still fancy purses

618
00:35:21,000 --> 00:35:22,560
Speaker 2: on the blockchain, which maybe you'll.

619
00:35:22,400 --> 00:35:24,640
Speaker 4: Do it, it'll happen, but yeah, there's been a lot

620
00:35:24,640 --> 00:35:28,480
Speaker 4: of talk and not much action. So yeah, me personally,

621
00:35:29,760 --> 00:35:32,759
Speaker 4: I try very hard not to brand stuff and say

622
00:35:32,760 --> 00:35:35,759
Speaker 4: it's the next big thing. I just want to make

623
00:35:35,800 --> 00:35:38,920
Speaker 4: products available that people use. And I think the best

624
00:35:38,960 --> 00:35:45,280
Speaker 4: buzzwords come out organically because consumers are actually calling things

625
00:35:45,560 --> 00:35:49,680
Speaker 4: and the things arise naturally, right, And I think that

626
00:35:49,760 --> 00:35:50,680
Speaker 4: there's a running.

627
00:35:50,440 --> 00:35:52,640
Speaker 2: Gag that make fun of them less though I really don't.

628
00:35:52,719 --> 00:35:55,799
Speaker 4: Yeah, mass adoption is a year away. It's always kind

629
00:35:55,840 --> 00:35:56,719
Speaker 4: of been a year away.

630
00:35:56,800 --> 00:35:59,959
Speaker 2: Situational is always a year away too, but it happened.

631
00:36:00,440 --> 00:36:04,520
Speaker 4: But yeah, I think that we're finally at the precipice

632
00:36:04,640 --> 00:36:09,920
Speaker 4: of cryptotechnology not being just bitcoin and meme coins and

633
00:36:09,960 --> 00:36:12,360
Speaker 4: actually being applied to things that are useful in the

634
00:36:12,360 --> 00:36:13,680
Speaker 4: real world.

635
00:36:13,920 --> 00:36:17,359
Speaker 3: I will believe it when I see it. But if

636
00:36:17,400 --> 00:36:21,280
Speaker 3: you have tokenized stocks, what regulatory regime does that actually

637
00:36:21,280 --> 00:36:23,279
Speaker 3: fall under in the US at least? Like is that

638
00:36:23,320 --> 00:36:25,480
Speaker 3: a security or is that a derivative or is that

639
00:36:25,920 --> 00:36:28,880
Speaker 3: something else? And how are you navigating that aspect of it?

640
00:36:29,160 --> 00:36:32,439
Speaker 4: Well, so they're they're not permissible in the US yet,

641
00:36:32,719 --> 00:36:36,359
Speaker 4: But our belief is that in the ideal world they

642
00:36:36,360 --> 00:36:39,520
Speaker 4: would not be treated as a derivative, Okay, they would

643
00:36:39,520 --> 00:36:43,040
Speaker 4: instead be treated as a security kind of pari pasue

644
00:36:43,719 --> 00:36:47,880
Speaker 4: traditional stocks. So basically, all of the protections, all of

645
00:36:47,920 --> 00:36:52,640
Speaker 4: the structure that the SEC can kind of promulgate to

646
00:36:52,680 --> 00:36:57,560
Speaker 4: individual stocks should pass through to stock tokens as well.

647
00:36:58,040 --> 00:37:03,640
Speaker 4: And our belief is actually that this doesn't require new legislation.

648
00:37:04,000 --> 00:37:08,000
Speaker 4: The SEC can basically make the rules. They can do

649
00:37:08,080 --> 00:37:12,120
Speaker 4: a rule making, they can even do relief in advance

650
00:37:12,160 --> 00:37:15,279
Speaker 4: of rule making like they did for reggaets. If you

651
00:37:15,280 --> 00:37:18,200
Speaker 4: guys are familiar a few decades ago. So we've been

652
00:37:18,200 --> 00:37:21,680
Speaker 4: working with them, and I think actually the folks at

653
00:37:21,719 --> 00:37:25,120
Speaker 4: the sec HESTER and the Crypto Task Force, you know,

654
00:37:25,120 --> 00:37:28,120
Speaker 4: we've been engaging in a lot of roundtables, including tokenization.

655
00:37:29,120 --> 00:37:32,640
Speaker 4: I think they're pretty keen to make this happen. And

656
00:37:32,680 --> 00:37:36,200
Speaker 4: I actually think the EU launch and showing that you know,

657
00:37:36,680 --> 00:37:41,080
Speaker 4: these tokens are useful. It works well, Customers love it.

658
00:37:41,080 --> 00:37:44,560
Speaker 4: It's a huge efficiency improvement and infrastructure improvement behind the

659
00:37:44,600 --> 00:37:46,879
Speaker 4: scenes that makes all kinds of things that they care

660
00:37:46,920 --> 00:37:50,120
Speaker 4: about easier. My hope is that that'll help kind of

661
00:37:50,160 --> 00:37:55,480
Speaker 4: spur innovation and spur activity and acceptance worldwide, not just

662
00:37:55,520 --> 00:37:56,759
Speaker 4: in Europe.

663
00:37:56,800 --> 00:37:59,520
Speaker 2: The changing administration must be must have been huge for you.

664
00:38:00,760 --> 00:38:05,439
Speaker 4: It was definitely a positive because you know, probably over

665
00:38:05,480 --> 00:38:08,400
Speaker 4: the much of the past, much of the period of

666
00:38:08,440 --> 00:38:11,920
Speaker 4: twenty twenty to twenty twenty four, we had to play defense.

667
00:38:12,600 --> 00:38:16,719
Speaker 4: Our business was under assault from multiple angles, and I

668
00:38:16,719 --> 00:38:21,840
Speaker 4: think at first when the administration changed, having that not

669
00:38:21,960 --> 00:38:24,520
Speaker 4: be a huge factor was a huge relief, just not

670
00:38:24,640 --> 00:38:28,160
Speaker 4: having regulation by enforcement and not having to like spend

671
00:38:28,239 --> 00:38:31,520
Speaker 4: a significant amount of mind share and resources on defending

672
00:38:31,560 --> 00:38:37,759
Speaker 4: our business from this onslaught, and then that shifted into Okay, well,

673
00:38:37,760 --> 00:38:40,120
Speaker 4: we've got to exercise a muscle that we haven't really

674
00:38:40,160 --> 00:38:42,880
Speaker 4: had to exercise before, which is there's an openness to

675
00:38:42,880 --> 00:38:47,520
Speaker 4: create new rules and to like actually move forward and

676
00:38:47,640 --> 00:38:50,160
Speaker 4: encourage innovation. What does that look like? What does it

677
00:38:50,200 --> 00:38:53,880
Speaker 4: look like to actually work with an administration that wants

678
00:38:54,400 --> 00:38:56,960
Speaker 4: to get on the front foot and make the US

679
00:38:57,000 --> 00:39:00,239
Speaker 4: the leader. And I think that's been very welcome. I

680
00:39:00,239 --> 00:39:02,399
Speaker 4: think you saw with the stable coin bill, you'll see

681
00:39:02,400 --> 00:39:06,239
Speaker 4: with market structure that I think we'll be able to

682
00:39:06,800 --> 00:39:07,640
Speaker 4: execute on this.

683
00:39:08,040 --> 00:39:10,200
Speaker 3: What's it been like working with them? Just give us

684
00:39:10,200 --> 00:39:13,400
Speaker 3: some color of like the actual process in this administration

685
00:39:13,520 --> 00:39:14,440
Speaker 3: versus the last one.

686
00:39:14,640 --> 00:39:18,279
Speaker 4: They've been moving fast, which is pretty amazing. I mean,

687
00:39:18,800 --> 00:39:22,600
Speaker 4: bo Hines and David Sachs care a lot about this,

688
00:39:22,800 --> 00:39:26,759
Speaker 4: they care a lot about us being number one in

689
00:39:27,160 --> 00:39:31,759
Speaker 4: crypto as well as AI. They've been engaging industry, and

690
00:39:32,239 --> 00:39:35,840
Speaker 4: they're also like allergic to bureaucracy. I think in the

691
00:39:35,840 --> 00:39:40,600
Speaker 4: previous administration, frankly, it was hard to get a meeting right.

692
00:39:41,120 --> 00:39:44,080
Speaker 4: First of all, I don't know for how long people

693
00:39:44,120 --> 00:39:47,760
Speaker 4: weren't going into offices. But like it was remote meetings,

694
00:39:47,800 --> 00:39:49,279
Speaker 4: it's hard to get the stuff done.

695
00:39:49,960 --> 00:39:51,640
Speaker 2: You made a substantive difference into.

696
00:39:51,480 --> 00:39:54,160
Speaker 4: That made a substantive difference because I think it's really

697
00:39:54,200 --> 00:39:58,840
Speaker 4: hard to solve complex problems with multiple stakeholders remotely. So

698
00:39:58,960 --> 00:40:01,520
Speaker 4: even just something as simp is like having a round table,

699
00:40:01,760 --> 00:40:04,040
Speaker 4: wasn't really done, couldn't couldn't really be done in the

700
00:40:04,080 --> 00:40:06,719
Speaker 4: previous administration because they were all it was all just

701
00:40:06,840 --> 00:40:09,400
Speaker 4: virtual chats. Everyone was working remotely.

702
00:40:10,080 --> 00:40:13,839
Speaker 2: I have another crypto related question. One of the things

703
00:40:13,880 --> 00:40:17,560
Speaker 2: I wonder about is who makes money in crypto? And

704
00:40:17,600 --> 00:40:20,080
Speaker 2: by that I mean like, at one point there was

705
00:40:20,120 --> 00:40:23,279
Speaker 2: a lot of excitement about the specific l ones right

706
00:40:23,560 --> 00:40:27,120
Speaker 2: so Ethereum, ver Solana, et cetera. But it's not clear

707
00:40:27,120 --> 00:40:29,720
Speaker 2: to me that they're gonna like collect tons of fees.

708
00:40:29,840 --> 00:40:32,160
Speaker 2: Especially you know, it's like you're using a layer two

709
00:40:32,239 --> 00:40:34,320
Speaker 2: I don't know how much value, or you're built, and

710
00:40:34,360 --> 00:40:35,680
Speaker 2: then you're gonna build a layer two I don't know

711
00:40:35,719 --> 00:40:39,400
Speaker 2: how much value. Actually, then crews to uh say, Ethereum

712
00:40:39,760 --> 00:40:43,880
Speaker 2: Circle recently came public doing incredibly well that business is

713
00:40:43,920 --> 00:40:46,440
Speaker 2: it seems like it's insanely good. On the other hand,

714
00:40:46,840 --> 00:40:50,680
Speaker 2: they paid a lot of their money to Coinbase for distribution,

715
00:40:51,160 --> 00:40:53,520
Speaker 2: et cetera. So I don't really know if they're gonna

716
00:40:53,640 --> 00:40:55,080
Speaker 2: make a ton of money in the long time. Maybe

717
00:40:55,080 --> 00:40:57,040
Speaker 2: it'll be the distribution. Are you gonna by the way,

718
00:40:57,080 --> 00:40:59,000
Speaker 2: you're gonna get in on that, like we'll circle, Like

719
00:40:59,200 --> 00:41:02,799
Speaker 2: at some point will you be collecting money from the

720
00:41:02,840 --> 00:41:06,799
Speaker 2: stable coin issuers to the customers who hold that coin.

721
00:41:06,600 --> 00:41:10,279
Speaker 4: On your platform. Well, we we announced last year that

722
00:41:10,360 --> 00:41:13,719
Speaker 4: we joined the Dollar Global Network, which is a consortium

723
00:41:13,719 --> 00:41:18,680
Speaker 4: with Paxos, crack In a bunch of other companies to

724
00:41:18,760 --> 00:41:21,600
Speaker 4: create a new stable coin that's going to be global

725
00:41:21,640 --> 00:41:25,680
Speaker 4: in nature and will pay very competitive interests to holders.

726
00:41:26,360 --> 00:41:29,239
Speaker 4: So the goal would actually be to take much of

727
00:41:29,480 --> 00:41:33,120
Speaker 4: those economics and pay them in the form of interest

728
00:41:33,200 --> 00:41:35,399
Speaker 4: to customers. Because if you think about it, if you're

729
00:41:35,480 --> 00:41:39,080
Speaker 4: if you're holding you know us DC or most are tether,

730
00:41:39,600 --> 00:41:45,000
Speaker 4: most other stable coins, h you're not getting interest, which is.

731
00:41:45,160 --> 00:41:48,480
Speaker 2: FI users are getting interest indirectly though, right if they

732
00:41:48,520 --> 00:41:53,120
Speaker 2: hold us DC on Coinbase and Circle remis money to Coinbase,

733
00:41:53,160 --> 00:41:55,440
Speaker 2: and then Coinbase remix money to the user.

734
00:41:55,320 --> 00:41:59,040
Speaker 4: They are they are getting rewards uh, which is which

735
00:41:59,120 --> 00:42:01,480
Speaker 4: is true, But I think it's a little bit different

736
00:42:01,520 --> 00:42:05,719
Speaker 4: than interest, and I think it's also not universal. I mean,

737
00:42:05,719 --> 00:42:08,880
Speaker 4: you have to be holding it custodially. You can't be

738
00:42:09,520 --> 00:42:12,960
Speaker 4: just like holding it on chain, and you're certainly not

739
00:42:13,040 --> 00:42:17,360
Speaker 4: getting it if you're using tether or one of these others.

740
00:42:17,760 --> 00:42:19,800
Speaker 4: So yeah, I think I think they can get rewards

741
00:42:19,840 --> 00:42:23,480
Speaker 4: and incentives, but I think over time they'll have to

742
00:42:23,800 --> 00:42:27,319
Speaker 4: They'll have to get interest as well, because if you're

743
00:42:27,320 --> 00:42:30,360
Speaker 4: not getting interest, you don't really have an incentive to

744
00:42:30,440 --> 00:42:34,319
Speaker 4: hold US dollars. In the form of stable coin, the

745
00:42:34,360 --> 00:42:37,680
Speaker 4: incentive would just be converted immediately and put it in

746
00:42:37,680 --> 00:42:40,640
Speaker 4: a bank, which I think most crypto people would tell

747
00:42:40,680 --> 00:42:42,880
Speaker 4: you it It kind of defeats the whole point of

748
00:42:43,719 --> 00:42:47,280
Speaker 4: using crypto. I think internationally it's okay because those people

749
00:42:47,360 --> 00:42:50,600
Speaker 4: just want convenience. Yeah, so you can you can get

750
00:42:50,680 --> 00:42:53,640
Speaker 4: rid of I think it's a good enough value proposition

751
00:42:53,719 --> 00:42:56,600
Speaker 4: for now, but I think over time, as the interest

752
00:42:56,760 --> 00:43:02,239
Speaker 4: is unlocked, the best state coins will actually the ones

753
00:43:02,239 --> 00:43:04,640
Speaker 4: that ultimately gain market share are going to pay a

754
00:43:04,760 --> 00:43:07,279
Speaker 4: very competitive interest rate. So that's going to become an

755
00:43:07,320 --> 00:43:12,080
Speaker 4: access for competition, and the end user will benefit. So actually,

756
00:43:12,239 --> 00:43:15,799
Speaker 4: to cut to the chase, I'm not sure that's a

757
00:43:15,840 --> 00:43:19,200
Speaker 4: long term, sustainable, large revenue stream. I think it'll get

758
00:43:19,239 --> 00:43:19,919
Speaker 4: competed away.

759
00:43:19,920 --> 00:43:22,400
Speaker 2: Maybe no one will make money in cryptoni benefit of

760
00:43:22,400 --> 00:43:22,880
Speaker 2: the consumer.

761
00:43:23,239 --> 00:43:26,919
Speaker 3: Well, okay, this is exactly the question I wanted to ask. Okay,

762
00:43:26,960 --> 00:43:30,319
Speaker 3: so who makes money here? When I think about capital markets,

763
00:43:30,640 --> 00:43:33,080
Speaker 3: Like if I'm an old school investor or an old

764
00:43:33,120 --> 00:43:36,319
Speaker 3: school economist thinking about capital markets, I think like, okay, well,

765
00:43:36,360 --> 00:43:39,120
Speaker 3: an investor comes along and they give a company money

766
00:43:39,800 --> 00:43:42,360
Speaker 3: and they get equity in return, and the company uses

767
00:43:42,360 --> 00:43:44,600
Speaker 3: that money to go out and expand their business, and

768
00:43:44,640 --> 00:43:48,000
Speaker 3: eventually they pay back the investor. And then I look

769
00:43:48,040 --> 00:43:51,680
Speaker 3: at investing nowadays. I'm sure you've heard this criticism before,

770
00:43:51,800 --> 00:43:55,319
Speaker 3: but so much of it seems extremely synthetic. You know,

771
00:43:55,440 --> 00:43:58,600
Speaker 3: tokens built on top of tokens on top of tokens.

772
00:44:00,160 --> 00:44:03,360
Speaker 3: I guess my question is, like, to you, what is

773
00:44:03,400 --> 00:44:07,000
Speaker 3: the actual purpose of capital markets and this type of training.

774
00:44:07,640 --> 00:44:12,920
Speaker 4: I do think that there's a valuable purpose of capital formation.

775
00:44:13,600 --> 00:44:18,120
Speaker 4: I think it's gotten a little bit lost, or i'd

776
00:44:18,160 --> 00:44:21,359
Speaker 4: say the retail investor in the US has gotten disconnected

777
00:44:21,360 --> 00:44:25,319
Speaker 4: from that purpose because not too many companies are going

778
00:44:25,360 --> 00:44:28,440
Speaker 4: public nowadays. I think past few months have been an

779
00:44:28,480 --> 00:44:32,319
Speaker 4: exception locally, but if you look out broadly, you know,

780
00:44:32,400 --> 00:44:35,960
Speaker 4: back in the eighties or late seventies, you used to

781
00:44:36,040 --> 00:44:38,920
Speaker 4: be able to get into a public company at IPO

782
00:44:39,000 --> 00:44:42,880
Speaker 4: at a pretty low evaluation and kind of get a

783
00:44:43,080 --> 00:44:45,839
Speaker 4: thousand X or ten thousand X return. I mean, if

784
00:44:45,840 --> 00:44:50,239
Speaker 4: you'd invested in Microsoft or Apple at IPO, you had

785
00:44:50,280 --> 00:44:52,640
Speaker 4: a lot of upside left. So companies used to go

786
00:44:52,680 --> 00:44:56,359
Speaker 4: public earlier. Nowadays, you know, you've got SpaceX Open AI

787
00:44:56,560 --> 00:45:00,480
Speaker 4: companies that are worth hundreds of billions of dollars still

788
00:45:00,560 --> 00:45:04,240
Speaker 4: staying private, and those gains are accruing to a smaller

789
00:45:04,239 --> 00:45:08,799
Speaker 4: and smaller set of wealthy insiders. And I think that's

790
00:45:08,840 --> 00:45:13,200
Speaker 4: another potential for the technology because you know, as I mentioned,

791
00:45:13,880 --> 00:45:18,400
Speaker 4: we release SpaceX tokens to consumers as part of this,

792
00:45:19,560 --> 00:45:22,520
Speaker 4: as part of our to catch a token event. And

793
00:45:23,280 --> 00:45:26,319
Speaker 4: what that will do over time is you'll have twenty

794
00:45:26,360 --> 00:45:29,840
Speaker 4: four to seven liquid markets in private stocks as well,

795
00:45:29,920 --> 00:45:33,360
Speaker 4: and I think that's going to be very exciting in

796
00:45:33,400 --> 00:45:36,640
Speaker 4: the US if those are permissible, which I think requires

797
00:45:36,640 --> 00:45:41,560
Speaker 4: the crypto stuff, but also a relaxation of the accreditation standards.

798
00:45:41,880 --> 00:45:45,160
Speaker 4: I think things start to get really interesting because then

799
00:45:45,200 --> 00:45:49,400
Speaker 4: you unlock capital formation at a greater scale and also

800
00:45:50,440 --> 00:45:55,400
Speaker 4: participation for retail in some of these great opportunities. Like

801
00:45:55,400 --> 00:45:57,600
Speaker 4: if you're a retail and you want to gain exposure

802
00:45:57,640 --> 00:46:02,320
Speaker 4: to the AI boom, your options the US are extremely limited,

803
00:46:02,360 --> 00:46:04,560
Speaker 4: And I actually think that's a huge problem because the

804
00:46:04,600 --> 00:46:08,600
Speaker 4: AI boom is very, very consequential to everyday people.

805
00:46:08,760 --> 00:46:12,239
Speaker 2: Man, I'm also looking at the circle IPO. This thing

806
00:46:12,320 --> 00:46:15,279
Speaker 2: is insane. It goes up like twenty percent a day.

807
00:46:15,600 --> 00:46:17,440
Speaker 2: I have a question about IPOs. I'd love to get

808
00:46:17,440 --> 00:46:20,920
Speaker 2: your take on this. Every time there's an IPO that

809
00:46:20,960 --> 00:46:23,880
Speaker 2: goes up, you have like the sort of like Ninia's like,

810
00:46:23,920 --> 00:46:25,600
Speaker 2: actually this was bad and they left all.

811
00:46:25,480 --> 00:46:27,120
Speaker 3: This money money on the table.

812
00:46:27,280 --> 00:46:31,600
Speaker 2: There have been alternative routes to ipoing for decades actually

813
00:46:32,400 --> 00:46:35,799
Speaker 2: late nineties. Google famously did a Dutch auction when it

814
00:46:35,840 --> 00:46:40,439
Speaker 2: became public, et cetera. Yet the IPO as a thing persists.

815
00:46:40,719 --> 00:46:43,400
Speaker 2: Do you have a theory for why, Like why is

816
00:46:43,440 --> 00:46:47,479
Speaker 2: it that like the IPO model where the big bank,

817
00:46:47,560 --> 00:46:51,319
Speaker 2: the big legacy banks, they get their allocation and their

818
00:46:51,320 --> 00:46:53,719
Speaker 2: best clients get this big bump et cetera, and the

819
00:46:53,719 --> 00:46:56,440
Speaker 2: company leaves money on the table. Why does it persist

820
00:46:56,680 --> 00:46:58,440
Speaker 2: for so long? In your view? What does it say

821
00:46:58,440 --> 00:46:58,919
Speaker 2: about markets?

822
00:46:59,120 --> 00:47:01,320
Speaker 3: Is this a roundabout way of asking why robinhood IPO?

823
00:47:01,719 --> 00:47:03,719
Speaker 2: No? I mean sure maybe, but like, what is it

824
00:47:03,760 --> 00:47:07,680
Speaker 2: about the traditional IPO that's so lindy Well, I think

825
00:47:07,680 --> 00:47:12,640
Speaker 2: it's just the enshrined in regulatory No, it's not. The

826
00:47:12,760 --> 00:47:15,440
Speaker 2: Google did a Dutch auction. There are clearly other ways

827
00:47:15,480 --> 00:47:19,799
Speaker 2: to go. SPACs existed, they're coming back already, and yet

828
00:47:19,840 --> 00:47:23,480
Speaker 2: good companies continue to basically go by the IPO road.

829
00:47:23,960 --> 00:47:26,120
Speaker 4: Yeah, that's a good question. I would say those are

830
00:47:26,120 --> 00:47:29,880
Speaker 4: all kind of variants of the IPO that people have

831
00:47:29,960 --> 00:47:33,080
Speaker 4: experimented with. You have direct listings as well.

832
00:47:33,160 --> 00:47:33,759
Speaker 1: Yeah.

833
00:47:33,880 --> 00:47:36,359
Speaker 4: Downside of course with the direct listing is you can't

834
00:47:36,440 --> 00:47:40,400
Speaker 4: raise primary capital, which I think is useful to a

835
00:47:40,440 --> 00:47:43,520
Speaker 4: lot of companies like they do look at it as

836
00:47:43,600 --> 00:47:49,200
Speaker 4: a financing event. So I think there will be some

837
00:47:50,200 --> 00:47:54,919
Speaker 4: iteration and some experimentation within the IPO sandbox like we've seen.

838
00:47:55,400 --> 00:47:59,880
Speaker 4: But I think you look at tokenization of private companies

839
00:48:00,400 --> 00:48:03,120
Speaker 4: if we kind of pull on that thread, that that

840
00:48:03,160 --> 00:48:07,040
Speaker 4: presents an interesting alternative to to companies as well. Both

841
00:48:07,080 --> 00:48:13,120
Speaker 4: for raising primary capital and for tapping into secondary liquidity

842
00:48:13,200 --> 00:48:16,520
Speaker 4: for shareholders. I think it's not yet clear what the

843
00:48:16,560 --> 00:48:20,840
Speaker 4: impact of that will be long term to capital markets,

844
00:48:21,520 --> 00:48:22,960
Speaker 4: but it's definitely coming.

845
00:48:23,280 --> 00:48:28,480
Speaker 3: So you mentioned the accredited investor limitations regulations in the US,

846
00:48:28,640 --> 00:48:31,520
Speaker 3: and I've never I've never really decided how i feel

847
00:48:31,520 --> 00:48:33,719
Speaker 3: about them, because, you know, on the one hand, they're

848
00:48:33,840 --> 00:48:37,520
Speaker 3: supposed to protect uninformed retail investors. I guess, on the

849
00:48:37,520 --> 00:48:40,239
Speaker 3: other hand, they do seem to lock people out of

850
00:48:40,280 --> 00:48:44,279
Speaker 3: a lot of opportunities in the market. And one thing

851
00:48:44,320 --> 00:48:46,560
Speaker 3: you hear from companies such as robin Hood is this

852
00:48:46,640 --> 00:48:49,920
Speaker 3: idea of democratizing finance, Like that is the buzzword and

853
00:48:49,960 --> 00:48:52,040
Speaker 3: the catchword, and we're going to bring all these offers

854
00:48:52,160 --> 00:48:52,759
Speaker 3: created that.

855
00:48:52,680 --> 00:48:54,560
Speaker 4: By the way, Oh did you that was our mission?

856
00:48:54,600 --> 00:48:56,360
Speaker 4: Democratized finance for all.

857
00:48:57,200 --> 00:49:01,839
Speaker 2: They talked about that, yeah, Trader in ninety nine.

858
00:49:02,120 --> 00:49:05,440
Speaker 3: Also peer to peer lending, like they were all over that. Okay,

859
00:49:05,440 --> 00:49:06,320
Speaker 3: But on that note.

860
00:49:06,680 --> 00:49:09,760
Speaker 4: Well they got it from us, okay.

861
00:49:09,840 --> 00:49:13,040
Speaker 3: But on this note, like, is there a limit to

862
00:49:13,120 --> 00:49:15,720
Speaker 3: how far you can democratize finance or do you believe

863
00:49:15,760 --> 00:49:20,440
Speaker 3: there should be like any guardrails in terms of investor access.

864
00:49:20,760 --> 00:49:24,040
Speaker 4: I think any is a big term. I mean, obviously

865
00:49:24,080 --> 00:49:28,400
Speaker 4: I can think of some examples of things that maybe

866
00:49:28,400 --> 00:49:33,239
Speaker 4: you shouldn't be democratized or at least democratized. First, Like,

867
00:49:33,280 --> 00:49:37,040
Speaker 4: I don't know if retail needs to be trading collateralized

868
00:49:37,040 --> 00:49:41,600
Speaker 4: debt obligations or some of these heavily institutional products. But

869
00:49:43,040 --> 00:49:45,160
Speaker 4: I think with private companies it's a little bit of

870
00:49:45,200 --> 00:49:50,680
Speaker 4: an easier discussion. I think that it's hard to imagine

871
00:49:50,960 --> 00:49:55,759
Speaker 4: an argument for why retail should not have access to that,

872
00:49:56,200 --> 00:49:59,440
Speaker 4: like the an argument that on its face is an

873
00:49:59,440 --> 00:50:02,680
Speaker 4: illogical and you have access to so many things. You

874
00:50:02,719 --> 00:50:06,719
Speaker 4: can just spend your money on Amazon and buy all

875
00:50:06,760 --> 00:50:10,480
Speaker 4: sorts of trinkets that immediately lose value and depreciate. You

876
00:50:10,520 --> 00:50:14,680
Speaker 4: can buy mean coins, right, So the idea that those

877
00:50:14,719 --> 00:50:17,560
Speaker 4: classes of ways to spend your money are okay, But

878
00:50:18,440 --> 00:50:21,560
Speaker 4: buying open ai or SpaceX stock, I think, on its

879
00:50:21,600 --> 00:50:25,359
Speaker 4: face it's illogical. Either we have to ban a whole

880
00:50:25,360 --> 00:50:28,200
Speaker 4: bunch of other things that people do to blow their money.

881
00:50:29,480 --> 00:50:32,760
Speaker 2: Be My issue is that I think in a world

882
00:50:32,960 --> 00:50:37,200
Speaker 2: everything is available, you induce a lot of people to

883
00:50:37,560 --> 00:50:40,759
Speaker 2: essentially find ways to fraud, to create fraud. Whereas a

884
00:50:40,800 --> 00:50:43,880
Speaker 2: trinket is a trinket. Anyway, I think we have to

885
00:50:44,080 --> 00:50:46,600
Speaker 2: let you go. We could talk for a real long time.

886
00:50:46,680 --> 00:50:48,400
Speaker 2: Well everything beyond chain in the future.

887
00:50:49,200 --> 00:50:52,440
Speaker 4: I don't know about everything, okay, but I think anything

888
00:50:52,520 --> 00:50:55,359
Speaker 4: that people want to trade, buy or sell and get

889
00:50:55,440 --> 00:50:59,360
Speaker 4: liquidity on will likely find its way on chain.

890
00:51:00,560 --> 00:51:03,280
Speaker 2: Attend to thank you so much for coming on odlash.

891
00:51:03,320 --> 00:51:03,920
Speaker 2: That was a blast.

892
00:51:04,000 --> 00:51:05,120
Speaker 4: Thank you guys, Thank you.

893
00:51:18,400 --> 00:51:21,480
Speaker 2: Tracy. I really can't believe the degree to which like

894
00:51:21,640 --> 00:51:24,560
Speaker 2: a blockchain. I mean, he didn't say blockchain, but is

895
00:51:24,840 --> 00:51:27,200
Speaker 2: every all these companies have their own chain, so like

896
00:51:27,520 --> 00:51:31,640
Speaker 2: coinbase has its own chain called base, robin Hood with

897
00:51:31,680 --> 00:51:34,960
Speaker 2: its own chain, Like I thought that was so ridiculous,

898
00:51:35,040 --> 00:51:37,360
Speaker 2: the idea of like seven or eight years ago. And

899
00:51:38,160 --> 00:51:40,560
Speaker 2: it's a little different, like they're not putting tomatoes on chain,

900
00:51:40,800 --> 00:51:44,000
Speaker 2: but like the change themselves that were the coin is

901
00:51:44,000 --> 00:51:45,920
Speaker 2: not that important. It sort of took off in a

902
00:51:45,960 --> 00:51:47,000
Speaker 2: way that I wouldn't have guessed.

903
00:51:47,080 --> 00:51:50,359
Speaker 3: Here's my question. If you're a person right now who

904
00:51:50,440 --> 00:51:53,960
Speaker 3: is not trading crypto, Yeah, is there anything in your

905
00:51:54,080 --> 00:51:58,200
Speaker 3: day to day life that is, you know, trading or

906
00:51:58,239 --> 00:52:00,600
Speaker 3: existing or being tracked on chain?

907
00:52:01,320 --> 00:52:04,319
Speaker 2: I don't really think so. Yeah, I don't think so, so,

908
00:52:04,760 --> 00:52:05,319
Speaker 2: but it does.

909
00:52:05,480 --> 00:52:08,120
Speaker 3: But we're so we're still we're still in the wait

910
00:52:08,200 --> 00:52:12,000
Speaker 3: and see mode. People are still talking about it. And yeah,

911
00:52:12,080 --> 00:52:15,960
Speaker 3: I guess, like I'm open to the idea that chain

912
00:52:16,080 --> 00:52:19,080
Speaker 3: technology is going to change things and make things different,

913
00:52:19,120 --> 00:52:21,480
Speaker 3: But I guess, like, why hasn't it happened already? And

914
00:52:21,520 --> 00:52:25,799
Speaker 3: then b it sounds still like the barrier isn't necessarily technology,

915
00:52:25,880 --> 00:52:27,840
Speaker 3: Like we have things that would allow you to do this,

916
00:52:27,960 --> 00:52:29,080
Speaker 3: but it's still regulatory.

917
00:52:29,680 --> 00:52:32,120
Speaker 2: I mean, it sounds like the reason it didn't happen

918
00:52:32,360 --> 00:52:34,879
Speaker 2: is because all the Biden administration people were working from

919
00:52:34,920 --> 00:52:39,000
Speaker 2: home and they couldn't they didn't have around tape. No,

920
00:52:39,080 --> 00:52:41,319
Speaker 2: it does sound like probably that is part of it,

921
00:52:41,400 --> 00:52:44,960
Speaker 2: the sort of changing regulatory environment and the deep suspicion

922
00:52:45,400 --> 00:52:48,600
Speaker 2: towards crypto for better or worse, uh on the part

923
00:52:48,600 --> 00:52:51,800
Speaker 2: of the Democratic Party in the US, Like obviously seems

924
00:52:51,840 --> 00:52:54,600
Speaker 2: pretty real. And I do think it seems like that

925
00:52:54,960 --> 00:52:58,360
Speaker 2: between the Genius Act, definitely change in Congress, and obviously

926
00:52:58,400 --> 00:53:01,120
Speaker 2: the changing of the guard at the Sea See, there

927
00:53:01,280 --> 00:53:04,239
Speaker 2: is a real movement. And to my mind, it's not

928
00:53:04,480 --> 00:53:07,160
Speaker 2: really like and again I always sort of go back

929
00:53:08,600 --> 00:53:11,200
Speaker 2: and think about our episodes with Austin Campbell. To my mind,

930
00:53:11,200 --> 00:53:14,640
Speaker 2: it's not like, okay, like there is some benefit to

931
00:53:14,680 --> 00:53:18,960
Speaker 2: me right now in the existence of chains. But the

932
00:53:19,080 --> 00:53:22,239
Speaker 2: idea that like legacy software for reasons that we all

933
00:53:22,280 --> 00:53:24,520
Speaker 2: know is never get to get its act together to

934
00:53:24,600 --> 00:53:27,879
Speaker 2: have something like twenty four to seven trading for better

935
00:53:27,920 --> 00:53:29,480
Speaker 2: or worse. I don't even know if twenty four to

936
00:53:29,520 --> 00:53:31,759
Speaker 2: seven is trading, but some people want to do it,

937
00:53:31,760 --> 00:53:33,600
Speaker 2: because some people want to trade at three pm in

938
00:53:33,640 --> 00:53:37,240
Speaker 2: the afternoon, And it sounds like or of what I suspect,

939
00:53:37,280 --> 00:53:40,080
Speaker 2: and I think it's probably like real or imminent. Is

940
00:53:40,120 --> 00:53:43,480
Speaker 2: that through change that will that that'll be something that

941
00:53:43,520 --> 00:53:44,440
Speaker 2: becomes fairly common.

942
00:53:45,120 --> 00:53:47,960
Speaker 3: I guess here's where I'm coming from. It seems to

943
00:53:48,000 --> 00:53:51,279
Speaker 3: me that a lot of this is incremental rather than revolutionary,

944
00:53:51,400 --> 00:53:53,440
Speaker 3: and when people were first talking about it, it was

945
00:53:53,560 --> 00:53:56,239
Speaker 3: very much in those revolutionary terms, and now it just

946
00:53:56,280 --> 00:54:00,520
Speaker 3: seems like, you know, like an efficiency improvement.

947
00:54:01,160 --> 00:54:02,839
Speaker 2: I actually I totally agree with that. I mean, one

948
00:54:02,840 --> 00:54:05,160
Speaker 2: thing this is definitely not is some sort of like

949
00:54:05,320 --> 00:54:09,920
Speaker 2: cipherpunk vision where people are trading everything without the government

950
00:54:10,000 --> 00:54:12,960
Speaker 2: being able to look at That is definitely true. But

951
00:54:13,200 --> 00:54:16,799
Speaker 2: you know, like the efficiency improvement is it's nothing like,

952
00:54:16,840 --> 00:54:20,400
Speaker 2: it's not it's not only not nothing. So no, I

953
00:54:20,400 --> 00:54:22,280
Speaker 2: think it's actually kind of a surprise to me because

954
00:54:22,320 --> 00:54:25,919
Speaker 2: the the way people talked about, you know, the thing

955
00:54:25,960 --> 00:54:30,719
Speaker 2: with blockchains is that they're decentralized and costly, and you

956
00:54:30,800 --> 00:54:33,279
Speaker 2: brought up the point of etherorem gaess fees. But if

957
00:54:33,280 --> 00:54:36,840
Speaker 2: everyone can have these sort of basically low fee layer

958
00:54:36,920 --> 00:54:41,160
Speaker 2: twos because they're more they're in large part centrally run,

959
00:54:41,440 --> 00:54:44,640
Speaker 2: you sort of solve some of the compute issues because

960
00:54:44,640 --> 00:54:47,680
Speaker 2: you're not you don't have to like coordinate all these

961
00:54:47,719 --> 00:54:50,520
Speaker 2: different nodes around the world. It's the robin Hood chain,

962
00:54:50,560 --> 00:54:55,600
Speaker 2: it's the coinbase chain, it's whatever. Maybe it is more

963
00:54:55,600 --> 00:55:01,040
Speaker 2: efficient than legacy infrastructure that has been updated and cobbled

964
00:55:01,080 --> 00:55:04,640
Speaker 2: together for like literally decades, and we'll be here decades

965
00:55:04,640 --> 00:55:05,040
Speaker 2: from now.

966
00:55:05,280 --> 00:55:08,160
Speaker 3: It's certainly true that you don't hear the gas fee

967
00:55:08,320 --> 00:55:11,480
Speaker 3: complaints the way you used to write like that that's

968
00:55:11,520 --> 00:55:13,919
Speaker 3: been solved. All right, Well shall we leave it there?

969
00:55:14,160 --> 00:55:15,040
Speaker 2: Yeah, let's leave it there.

970
00:55:15,239 --> 00:55:17,759
Speaker 3: This has been another episode of the Authots podcast. I'm

971
00:55:17,800 --> 00:55:20,760
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway.

972
00:55:20,640 --> 00:55:23,440
Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart,

973
00:55:23,719 --> 00:55:26,960
Speaker 2: follow our guests vlaed Tenev at vlad Tenev. Follow our

974
00:55:26,960 --> 00:55:30,360
Speaker 2: producers Carmen Rodriguez at Carmen armand dash Ol Bennett at

975
00:55:30,440 --> 00:55:33,600
Speaker 2: Dashbott and Kale Brooks at Kale Brooks. For more odd

976
00:55:33,680 --> 00:55:36,399
Speaker 2: Laws content, go to Bloomberg dot com slash odd Lots.

977
00:55:36,440 --> 00:55:38,799
Speaker 2: We have been daily newsletter and all of our episodes,

978
00:55:39,080 --> 00:55:41,200
Speaker 2: and you can chat about all of these topics twenty

979
00:55:41,239 --> 00:55:44,800
Speaker 2: four to seven in our discord Discord dot gg slash

980
00:55:44,880 --> 00:55:45,359
Speaker 2: odd Lots.

981
00:55:45,719 --> 00:55:48,200
Speaker 3: And if you enjoy adlots, if you like it when

982
00:55:48,239 --> 00:55:51,040
Speaker 3: we talk about the future of trading them, please leave

983
00:55:51,120 --> 00:55:54,480
Speaker 3: us a positive review on your favorite podcast platform. And remember,

984
00:55:54,560 --> 00:55:56,799
Speaker 3: if you aren't a Bloomberg subscriber, you can listen to

985
00:55:56,920 --> 00:55:59,680
Speaker 3: all of our episodes absolutely add free. All you need

986
00:55:59,719 --> 00:56:02,480
Speaker 3: to do is find the Bloomberg channel on Apple Podcasts

987
00:56:02,480 --> 00:56:05,080
Speaker 3: and follow the instructions there. Thanks for listening.