Jai (Danny) An, Co-Founder & CEO of TrustToken: The Founding Story of TrueUSD

Jai (Danny) An is the Co-Founder & CEO of TrustToken. In this conversation, Jai and Anthony Pompliano discuss brain implant technology, automation of knowledge and value, how TrustToken built their crypto infrastructure, and the founding story of TrueUSD. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:13Anthony Pompliano?

  Jay An is a co-founder of Trust Token. In this conversation, we discuss brain implant technology, automation of knowledge and value, how Trust Token built their crypto infrastructure, and the founding story of true USD. I really enjoyed this conversation, and Jay has tons of great insights. I hope you enjoy it nearly as much as I did. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow

• 0:54Anthony Pompliano?

  a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:03Anthony Pompliano?

  Alright guys, bang, bang. I am here with Jay from Trust Token. We've got a ton of stuff to go over, but I really appreciate you taking some time to come on and then talk to us about what you're building.

• 1:13Speaker 01

  Yeah, thanks so much for having me, Jay.

• 1:17Anthony Pompliano?

  So let's do this. Why don't we start with your personal background? You've got kind of a cool story, so maybe just share that with us and then we'll get into the crypto stuff.

• 1:28Speaker 01

  Sounds good. So I grew up in Texas, spent a little time in Korea growing up, and then moved back to Texas. After I graduated from university, I went to work as a product manager, and then did some data science work. And after that, I met my co-founder Rafael. He studied computer science at Stanford, and after he graduated, we met each other at an event, found out that we were both sleeping in cars and had similar life philosophies. We basically felt like we were fundamentally okay, that we had won the ovarian lottery, and that we... You know, we could get a job and the rest of our lives, it wouldn't be too difficult just by the factor of being born in a lucky spot.

• 2:10Speaker 01

  And so we thought about what we wanted to do, took kind of an expansive look at our lives and realized that we had some similarities in how we saw that and some were including like that that we were fundamentally okay, that technology was going to have a massive amount of impact in our lifetimes and that we wanted to be in the field and influence the technologies in a positive direction as much as possible. And so we kind of teamed up, said, you know, it'd be great if there's a team that worked together, really help each other grow and become better people. And that's what we did. And so we embarked on a year of just exploring various technology fields, taking different lenses on how to look at these these fields and these technologies. And we just built stuff, sleeping in our car for a year, exploring.

• 2:54Speaker 01

  And we, that's where we, you know, found Ethereum. We explored artificial intelligence, brain-computer interfaces, biosynthesis. And, and that's where we really kind of dived into Ethereum and I would say nerded out on it. It was probably 2015, it was still pretty early days. And I think Raf got exposed to Bitcoin earlier on at Stanford in cryptography class. And after a year of doing that, we both decided to kind of double down bet on certain technologies. Raf went to Google Brain to do machine learning research. I went to a neural implant startup called Kernel and I was the first engineer there

• 3:37Speaker 01

  and we explored how you actually put electrodes into people's brains to increase the bandwidth and connectivity between computers and our brains. And so we did that for a while. And so, and realized that, hey, you know, we've been looking at all these technology fields because we have, you know, a software lens, but there may be fields where there's no software that we can actually learn how to build startups in. And so we kind of took a opposite track and started looking at these dusty old industries like finance and government and really dived into these and landed with an idea of creating estate planning software. An estate planning software is living trusts. Basically, you put your assets into this so that it makes the transition between ownership of those assets

• 4:22Speaker 01

  easier. And so we actually raised some funding off of that. And we were building out this thing, estate planning software company. And every couple of months, we would, we would kind of pop up our heads and really examine, you know, are there any fields of technology that are starting to pick up? Because as I'm sure you're familiar with POMP, these fields really are windows of time and certain parts of the world or certain parts of the field get at some sort of precipice. And this is what we learned in our first year of exploration, where things just get to the right time where there's a window opening. And we had some friends that were really diving into the crypto space, like, like some of the guys

• 5:04Speaker 01

  at Falcon. And we were having conversations and, and of course, they had that big raise. And that was really like a blip that we saw on the radar that that showed that maybe the timing had just shifted because it was, you know, hundreds of millions of dollars raised. And if you're looking at across the distribution of things that that happened, it's like, you know, a six standard deviation event. And so this was just a couple of months starting into the startup. And so we had built, we had basically just writing a lot of code. And we started to think about, okay, what, what could crypto do from our previous experience and what we were doing now? And we were building legal entities where you can actually assign the beneficial ownership to tokens, essentially. And so that was the

• 5:44Speaker 01

  genesis of asset tokenization. And we thought that this, this world computer could kind of be the bedrock for a new financial system that makes the movement of asset ownership or money or, or, or ownership of anything much easier across the entire world. So that's how we started really thinking about about what we're doing now.

• 6:05Anthony Pompliano?

  I love it. I love it. All right. We can't talk about crypto until we talk about the neuro prosthetics. I am upset with this idea of, you know, eventually we are going to have the machines and computational power either very, very closely aligned to the human body or actually implanted inside. And that can take a whole bunch of different forms from in the brain to, you know, eyes to just something on your wrist. But I think that Kernel and Neuralink are kind of the two best known for these kind of brain implants. Talk a little bit more about, you know, kind of where that work is today in terms of like, how far along is the

• 6:50Anthony Pompliano?

  technology and what some of the challenges are that those companies may be facing.

• 6:55Speaker 01

  Yeah, definitely. Maybe I'll step back just to just to go into what the fundamental problem that's trying to be solved. And that's really just trying to figure out how to make it so that we can communicate and computers can communicate with us with higher bandwidth. And that means right now, you know, we're typing in our computers and we're reading words on a screen or watching video. And that's the speed at which we're actually taking in information or sending information. And computers are shooting information all across the world at lightning speeds, at gigs and gigs, terabytes of information. So that's really the big problem that a lot of these projects are looking at. And the way they're approaching it is by sticking devices into the brain or even trying to read the neural signals

• 7:37Speaker 01

  by not having electrodes in the brain, by just reading it off of, let's say, on the skull itself. And so that's, that's kind of what is the, the, the method by which we can say, okay, there's things happening in the brain. They're throwing off these, these signals. There are some devices that can read them. Which devices do we go with to read this information to actually get an idea of what's happening? And so Kernel specifically started off with the hypothesis that there was this USC lab called the Bergo Lab, and they had done some very interesting research on memory formation, where they took mice and monkeys and

• 8:13Speaker 01

  slugged electrodes in a specific place in the hippocampus called the CA1 and CA3. And they would actually shock these parts. Think of it as like a black box where one portion of the brain in the hippocampus would, which throw these signals, which, which are.

• 8:30Speaker 01

  Neurons firing and then the the output side would also then shortly thereafter fire neurons. And if you just record the input firing and the output firing, where the input is receiving all the signals from the brain about what memory is to be formed, then you can get an idea of there's some sort of mathematical transformation that is happening between the input side and the output side. And the whole idea was can we actually get an idea of what that mathematical formula is if we just laid out all the data? And so we had a bunch of people from the lab look into this and they had already shown some research showing that you can increase long-term memory formation with mice and monkey and monkeys. And the way that they would do that, they would have them, these, let's say, the mice

• 9:13Speaker 01

  or the mouse go into a, three options where they can pull a lever and then a door will open and one of the doors will hold a treat. And so when they they would actually open, pull a lever and find a treat, they would shock the mouse's brain and that would increase the probability that the mouse would come back to the same set of choices and do the, open up the the door with the treats with more likelihood. It got a little crazier and more sci-fi when they did this with a receiver and a donor rat where you would have one mice go through the experiment, open up the lever, find the treat, get, read the signals that are coming in for this mouse is now making the memory and then shock another mouse that that actually, you know, never went through the experiment

• 9:57Speaker 01

  and it was shown that the the receiver mouse was more likely to actually go go into the same set of choices and open up the the door and find a treat.

• 10:07Anthony Pompliano?

  And so as this is happening, like from a human's perspective, putting this technology in our brain, right? Connecting our brains to computational power that is superior to what we naturally have.

• 10:23Anthony Pompliano?

  Is really interesting because one, it can increase intelligence, it can increase, you know, kind of information exchange, all these different things. The parts to me that are, it seemed like a no brainer, right? Are things like, imagine if you no longer have a barrier around language, right? You don't have to sit and type into a computer. You could literally just Google things in your brain, right? You, you don't forget things, all of that stuff. But obviously, there's plenty of people who say, you know, that all sounds great and, and it sounds like there's a lot of advantages to it, but there's also downside, right? There's kind of the ethical stuff around, you know, look, you're putting technology inside people's brains. Is there an ability to hack it, right? Is there ability to, you know, kind of control it? All of that stuff.

• 11:04Anthony Pompliano?

  How realistic are the concerns today, in your opinion, in terms of like, is that stuff actually worth thinking about? Or is that more of people who don't understand the technology, kind of, you know, going sci-fi, but not actually realizing what the limitations of the tech are?

• 11:21Speaker 01

  Yeah, those are good questions. Let me rewind a little bit because you mentioned, you know, what, where is the state of the, the science and technology right now? And what are the approaches that, let's say, these companies or other companies are taking? And then I can dive into, you know, what are the ethical implications and timelines for these? So the state of science, when, when we were there, and that was, you know, a couple of years out, or a couple of years back, and so I've been out of it for maybe one or two years where I haven't been tracking it much. Is that we, we, we came up with all of these devices like eCOG, MRI, and, and there have been, let's say, a decade or two where people have just been recording all of these signals, but we don't really have a theory of mine or a way of understanding like, okay, what do these signals mean?

• 12:06Speaker 01

  So we have a bunch of data and we don't really know what that means. And the, the kind of, there's different approaches of can you actually come up with a top-down idea of, of how to think about what these signals mean and how they interrelate with each other to form consciousness, memory, things that we, we find as capacity of human beings. And that was the state. It's just like, okay, we got a lot of information. Maybe we can just throw neural nets at the data and things will happen and we'll be able to do predictions on what, when one brain starts to go off, does the other part brain go off and in what formation and at what time? And so I believe that currently these projects, and once again, this is just based off of my understanding, or at least my prediction, because I haven't been following

• 12:49Speaker 01

  it, is that they're actually trying to get more, more data by having electrodes that are less invasive or less damaging, and trying to get a reading of the entire brain or portions of the brain with enough fidelity and enough depth that, that we have a more holistic picture of what's happening in the brain, or one portion of the brain. And I think, I think Elon might have actually like, I think there was like some research paper that came out about how they're doing this with a sewing machine that stuck electrodes into a mouse's brain. I think that came out somewhat recently. Cool. And so, so I think those are the two approaches. No one's really figured out a top-down way of making sense of the data. And so it's like, let's figure out how to get more data, more complete picture, and

• 13:34Speaker 01

  then we can maybe go a bottoms-up approach to understanding how the human brain really works, and how you get to these things like consciousness. The ethical implications are that they're multifarious. There's a, there's a lot of components to it. And so one big thing is that if you're looking at this in the context of artificial intelligence, which I believe Elon is, is, is looking at it from, you know, AI is, it has the ability, if it has any form of consciousness or anything, has the ability to basically plug into a bunch of brains, which are CPUs and RAMs, and, and, and start to self, to recur and improve itself. And so if we don't really have a way of communicating or taking in information from,

• 14:14Speaker 01

  you know, a, a, a computer, then the, the level of understanding and the, the level of intelligence will, will, you know, grow significantly different over time, or very, very quickly. And so that's, that's one set of context of ethical implications, which is what I think is driving the motivation of how can we actually learn to increase the bandwidth between computers and humans. In terms of being able to transfer memories, things like activating consciousness, like, you know, a future state could be, I think, I think, I think these are still quite a bit away, I would say, on the order of decades. And it really is a question of how do you augment human intelligence? And

• 14:57Speaker 01

  It like the current state is that we're just like, we really don't have a good sense of how our mind creates things like memories and consciousness and how it works. But we're like on the stage of like, let's just improve our devices so we can read the information from our brain better. I think it can be decades or, you know, there could be one large shift in technology. Like we are able to stick electrodes without harming anyone. And the big blocker honestly is, is that we just can't like get the information because, you know, it's, it's very difficult to stick electrodes into people's brains. In the United States, it's very difficult to stick electrodes into animals because there's so many animal protectionist, uh, uh, like rules and regulations and activists in China and other parts of the world.

• 15:39Speaker 01

  For example, one thing we researched is that China has so many monkeys that are being experimented on. Um, and it's just a completely different ballgame. Like imagine if the state of science was you relied on this one thing that you're able to do, um, where you, you have essentially experimental set and one country has, you know, almost, I wouldn't say unlimited, but very, very large amounts as well as governmental support and one country actually limits you from, from doing anything. And so that's another ethical implication where, you know, there are different paces that this technology can go because it's, it's highly dependent on just being able to get data, be able to form hypotheses and, and, and progress with the, the, you know, scientific method.

• 16:21Anthony Pompliano?

  Got it. And so how, um, how do you view some of this stuff around like the ability to use technology and machines and augment human intelligence, right? To me feels like a form of automation, right? The kind of, it's increasing efficiencies in a very kind of weird way. Um, but crypto has a lot to do with that as well, right? And, and without stretching too far, it's this feeling of like,

• 16:52Anthony Pompliano?

  Crypto is transactions of value, right? And the connection between the human brain and a machine that's embedded inside of the brain is a transaction of knowledge, right, of information. And it just feels like there's actually more similarities there than differences, or at least there's more similarities than people probably initially would assume. Do you, having worked on both, do you feel like that's a fair statement? Or do you think that, you know, I'm really stretching on that?

• 17:21Speaker 01

  No, I think there's definitely connections. And so I see the internet as a form of, you know, collective consciousness or collective intelligence, whatever you want to call it. And the first wave of information was we were just putting static information online. And then we're putting more vibrant information like blogs and videos and audio. And now those are also interlinking very well. And then you had the first forms of how you actually weight that information in terms of importance, which is things like Reddit and uploading. And I think that crypto represents, you know, a fully free liberated form of collective information and intelligence where, you know, you have things like staking and voting,

• 18:01Speaker 01

  where people are really creating weights on what are the pieces of information and how are they actually significant and important? Meaning, you know, now you have a complete, let's say, economy or a political system that's based on the voting and it's evolving and it's growing. And that's like one system. And there's another system that's like the MakerDAO system. And that's really an amazing thing to see because you're seeing the internet actually figuring out how to organize behavior and expectations and aligning and coming up with agreements and then, and then, you know, deploying these experiments. And it's something where I think that it's like the next evolution of where I believe the internet's going.

• 18:46Anthony Pompliano?

  Absolutely. All right. So we could talk about neuroprosthetics and brain implant technology for forever, frankly. Let's move to crypto here. Help me understand, you know, as you guys started building the estate planning type software, initially it sounds like there was no focus whatsoever on crypto. You guys just kind of backed into this? Or did you actually know about crypto and thought that maybe one day you would actually incorporate it?

• 19:16Speaker 01

  Yeah, definitely. We know about crypto, kind of in that year of exploration where we looked at fields. Ethereum and crypto was one of the more interesting fields that we dived into. But it didn't feel like at the time that there was really a clear way of how you actually create something that people want. And that's really the primary driver of what we're trying to do. And I think that crypto represents this interesting field where there's two worlds. And you're trying to bridge the old financial system and all the relevant stakeholders and people and the users in this new financial system. And so one of the things that we found when we kept creating things in, let's say, these fields that we were exploring,

• 19:56Speaker 01

  is that it was always kind of past where people were actively looking and there was very little ability to get user adoption. And we explored SaaS, we explored consumer, etc. And so crypto was something that we were definitely tracking. And every few months, we would pop our heads up and look around at the fields that we're tracking. And this is, I'm sure you're familiar with POMP as an investor. It's hard as an entrepreneur where you're kind of straddling the lines between the micro and the macro, where you're executing and you pop your head up once in a while and say like, am I actually in the place where actually, am I sub optimizing or am I in a local maxima instead of a global maxima? And so we did that. We kind of set that parameter in place where we would pop up and say,

• 20:41Speaker 01

  hey, are there any things that we should be looking at here? And so we did that a couple of months after we raised funding for the Safe Plying software. We had a couple of months where we were building the software. And then, as I said, I talked to a couple of friends that were in crypto. And there was just a sign, the Filecoin IPO was a very significant, if you're just tracking things on the distribution of how often they occur, it's very rare to see something like hundreds of millions of dollars, essentially similar to an IPO. It represented a new

• 21:16Speaker 01

  New possibility of capital formation. And when we, when we looked at that, we said, okay, you know, this could be one, one step toward a revolution in capital formation. And what, what do we think that is, is a big thesis in, in how this could change, you know, the world? And one of them is just moving assets onto a new, more transparent, more efficient system. And so that was, that was one of the big things that we, we locked into. And it was natural because we had a legal perspective. We were, you know, we, our first hire was a, as an attorney. And so we said, you know, if there are these two worlds and they are about to just grow in parallel, what are the things that are going to bridge those two things?

• 21:57Speaker 01

  And, and that's really the, you know, the, the question that we've been trying to answer for the last couple of years now.

• 22:04Anthony Pompliano?

  Absolutely. And so as you guys are doing this, right? You, you realize that there's kind of this asset tokenization that's going to happen, or kind of digitization of assets. And the way I think about this is there's stocks, bonds, currencies and commodities, right? Those are the four asset classes you can own. Why start with the currencies, right? And going after the, the kind of true USD? Did just walk us through kind of your approach and logic? Was that the first one you actually started with? Or is that just the first one that got traction everyone knows you for?

• 22:37Speaker 01

  Yeah. Good question. It was actually probably not known at all, but it's not the one that we started with. We actually started off with tokenizing an artist's song by Taran Southern. And so we said, okay, asset tokenization makes sense. You know, we have a team. And, and actually after we said asset tokenization, we said, okay, let's go talk with banks and trusts companies, someone that can actually custody the real world assets and then on behalf of the token holders. And so we had a, we had a period where we went around and we just flew to trust companies and banks and talked to them. So like, hey, is this something that, no? We always had this assumption that it'd be very like a stodgy conversation, but you know, some people were very receptive and this was early days. It wasn't like the heydays of crypto.

• 23:22Speaker 01

  And we had these conversations, we said, okay, what's, what's, and this is another thing that I think entrepreneurs run into often, which is, do you choose something that's pragmatic and like you, you, you see that you can attain it? Or do you choose something that's visionary? And the thing about asset tokenization is that that's a decade plus long thesis. And so the question is, where do you start? And so that's something we're noodling over. And we started off with something where we tokenized a song. And then we said, okay. And I think we announced that at some sort of ethereal or consensus event. And then we were looking at what's, what's something that actually will be used? And there's, there's evidence of demand for. And of course, TED was there. And when we were looking at it, it was, I think, a couple hundred million. It hadn't reached like a billion plus mark.

• 24:05Speaker 01

  And we said, this thing is clearly pretty weird, but people are buying it. And you know, if there's anything that we can tokenize as an asset, currencies may make, may, may be the first things that are actually useful, given the, the inherent level of volatility in the space. But of course, we said, you know, is there any bank that can actually hold this? And tokenize it? So we had this heated debate. And by this time, we were like, you know, four or five people in like a classic, you know, bedroom arguing, debating and arguing about this stuff. And we're like, there's no bank, there's no way we can ever find one. I remember talking with Wences Casares, who is the CEO of Zappos. And then in 2014, and we talked to a number of people and they just said, you're not going to find a bank. There's no way you're going to find a bank.

• 24:50Speaker 01

  And he kind of gave me stories about the search for a bank and how they're closing them down constantly. And so this was a pretty down period. We're like, okay, you know, we believe asset tokenization is going to happen, but we need to figure out what the first steps are like. And they have to be pragmatic and they have to actually matter and that people have to want to use it. And then we were having this, this debate. And then Michael, our first hire, an attorney, he, he went with, I think he, he may have gone separately to one of the, one of the trust companies and said, hey, you know, The trust company said they could bank dollars. And we just looked at him and said, hey, I don't think, no, no, no.

• 25:31Speaker 01

  And we said, okay, like, and we spelled out exactly what we want to do, which is put dollars in a bank account, assign the beneficial ownership of the tokens to people that can use it, you know, holding it on crypto wallets. And we said, okay, we're going to write him an email and we're going to, we're going to see if he responds. Wrote him an email. I think he got back pretty, pretty, pretty soon. And, and we got the email. We're like, okay, we're going to fly there. I think we flew there the next day. It might've been the next day or the day after. Flew there the next day. It was in Nevada, landed there. And we had already talked to multiple bank and trust companies in Nevada. Nevada and South Dakota are kind of the large areas for banking, banking and trust companies.

• 26:12Speaker 01

  And walked through the, the idea and what we're doing for, for a couple of hours. Turned out, you know, it was actually possible. This is what I mean by the, the window, windows where, you know, there was no real bank, except maybe this one bank that was willing to do it. And then we came to agreement, started coding. And then I think we, we then sent, oh, and then we had to get an exchange. And so I think on the way to this, on the flight to this, to this bank in Nevada, Raf, my co-founder, sent a cold email to Bitrix, to Bitrix and said, hey, we're going to build a more trustworthy, stablecoin than Tether. Would you be interested in listening us?

• 26:56Speaker 01

  And then he, he forwarded us to their, their CSO. And, and then we had a call, I think this was all during like December. And so basically everyone had gone home for the holidays and we had, we had a, a, a video call and with, with their CSO and said, hey, we're, we got this bank. We have this form. We're going to allow people to redeem this stablecoin. And then he said, okay, it sounds good. And there was this period where it was kind of a dark period where like, okay, we don't know what to tokenize, even though it's a big project. And then almost everything kind of fell into place immediately after we found an auditor. And then sometime in January, we announced and then

• 27:37Speaker 01

  February, we marched, we launched. A lot of it was actually just building out all the code, figuring out how to do market making, getting the auditors and exchanges and figuring out KYC M L and compliance.

• 27:50Anthony Pompliano?

  Got it. And so when you first launch, right, you had gone through all this work to get the product in a place where you felt comfortable legally and on regulatory front to launch it. You've got kind of everyone else lined up. What happens? Is it just kind of immediately you say, hey, there's traction, people want this? Or does it kind of go sideways for a while and then eventually there's the adoption that we see today?

• 28:16Speaker 01

  So we launched in March. So this was actually just a month ago was one of your anniversary of True U S D. And I think that means that we were the only stable coin besides Tether and Maker Dow. And so we were kind of the, I guess, Tether 2.0 where we said we were going to prioritize legal, legal aspects, transparency, et cetera. And we had an auditor as well.

• 28:42Speaker 01

  And so when we launched it, I don't think there was like this like moment that entrepreneurs pray for and say like, oh, this thing is going to pop off up into the right. It was very much like, okay, we got to figure out how to actually think about what the growth lovers are. And one of the biggest things was simply just getting getting listings on exchanges. And this was also during the time period where we were going through, going through like fundraising. And so we were hiring, we were six people and then we were all on our kind of apartment bedroom. And then we moved into an office. And then we were just figuring out hiring. And so we were hiring because we had launched something and there are a lot of like legal, the amount of time I spent on law

• 29:23Speaker 01

  firm calls was one of the, yeah, it was a learning experience, but that was where you You have a chance where it's an interesting business because you're trying to grow up into the right, the more that you grow up into the right, the more scrutiny you get from compliance and regulatory and security. And so you're always towing this, straddling this balance between how fast can you grow and what are the risks that you're mitigating? And so getting people in the right place at the right time, that was, that was really the, right after we launched. And then as we got more exchange listings, it started to, you know, market, I guess, it marketed itself.

• 30:02Anthony Pompliano?

  Got it. And now that you've been through all this, anything that you guys would do differently, or that you, that you think you would do differently?

• 30:10Speaker 01

  Good question. One of the things, I was talking with a team member at Maker, and they had kind of done the more traditional route where there's a bunch of people that are doers and they come in and everyone's doing stuff. And then at some point it breaks because you need some sort of management layer and some management systems like OKRs and goal setting. And we had a lot of inbound interest from some amazing director, manager level talent. For example, we brought someone in from the, that worked at the SEC, the CFTC, the OCC on the legal side. We had a head of talent from Airbnb. We had a Microsoft BD person come in, someone that worked at banks. And they just brought in a wealth

• 30:53Speaker 01

  of experience from Silicon Valley and East Coast. And we had these inbound interests. So the question was, do we actually hire that management level? And then they would hire the teams out, rather than, you know, doing the doer to the manager sequence. And so there's pros and costs because almost with everything, and this is the thing about receiving advice, is that there's trade offs. And one of the things I noticed is that the culture becomes, the culture evolves much quicker, once you have a management layer and they're building up their team, because everyone brings a big piece of culture. And so this is a question of just like, is it adding to the culture and thinking about, you know, thinking about culture thoughtfully, rather than like, hey, we're just trying to grow as quickly as possible. And so let's, let's, let's figure out how to get butts

• 31:37Speaker 01

  in the seat. So that's something I would be more thoughtful of, I would recognize that. But like, hey, we're like bringing significant pieces of culture in. And that's something that founders are stressed upon when they're even just hiring the doers. But when you bring in the management layer, it's really, it's really a, should be thoughtfully approached.

• 31:55Anthony Pompliano?

  Absolutely. It makes a ton of sense. Where do you think the next assets, right? So not necessarily even just for a trust token, but just currencies. I think you've done a good job kind of explaining the process and the logic behind currencies. What about stocks, bonds and commodities? Where do you think kind of the next wave of tokenized assets comes from and why?

• 32:21Speaker 01

  Yeah, so we are definitely focused on tokenized currencies and we'll be launching those very quickly in succession. In terms of others, definitely we've seen interest in treasuries and interest in S and P 500 or even stock that the world cannot easily access like Apple stock. And so those experiments are popping up, you know, left and right. And we know we had a lot of people that are interested in real estate. And really, the fundamental question is where does the buy side form? And what is the acquisition process for that, for the user acquisition? And so we always take the approach to like, hey, we're just looking for, we're looking for evidence that people want this. And I think that is what's interesting about crypto right now.

• 33:05Speaker 01

  It's incredible Petri dish of companies running experiments and seeing what sticks and what gains adoption. And so I think that will happen is that you'll see kind of the basic, the basic assets that people use the most without thinking like it's an investment like currencies and then start to go up to things that are less, less cognitive overhead to think about where they're selling like, oh, this is a treasury thing that will give me interest. So that's like a savings account. Okay. And I think this is the first time where you can have access to these financial services worldwide. And so I think that it'll kind of go bottoms up like that.

• 33:41Anthony Pompliano?

  Very interesting. What do you think are the biggest challenges as an ecosystem moving forward? In terms of tokenization of all these assets? Is this something where we still are in need of infrastructure? Have we kind of gotten past that? And you mentioned kind of, you know, what the capital markets and where liquidity is going to come from? Is that the biggest challenge? Where's kind of your focus on a more macro industry level?

• 34:07Speaker 01

  Yeah.

• 34:10Speaker 01

  So I think that there are, we've now gone around in various parts of the world to see where crypto and asset tokenization can be most used. And so Asia is very secondary market-focused. Places in Latin America like Argentina, they've had some inflation issues. And so, and then the US, and particularly in Silicon Valley, you'll see that there are a lot of projects. And when I visit Asia, it's weird because there's more investors and there are projects. And all the Happy Hour is just like, or I don't know if they're called Happy Hour, it's the networking events, they're just more investors and there are projects. But in Silicon Valley, everyone just kind of heads down, heads down building. And so, what I see is that there's an amazing

• 34:50Speaker 01

  amount of just diversity in how people are approaching it, but they're kind of geolocated.

• 34:58Speaker 01

  And so, I think it really is a question of where you are playing geographically, because Asia has a lot of the secondary market activity. And so if you're doing something that's on the liquidity side, or seeing things like a new derivative exchange being popped up, it's likely that the user acquisition is going to be much easier over in Asia, and your marketing ought to be focused there. If you're building some fundamental tech, maybe Silicon Valley, because you can bounce off ideas and get more, there's access to longer-term thinking investors. And so what's interesting about where we are with True USD and other tokenized currencies and asset tokens in the future is that you really have to think about how to allocate resources most effectively. And that's really a question of just reading where the market is, and does

• 35:43Speaker 01

  a product actually meet the places where the themes are most prevalent.

• 35:48Anthony Pompliano?

  Got it. And I guess, as you think about this, how does regulation play into all of it? Right? So you're talking about multiple jurisdictions, you're talking about kind of a very global business, right? A piece of technology that hopefully will empower that kind of global transaction system.

• 36:10Anthony Pompliano?

  What do regulators do or kind of how do you see them playing into this?

• 36:13Speaker 01

  Yeah, it's a good question. So with regulators, I have learned enough where the way that regulators operate is that I don't know if I'm trying to model how regulators operate. It's pretty much a black box. There's a lot of political reasons why regulators choose one way or the other. I think I fundamentally believe they're trying to do the best that they can. And I've seen that the US in particular hasn't has done less of a heavy-handed approach than, you know, what people have feared, where they just kind of really knocked down the bad actors. They've put some rules, but they're not too strict. There were some guidance out that's not too strict.

• 36:53Speaker 01

  And when we explored other places like Singapore and Switzerland, they're oftentimes looking to the to the US and see what guidance that's put out. And then either following or adding slightly different things. And so there was this period of there is complete unknown about what regulators are going to do. And then you talk to law firms, which are, you know, a direct part of how you interact and think about interacting with regulators. And all of them have their own opinions and oftentimes they'll be contradictory. And so at the end of the day, you're still going to have to pay attorneys and then decide, okay, what are we comfortable with in terms of risks that we take? If I had to give a practical advice on how to approach it, I really believe that finding someone that has the perspective of working at a litigation firm

• 37:35Speaker 01

  or a regulator firm and also has startup experience, for example, a head of legal, Alex, he has that perspective. And also he has an MBA and so he's able to really just like look at things from a risk and return perspective. Where, you know, if you have a traditional just attorney background, it's really difficult to just say like, what's the return that we're getting? It's much easier to just look at the risk side. And so I think that I think that projects that are able to think about risk return and call shots. And ultimately, you know, there's some roll of the dice in terms of what regulators will stop and allow versus, you know, allow to actually have a free kind of brain in the market. I think those projects will probably have an advantage. And there are some projects that are pushing the envelope. Some projects are playing much more safe.

• 38:19Speaker 01

  We have always, always been on the more conservative side. And so almost everything we've done, we've taken, you know, a couple of steps back from where the line, where we think the line is. And of course, we also have a director of finance. And taxation is a big component because regulators also think about taxation and it's one of the hot topics. We have a director of finance, Alex, that he created a lot of the alphabets or Google's other startups. And so it's familiar with a lot of the implications of what it's like to operate in multiple countries. And so I think that those two components, just having a good person that knows what regulators care about, how they think about it, have they been on the inside? Can they weigh risks is, is the best way to practically approach it. But in terms of how regulators will play the game,

• 39:04Speaker 01

  it's just a lot of political machinations and following and other, other regulators like the US.

• 39:09Anthony Pompliano?

  Got it. And that makes a ton of sense. Any area of tokenization that maybe you're paying attention to or you're excited about that you think isn't getting enough attention? Like things other people should be paying attention to, but they're not?

• 39:22Speaker 01

  Yeah. And so I think it's, it's the, it's just paying attention to what level of a stack are you looking at? And so there's asset tokenization, which is just the, the, the tokenization of the asset where you, you know, create an ERC 20 token and you say it's backed by some underlying asset. And then the question is, what happens with that asset? Is it trading on the secondary market? Is it in Asia? Does it have leverage? Is there an option call on it? And that's, that's where you really see the, the entire stack of what's possible. Once you move an asset onto the blockchain layer, uh, really unfold. And so the question is just, uh, if you're in, if you're thinking about asset tokenization, is it going to look more like people are tokenizing a bunch of assets and people are buying it? And that creates a bunch of businesses? Or is it going to look like there are a few asset tokens that are created and they're vertically integrated?

• 40:07Speaker 01

  Meaning now you have, let's say that you have a tokenized currency and now it's trading on some sort of multiple exchanges and they're also in a set protocol. And so there's a bundle of them and there's also derivatives and options on top of it. And so you're, you're increasing Utility of that asset token rather than saying we're going to tokenize more assets. And so we've done both a broad kind of a T shape like let's look at all the asset classes. And let's think about where do we actually allocate and think about resources here. And we found that increasing the utility of an asset class. And then moving on to the next asset class really you figure out as a company. How to make something useful that's really new.

• 40:48Speaker 01

  And there are so many different ways that money or assets can be used, they can be lent out, it can be borrowed. It can be used as derivatives and so forth that I think that people are paying attention to let's let's tokenize all the assets. And the question is like, what's going to happen with those asset tokens? Who's going to use it? Why is there utility there? I think paying attention too much on the process of moving assets to blockchain without figuring out how to make it useful. It is one of the difficult parts of the space because you can always say, I'm going to carve out this part of the stack. And other people are going to figure out how to make it useful.

• 41:18Anthony Pompliano?

  Got it. I that's super interesting. All right, before before I wrap up, I always ask rapid fire set of questions. What's the most important company in crypto other than yourself?

• 41:29Speaker 01

  Wow, there's a couple of different ways you can look at that question. You know, I would say I would say it would be, I don't know if this is a cop out answer, but. A16Z crypto is, I think, one of the more they're investors in us. One of the more important companies in the space because they are actively working across many of these fronts from regulators. To LPs to projects and providing both the communication and support. To be able to push this forward in a way that that allows for all of the counterparties or stakeholders. To start to accept and understand this technology. And and I think that it's easy to kind of focus on one like, oh, we're going to just build technology.

• 42:12Speaker 01

  Or we're going to figure out users or we're going to figure out regulators or we're going to build companies. And not think about the holistic picture and the holistic picture really is like, hey, this is a. Big change, big shift. And it's not like we can just like have a small group of people cross the chasm and say, we are the one that are crossing the chasm. We have to figure out what the bridge is to all the people that are involved in the financial system, which is literally almost everyone. And I think that is a very important job that requires multifaceted skill sets.

• 42:46Anthony Pompliano?

  Absolutely. What's the one regulation that you would change or improve if you could?

• 42:52Speaker 01

  How? I would change the securities law. And I think that there was actually a CoinDesk proposal that tried to be more specific of how the tokens don't fall into the Securities Act in the 1930s and say like, hey, there's a lot more information out there on the internet. The original reasons these laws and regulations came in is because there's a lot of purposeful misinformation for you to buy something that was not based on true information. And now we're in the day of the internet. And so if we can figure out a way how to get the benefits of having fractional ownership that can be traded across the world while

• 43:36Speaker 01

  still having enough regulation where the information asymmetry isn't capitalized on by fraudsters, that would be amazing. Because I think that would open up the floodgates for us to really figure out how these tokens can be used to incentivize behaviors, get people to be more involved with different products or networks. I think that would open up floodgates.

• 43:57Anthony Pompliano?

  Absolutely. What do you think is your most controversial thought in crypto? What's the one thing that you believe that you think everyone else would disagree with you on?

• 44:04Speaker 01

  Oh, yeah. I think it depends on the group. But if we're talking about the pure, let's say, purist crypto group, I would say the most controversial is that you need some element of centralization, and you need to figure out how to bridge, create bridges to many different parties, banks, regulators, lawyers, market makers, exchanges, LPs, institutional capital, to really make this thing grow and expand the pie. And I think that that bridge creation and understanding the perspectives and the incentives and the way these decisions are made in each of these groups and stakeholders is probably one of the more controversial ones in the purist groups.

• 44:47Speaker 01

  Holistically, um, yeah, I would say that depending, depending on the peer group. But if we're saying just like in, in the crypto scene, uh, that, that would say that's one of the more controversial ones.

• 44:59Anthony Pompliano?

  That I think that's, that's controversial, but there's plenty of people who, who agree with it.

• 45:04Speaker 01

  Yeah.

• 45:04Anthony Pompliano?

  What, uh, what is the most important book you've ever read?

• 45:08Speaker 01

  How about, how about I'll choose a book that I recently read, cause, cause I'm, I'm influenced by it. Um, I read a book called Waking Up by Sam Harris. And I think it's a, it's a good perspective because I read a number of these books that the topic is on, which is about how to do meditation, how to actually, um, think about your subjective experience of life. And improve your ability to see and become aware of the thoughts, feelings, stories. And, and whether or not you play those out, or whether or not you're able to see them, become aware of them and let go. And I think he takes a, he, he's trying to bridge the, the Western view with the Eastern view. I don't think he does it perfectly, but I think he's, he's, he's doing one of the, uh, he's attempting to, to bridge these two

• 45:53Speaker 01

  philosophies or worldviews in a way that, that I think reconciles them and, and brings into light a lot of the, uh, the pros of, of, of perspectives.

• 46:05Anthony Pompliano?

  For sure. What, and do you feel like it's a controversial book? Or it's just a way to view the world that maybe most people don't think about? Like what, like, well, I guess what, what attracted you to it?

• 46:21Speaker 01

  Yeah, he's, he's somewhat controversial because he is, um, he's belligerent in terms of, um, the, uh, where, where like the fraudsters of spirituality can happen and why they happen.

• 46:36Anthony Pompliano?

  Yep.

• 46:36Speaker 01

  I mostly honed in on, um, on the ability of like our, our everyday moment in life, every single moment is determined by how we, um, uh, are aware of our subjective experience of life. And so, um, I think a lot of people are, are, are, that, that's something that's I think difficult unless there's a lot of meditations. For example, I've been meditating for quite a while. Um, and so. There's a similar topic on this, which is "This is Water" by David Foster Wallace, where he says, "The things that are so banal and obvious are the things that are most difficult to see." And the idea is that we are constantly able to ascribe meaning and

• 47:21Speaker 01

  determine how we are experiencing or perceiving life. And that's something that's difficult to understand unless we're rooted in constantly being aware of what are the lenses that we apply whenever things are happening in life.

• 47:33Anthony Pompliano?

  Yeah, it is super interesting. What about aliens, right? You believe in aliens? Think they're real?

• 47:42Speaker 01

  Aliens? I think it's possible, yeah. I mean, I don't rule out, there's never anything for me that's 0% probability. There's always just some weight that I give it. There's evidence that comes up, then I say like, "Okay, that's even more possible now."

• 47:57Anthony Pompliano?

  I love it. I love it. I think that's a pretty good way to go through life, frankly.

• 48:03Anthony Pompliano?

  All right. And then I answer, or I end each interview, letting you ask me one question. Any question you want to ask me?

• 48:10Speaker 01

  Yeah. Pump, what do you care about most?

• 48:13Anthony Pompliano?

  Being happy and having fun. I, you know, talk about it quite often, that the only thing that really matters in life is if we're enjoying, right? It's kind of like, none of us getting out of here alive. And I think I subscribe to this thought process that a lot of people do things because they feel like that's what they're supposed to do, or they do things because they believe that that is the answer that will cause the least amount of conflict with the people that they care about, right? So usually it's, you know, their parents, or, you know, that type of thing. And I just think that people should optimize more than anything else for what makes them happy, and what they enjoy, and

• 48:56Anthony Pompliano?

  how they have fun, right? And so sometimes that's gonna look super weird to everybody else, but if you enjoy it, knock yourself out. Who cares, right?

• 49:06Anthony Pompliano?

  So I think that's kind of where I shake out on it, but it's, it sounds a little weird to say that's the thing I care the most about, but it's just the thing that I probably have it at the forefront of my mind the most, that I kind of make decisions based off of.

• 49:22Speaker 01

  Yeah, I hear you.

• 49:23Anthony Pompliano?

  All right. So, all right, man. Listen, I really appreciate you taking the time to do this. I'm obviously a big fan of what you guys are doing. We are investors and remain big cheerleaders for the work. And hopefully, we will do this again in the future. And we will have plenty, plenty more to share then.

• 49:44Speaker 01

  Thanks so much for having me, Pop.

• 49:46Anthony Pompliano?

  Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.