78 - Institutional DeFi Infrastructure | Fireblocks' Michael Shaulov

Fireblocks is building infrastructure to help businesses adopt digital assets with a suite of products, providing institutions access to DeFi with security and convenience. Last month, Fireblocks raised over $300 million at a $2.2B valuation. CEO Michael Shaulov comes on the Bankless Podcast to explore why institutions are choosing to outsource their crypto-native workflows to an infrastructure company like Fireblocks, whose expertise and products aim to provide secure & effective storage, transactions, and issuance. Get the Debrief for this episode! https://shows.banklesshq.com/p/exclusive-debrief-institutional-defi ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🍵 MATCHA | DECENTRALIZED EXCHANGE AGGREGATOR https://bankless.cc/Matcha 🔐 LEDGER | SECURE YOUR ASSETS https://bankless.cc/Ledger 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 6:00 Michael Shaulov of Fireblocks 8:05 Valuation and Raise 13:18 Institutional FOMO 17:39 What is Fireblocks? 22:27 Outsourcing Workflows 27:41 Institutions are Coming 31:31 Clients & Products 41:52 AWS For Crypto Banking 48:22 Security & Management 54:10 Bullish on DeFi 1:00:16 CeFi & DeFi Activity 1:08:20 Using Aave & Compound 1:12:50 Bridging into DeFi 1:15:58 Institutional DeFi 1:22:00 Regulation 1:30:26 Too Successful 1:35:31 The DeFi Mullet 1:39:17 Closing & Disclaimers ------ Resources: Fireblocks https://www.fireblocks.com/ Fireblocks on Twitter https://twitter.com/FireblocksHQ?s=20 ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. David, awesome podcast today, and subject I didn't know too much about. Who did we talk to?

• 0:27David Hoffman?

  We talked to Michael Shaulov from the Fireblocks company, which just raised $310 million, which is all going to infrastructure to help people that get scared coming into crypto, which is more or less everyone, especially when there's a lot of risk at stake. So tended to be geared towards institutions. Fireblocks is an infrastructure for getting into the world of crypto, but not just getting assets into cold storage, but getting them into safe storage, yet also hooking into all of the cool powers that DeFi and the rest of the crypto ecosystem gives you. So we talked to Michael about what it's like to build that company, and really how this company fits into the overall sphere of the

• 1:10David Hoffman?

  crypto world, and what they have really unlocked and are enabling over at the world of Fireblocks.

• 1:16Ryan Sean Adams?

  Yeah, absolutely. This is like a huge bridge to crypto to me, and it's an institutional bridge, not only to crypto, but it's also an institutional bridge to DeFi. So that's what's super exciting about what Fireblocks is doing. There are a lot of crypto custodians out there, Coinbase, Gemini, they will hold your keys. There's companies like BitGo, that sort of thing. But Fireblocks does more than that for institutions. They actually give them exposure to DeFi protocols. So if you're an institution, you want to trade something on Uniswap, but you want to do it in a way that secures your private keys, or if you want to deposit funds into Compound or Aave, Fireblocks does this. So David, this

• 1:57Ryan Sean Adams?

  is really cool, because I think it is, I guess, living out one of the predictions we've made for a while, which is kind of the protocol sync thesis, that the most decentralized, credibly neutral protocols will kind of tend To fall to the bottom of everything else and everything else will be built on top of them. We also talk about a little bit about the DeFi mullet, which is sort of an extension of the crypto protocols thesis. The idea that fintechs are going to start building on these DeFi protocols and become these these hybrid crypto fintech type things. And we're really seeing that play out with the fire block story. That's like exactly what they are doing. They are the bridge to to this entire thesis.

• 2:38David Hoffman?

  For me, the most interesting part of this conversation was how the similar skills from the TradFi world, which we would consider to be like cybersecurity. When you take cybersecurity skills and then you apply them to DeFi and you use Ethereum and Bitcoin as your backend, like all of a sudden you have cybersecurity, not around, you know, information and IT for a traditional company. But now you have cybersecurity around bank accounts, right? Like your Ethereum wallet, your Bitcoin wallet. And that fundamentally changes the role that Fireblocks has for going from a cybersecurity background to just infrastructure, security and protection around your bank account, which is your private key. And so it really just like is a new evolution as to what cybersecurity means.

• 3:22David Hoffman?

  Because now the cybersecurity is now fintech. Now it's now it's a fintech service, not just, you know, protection around like your servers. And so the changing nature of the role of similar skills from TradFi or from the legacy world into DeFi, I think is a really interesting through line that that if you pay attention, you can glean a lot of lessons out of this episode with with Michael.

• 3:45Ryan Sean Adams?

  Yeah, I love this conversation hugely bullish on what's happening with DeFi. Like the institutions now have a way to enter directly into DeFi protocols, not just one or two, but like all of them. Make sure you stay tuned where Michael talks about how like through Fireblocks, they basically have access to all of the DeFi protocols that are available that can be connected through Wallet Connect. One question, though, David, we did ask him near the end that I was sort of concerned about thinking about this is like, Fireblocks is not bankless. You are giving up your private keys to to another entity in order to use this. Institutions kind of have to do that anyways in order to play in the space. So what happens if everyone starts giving up their private keys? Do we get a less bankless world? So he answers that question. I think he had a pretty nuanced answer, which I really appreciated.

• 4:29Ryan Sean Adams?

  So guys, we think you are going to enjoy this episode. Before we get into it, we want to thank the sponsors that made it possible.

• 4:37David Hoffman?

  Living a bankless life requires taking control of your own private keys. Not your keys, not your crypto. That's why so many in the bankless nation already have their Ledger hardware wallets, which makes proper private key management a breeze. But the Ledger ecosystem is more than just a secure hardware wallet. Ledger is the combination of the Ledger hardware wallet and the Ledger Live app. And if you're used to seeing all of your crypto services and favorite D apps all in one place, Ledger is where you want to be. Not only does Ledger let you buy crypto assets straight from the app, but it also hooks into decentralized exchange aggregators like Paraswap, which makes sure that you are getting the best prices on your trades without your assets ever leaving your control. DeFi never stops growing, and the Ledger Live app grows alongside with it. So click the link in the show notes

• 5:22David Hoffman?

  to see all the DeFi apps that Ledger Live has. And stay tuned as more and more apps come online. And if you don't have a Ledger hardware wallet, what are you even waiting for? Go to ledger.com, grab your Ledger, download Ledger Live, and get all of your D apps all in one place. Arbitrum is an Ethereum scaling solution that is going to completely change how we use DeFi. If you've been using Ethereum for the past 12 months, you've probably noticed the high gas fees and the slow confirmation times that have been plaguing DeFi. Too many people want to use Ethereum, and it doesn't have enough capacity for all of us. That's where Arbitrum comes in. Arbitrum is a Layer 2 to Ethereum, which means Arbitrum can increase Ethereum's throughput by orders of magnitude at a fraction of the cost of what we are used to paying. When interacting with Arbitrum,

• 6:07David Hoffman?

  you can get the performance of a centralized exchange while tapping into Ethereum's level of security and decentralization. This is why people are calling this Ethereum's broadband moment, where we get to add performance onto decentralization and security. If you're a developer and you want to save on gas costs and make an overall better experience for your users, go to developer offchainlabs.com to get started building on Arbitrum. If you're a user, keep an eye out for your favorite DeFi apps building on Arbitrum. Arbitrum has been working with over 300 teams, including Ethereum's top infrastructure projects, and will be opening up to all users shortly. There are so many apps coming online to Arbitrum, so you may want to pack your bags in preparation for the great migration to the Arbitrum Layer 2. To keep up to speed with Arbitrum,

• 6:51David Hoffman?

  follow them on Twitter @Arbitrum and join their Discord.

• 6:56Ryan Sean Adams?

  Bankless Nation, we are super excited about our next guest. We have Michael Shaloff. He's the CEO and co-founder of Fireblocks. What is Fireblocks? Fireblocks is like the AWS of crypto banking. He's grown this company to crypto unicorn status already. So in late July, they raised over $310 million at a $2 billion valuation. Just blows my mind. If you're in the crypto institutional space, you already know about Fireblocks, but if you're not, maybe if you're a Bankless listener, it's kind of a DeFi power user, then Fireblocks is probably one of the most important companies in crypto that you've not heard of. And here's my favorite part. Fireblocks is DeFi friendly. So I definitely see Fireblocks as providing an essential

• 7:40Ryan Sean Adams?

  bridge between the institutions we've been craving to come into crypto and DeFi. This is part of the Protocol Sync thesis in action, we think, where the decentralized money protocols become the base layer for everything else. Michael, after that long intro, sir, I want to say, welcome to Bankless. How are you doing?

• 7:59Speaker 02

  Thank you. Thank you. Thanks, Ryan. Thanks, David, for having me. Doing great. And, you know, excited to join you guys in the session.

• 8:06Ryan Sean Adams?

  Well, I bet you're doing great because you guys just raised $300 million at a $2 billion valuation. I have two questions about this. First, how does that feel? And then, and then, second, what are you going to do with all this money?

• 8:19Speaker 02

  So it feels great. I mean, I think that it's, I wouldn't say just the valuation and the money. I think it's the fact that it happened in a fairly short period of time, right? Because we started the company back in 2018 and we launched our product about two years ago. And probably the most important, actually, the most important numbers for us is the fact that we have 500 clients, right? And the fact that we have about, while we grew the company to about 160 employees, right? In that period of time. So just we're seeing the market expanding and

• 8:59Speaker 02

  Yeah, generally exciting. And the the main thing around, I think, the funding itself, right? Or the big question is, what are we going to do with the money? Is is mostly around the fact that we need to continue to invest first and foremost, right? In engineering and to be able to support the client base, to support more and more institutions that are coming to the space, both from engineering standpoint, operations standpoint, customer success, customer support and so on. And the second aspect is that for our clients, it's sort of very important to understand that they're dealing with a stable player that can, you know, work with them on the long term, right?

• 9:44Speaker 02

  And the fact that we have now the balance sheet and the money and the and the ability to stay independent is extremely important for for our current clients and especially for the people that we are currently working on doing business with.

• 10:01Ryan Sean Adams?

  So you you mentioned, Michael, more and more institutions coming to the space. So is that what you're seeing? Are institutions starting to flood into the space? And give us a flavor for who these institutions are, maybe some names listeners might recognize.

• 10:15Speaker 02

  Yeah, so we are seeing, we're seeing quite a lot of the banks. It's it's a bit weird, right? Because, you know, I guess in many ways, the entire essence of crypto, right? Was to basically maybe this intermediate, this intermediate banks, right? But inevitably, what happens is that, at least right now, a lot of those banks, they do have, whether it is FOMO, right? Looking at the fintech players and trying to sort of like tap into that amount of, into that activity, into that revenue stream, into the opportunity, right? So that's, you know, one reason why they're doing it.

• 11:00Speaker 02

  And I think that the most interesting aspect of it is that the more intelligent group of, I would say, Uh financial institutions, traditional financial institutions, you know, banks, exchanges, uh some of the more traditional fintechs, right? They're basically looking at the underlying technology. And I guess in many ways, what we call DeFi, but eventually the essence of blockchain, right? The ability to have uh autonomous finance that is driven through smart contracts. And this sort of, you know, smart programmable money.

• 11:36Speaker 02

  And they understand that this is, might be the most impactful and interesting technology. Um that they can, you know, that on one hand, if they're there early, they can use it as part of their competitive advantage, right? And on the flip side, if they're late, uh they can be completely disintermediated, right? So I think that there is a broad realization of that. And that's why I think people are sort of, those institutions are coming in, right? So I guess a good example that uh we always give, and they invested in us in their, in the Series C,

• 12:19Speaker 02

  is Bank of New York Mellon that we are working with, uh to basically deploy the technology with uh uh uh and build those capabilities. And for, you know, for the listeners that are unfamiliar with Bank of New York Mellon, it's like the oldest bank in, in the United States. And they're the biggest custodian in the world. In fact, I'm not sure the, the exact number right now. But they hold somewhere around forty trillion dollars of assets, right? So the majority of the assets in the world are actually sitting in Bank of New York Mellon. And, and they do see, um it's, it's sort of public information, but they do have a fairly extensive uh plan

• 12:58Speaker 02

  around not only how they do, you know, crypto like Bitcoin, Ethereum, but really how this is sort of uh pro- wha- what is the progression to really touch on the uh traditional assets or the existing assets that they're currently custody? And how they can basically bring them into blockchain, tokenize them and so on.

• 13:18Ryan Sean Adams?

  Michael, you mentioned FOMO in the context of institutions. We talk about retail FOMO all of the time. Is it true that institutions can also get FOMO?

• 13:30Speaker 02

  The individuals within institutions can get FOMO, right?

• 13:36Speaker 02

  I guess like, you know, people are people, right? And, and, yes, I mean, in reality, the, what happened was, is that

• 13:49Speaker 02

  all those banks and institutions, they, somewhere in between FOMO and basically, you know, being caught off guard, right? If you take JP Morgan Chase as an example, right? And I think it's, it's an interesting example to look at. They sort of switched side over the last, I don't know, 12 months, 18 months, right? From the CEO of the bank saying,

• 14:21Speaker 02

  you know, this is a complete fraud. I don't remember the exact wording.

• 14:26Ryan Sean Adams?

  Oh, I remember, I remember all of that. You know, Jamie Dimon said this and crypto Twitter went absolutely berserk on these comments. But yes.

• 14:35Speaker 02

  Yeah, but, but I guess his, his main comment was, I think he had two comments. One, he said like, you know, or three comments, that is like the biggest bubble of all time. You know, it's fraud. And, and his third comment, which, which I appreciate the most is that he said that he will fire any employee that will touch crypto because he's stupid enough to basically invest in crypto, right? That was, that was basically his most probably interesting comment. Yeah, I appreciate that, you know, very opinionated gentleman, of course. But, but the reality is, right, that the bank sort of publicly changed his stance in, you know, very quickly, within almost 12 months.

• 15:19Speaker 02

  And, but probably the most, the, the, the craziest story, which I think is sort of maybe...

• 15:27Speaker 02

  Not very obvious to people from the outside is that think about a situation where basically your employees are penalized for uh touching this asset, working with technology, right? And then everybody wake up one morning and and basically they're telling like, "Okay, now we need to go and execute against something that we basically have zero internal knowledge, right? No one in the bank have ever done a single Bitcoin or a crypto transaction. Now let's go and offer it to our, you know, tens of millions of clients, right? And that's like a very difficult situation where

• 16:13Speaker 02

  you're basically trying to go from, you know, zero to sixty very quickly, but you never took any driving lessons.

• 16:23Speaker 02

  Right?

• 16:25Speaker 02

  So I think that a lot of those institu-- now, when I say FOMO, what I basically, it's sort of reflecting the situation because if you think about how this should have happened if it was well planned, they had, you know, ten years, right? To basically investigate, educate themselves, you know, do, you know, test, testing, and just accumulate the knowledge the same way that I and you guys did, right? But they are being, they're being caught off guard and and the fact that they're seeing some of the biggest, you know, biggest fintechs, right?

• 17:08Speaker 02

  Moving so quickly into the space sort of forces them to react quickly in a way that is really unplanned.

• 17:17David Hoffman?

  And I think that actually offers a great explanation as to why Fireblocks has raised such a large amount of money with such a strong valuation is because when institutions FOMO and when they realize that they are behind the curve with regards to infrastructure development, they realize that they need to outsource some of this and then-- They turn to fire blocks. And so that brings me to, I think, what we should really get into next, Michael, which is exactly what is fire blocks? And why do, why would an institution choose to leverage fire blocks rather than going and building out all of these same things in-house and doing it themselves? And while you give that answer, I want, I'd like to ask the listener to put this into the context of the protocol sync thesis,

• 18:02David Hoffman?

  which if you're not familiar with, you should definitely go and do your homework on the protocol sync thesis, because I think that's going to be a theme of what fire blocks is and what it's doing throughout the show. But, Michael, question to you, what actually is fire blocks? And what is the products and service that you guys have to offer?

• 18:19Speaker 02

  Yeah, so we basically make those crypto, making the ability of businesses to, to offer,

• 18:34Speaker 02

  making, making the ability for businesses to basically offer services in crypto is, what does it mean? The first thing that it means that we basically provide them a secure access to, to storing those assets. And so essentially a wallet technology that is secure and designed for institutional usage, right? So hot storage, cold storage, warm storage, all that is being basically packaged to the technology they can consume and install and use, right? With all the complexities, regulations, policies and workflows that they need.

• 19:12Speaker 02

  The second capability is around the ability to transfer assets between themselves and between their counterparties or business partners in a secure way. So I assume that like, that most of the people on the show familiar with the fact that when you're sending the transaction, you're sending a Bitcoin transaction, you're sending Ethereum transaction to your favorite exchange or for your, to your favorite DeFi protocol. There is those, you know, depending if it's Bitcoin or Ethereum, 15 seconds or 15 minutes of a heart attack, right? That you don't know if you actually put the address, the right address, and if you made a mistake, right?

• 19:55David Hoffman?

  Even if you're a veteran, you still get that, by the way. It never goes away.

• 19:58Speaker 02

  Yeah, it never goes away. Yeah, that's that's part of the extreme fun in this.

• 20:05Speaker 02

  So, yeah, so, you know, I mean, I think that most most retail users and most consumers and even prosumers, they would do a handful of transactions per day, right? If you are operating a brokerage, an institutional brokerage, you can end up doing hundreds of transactions like this per day, right? If you are a big exchange, right, you're talking about thousands, right? So clearly to scale up, and by the way, an average transaction size in our network is around $100,000, right? So if you make a mistake, it's going to be a very costly mistake, right?

• 20:47Speaker 02

  And therefore, what we basically created is this concept that is called the Fireblocks Network, which is essentially a directory, a set of APIs and plugins that basically creating sort of like an off-chain protocol that allows you to securely transfer those deposit addresses and identify the destination wallet or the counterparty that you're sending this transaction to and guarantee that, you know, if, you know, I'm sending a transaction to David, this transaction will go to David by selecting him in a directory. It's not going to go to Ryan, it's not going to be sent to the, you know, to the void, right?

• 21:30Speaker 02

  So that's basically the second capability, the Fireblocks Network, that is, became, you know, sort of almost the de facto platform to to work with with digital assets. And then the last capability that we have is around all the access to tokenization, smart contracts and DeFi. So it is.

• 21:56Speaker 02

  Slightly like, you know, different things in our offering, but it's basically all the packaging around secure access to, you know, what we will call decentralized finance.

• 22:09Ryan Sean Adams?

  So you just said three things there, Michael. One is wallet custody, storage, right? The second is a network to route transactions and the third is access to what we call money protocols, DeFi protocols, right? And staking, maybe I'll bundle in there too. So those three things. But I want to ask an obvious question. You kind of alluded to this. If you're like the person who just sent at an institution, a, you know, transaction with $5 million in it, and you're not quite sure whether it's the right address or not, right? Like you may have missed a character, like oops, right? That is not a good feeling. And obviously institutions can't

• 22:50Ryan Sean Adams?

  do that on a daily basis. But like, is that like, I think some people are still sort of wondering, right? Like, why can't institutions just custody things on their own? Like the individuals listening to Bankless, they do this all of the time, right? So why is it so difficult for institutions to enter this space? Why do they need those, those three services? Why can't they just use, you know, hardware wallets and MetaMask and deposit in Aave themselves? Why do they need Fireblocks?

• 23:22Speaker 02

  Because of the complexity and the security level that they need, right? So when we started Fireblocks, that's what institutions were doing, right? They would, I remember my, the first time I walked into one of our bigger customers and they had a Ledger Nano with, you know, $80 million worth of Bitcoin on it. And they were doing

• 23:51Speaker 02

  Yeah, fifty transactions per day, probably. And the way that it was controlled is that one guy had the ledger nano, the other guy had half of the passcode, and the third guy had the PIN code, and the third guy had the other half of the PIN code, right? And every time that they wanted to do a transaction, they basically had to come, all of them together, and, you know, collaborate, and sort of check, do all the checks and balances, right? To basically guarantee that they're sending the right amount, that they're putting all the protocols in place. And those protocols can be, those protocols can include, first and foremost,

• 24:36Speaker 02

  are we sending it to the right recipient, right? But have we, they have compliance obligations, right? So they need to take that deposit address, scan that deposit address in something like Chainalysis or Alpik, right? To guarantee that it's not a bad actor, right? Because they do need to operate within, you know, the applicable law, right? Depending on the jurisprudence, right? And for sanctions and things like that, right? They might have all kind of a procedures that they guarantee to the regulator that a transaction above, you know, $100,000 is going to be reviewed and approved by their accounting team, right?

• 25:18Speaker 02

  And, you know, and last but not least, I mean, let's assume the scenario that I just explained, you can have maybe like three people that is involved in that process. But what happens if you need to have five people, or 10 people, or 20 people, right? That are involved and maybe like, you know, those, they're working in shifts, right? So the complexity that is required to really do it in a robust way, with high availability, with all the policies and procedures that those entities need to comply,

• 25:58Speaker 02

  is well beyond what something like a hardware wallet can provide, right? And this is basically where Fireblocks excels, right? That you, on top of those basic offerings, you have A policy and workflow engine where as a customer you can essentially codify all those workflows and all those approval processes. At the fundamental level of the wallet, it's actually enforced cryptographically through this technology. It's called MPC, multi-party computation, right? So you actually don't have a situation that you're relying on a one single device to hold your private key.

• 26:43Speaker 02

  The private key is distributed in, you know, among a set of servers and endpoints and mobile devices. And even if one device fails, lost, or actually like, you know, a quorum of, even if even under a situation where a quorum of those devices fail, fails or being lost, you can still recover, right? So all those functionalities are, you know, fairly complicated. And it takes time to build, right? It requires pretty significant expertise, both from cybersecurity domain, IT, cloud, mobile and so on. And most institutions, they just don't have that skill set.

• 27:27Speaker 02

  And even if they have that skill set, it takes several years to basically build a product with all the functionalities that we have. And, you know, they are required, they need, right, to actually to operate.

• 27:40Ryan Sean Adams?

  Michael, I just want to rewind the clock for the listener here back to like 2017, 2018. There was this mantra when the, when the bull market, the crypto bull market was getting a little long in the tooth, but it was still rising. Everyone was euphoric, everyone was excited. And this, this mantra that people kept repeating, the institutions are coming, right? That was supposed to be the next wave of crypto adoption to send prices even higher and higher. But like, I, I remember at the time, what you were saying about like large crypto funds storing funds on hardware wallets. Like, that's, that was how everyone was doing it back then in, in 2017, 2018.

• 28:21Ryan Sean Adams?

  I know a story of a crypto fund, I, I won't name them, but like they used to talk about how They would hide their recovery keys in a safe deposit box in a bank and they would like use glitter and glue on top of the envelopes to to create like a like a certain pattern of glue that couldn't be like repeated and tampered with and and you know, I guess I guess made phony. And this was kind of the and you couldn't really bring the institutions into that environment. Because if you are a large bank or a large, you know, pool of capital, you're not going to enter that level of Wild West. So we needed like this layer of infrastructure in order to

• 29:05Ryan Sean Adams?

  actually get the institutions to come first. What I'm saying is 2018, 2017, 2018, the institutions are coming wasn't even possible for them to come. That was a pipe dream. We did not have the custodial infrastructure on top of this to allow the institutions to start pouring capital in. And I think that's basically what you've built over the last three years with fire blocks. Does any of that resonate?

• 29:28Speaker 02

  Yeah, I mean, I think that definitely that's the majority of the story, right? I think that we that there was lack of infrastructure, right, for for that to happen at the time. Honestly, just to reflect on 2017, 2018, I think in retrospect, right, there were a lot of probably, you know, regulatory issues, right, that even if the institution, if the bigger institutions would have tried to enter the space, I think the regulation was still not there for them to really, you know, jump fully in, right? But honestly, those are, I think,

• 30:13Speaker 02

  the two main things that have been resolved over the last three years or so, which I think

• 30:22Speaker 02

  That I think allow a much more, you know, a real interest and a real movement of institutions into the space. And honestly, you know, with how much I want to always say like, you know, the institutions are coming, it's still there, you know, when a big, when big institutions, even small institutions, even some of the smaller banks that we are working with, it's a fairly lengthy process. It takes them somewhere between, you know, six to nine months to basically go from inception to really signing contract and start deploying the technology and probably takes them almost 12 months to go from zero to production where

• 31:05Speaker 02

  they can offer, offer those services, right? So we are sort of in the middle of, of, of that process and in the middle of that happening. So I think we're already starting to see some of those vehicles coming into the market. We are going to see even more of them towards the end of this year. And I think that there will be quite a lot that we're going to see in 2022.

• 31:32Ryan Sean Adams?

  So when we talk about some of the 500 customers that you have, like I see a couple categories here. There are kind of like the crypto banks, as we call them, like the BlockFi's of the world. These are a bit more, you know, crypto native, and I'm curious what they use you for. There also seems to be the second person of like funds, you know, Galaxy Digital might be an example of that, large capital pools. I don't know if they're staking. I don't know what they're doing, but I'd be curious to hear a user story for them. And then there are these, these fintechs and new banks. I mean, you, you mentioned one of the banks, Mellon, but also these fintechs like Revolut that are using Fireblocks for things. So like, walk us through what each of these groups are using you for. Is it

• 32:16Ryan Sean Adams?

  across those categories? Is it like, you know, custody and also like, you know, payment and trade? Or like, when I deposit funds in something like BlockFi, how is, how is Fire, Fireblocks potentially getting involved?

• 32:31Speaker 02

  Yeah, so the way that we segment the market right now in a very high level is that we have what we call crypto trading firms, right? So that can be Galaxy, can be Block Tower, it can be proprietary trading, hedge fund, broker, but essentially it's either they're basically trading their own money, they're trading money of their investors, or there's some kind of intermediary that is facing businesses from one side or credit investors on one side and then liquidity exchanges and so on on the other side, right? So that's basically category number one. That category is about forty-five, like basically forty-five

• 33:14Speaker 02

  percent of our client base. And then the other category is what we will call business to consumers, right? Or business to retail that for me, although maybe a year ago, there was a clear distinction between someone like BlockFi, Celsius, and you know, Voyager, to someone like Revolut. But I think that over the last twelve months, those categories, they become more or less the same type of entity, right? Because, you know, for Revolut, which is the biggest, it's the biggest neo-bank in Europe, and you know, for the listeners

• 33:54Speaker 02

  that are not familiar with Revolut, they sort of built a name for themselves for offering a credit card and an app through which you can, if you're traveling through Europe, you basically have very low interchange between, you know, different currencies, right? So they came with a very interesting offering. You capture the very large customer base in Europe and then sort of expanded to offering regular banking services, right? And then they basically went into offering crypto, you know, buy, sell, and you know, recently also withdrawals, and they have a pretty interesting roadmap over there. And then, you know, when you look at BlockFi and Celsius, they basically almost started from the other side of that, of that spectrum, and they basically

• 34:40Speaker 02

  Oh, you already like a very sophisticated user. You already have crypto deposit with us. We will basically generate yield on that. But then they basically went downstream, right? They basically said, okay, maybe you're not that sophisticated. You can, uh, you know, buy through us or sell through us. And by the way, you know, if you have crypto, why won't you also use our credit card, right? So they almost went down towards what Revolut started with, right?

• 35:06Ryan Sean Adams?

  Yeah, I totally agree with that. Like case in point, BlockFi just rolled out a credit card, right? They started purely crypto, now they have a Visa card.

• 35:13Speaker 02

  Right. So, so I think that at the end of the day, broadly speaking, those are, uh, you know, in the long run, they, they will be fintechs, neo-banks, however we want to call them, right? But basically, wallet providers that will have maybe start from crypto and then diversified into fiat or started with fiat and diversified to crypto. But eventually, I guess, there is a hybrid world that all of them are trying to compete to be your main finance app and allow you to do whatever you want. And I think that hopefully, as we all believe here, over time, there will be this like more and more shift into things that are digital assets.

• 35:52Speaker 02

  So there is a question of like, if you want to basically pay, uh, or, or send a transaction that is cross-border, why will you even use a credit card? Why would you just use a stablecoin, right? So, um, so that's, I think, like, you know, just the holistic vision for all of them. In terms of just, you know, to your question around where Fireblocks plays in that flow, right? Um, so for all of those offerings, as a retail client, you're basically facing a custodial service uh, that is operated by, um, you know, but, but by the company, by the app that you're using, right?

• 36:32Speaker 02

  It's, uh, it's not that you have your keys, uh, you know, on your, on your device, right? You're basically sending your assets to a wallet that is operated by, whether it's BlockFi or Celsius or someone else, right? Uh, and what happens behind the scene is that

• 36:52Speaker 02

  Fireblocks is a technology provider that powers those wallets, right? So your payment, the deposit address that you see is basically a deposit address that is generated by, from, of a Fireblocks technology wallet. The funds will be deposited over there. Each one of those entities has a different way of doing treasury management, right? So especially if we are looking into sort of those yield accounts, right? They need to basically take your Bitcoin and do something with it, right? To execute some kind of strategy that in, if you basically deposit one Bitcoin, in a year from now, you will be able to receive, you know, one Bitcoin point zero five, right?

• 37:37Speaker 02

  Like, you know, five percent interest or whatever they currently promising. And, you know, usually there are a couple of strategies, right? To, to generate yield, right? One strategy, which I would say is one of the most popular strategies essentially, to lend it to high-grade borrowers. Most of those borrowers are probably very sophisticated hedge funds or crypto funds, right? That they, they borrow this crypto to, to short. You know, in some cases to short, in some cases they have other strategies, right?

• 38:18Speaker 02

  But basically they would borrow, borrow this crypto to execute their trading strategies.

• 38:25Speaker 02

  Another option is to basically service as a gateway into DeFi, right? So you depositing it with a C-Fi provider, but the C-Fi provider will take advantage of the fact that they have, they can basically face something like Compound or Avi, and they will generate yield through Compound or Avi. And then the third one is that they might have some kind of prop trading or proprietary trading strategies by themselves, and they will allocate to that portfolio, right? So. In general, all of those activities that I just described, you know, from a settlement standpoint, I mean, they all require movement of the asset, right?

• 39:07Speaker 02

  Whether you're forwarding that asset to someone else that is borrowing from you, whether you're trading it now on some kind of centralized exchange, or whether you're basically depositing it into some kind of DeFi protocol. And basically, the institutional desks in those entities that are responsible of executing those strategies, and usually there isn't like one strategy that those entities will go after. They will try to diversify to minimize the risk of some kind of, you know, specific market event. They would use firebooks, right, for the management, the treasury, the movement of the asset.

• 39:44Ryan Sean Adams?

  When you say treasury, do you mean custody? Is that what you mean?

• 39:47Speaker 02

  Well, when I say treasury, I basically mean how do you,

• 39:53Speaker 02

  how do you move the, how do you move the asset between treasury operation? How do you move the assets between, or settle the assets between different venue? Like a very simple treasury operation might be that, you know, I'm using cold storage within Coinbase, like Coinbase custody. It's like their institutional offering, I'm using them as my cold storage provider. But I also trading on four different exchanges, right? So I need to pull funds out of Coinbase, and now I need to basically deploy that crypto on, you know, Bitstamp, Kraken, FTX, right? I need to do all this movement, maybe now I have too much crypto on FTX,

• 40:38Speaker 02

  I need to go and move that crypto to Bitstamp. So all those movements, this is what I call treasury.

• 40:45Ryan Sean Adams?

  Got it. So it's not in those cases, when you say treasury, it's not that you're always providing custody for those assets, though in some cases, it sounds like you can and you do. But when you say treasury operations, you're talking about kind of the movement of those assets, you know, wherever it needs to go, wherever they need to go?

• 41:03Speaker 02

  Yeah, so we do provide a lot of the custody for those assets, and it really depends on the client. Some clients would use us for 100% of the custody. Some clients will use us for a portion of the custody. Most clients would use us for a certain percentage of custoding the funds. Um, but we also, we are sort of not uh religious or fundamentally obsessed about it. All the custody is supposed to be with Fireblocks. In fact, we do believe that it's a good thing that you have it diversified across, you know, multiple high, uh, uh, you know, uh, high-grade reputable providers.

• 41:47Speaker 02

  Just, you know, in terms of risk concentrations and things like that.

• 41:51Ryan Sean Adams?

  That kind of brings me to how you see yourselves, Michael. So I, I think you, uh, I understand your background is like cybersecurity, right? And so you, you probably started this with like a cybersecurity mindset, right? Like, okay, how do we keep these crypto assets safe? Like there are these hacks and there's Mt. Dox and there's all of these things that, bad things that can happen to your private keys, right? And lots of incentives for people to steal them. But now it seems like you're something else. There's some kind of a fintech, maybe even like a, a bank. I, I said in the intro, an AWS for crypto banking, basically. And that seems to me to be a good definition. How do you think of yourselves?

• 42:31Speaker 02

  That's actually a good summary of the, of the journey, right? So when we, when we started, our thesis was that um, it's a cybersecurity play for finance. So just as an anecdote, right? Uh, I, I've been in the cybersecurity space for about 20 years, right? Before starting Fireblocks, uh, both in, you know, very technical roles and eventually in, you know, commercial roles. You know, sold my previous company to the, one of the biggest vendors in the cybersecurity space. And then was running basically their innovation products, which was their mobile and cloud. And when you're in the cybersecurity space, there is actually a very interesting, uh,

• 43:15Speaker 02

  again, uh, an interesting number, right? That 40% of the cybersecurity revenue is actually coming from the financial vertical. Okay, so what you basically understand when you.

• 43:27Ryan Sean Adams?

  I had no idea, by the way. And, and that is in a pre, like, that is in a pre-private key world.

• 43:34Speaker 02

  No, that's just, that's like selling firewalls to JP Morgan.

• 43:38Ryan Sean Adams?

  Okay, got it. Yeah. We're not dealing with bear assets in this.

• 43:45Speaker 02

  No, I think, I think there is also a lot of, by the way, misconception around in the crypto space, or the crypto space is being accused for this sort of extreme fragility around bear assets and the fact that you can lose those assets. I think people just don't realize the amount of assets theft hacking that is actually happening in the traditional space, right? And by the way, like for anyone on this call, every time that you hear that people accusing crypto at being the main driver for ransomware, right? You know, Google, uh, Google FBI, um, business email compromise.

• 44:31Speaker 02

  And what you will discover that the amount of fraud and the amount of extortion that is happening on traditional rails with US dollar across SWIFT and, and, uh, and ACH is tenfold than everything that is happening, if not more than what's happening with ransomware, because the number for just a very stupid way of doing extortion and, and, and phishing, which is called business email compromise. So it's basically someone hacks my account at the CEO and then sends an email to my CFO. Tells her, "We forgot to pay to this vendor in China, $40 million. We need to do it today, otherwise they would stop our supply chain."

• 45:14Speaker 02

  And, and the CFO actually like, you know, goes into the bank accounts and, and wires that money to China. That's like a $3 billion per year fraud.

• 45:26Ryan Sean Adams?

  Wow. I had no idea.

• 45:28Speaker 02

  Yeah. So, and that's an FBI number, right? So if you, if you Google it, you actually land on a, on a website of the FBI. And that's the number that they published and, you know, they have all those.

• 45:43Speaker 02

  Sort of recommendations of how you're supposed to avoid, okay? And no one accuses the banks that basically they are the main driver for or no one accuses Swift or ACH that they're the main driver behind a $3 billion loss per year for the US industry. So maybe like to go back to my point is that what you do realize is that the financial, what I've realized, right, is that one, the financial industry is at the end of the day, probably the most interesting industry to start building, to build like some kind of cybersecurity play, right?

• 46:25Speaker 02

  And it was also very clear for me at that point in time that when we look at blockchains, it's a transformative technology, right? That, you know, assuming that everything plays out right, that all those banks, well, either they will disappear, right, or they will have to replatform into this technology. So it's not going to happen in five years, right? But, you know, over the long horizon, it will happen. And what we initially set to do is to basically build a security solution. In some ways, you can think about it like an antivirus or a firewall, right, for crypto, right?

• 47:05Speaker 02

  We're very quickly, we find ourselves, well, you know, I personally find myself in probably the most intense crash course around finance that, you know, I had to understand what is an option, what is derivative, you know? What is settlement, how clearinghouses work and how the entire plumbing is of both the traditional world and the new world is basically structured. And to basically realize that we are actually not a cybersecurity company. We are a fintech infrastructure company that, you know, maybe in some ways you can think about us as the AWS of this space, or you can think about us as the Shopify of this space.

• 47:48Speaker 02

  But it is a fintech infrastructure company by all All means and you know that's what we are and and I think it also required us to think very differently around our business. What are the risks? What are the regulations? We need compliance people. We need things that you know, as a cybersecurity or just like an enterprise software business, you simply don't have those people in the company. But if you're a fintech company, okay, this is sort of the bread and butter and the cost of running the business.

• 48:22David Hoffman?

  And Michael, I actually think that that is the most interesting part about this conversation where like if Fireblocks was a legacy, just you know, security company, maybe it's one of his customers would have been like Goldman Sachs and you would have just prevented fraud from Goldman Sachs. But now one of your customers is Ethereum or or one of your customers is DeFi, right? And you are connecting Ethereum to other customers, right? Where and so that is the new infrastructure, the new security that you are providing. And that fundamentally changes the nature of your business, as you just said. And so they talk about that evolution from just going from a software security company

• 49:02David Hoffman?

  to realizing you are now actually dabbling in the world of financial services. And kind of to what Ryan said, starts to make Fireblocks kind of feel like a new bank, right? Like a kind of a place to deposit your assets. Would you would you agree with that take? And talk about just the evolution of Fireblocks from going from a from a security providing company to more of a fintech company.

• 49:26Speaker 02

  Yeah, so I don't think we don't view ourselves honestly as a new bank. We do view ourselves as maybe the, you know, if you want to take the parlor to the bank, right? Then in the most traditional way to think about it, maybe we are the company that sells the safes that are being installed in the bank.

• 49:48David Hoffman?

  Because our brings brings security.

• 49:50Speaker 02

  Yeah, yeah.

• 49:50David Hoffman?

  Ethereum is the bank, right?

• 49:52Speaker 02

  Yeah, yeah, and brings, right? And there is and I think that there is also a fundamental question that I always mention to people, I think, you know, at least for. The more traditional financial folks just like blows their mind, right? But what is really custody, right, in the space? Because at the end of the day, the blockchain is the custody, right? The the the real sort of custody solution is actually not Fireblocks. It's not BlockFi, it's not Bank of Europe Mall, right? The real custody is Bitcoin, right? The real custody is it here, right? Because the ledger, like of who owns what, right? And the gatekeepers to to your account is eventually the blockchain and the miners, right?

• 50:37Speaker 02

  And what we are doing and the banks and and is basically the access controller, right? We are the one that are basically helping you to secure identity, helping you to basically secure your password, right? If if if maybe like, you know, we're trying to maybe put the analogy in place. If in the traditional space, Citibank is your bank and your custodian. And, you know, you have one password on your computer, which is basically your login into your account to transfer the money, right? You know, Fireblocks and all the people that are doing wallets is, you know, the one pass, right? That that helps you to to securely control the password.

• 51:21Speaker 02

  Now, it's clearly like, you know, to do it in an institutional way is very different. But that's basically, I guess, one way to look at it. I think another way to look at it is really, okay, we are the financial infrastructure that is more related to maybe at at the most basic layer is like Brink's and the folks that push the safe into the bank. But more broadly today, it's almost like a core banking system, right? So for people that are unfamiliar with how banks are run in practice, right? There are sort of.

• 52:00Speaker 02

  A dozen companies worldwide like Pfizer, Finestra and so on, that those companies basically developed all the databases and all the software that the banks are running on, right? The bank itself is basically a regulatory license, a bunch of people, you know, a customized UI, but on the backend, there is basically a technology that is usually, not like the bigger banks, but it's like, you know, the midsize banks, it's usually off-the-shelf software that is essentially running all that. It has a bunch of plugins for your credit cards, for the compliance,

• 52:45Speaker 02

  for wiring money and so on, for lending and borrowing. And Fireblocks is sort of the equivalent of that for digital assets, right? You're a business, you have the license or you don't need the license. So now you want to do that, you consume our software and, you know, we make it very easy for you and very robust for you to run it.

• 53:14Ryan Sean Adams?

  It's funny because this is all a new paradigm. You know, like when people are new to crypto, they'll get a hardware device like a ledger or something, right? And they'll be like, oh, my tokens are on this USB stick. And it's like, no, they're actually not. They're still on Ethereum, right? What you have on that USB stick is private keys to go unlock a vault on Ethereum. That's why when you're saying like Fireblocks is like Brink's, it's almost like LastPass, because you are doing the private key management for unlocking the vaults that are on Ethereum or Bitcoin or pick your other blockchain, right? But the actual storage of the assets, as weird as this is, happens on the chains themselves, right?

• 53:59Ryan Sean Adams?

  That's where the assets always are. It's a different mental model that I think people need to wrap their heads around and it's new for crypto.

• 54:05Speaker 02

  It's very difficult for people to...

• 54:07Ryan Sean Adams?

  It is. It's weird. A little weird at first. Let's talk about something else that's weird, and that is this DeFi thing. It's kind of weird, kind of strange for people. And I think I've heard you say before, Michael, some of your past conversation interviews, that you're a DeFi bull. And it seems like you guys have oriented your products that way, too. Can you tell us why? Why are you bullish on DeFi?

• 54:33Speaker 02

  In one sentence, because, or maybe if it's like in one word, because that's the assets. Right? I mean, at the end of the day.

• 54:44Speaker 02

  Right, there is Bitcoin, and Bitcoin has some specific property around

• 54:51Speaker 02

  a reserve, right? A reserve asset. But everything else, the reason why we're doing it is because we are able to create those tokens that represent some kind of asset, right? I mean, it can be, you know, stablecoin, it can be NFT, it can be a kitty, right? A digital kitty on the blockchain. It can be a real estate asset, by the way. I mean, funny enough, I think people don't really remember, but the NFT standard was actually, I think originally was invented because people wanted to tokenize fractional real estate, right?

• 55:28Speaker 02

  And then what we're actually able to do is to build this unbelievable machinery that are the DeFi apps, right? That replicate what traditional financial institution had to do in a centralized way with huge amount of counterparty risk, with human procedures and human oversight and human errors, right? And we are able to execute those things in an autonomous way without, with governance, right?

• 56:09Speaker 02

  And with autonomous governance and basically allow interactions from, between two people over the internet from, you know, two sides of the world without having, with having zero trust, both between them, but also like, you know, there is no intermediary that they both need to trust that might default the fraud or make a mistake which will impact both of them.

• 56:40Ryan Sean Adams?

  Let me ask you this, though. Like, you're from cybersecurity, Michael. Like, not a little bit terrifying? DeFi terrifying? Like, one hack, one error in the code, $250 million, gone. You know, Parity Wallet hack, gone.

• 56:53Speaker 02

  Yeah, yeah. I mean, I am, okay, but I think that it's a maturity, right? There's sort of like a maturity curve that's happening over there. I mean, I'll give maybe like a very different example. You know, a year ago, I bought a Tesla, and most of the time, I drive on autopilot, right? And it works. Like, you know, it works. Like, I drive at 60 miles per hour, you know, autopilot, and I sort of trust the vehicle to be able to perform something that probably three years ago, or even five years ago, would be terrifying, right?

• 57:34Speaker 02

  And it's sort of like, you know, there aren't examples of bad things that happen, right? And, you know, you talk with people that were using autopilot, you know, three, four years ago. They tell you about, like, you know, crazy, conky experiences, that it would just, like, stop in the middle of the highway, and it was just a complete disaster, right? But over three years, basically Tesla was able to bring it into something that, look, you know, I can drive for two hours without essentially, you know, trying to interfere with the driving, right? So I think, you know, the unfortunate reality is that there will be, a lot of money will be made,

• 58:16Speaker 02

  a lot of money will be lost by the time that we'll get to the point where we see full maturity, right, of DeFi. But with that being said, you know, you look at the, on the massive protocols that we have, Compound, Avast, Uniswap, right? I think that, you know, knock on wood, right, with those protocols...

• 58:43Speaker 02

  We're already approaching a point where the technology risk is substantially low that will allow people to deploy it without huge amount of concern, right? And I think that the real point of that really happening is that when those protocols will be insurable, right? And there is also a question of what will be the mechanism to ensure those protocols? Because it might also be the case that they will not be insured by, you know, AIG or Munich Creed. They will be insured by also, again, some kind of a decentralized finance-based insurance capability.

• 59:27Speaker 02

  But, you know, I think that with the bigger protocols, we are slowly getting there. But it takes time, right? But I think that if three years ago, it was, you know, somewhat delusional, right? I think we are at the point where, you know, we are launching, we are launching, I mean, together with Compound, we launched Compound Treasury and, you know, we're working with AveArk on things that for people that understand the technology risk,

• 1:00:08Speaker 02

  they are willing to go in with massive amount of capital and use those protocols.

• 1:00:16David Hoffman?

  Michael, earlier in the show, you talked about how a lot of your clients will migrate funds across different exchanges. I would suspect that that's a decent amount of just people just taking arbitrage opportunities across C-Fi exchanges. But what about people's activity? What about your clients' DeFi activities? Can you kind of compare and contrast the amount of activity that your clients use in a C-Fi world? And then also, how much activity is in a DeFi world? How do those things compare? And then when they are using the DeFi things that Fireblocks is hooked into, what is the frequent activities that you see your clients doing?

• 1:00:53Speaker 02

  Yeah, so.

• 1:00:58Speaker 02

  Let's start with some, again, numbers, right? Right now, we have about, I would say, eighty clients that use our DeFi plugins, right? Out of, let's say, five hundred clients, or let's say, like, you know, four hundred and fifty live clients, right? So we are approaching, right, the, almost like, you know, the twenty-five percent, I guess, right? Of clients, and, you know, we see, I think, on a daily basis, more and more clients, basically, asking us to activate those, those plugins for them, right? So there is, like, a daily progression into, into, into that.

• 1:01:40Speaker 02

  And just to be, to set sort of the, the timeframe, we basically launched our DeFi beyond what we had with Compound, which we launched over a year and a half ago. The main capabilities we launched at the beginning of this year, right? Basically around January, right? So in six months, we basically managed to almost activate one quarter of our client base to, to work with DeFi, or they activated themselves.

• 1:02:06Ryan Sean Adams?

  That surprises me, by the way. Twenty-five percent is a lot higher than I thought of.

• 1:02:11Speaker 02

  Yeah, I mean, also for me, I think that we didn't expect that there will be such a huge uptake. I mean, I think that, as of right now, there is still a lot of, you know, we see a lot of crazy things that are still, you know, happening. So I think a lot of people are still experimenting with, you know, liquidity mining and, and they, they, every day, they are trying, basically, new protocols, and, you know, it's not only Ethereum. We, we see people doing it on, on, on Binance Smart Chain, which we support also.

• 1:02:55Speaker 02

  We're seeing them doing that on Polygon and Matic and those protocols, right? So you basically see some kind of, like, you know, all over the place, activity. And, and I think a lot of that is somewhat of experimentation. We do have quite a few clients that they have.

• 1:03:16Speaker 02

  Very clear strategies, right? In terms of how they work with DeFi, how they work with, for example,

• 1:03:25Speaker 02

  you know, for example, something which I always found a very interesting example is

• 1:03:34Speaker 02

  stablecoin arbitrage opportunities, right? So basically, you have this temporary arbitrage between synthetic stablecoins, right? And, and, and the asset-backed stablecoins like USDC, right? And you have different yield curves between them, and, and there is an arbitrage. So there are, there are people that are essentially matching that arbitrage. And I guess the fascinating thing about that, right? Is that first and foremost, it's a strategy that is not like a crypto-native strategy.

• 1:04:15Speaker 02

  It's basically a strategy that is taken from FX, where, you know, people will basically do, you know, foreign exchange currency arbitrage. And the second aspect of it is that because of what those people are doing, they're essentially stabilizing, right? The, the, the value of the synthetic stablecoins, right? Because they essentially, the activity they're doing is, is continuing sort of like, you know, bringing them closer to the actual dollar, right?

• 1:04:48Speaker 02

  And, yeah, and, and, and that's, you know, it's not the vast majority of what people are currently doing, but that's maybe just a very interesting example of, of things that I've seen people doing. There's also maybe another example that, that is, is just our personal example of how we use DeFi internally, right? So.

• 1:05:14Speaker 02

  About thirty percent of our clients, instead of paying us with wire, ACH, or credit card, they pay us with stablecoin. And in general, in the very beginning, we basically told people on it to send us USDC. And over time, we basically started to allow people to pay us with both Pax and USDT. Now, the main issue that we have is that we don't, eventually, we do need to, at some point, we do need to offer up those tokens to fiat, right, for accounting reasons. But what are we doing in the meantime, right? The first thing that we do is, we do use, when someone, for example, pays us with USDT,

• 1:05:59Speaker 02

  we use either Uniswap or Curve, right, to immediately swap it to USDC with a very fairly minimal slippage, right? The second thing that we do is that we do use Compound and Avid to basically generate a much higher interest rate on those deposits than any bank can offer now for, you know, the money that we raised from the VCs that is currently sitting in the bank. And, you know, in a good day, we're basically getting, you know, twenty-five bips, right? So, and that's just, this is just sort of a really interesting example where I think,

• 1:06:39Speaker 02

  when I think about the real value of that, that's, for me, it's a mystery, how come

• 1:06:48Speaker 02

  there isn't sort of a huge amount of businesses trying to do exactly that?

• 1:06:53Ryan Sean Adams?

  Yeah, I totally agree. I love, by the way, that you are dog fooding your own tools to go bankless and like dog fooding these crypto protocols, basically. And like, what we've found too is like, while we can't completely severtize with the traditional banks of the world, right, the DeFi ecosystem is just better, right? Like, lower wire transfer fees, higher interest rates, like just immediate transfers, like it's just a better financial system. So like, you know, good on you guys for leading the way and actually using the tools that you're building.

• 1:07:28Speaker 02

  Yeah, I mean, we, the first time we've done it was actually when we had a client that wanted to pass thirty thousand dollars with a credit card.

• 1:07:39Speaker 02

  Our option was to basically take it on Stripe and then to pay $1,000 to Stripe as a commission.

• 1:07:45David Hoffman?

  30%, yeah.

• 1:07:46Speaker 02

  Yeah, and I thought like, okay, so if the stablecoin, that was, you know, a year and a half ago when the gas prices were low, right? So it costs us maybe 30 cents on the gas, right? But, yeah, instead of $1,048 hours to get in our bank account, it was 15 seconds and, you know, 25 cents, right? So it's not 10 times better, it's like 10,000 times better, right?

• 1:08:19David Hoffman?

  Yeah. Michael, earlier you talked about how Fireblocks is both the service provider for Compound Treasury and Aave Ark, the respective like institutional versions of those two major DeFi protocols. And before this conversation, I kind of thought that Compound Treasury and Aave Ark would be doing their own KYC in order to do their own onboarding for institutions. But it sounds like they are outsourcing that to Fireblocks and allowing you guys to do that, that lift of the journey for institutions to start to use these DeFi apps. Which brings me to my question is when you do the, A, is that true? And B, when you do the onboarding for an institution so they can start to use Compound Treasury,

• 1:09:03David Hoffman?

  by definition, does that also make that same institution ready to be using Aave Ark? Is that how it works?

• 1:09:11Speaker 02

  So what we do with Aave is different than what we do with Compound. And it's, and I think that the way that I look right now on the institutionalization of DeFi is that we are currently in the...

• 1:09:33Speaker 02

  Sort of experimental phase around the compliance issues over there, right? And that's why I think we are taking different approaches with each, right? For Compound, we actually, for Compound Treasury, we're actually not the, uh, the, um, we are not the KYC provider because of the way that they basically structured their, um, their offering, okay? Um, and, and what, what is basically being done over there is that we do have an entity

• 1:10:16Speaker 02

  that is not our main entity. It's, it's, it's a subsidiary that has specific licenses that help them to do what they need to do. And clearly, there is a technology that is used by them to do it in a secure way, uh, which guarantees the, both the, you know, on-ramping the funds, deploying them into the protocol and so on. Uh, with, with AVE, the situation is actually somewhat different. With AVE, what we are really experimenting is around creating, um, what I would call S, an institutional pools, right? Where they're sort of gated, right?

• 1:11:00Speaker 02

  And they're gated by KYC. And it's true that, uh, at least in the experimental phase of this, uh, Fireblocks is the, uh, Fireblocks and the Fireblocks network essentially is sort of the KYC gate, right? Uh, because we, uh, the, the advantage that we have is, first of all, because of, uh, some specific capabilities that are related to that entity, we do have, uh, and the...

• 1:11:34Speaker 02

  The machinery and the technology to basically properly KYC clients or institutional clients, which is not a trivial task. And the second thing is that we know or we are able to basically enforce

• 1:11:52Speaker 02

  a linkage between your identity and your wallet, right? That is related to both the technology, it is actually related to MPC. And therefore, when we allow you to enter through that gate, because there is a whitelisting of your wallet, we can guarantee that this is your wallet, right? We can guarantee that this is your wallet. We can guarantee that the assets that are flowing through that wallet, the path that they belong to you.

• 1:12:22Speaker 02

  You know, if you take, if you took assets from a bad actor and you're trying to throw them into the pool, because we have a partial control over that wallet through MPC, we can at least block you from doing that, right? So the technology, there is a more interesting sort of combination of a mixture of technologies, which basically allows us to operate those gates.

• 1:12:49Ryan Sean Adams?

  So Michael, I'm curious, like if you're to summarize this for us, when you're talking about those DeFi plugins that your clients have access to, right? This could be the institution, say, that wants to just invest and get a higher yield for the stable compound, right? So you've got like lending and borrowing. What other protocols do you have too, just high level? Do you have like trading? If I'm an institution, can I click the Uniswap plugin or the Sushi Swap plugin and start trading these long tail assets? And how about staking? Can I just like switch something on and suddenly start staking?

• 1:13:24Speaker 02

  Yeah, so first and foremost, initially, we started with building the experience into the product itself as a very intuitive experience where we actually have it still with Compound, where you have an asset that you see in the wallet, you can click on it. And one click, you basically, it's being deposited into Compound, right? But what we discovered very quickly is that there is this sort of like huge long tail, right, of applications that everybody want to access into. Some of it is because, you know, the really, really use case, and some of it is just basically chasing after some kind of a temporary yield, right, that exists over there. So we had to generalize.

• 1:14:08Speaker 02

  And the way that we generalize it is by essentially creating three main approaches. The first approach, which is sort of the easiest to understand, is API. So there is an API. If you want to interact with any smart contract, you have what we call the Firebox DeFi API. You basically can invoke a function, that function is function of a smart contract, and that is has policies that are being checked and so on. The second is a browser extension, so very similar to MetaMask, but instead of basically using a wallet that sits in your browser

• 1:14:48Speaker 02

  or a hardware wallet, it's actually links into the secure wallet platform of Firebox, the Firebox Vault. And the third, which is my personal, my personal most favorite plugin, is through Wallet Connect, right? So you go to a website, you basically click, you go to Compound or you go to Wallet, right? And you basically click Connect My Wallet, you click Wallet Connect, and then you're basically taking your phone, there is the Firebox app, you scan it, and behind the scene, it basically creates a bridge into your vault, and then you can basically interact through the, through the Wallet Connect bridge. So those are the three capabilities that we have as it relates to DeFi.

• 1:15:33Speaker 02

  And because of the generic capability there, yes, you know, you can use Compound, you can use Avid, but... You can use uni swap, sushi swap, you know, D Y D X, you know, any

• 1:15:48Ryan Sean Adams?

  You can use anything on DeFi then, while connect, anything that has a while connect, uh, interaction point.

• 1:15:54Speaker 02

  Yeah, I think it has basically Meta Mask or what connect you can, yes.

• 1:15:58Ryan Sean Adams?

  So what do you think of this idea of institutional DeFi? So we're seeing it start to play out with, uh, Ave, start to play out with, with Compound. Is this going to be a thing? So you said you had 25% of your customer base start on DeFi and I'm guessing that's just all happened within the last year or so, like, you know, like a DeFi summer and post DeFi summer phenomenon. But like, what's it going to take to get institutions really comfortable with DeFi? Is, uh, is institutional DeFi going to become a thing?

• 1:16:27Speaker 02

  Yeah. So, so I think it's, it's, it's important to clarify, right? That the 25% that are using it right now, they're using just the regular protocols, right? They're using, they're using those, uh, three extensions, API, wallets, connect, uh, while browser extension. And they accessing the same pools as anyone else, the same pools as the retail, right? There is nothing unique about, uh, the specific protocol that they're accessing.

• 1:16:53Ryan Sean Adams?

  So I guess that's one, that's one version of institutional DeFi, which is just like institutions now have a managed way to get access to all of the other DeFi protocols that we have. I guess that's

• 1:17:04Speaker 02

  Yeah. Yeah. They, they have, they have a convenient, highly secure, uh, way with in, internal guardrails that allows them to do it, right? The next phase of it is to solve the compliance or the regulatory issue, right? And I don't know, uh, what is the percentage of the 75% that are not in DeFi right now from our customers? That the reason why they are not in DeFi is because of the compliance regulatory issue. But at least from the subscription that I'm seeing into, uh, testing some of those newer initiatives, right?

• 1:17:47Speaker 02

  Like the Compound Treasury and the Ave Ark, it, it is like, you know, 10, 20% at the very least. Right that are interested in in that type of product. There is an overlap, by the way, between the one that are using it right now and the people that want to be part of that offering as well. But definitely there are unique names over there that are probably playing in the fire because they don't have. Uh, because from a regulatory standpoint, they are uncomfortable with participating in a pool where there is uncertainty around where is the other crypto that is in that pool is coming from, right?

• 1:18:31Speaker 02

  And that's just basically, I guess, a kind of a regulatory limbo situation. And I guess like, you know, I don't need to basically. I mean, we can, but I'm not sure that I need to give a like a 30 minutes overview of all the different approaches that, you know, from FATF to FISA and to, you know, uh, all the other regulators, everything that they're trying and, and, you know, the crypto bill in the United States. But I think that that that entire um, um, the, the regulatory environment around DeFi is unclear and is in flux, right?

• 1:19:10Speaker 02

  So their only way to deal with it is basically to say, okay, what are the most extreme procedures that I can take to still benefit from it? And that means that I'm going to only access basically a subset of the protocol that is gated. And it's guaranteed that I'm basically entering into this game with uh, people that are in the same compliance level as I am.

• 1:19:38David Hoffman?

  Hey guys, I hope you're enjoying the conversation with Michael thus far. In the second half of the show, we, we bring up the conversation of regulation and how Michael and Fireblocks has had to traverse the changing regulatory landscape, as well as how are they positioning themselves for future unknown regulatory headwinds? Ryan asked Michael the question, what happens if Fireblocks is too successful? Is that a risk vector for Ethereum? Can they suck in too much? And become too much of a centralized risk for the rest of the ecosystem. I thought his answer, Michael's answer to that was particularly fascinating. All that and more is coming in the second half of the show, so don't go anywhere. But first, before we get there, we need to take a moment to talk about some of these fantastic sponsors that make this show possible.

• 1:20:22David Hoffman?

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• 1:21:03David Hoffman?

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• 1:21:47David Hoffman?

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• 1:22:31David Hoffman?

  and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless.

• 1:22:43Ryan Sean Adams?

  Let's touch on regulatory for a minute. It's difficult to speculate what's going to happen next, but I'm curious how regulatory issues have impacted your business and what you really think about. Like, what keeps you up at night with respect to regulation? I think we've seen in the past couple of years, definitely some tailwinds, right, for crypto? Like, you know, good regulatory initiatives. OCC said banks can hold crypto, for example. I imagine that was impactful. That was a great thing. We also have seen some headwinds, right? There's the Gary Gensler speech that just came out as we're recording this this week. There's like comments like shadowy crypto coders in the Senate. There's also, if you look toward the east, central bank digital currency in China, what they're doing to like,

• 1:23:29Ryan Sean Adams?

  get crypto miners out of China. But like, what's your take? What do you think about where we are with respect to regulation now? And what kind of worries you, keeps you up at night?

• 1:23:42Speaker 02

  I wouldn't say I'm not worried, right? But I do think that on the long run, certain type of regulation is both necessary and good, right? The main concerns that I have is that, you know, when you have, you know, hammer, every problem looks like a nail, right? And that's the situation right now, that the regulators, they have frameworks that were created, whatever, like in the 1940s, in the 1970s, in the 1990s, right?

• 1:24:27Speaker 02

  But those frameworks are...

• 1:24:31Speaker 02

  One can argue if they're useful or not useful for a specific type of ecosystem signal or finance. I mean, for everyone who spends enough time with the technology, he understands that the... And I think like, you know, there's a slight difference between the SCC sort of view on things that they're coming in and they're basically saying, "Look, you know, let's make sure that people are not being defrauded, right, through illegitimate ICOs, to trying to enforce, you know, travel rule and compliance and BSA AML through tactics that just technologically do not comply, right?

• 1:25:16Speaker 02

  Because at the end of the day, let's take like, you know, the most extreme proposals over there, which basically were trying to force KYC on hosted, unhosted, like, you know, take DeFi developers, to hold DeFi developers as accountable, right, for what they are building. I think anyone who understands this technology enough understands that, A, you know, it's just going to hurt the people that are doing the legitimate things. And the people that are want to use this technology in an illegitimate way, right?

• 1:26:01Speaker 02

  The cyber criminals, the, you know, the regular criminals or whatever, they can bypass all those things at the click of a button, right? There is nothing that holds you from, you know, taking a paper wallet, right? I mean, let's take like, you know, the latest, one of the latest proposals, right, that were put in front of the Senate, that they basically said, "Oh, by the way, you know, unhosted wallets need to report on tax." Well, guess what? I can print a QR code on this piece of paper and it becomes an unhosted wallet. So now this piece of paper is responsible for reporting tax, right? So like, people basically, I think, don't understand

• 1:26:46Speaker 02

  the extent of a technology. And then what they're basically doing there, they're preventing the good usage, but they're not really blocking the bad usage of the technology. So... I think, and that's like, you know, what honestly worries me. I think that, or from everything that I've seen also in other domains in my experience. And I've seen, I think, similar situation in the past, you know, just to give a maybe an interesting example from the privacy space, right? Maybe some of the listeners remember the famous case of the FBI against Apple, right?

• 1:27:29Speaker 02

  That, you know, they're basically telling Apple, hey, you know, we don't care. Unlock this iPhone. And Apple was like, no, well, we're not going to unlock this iPhone because we don't have the keys. And two, we are not going to introduce the backdoor because that goes against the will of our consumers. And if you want, like, you know, go pass a law which will force us to do it, which clearly would not something that will fly in a modern democracy, right? So I think that, you know, we will eventually face a similar situation where the technology will prevail. And, and, and eventually it will, we will have tools that are self-regulated.

• 1:28:12Speaker 02

  There are quite a few exciting companies that I've seen recently that are coming to basically deploy identity, deploy compliance into DeFi and to do things, you know, I don't know if it's like solve the problem 100%, but it's definitely going towards the right direction rather than trying to essentially, you know, come with this hammer and basically say, well, you know, everybody need to report every suspicious transaction, you need to KYC everyone and, and, and, and, and send SRS on everything that is suspicious. It's like, yeah, that will not work, right? So that's just like, you know, my personal view.

• 1:28:51David Hoffman?

  Michael, is there anything about regulation that has impacted the trajectory of your business over at Fireblocks? Is there anything that you wanted to do, but your lawyer said no due to regulation that you also think is silly and should be changed?

• 1:29:06Speaker 02

  I mean, okay, I think actually for us, regulation was somewhat favorable around the OCC and a lot of the things that happened last year, right, which basically mobilized what is a very important segment of the market for us, right? So I'll give them that. You know, there were things that we worked hard recently to put in place. For example, we block OFAC transactions, right? So there were things that we had to do or comply with. You know, there were customers that we didn't agree to service them because we thought that it was too high of a risk,

• 1:29:48Speaker 02

  right? So there are things that I believe that whether it's regulation or just like our own reasonable judgment that prevents us to do that. And beyond everything else, there is, I think, beyond the regulation, there is just like, you know, pure reputational risk, right? So eventually, when you play the game that we play, you, the reputation is important, and I think you need to basically be thoughtful in terms of how certain things will be perceived by your customers or by your prospects.

• 1:30:26Ryan Sean Adams?

  Michael, this has been a really interesting, like, thanks for walking us through this. We have just a few more things that we want to cover with you as we close here. But I, you know, I want to talk maybe about a worry that listeners might have, and it's a worry in the back of my mind, too, right? So this, this podcast is called Bankless. This entire movement is called Bankless, right? This is a movement to restore self-sovereignty to the individual, right? Peer-to-peer type transactions. My worry is not that you guys won't be successful, but my worry is that you'll be too successful. So picture a world where Fireblocks or someone else like Fireblocks has all of the world's crypto assets. They're all institutional,

• 1:31:10Ryan Sean Adams?

  they're, they're all custodied, they're not fully bankless. And then, and then what happens? What if you guys get acquired by Jamie Dimon at JP Morgan, or worse, Wells Fargo, right? David Wells Fargo could be that acquiring company. Then we're back to the same spot.

• 1:31:26Speaker 02

  Then we're just open accounts, right, for people that don't exist.

• 1:31:30Ryan Sean Adams?

  Like, can you allay these fears, right? So there is, there is this important thing that we are trying to build, which is a new financial system that is not a financial system full of the same banks we just left. Like, hey, here's, here's the new boss, same as the old boss.

• 1:31:47Ryan Sean Adams?

  Is what you're doing, as important as it is right now, as a bridge to institutions and DeFi and crypto, does it also have a trade off here? Could we be centralizing the, the system in this way? What are your thoughts?

• 1:32:02Speaker 02

  Yeah, so honestly, uh, it's a very important concern and something that actually philosophically we think a lot about, right? And, you know, in other podcasts you will hear me saying that one of the reasons that Firebox works the way Firebox works and not the way that, for example, Coinbase custody works is that, at least in our case, the institution that we serve is in direct custody, right? So Firebox, like Firebox as a company, right? We don't have access to, to the keys or to the sufficient amount of key material to really operate on behalf of our class clients. So first and foremost, I do believe, at the very least,

• 1:32:45Speaker 02

  in the institutional idea around not your, you know, not your keys, not your Bitcoin, right? So basically, each one of our individual customers is keys, is Bitcoin, right? Not our keys.

• 1:33:00Speaker 02

  On the long run, I do think that what we are seeing over here, and maybe I'm just like sort of shooting myself a bit in the foot, right? Is that we, we, we, we actually looking into

• 1:33:17Speaker 02

  a temporary situation, right? And I, I think that like, that the thesis that we have is that eventually

• 1:33:28Speaker 02

  The reason that it's now important to work with the banks and it's important to work with Jimmy Diamond, it works important to work with Wells Fargo is to bring it to the masses, right? I think that once we will bring it to the masses, right? And my grandma will have access to Bitcoin. This is where we will actually be able to unlock self custody, you know, wallets that are completely non custodial. And people will like, you know, will start to see an outflow, right? From those institutions. And then you can ask yourself, okay, so, you know, then you guys, fire blocks are doomed, right? Because basically what's happening right now is that you essentially,

• 1:34:10Speaker 02

  you know, selling a service that eventually will disintermediate your own clients. So the way that I think about it is that, look, in,

• 1:34:21Speaker 02

  eventually, like, you know, financial institution or non financial institutions, in the end of the day, we have businesses, right? And those businesses need to run and they need to do their own finance. And I'm actually looking forward for the world where my clients are not necessarily only Wells Fargo or JP Morgan, but my clients are Airbnb and, you know, Uber and Booking.com and Spotify and all those guys that are internet companies that honestly, for them probably this technology means more than, I mean, except of the retail, you know, if we think about, you know, unbanking.

• 1:35:04Speaker 02

  I think that there is unbanking for the retail, but there is also unbanking for the businesses, right? Because right now, all those businesses that we value and we use their services, right? They're being banked, right? And, you know, sometimes they don't get the best service, right? Sometimes they're being overcharged. And the main question is, how can I eventually go direct to them, enable them and do and help them do what they want to do?

• 1:35:29Ryan Sean Adams?

  Here's what we have, Michael. So Dave and I have talked about this a lot. So Bankless listeners will be familiar with this. This is what we call the DeFi mullet thesis. And this is what we think is happening in general with fintech right now, which is a whole bunch of fintech companies are about to grow out their DeFi mullet, right? So fintech in the front, DeFi in the back, crypto rails in the back. And that seems to be what's happening. So your comment about like, hey, when I look at BlockFi and when I look at Revolut, they're actually converging on the same thing. They're all like fintech companies that are hybrid crypto, right? So I'm curious if you could make some predictions in this area, since you're so close to it, right? We see Visa, they're getting into crypto, they're hiring blockchain people.

• 1:36:11Ryan Sean Adams?

  We see PayPal, what are they doing? We see, you know, Square, Jack Dorsey's talking about DeFi, all these things. How is the DeFi mullet going to play out in the coming, let's say, one to three years? Do you think all of these fintechs will convert to crypto rails? And how's that going to look?

• 1:36:32Speaker 02

  Yeah, so I guess it goes to my previous comment around this is the essence, right? I think that is that going to happen in the next three years? Well, I hope, right? I'm not entirely sure that it will move that fast, but I do think that for the two things need to happen, right? One is definitely sort of the access and what Firebox is doing and sort of just helping them to do it in a secure, compliant way, which is, you know, paramount for the access or like, you know, for the nice hair that they have back, right?

• 1:37:09Speaker 02

  Like, you know, someone that come their hair. And the second aspect there is that we need more assets, right, on DeFi, right? Or we need more instruments, right? Because I think that one of the problems that we're seeing that I'm also quite concerned of, right, is that right now we have Bitcoin, we have, you know, a bunch of tokens that are protocol tokens that, you know, their value is sort of derived from what that protocol utilization will be, but beyond that, it's not that much of an interest, right? We have some governance tokens that are important, but again, it's not, you know, really meaningful. And then we have stablecoins, right?

• 1:37:54Speaker 02

  Stablecoins, for me, is like, you know, really a very important instrument. I don't think that CBDC will happen that quickly, and therefore, stablecoins are really, really good, you know, instrument. But now we need, basically, like, to bring more, you know, real-world tokens into this ecosystem for the DeFi protocols to be effective, right? Because, you know, the value of swapping USDC with Ethereum is only valuable if you're speculating on Ethereum, right? Or you need to, I don't know, buy gas, right?

• 1:38:35Speaker 02

  But the value of basically swapping USDC to an NFT, or to a tokenized real estate, or to, you know, I don't know, mortgage, or something that can actually represent a financial instrument, is actually, like, you know, very, very useful. And I think for this ecosystem, not to sort of, like, you know, just collapse into itself, we need to see the fintechs and the FIs basically starting to deploy MINTs, you know,

• 1:39:13Speaker 02

  and bring more representable assets into the blockchain for the DeFi to really become, maybe like, you know, not only the back, but also the front.

• 1:39:25Ryan Sean Adams?

  Really cool insight. I haven't heard that take before, Michael. It's been a pleasure to have you and you thank you for Fireblocks. Thank you for beating the hairspray in the DeFi mullet to tie all of these things together, sir. It's been a pleasure to have you on Bankless.

• 1:39:39Speaker 02

  Thank you so much, guys. It was fun.

• 1:39:43Ryan Sean Adams?

  All right, guys, action items for you. One is get a job in crypto. Wow, Fireblocks just raised $300 million. I bet they are hiring. Every crypto company I know of is hiring as well. We have a job board at Bankless. We will include a link to that in the show notes. Has some of the hottest jobs in crypto. You could check that out. Also, David, we need some more five-star reviews. We're doing really well, but guys, if you are a longtime listener of Bankless, have not done a five-star review, what should they do, David?

• 1:40:13David Hoffman?

  They should go to wherever they listen to podcasts and make sure that you give us those five-star reviews. So Bankless can get to the top of the iTunes Business and Investing Podcasts, where we always have wanted to be, yet we are not there yet. So if you could help us by giving us those five-star reviews, it would be greatly appreciated.

• 1:40:31Ryan Sean Adams?

  All right, guys, none of this was financial advice. None of this was hairstyle advice. ETH and crypto are risky.

• 1:40:37David Hoffman?

  Wait, we're allowed to get hairstyle advice? We're going to get in trouble for that.

• 1:40:41Ryan Sean Adams?

  Next podcast. You can lose what you put in, guys, but we are headed west. This is the frontier. It's not for everyone, but thanks for joining us on the Bankless journey.

• 1:40:49David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks and exclusive content, and even the Bankless token for airdrops, raffles and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders,

• 1:41:30David Hoffman?

  Ask Me Anythings and weekly rollups, where we summarize the week in crypto and other fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless nation.