1 00:00:06,910 --> 00:00:09,380 Welcome to Nasdaq trade talks, 2 00:00:09,380 --> 00:00:12,559 where we meet with the top thought leaders and strategists in emerging technologies, 3 00:00:12,559 --> 00:00:15,485 digital assets and regulatory landscape, and capital markets. 4 00:00:15,485 --> 00:00:16,879 I'm your host, Jill Malandrino, 5 00:00:16,879 --> 00:00:18,904 and joining us this afternoon, we have John Devine, 6 00:00:18,904 --> 00:00:20,930 execution specialist at Blockfills, 7 00:00:20,930 --> 00:00:22,369 as well as Alan Orrick, 8 00:00:22,369 --> 00:00:24,140 co-founder of Clyde Network. 9 00:00:24,140 --> 00:00:27,664 We're here to discuss why 2025 could be the year for scaling, 10 00:00:27,664 --> 00:00:31,640 transparency and deeper market integration of decentralized exchanges. 11 00:00:31,640 --> 00:00:35,960 The DeFi landscape underwent a significant transformation in 2024, 12 00:00:35,960 --> 00:00:39,620 marking a year of convergence between decentralized and traditional finance. 13 00:00:39,620 --> 00:00:42,709 Blackrock fidelity ventured into decentralized staking, 14 00:00:42,709 --> 00:00:46,099 while decentralized exchange is known as Dex gained 15 00:00:46,099 --> 00:00:50,000 traction as essential hubs for liquidity and innovation. 16 00:00:50,000 --> 00:00:52,445 It is great to have the both of you with us. 17 00:00:52,445 --> 00:00:54,080 Let's kick it off with you, John. 18 00:00:54,080 --> 00:00:55,414 Give us a brief introduction, 19 00:00:55,414 --> 00:00:58,475 a reminder of where Blockfills is within the ecosystem. 20 00:00:58,475 --> 00:01:00,170 Yeah, sure. Great to be back with you, Jil. 21 00:01:00,170 --> 00:01:04,495 Jill. So Blockfills were an institutional liquidity provider and market maker. 22 00:01:04,495 --> 00:01:07,795 So so we're serving exchanges and we're also serving the, you know, 23 00:01:07,795 --> 00:01:10,180 participants directly like proprietary traders, 24 00:01:10,180 --> 00:01:12,760 hedge funds, bitcoin mining companies. 25 00:01:12,760 --> 00:01:14,454 And now more and more, 26 00:01:14,454 --> 00:01:17,154 we're starting to have conversations and looking 27 00:01:17,154 --> 00:01:20,019 to integrate with different decentralized exchanges. 28 00:01:20,019 --> 00:01:22,015 All right. And Alan, give us some background. 29 00:01:22,015 --> 00:01:23,725 Yeah. Hi, Jill. Thank you for having me on. 30 00:01:23,725 --> 00:01:26,230 My name is Alan Orrick. I'm the co-founder of Koi network. 31 00:01:26,230 --> 00:01:29,319 Koi is a scalable and programmable layer one blockchain, 32 00:01:29,319 --> 00:01:32,950 and we have a live network that is operating across the globe. 33 00:01:32,950 --> 00:01:35,605 So you can think of it being the decentralization of Bitcoin, 34 00:01:35,605 --> 00:01:37,779 speed of Solana, and programmability of Ethereum, 35 00:01:37,779 --> 00:01:41,305 looking to bring the next billion users on chain and actually plug in 36 00:01:41,305 --> 00:01:45,310 to these decentralized technologies and have something that can scale to global adoption. 37 00:01:45,310 --> 00:01:49,045 We're so excited to jump into the topic of liquidity and Dex profiles. 38 00:01:49,045 --> 00:01:51,909 And, Alan, before we get into outlook with you and John, 39 00:01:51,909 --> 00:01:55,420 give us a high level overview of Dex decentralized exchanges. 40 00:01:55,420 --> 00:01:59,140 How are they like and how are they unlike central exchanges? 41 00:01:59,140 --> 00:02:02,530 Yeah. So a decentralized exchange runs on a blockchain. 42 00:02:02,530 --> 00:02:06,159 So when you think of how the actual user can come in and interact, 43 00:02:06,159 --> 00:02:08,620 they're not interacting with a central intermediary. 44 00:02:08,620 --> 00:02:11,920 They're interacting with the network as a whole or a smart contract. 45 00:02:11,920 --> 00:02:14,260 So the smart contract can operate and 46 00:02:14,260 --> 00:02:18,070 facilitate the exchange of these assets in a trustless manner. 47 00:02:18,070 --> 00:02:22,360 So just as Bitcoin revolutionized having a monetary system that has 48 00:02:22,360 --> 00:02:27,759 no central intermediary or no owner of the entire network or ecosystem, 49 00:02:27,759 --> 00:02:31,150 the Dex or the decentralized exchange has 50 00:02:31,150 --> 00:02:36,130 no central authority over that facilitation or trade of those assets on a blockchain. 51 00:02:36,130 --> 00:02:40,449 So some of the largest ones that we've seen are Uniswap, pancake swap, 52 00:02:40,449 --> 00:02:43,330 and newer exchanges or exchanges such as 53 00:02:43,330 --> 00:02:47,020 hyper liquid that are facilitating these trading operations. 54 00:02:47,020 --> 00:02:50,845 What are the benefits to decentralized exchanges? John. 55 00:02:50,845 --> 00:02:53,755 This is going to be the fascinating question. 56 00:02:53,755 --> 00:02:59,885 I mean, right now the the low hanging fruit benefit to a decentralized exchange. 57 00:02:59,885 --> 00:03:04,250 It allows access to liquidity and liquidity pools, 58 00:03:04,250 --> 00:03:06,770 and you don't necessarily have to go through the hoops that you 59 00:03:06,770 --> 00:03:09,590 have to go through to face a centralized exchange. 60 00:03:09,590 --> 00:03:13,370 And what I mean by that is onboarding processes and 61 00:03:13,370 --> 00:03:19,100 traditional mechanisms that that are KYC policies and procedures. 62 00:03:19,100 --> 00:03:22,505 Those don't really, really come into play with with decentralized exchanges. 63 00:03:22,505 --> 00:03:24,185 That's the low hanging fruit. 64 00:03:24,185 --> 00:03:28,715 Of course, we're anticipating that the benefits won't just stop there. 65 00:03:28,715 --> 00:03:30,439 You're also talking about different, 66 00:03:30,439 --> 00:03:32,404 different ways to look at counterparty risk, 67 00:03:32,404 --> 00:03:36,110 as opposed to facing off with a centralized entity where you're 68 00:03:36,110 --> 00:03:39,815 facing against a balance sheet with a decentralized exchange. 69 00:03:39,815 --> 00:03:42,499 You're really you're facing off against code, 70 00:03:42,499 --> 00:03:44,690 and the risk becomes code risk. 71 00:03:44,690 --> 00:03:46,565 And that's another way to think about 72 00:03:46,565 --> 00:03:49,025 maybe some advantages that are going to come into play. 73 00:03:49,025 --> 00:03:50,450 Yeah. And Alan, I see you're shaking your head. 74 00:03:50,450 --> 00:03:52,250 But we do have to address the concerns when it comes to 75 00:03:52,250 --> 00:03:55,055 transparency and potential downsides. 76 00:03:55,055 --> 00:03:57,200 What are some of the pushback that you're getting? 77 00:03:57,200 --> 00:03:58,695 Because I hear no KYC. 78 00:03:58,695 --> 00:04:00,420 Nothing central governing this. 79 00:04:00,420 --> 00:04:01,485 And I can understand, you know, 80 00:04:01,485 --> 00:04:05,625 the obvious apprehension of institutions wanting to get involved. 81 00:04:05,625 --> 00:04:09,660 What are these downsides and how is it being addressed? 82 00:04:09,660 --> 00:04:13,739 Yeah, I mean, from my side, the way I see the downsides with the centralized exchanges, 83 00:04:13,739 --> 00:04:17,534 looking at moving into a Dex type architecture is that again, 84 00:04:17,534 --> 00:04:19,815 they lose a lot of control of their operations. 85 00:04:19,815 --> 00:04:22,889 So as we were saying with John's point, 86 00:04:22,889 --> 00:04:24,090 these are permissionless systems. 87 00:04:24,090 --> 00:04:26,985 So you don't really have an input of KYC. 88 00:04:26,985 --> 00:04:28,740 You don't have a way of censoring or 89 00:04:28,740 --> 00:04:31,380 limiting the ways in which people operate with these order books. 90 00:04:31,380 --> 00:04:33,480 And you have these systems that run 24 over seven. 91 00:04:33,480 --> 00:04:34,889 That's another big benefit, 92 00:04:34,889 --> 00:04:37,530 is that there's no sort of on and off time. 93 00:04:37,530 --> 00:04:40,980 It's you can go and interact with a decentralized exchange at any point, 94 00:04:40,980 --> 00:04:42,989 at any time of the day, holiday or not, 95 00:04:42,989 --> 00:04:44,970 or, you know, 9 to 5 or not. 96 00:04:44,970 --> 00:04:46,889 So I think whenever you're looking at some of 97 00:04:46,889 --> 00:04:50,009 the downsides of people moving into this Dex style architecture, 98 00:04:50,009 --> 00:04:51,899 it's how do we move away from this traditional world, 99 00:04:51,899 --> 00:04:54,839 this traditional finance, into something that is more open, 100 00:04:54,839 --> 00:04:57,440 more permissionless or more permissionless and has 101 00:04:57,440 --> 00:05:00,829 this way of achieving and getting that next level of legitimacy, 102 00:05:00,829 --> 00:05:02,900 because I do think there is a lot of skepticism 103 00:05:02,900 --> 00:05:05,300 and a lot of speculation around how Dexs work, 104 00:05:05,300 --> 00:05:07,459 and I think it's going to take a lot of time to ensure that 105 00:05:07,459 --> 00:05:09,709 these operate in a way that is transparent, 106 00:05:09,709 --> 00:05:12,230 because that is what's going to reassure 107 00:05:12,230 --> 00:05:16,115 all the customers and people using Dexs as they trade these assets on a blockchain. 108 00:05:16,115 --> 00:05:17,585 And John, you can understand why 109 00:05:17,585 --> 00:05:20,435 a tradfi institution or asset manager would have some pushback. 110 00:05:20,435 --> 00:05:22,895 I mean, they are in a heavily regulated space, right? 111 00:05:22,895 --> 00:05:26,959 So whether it's it's developing regulatory framework around that or finding 112 00:05:26,959 --> 00:05:31,025 solutions to be able to adhere and comply with regulations. 113 00:05:31,025 --> 00:05:35,480 I would imagine that's going to be a roadblock until that solution is delivered. 114 00:05:35,480 --> 00:05:37,010 That's that's how I see it. 115 00:05:37,010 --> 00:05:42,800 And I think the the broader digital asset industry understands the constraints that 116 00:05:42,800 --> 00:05:45,829 more traditional finance market participants 117 00:05:45,829 --> 00:05:49,055 are facing when trying to come into this decentralized world. 118 00:05:49,055 --> 00:05:52,550 There's going to have to be some type of bridge mechanism where 119 00:05:52,550 --> 00:05:56,569 we utilize permissioned decentralized Centralized exchanges, 120 00:05:56,569 --> 00:06:00,560 although there's a little bit of a conundrum in saying that. 121 00:06:00,560 --> 00:06:05,720 But but I think there is a route where you can have decentralized protocols, 122 00:06:05,720 --> 00:06:08,449 stand up exchanges in a decentralized fashion, 123 00:06:08,449 --> 00:06:11,839 but then make users go through a KYC process, 124 00:06:11,839 --> 00:06:15,215 or at least have some type of control on who has access to 125 00:06:15,215 --> 00:06:20,030 specific instruments or markets that are offered on the on on a specific Dex. 126 00:06:20,030 --> 00:06:24,019 That's seemingly almost has to happen before we we really 127 00:06:24,019 --> 00:06:28,055 get buy in from traditional finance to engage in these types of protocols. 128 00:06:28,055 --> 00:06:30,545 Yeah. And John I'm sorry. Go ahead Alan. 129 00:06:30,545 --> 00:06:31,925 I was going to chime in on John's point. 130 00:06:31,925 --> 00:06:33,485 We're seeing that live today right. 131 00:06:33,485 --> 00:06:36,440 Like Blackrock is deploying the Biddle fund on chain. 132 00:06:36,440 --> 00:06:39,154 Coinbase is actually just this week issuing 133 00:06:39,154 --> 00:06:42,230 KYC pools for people to provide LP on against base. 134 00:06:42,230 --> 00:06:44,720 And there are ways of bringing these traditional assets, 135 00:06:44,720 --> 00:06:46,654 these ways, these stocks, these bonds, 136 00:06:46,654 --> 00:06:49,879 these other instruments in a KYC or sort of limited manner 137 00:06:49,879 --> 00:06:53,225 for the people that are accustomed to that type of interface. 138 00:06:53,225 --> 00:06:56,130 And so I think we'll see that industry in that area continue to grow. 139 00:06:56,130 --> 00:06:59,579 But for the people that do want to remain crypto native and have the know how 140 00:06:59,579 --> 00:07:03,179 and the expertise to actually use these systems in the way in which they're designed, 141 00:07:03,179 --> 00:07:07,245 or the way in which they intend to kind of plug in more to that permissionless side, 142 00:07:07,245 --> 00:07:09,915 we'll see that still kind of have that appetite there as well. 143 00:07:09,915 --> 00:07:11,265 Yeah. And John, we spoke about this. 144 00:07:11,265 --> 00:07:13,275 This is a good segue for the question I was going to ask. 145 00:07:13,275 --> 00:07:14,745 We spoke about this at Global ALTs. 146 00:07:14,745 --> 00:07:17,685 Right. And when you think about the trajectory of rwas, 147 00:07:17,685 --> 00:07:19,050 the tokenization and so forth, 148 00:07:19,050 --> 00:07:21,720 that's really where the pools of liquidity are going to be 149 00:07:21,720 --> 00:07:25,005 sourced as the capital markets become more digitized and evolve. 150 00:07:25,005 --> 00:07:28,320 So what is the market maker role and why is it vital in 151 00:07:28,320 --> 00:07:32,550 ensuring liquidity for tokens that are listed on Dex. 152 00:07:32,550 --> 00:07:35,850 You know. Okay. So so I'm going to I'm going to try and 153 00:07:35,850 --> 00:07:38,940 and and split this into two different two different answers. 154 00:07:38,940 --> 00:07:42,509 So when you think about market making on a decentralized exchange, 155 00:07:42,509 --> 00:07:46,394 if we're talking about assets that are already liquid, so to speak, 156 00:07:46,394 --> 00:07:49,964 like Bitcoin or Ethereum or the options of, you know, 157 00:07:49,964 --> 00:07:54,675 call and put options for those assets or just any token that's trading in the top, 158 00:07:54,675 --> 00:07:56,770 you know, 200 by market cap. 159 00:07:56,770 --> 00:08:00,610 That liquidity provision is important on decentralized exchanges. 160 00:08:00,610 --> 00:08:03,190 But I don't think it's the most fascinating part 161 00:08:03,190 --> 00:08:05,545 of where market makers are going to come into play. 162 00:08:05,545 --> 00:08:07,779 Um, of course, market making companies are going to 163 00:08:07,779 --> 00:08:09,939 find opportunities to provide liquidity in 164 00:08:09,939 --> 00:08:14,290 already liquid assets that can be traded on centralized exchanges. 165 00:08:14,290 --> 00:08:19,360 But to me, what's fascinating is being able to provide liquidity 166 00:08:19,360 --> 00:08:24,700 in tokenized assets that aren't trading on centralized exchanges. 167 00:08:24,700 --> 00:08:26,769 And so you think about like the, 168 00:08:26,769 --> 00:08:29,170 the progression of of a digital asset. 169 00:08:29,170 --> 00:08:32,470 And how does it how does it come into play, so to speak. 170 00:08:32,470 --> 00:08:35,845 There's there's in traditionally there's there's been this this queue, 171 00:08:35,845 --> 00:08:38,514 you get in line to get listed at Binance or to 172 00:08:38,514 --> 00:08:41,350 get listed at Coinbase or Kraken or whatnot. 173 00:08:41,350 --> 00:08:42,534 But in the past few years, 174 00:08:42,534 --> 00:08:45,624 and certainly since Uniswap has come on the on the scene, 175 00:08:45,624 --> 00:08:48,100 we're seeing projects just completely 176 00:08:48,100 --> 00:08:51,789 skip that that queue for centralized exchange access, 177 00:08:51,789 --> 00:08:54,800 and they're listing directly on decentralized venues. 178 00:08:54,800 --> 00:08:58,625 That's where I think market makers are going to be able to sharpen their pencil and say, 179 00:08:58,625 --> 00:09:02,705 okay, what assets are getting deployed into these dexs? 180 00:09:02,705 --> 00:09:08,510 They're naturally illiquid because there is no centralized component to them yet anyway. 181 00:09:08,510 --> 00:09:11,029 And how can we provide a bid offer, 182 00:09:11,029 --> 00:09:14,375 spread and still manage risk in an acceptable fashion? 183 00:09:14,375 --> 00:09:17,570 That's where I think there's going to be a lot of juice for 184 00:09:17,570 --> 00:09:21,365 for liquidity providers to think about providing value to the ecosystem. 185 00:09:21,365 --> 00:09:23,570 Yeah. Alan, if you could expand upon that point, 186 00:09:23,570 --> 00:09:24,785 because I think that's interesting. 187 00:09:24,785 --> 00:09:26,840 Let's compare it to Tradfi as an example. 188 00:09:26,840 --> 00:09:28,220 There's a lot of ETFs that launched, 189 00:09:28,220 --> 00:09:31,925 and you're always looking to source liquidity in a very, very competitive space. 190 00:09:31,925 --> 00:09:35,059 Do you see that happening in the digital space where you 191 00:09:35,059 --> 00:09:38,389 know there's there's a certain segment that will always have, 192 00:09:38,389 --> 00:09:42,500 um, you know, a good source of liquidity and then all the other outliers. 193 00:09:42,500 --> 00:09:45,875 Or does the digital environment democratize that in any way? 194 00:09:45,875 --> 00:09:48,529 Yeah. I mean, I think if we look at the crypto landscape, 195 00:09:48,529 --> 00:09:50,960 it's all about what actually is gaining that liquidity. 196 00:09:50,960 --> 00:09:53,550 And then the market makers will flock to what has the interest. 197 00:09:53,550 --> 00:09:56,685 And I think things that drive utility long term will continue to 198 00:09:56,685 --> 00:09:59,909 sustain and will continue to be the thing that actually pushes forward crypto, 199 00:09:59,909 --> 00:10:02,429 because I think it's about looking at the ethos of why we're here, 200 00:10:02,429 --> 00:10:05,490 why we're creating these tokens and what's actually building crypto adoption. 201 00:10:05,490 --> 00:10:07,109 So taking a step back, 202 00:10:07,109 --> 00:10:09,600 I'm excited about the things that actually promote usage 203 00:10:09,600 --> 00:10:12,390 of blockchain technology and ensure that people can participate 204 00:10:12,390 --> 00:10:15,210 in decentralized systems and participate in the operation and 205 00:10:15,210 --> 00:10:19,470 facilitation of the sort of whole vision of Bitcoin. 206 00:10:19,470 --> 00:10:20,610 And on top of that, 207 00:10:20,610 --> 00:10:21,630 all the innovations from it. 208 00:10:21,630 --> 00:10:23,340 So dexs are one part of that. 209 00:10:23,340 --> 00:10:26,505 And so whenever you have the ability for people to come and trade, you know, 210 00:10:26,505 --> 00:10:29,084 we're getting to this point now where a lot of it is PvP, 211 00:10:29,084 --> 00:10:32,550 a lot of it is rotations across a lot of different sort of flash in the pans. 212 00:10:32,550 --> 00:10:35,070 And so how do we make it so that market makers can come 213 00:10:35,070 --> 00:10:37,859 in and provide the right sources of liquidity, 214 00:10:37,859 --> 00:10:39,630 sustain things that are long term, 215 00:10:39,630 --> 00:10:42,029 as opposed to coming in and fighting against the retail, 216 00:10:42,029 --> 00:10:44,730 fighting against the people that are trying to understand this, 217 00:10:44,730 --> 00:10:46,440 become educated and participate. 218 00:10:46,440 --> 00:10:48,600 Because oftentimes it looks like the market 219 00:10:48,600 --> 00:10:51,390 is kind of selling one thing and then doing something different. 220 00:10:51,390 --> 00:10:54,639 So I think it's about understanding the risks associated with market making, 221 00:10:54,639 --> 00:10:57,070 as well as someone that has launched a token project, 222 00:10:57,070 --> 00:11:00,849 we've seen the ways in which market makers can come in and propose different offers, 223 00:11:00,849 --> 00:11:04,885 or have different types of schemes or systems that can sort 224 00:11:04,885 --> 00:11:09,280 of either take advantage of a nascent team or or help a team grow. 225 00:11:09,280 --> 00:11:12,640 So it's about bringing in the right partners that want to help the project excel. 226 00:11:12,640 --> 00:11:14,290 And I think when you talk about ETFs to that, 227 00:11:14,290 --> 00:11:16,585 it's definitely something that does conflict or have 228 00:11:16,585 --> 00:11:20,215 a competing edge with the liquidity profile for things that are native on chain. 229 00:11:20,215 --> 00:11:21,429 Which is so interesting, John, 230 00:11:21,429 --> 00:11:25,360 because it's going to be I'm curious to see what projects that come on 231 00:11:25,360 --> 00:11:30,205 chain are going to be successful and what market makers gravitate to and what they won't. 232 00:11:30,205 --> 00:11:35,335 Do you have any insight into that in terms of where they're flocking to now, and what? 233 00:11:35,335 --> 00:11:38,875 What future projects do you think will be successful? 234 00:11:38,875 --> 00:11:41,470 I can't help but but approach 235 00:11:41,470 --> 00:11:44,830 the decentralized conversation from a bit of a biased perspective. 236 00:11:44,830 --> 00:11:50,184 And, you know, I come into this market really as an options specialist for Bitcoin, 237 00:11:50,184 --> 00:11:52,100 Ethereum, Solana, ET cetera. 238 00:11:52,100 --> 00:11:53,389 And so what I'm, 239 00:11:53,389 --> 00:11:56,269 I'm really focusing on right now is how are 240 00:11:56,269 --> 00:12:00,245 derivatives and liquidity going to build out in decentralized exchanges. 241 00:12:00,245 --> 00:12:05,030 We're seeing perpetual swap liquidity get get solved pretty seamlessly, I would say. 242 00:12:05,030 --> 00:12:08,840 But the options market is is a little bit of a different animal. 243 00:12:08,840 --> 00:12:12,200 And it hasn't had that that adoption curve. 244 00:12:12,200 --> 00:12:14,270 I would say that that the spot assets are 245 00:12:14,270 --> 00:12:16,940 the perpetual swap assets have experienced thus far. 246 00:12:16,940 --> 00:12:20,180 And there's a there's a few different functions as to why this is. 247 00:12:20,180 --> 00:12:24,650 But, uh, at the at the foundational level, 248 00:12:24,650 --> 00:12:27,019 we just need more professional options, 249 00:12:27,019 --> 00:12:30,605 market makers willing to commit capital to these decentralized venues. 250 00:12:30,605 --> 00:12:36,410 It's very capital intensive to to make a market in decentralized options. 251 00:12:36,410 --> 00:12:38,360 And so that's been a barrier. 252 00:12:38,360 --> 00:12:43,429 I'm hopeful that there's going to be some innovation on risk management procedures that 253 00:12:43,429 --> 00:12:45,950 will allow for some more capital efficiency when 254 00:12:45,950 --> 00:12:48,995 providing liquidity in a decentralized options vault. 255 00:12:48,995 --> 00:12:50,720 Um, I don't think we're quite there yet, 256 00:12:50,720 --> 00:12:52,170 but we're getting close. 257 00:12:52,170 --> 00:12:54,044 And I'm even starting to hear, 258 00:12:54,044 --> 00:12:55,980 you know, from the hedge fund community, 259 00:12:55,980 --> 00:12:57,899 they're starting to participate in some of 260 00:12:57,899 --> 00:13:00,090 these DeFi options vaults as liquidity providers. 261 00:13:00,090 --> 00:13:02,340 And that's not even their main, their main focus. 262 00:13:02,340 --> 00:13:05,175 So so there is growing interest. 263 00:13:05,175 --> 00:13:06,630 I'm talking options. 264 00:13:06,630 --> 00:13:10,784 I'm also fascinated by the idea that, 265 00:13:10,784 --> 00:13:14,040 again, coming from a commodities background, I'll be biased again. 266 00:13:14,040 --> 00:13:17,879 But tokenization of commodity markets that are illiquid or 267 00:13:17,879 --> 00:13:21,959 not as easily accessible for retail participants in traditional finance, 268 00:13:21,959 --> 00:13:24,089 let alone professionals like, 269 00:13:24,089 --> 00:13:26,160 you know, one that just came up was uranium. 270 00:13:26,160 --> 00:13:28,694 And you start to think about like as, 271 00:13:28,694 --> 00:13:33,180 as nuclear becomes a conversation again and as, as a, 272 00:13:33,180 --> 00:13:35,640 as a robust form of, of energy for, 273 00:13:35,640 --> 00:13:39,824 for us here on Earth with managing risk around that input, 274 00:13:39,824 --> 00:13:41,610 uranium is going to become a big deal. 275 00:13:41,610 --> 00:13:45,210 It's not a very well developed market in traditional finance, 276 00:13:45,210 --> 00:13:50,544 and it's a perfect opportunity to prove this decentralized, um, you know, 277 00:13:50,544 --> 00:13:56,440 exchange architecture to bring in liquidity for a tokenized commodity like uranium. 278 00:13:56,440 --> 00:13:57,745 And I could go down the list. 279 00:13:57,745 --> 00:14:00,820 I mean, that's really interesting. And we've seen the traction that it's built with, 280 00:14:00,820 --> 00:14:02,485 with treasuries as an example. 281 00:14:02,485 --> 00:14:05,260 I think, Alan, one of the things that we need to exercise to his patients, 282 00:14:05,260 --> 00:14:06,910 this is a young asset class. 283 00:14:06,910 --> 00:14:08,605 It is competing with Tradfi. 284 00:14:08,605 --> 00:14:11,560 It doesn't have the typical framework around it yet. 285 00:14:11,560 --> 00:14:13,989 And you wouldn't see companies like Blackrock or 286 00:14:13,989 --> 00:14:17,935 Coinbase making investments into this if they didn't have a longer term vision. 287 00:14:17,935 --> 00:14:20,395 Right. And I think there's this recency bias that we, 288 00:14:20,395 --> 00:14:22,840 um, expect immediate results. 289 00:14:22,840 --> 00:14:25,389 So I want to ask this question to both you and John from 290 00:14:25,389 --> 00:14:28,315 a near-term perspective and longer term as well. 291 00:14:28,315 --> 00:14:31,720 Right. Why could 2025 be the crucial year 292 00:14:31,720 --> 00:14:35,725 for scaling transparency, deeper market integration? 293 00:14:35,725 --> 00:14:37,824 Yeah. So as you look at 294 00:14:37,824 --> 00:14:41,754 sort of the past 15 years of crypto with Bitcoin starting in 2009, 295 00:14:41,754 --> 00:14:43,030 there's been so much that we've accomplished. 296 00:14:43,030 --> 00:14:44,410 But really we're only just getting started. 297 00:14:44,410 --> 00:14:46,780 We have regulation headwinds clearing right now. 298 00:14:46,780 --> 00:14:48,624 We have things like the Bitcoin strategic reserve 299 00:14:48,624 --> 00:14:50,750 the digital asset stockpile, stablecoin bills, 300 00:14:50,750 --> 00:14:52,639 and other types of regulation that are coming down 301 00:14:52,639 --> 00:14:55,460 the pipeline that overall create this sort 302 00:14:55,460 --> 00:15:00,320 of forward looking plan and this progress that can easily bring these assets on chain, 303 00:15:00,320 --> 00:15:02,375 because it feels like really for the past ten years, 304 00:15:02,375 --> 00:15:04,864 a lot of it has been very circular in terms of all 305 00:15:04,864 --> 00:15:07,400 of it existing in one ecosystem and the same players. 306 00:15:07,400 --> 00:15:08,614 So how do we grow the pie, 307 00:15:08,614 --> 00:15:11,029 bring people in and actually facilitate contracts, 308 00:15:11,029 --> 00:15:13,130 facilitate trade, facilitate payments, 309 00:15:13,130 --> 00:15:15,619 facilitate actually using these systems that we've 310 00:15:15,619 --> 00:15:18,380 designed to go and do things like buying a car with crypto, 311 00:15:18,380 --> 00:15:19,909 buying a coffee with crypto, 312 00:15:19,909 --> 00:15:24,559 or actually having ways that we can settle contracts against these decentralized systems, 313 00:15:24,559 --> 00:15:26,390 and then having that as a means of entry. 314 00:15:26,390 --> 00:15:28,804 So I think all of the things that Coinbase, Blackrock, 315 00:15:28,804 --> 00:15:31,070 other larger institutions that are looking at 316 00:15:31,070 --> 00:15:33,350 this are thinking of it from a practical way, 317 00:15:33,350 --> 00:15:36,890 and they're thinking it from how do we actually get more assets to use these systems? 318 00:15:36,890 --> 00:15:37,940 Because at the end of the day, 319 00:15:37,940 --> 00:15:40,430 they're better than the existing infrastructure that we had. 320 00:15:40,430 --> 00:15:43,010 As I said earlier, they operate in a 24 over seven manner. 321 00:15:43,010 --> 00:15:45,170 They're decentralized across the globe, and they're robust. 322 00:15:45,170 --> 00:15:47,990 And so we can trust that these systems are going to remain long term. 323 00:15:47,990 --> 00:15:51,074 And it's a matter of how do we improve transparency, improve the trust, 324 00:15:51,074 --> 00:15:53,774 the reliability and ensure that we have more people that can get 325 00:15:53,774 --> 00:15:56,654 access to these forms of asset classes. 326 00:15:56,654 --> 00:15:58,139 Right. And John, to wrap up here, 327 00:15:58,139 --> 00:16:00,779 when you think about it, longer term, it's exciting for me, 328 00:16:00,779 --> 00:16:05,265 as we're seeing in real time how market infrastructure is evolving and how it's going to, 329 00:16:05,265 --> 00:16:08,055 you know, change the landscape for global capital markets. 330 00:16:08,055 --> 00:16:10,680 What are your thoughts longer term? 331 00:16:10,680 --> 00:16:14,249 You know, there's there's something that we talk about in in 332 00:16:14,249 --> 00:16:17,190 these DeFi conversations called an atomic swap. 333 00:16:17,190 --> 00:16:21,360 And it's where I let's I'll use Bitcoin and a stablecoin as an example. 334 00:16:21,360 --> 00:16:23,190 I want to I want to buy Bitcoin. 335 00:16:23,190 --> 00:16:25,500 There's another seller I want to interact with. Okay great. 336 00:16:25,500 --> 00:16:28,770 I can deposit a stablecoin into a smart contract. 337 00:16:28,770 --> 00:16:32,370 And that seller can deposit bitcoin into that smart contract. 338 00:16:32,370 --> 00:16:38,130 And then they will automatically swap once both assets are in the smart contract. 339 00:16:38,130 --> 00:16:40,409 And I think this is going to be 340 00:16:40,409 --> 00:16:46,739 just a fundamental shift in how we think about transferring assets between each other, 341 00:16:46,739 --> 00:16:48,235 even in traditional finance. 342 00:16:48,235 --> 00:16:52,630 It just it removes an incredible amount of counterparty risk on these types of deals. 343 00:16:52,630 --> 00:16:55,210 And then the the other one that I think is 344 00:16:55,210 --> 00:16:59,770 just long term obvious play here is the lending and borrowing markets. 345 00:16:59,770 --> 00:17:01,300 And again I'll use Bitcoin. 346 00:17:01,300 --> 00:17:03,429 But we can talk about borrowing dollars against 347 00:17:03,429 --> 00:17:06,640 your stock portfolio or whatever traditional asset you want to talk about. 348 00:17:06,640 --> 00:17:10,990 But you know let's say I own Bitcoin and I want to borrow dollars against that asset. 349 00:17:10,990 --> 00:17:13,150 I can use the same type of a smart contract, 350 00:17:13,150 --> 00:17:17,560 deposit bitcoin into that contract and pull out stablecoin in this case. 351 00:17:17,560 --> 00:17:22,630 And that contract will manage the LTV and the liquidation levels automatically. 352 00:17:22,630 --> 00:17:25,750 And I'll have to collateralize if my underlying asset moves 353 00:17:25,750 --> 00:17:29,020 lower in price and I get collateral return if it moves higher. 354 00:17:29,020 --> 00:17:30,670 I think this is where 355 00:17:30,670 --> 00:17:36,325 the fundamental mechanics of finance will be impacted and it'll be long standing. 356 00:17:36,325 --> 00:17:38,170 All right. I appreciate both of your insights. 357 00:17:38,170 --> 00:17:39,490 Thanks for joining us on trade talks. 358 00:17:39,490 --> 00:17:43,105 I'm Joe Malandrino, global markets reporter at Nasdaq. 359 00:17:43,105 --> 00:17:44,770 Thanks, Joe. 360 00:17:44,770 --> 00:17:46,790 Thank you Joe.