{ "episodeId": "SLP712", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "arnab_naskar": { "name": "Arnab Naskar", "role": "guest", "tag": "ARNAB" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.18, "text": "If Bitcoin positions itself as a store of value and kind of a new form of money, free from state intervention, that infrastructure settlement layer can be used for other financial assets without any censorship. And this is where Liquid became very interesting. So effectively what we are trying to instock it is effectively using the Bitcoin infrastructure and the security of the infrastructure, building a new capital markets that not only smaller companies can access, but also asset managers, large institutions can also come in over the time. So it's creating an infrastructure for the new capital market which is not centralized and controlled by few players." }, { "speaker": "arnab_naskar", "time": "00:36", "start": 35.99, "text": "Hi everyone, welcome back to Stephan Livera podcast. Joining me today is Arnab Naskar from Stoker. He's one of the co-founders of Stoker, which is a tokenization platform building mainly on Liquid, which is a side chain, federated side chain of Bitcoin. so a lot of things happening in the tokenization and RWA world. do you wanna just give us a very quick background on yourself and what Stoker is?" }, { "speaker": "stephan", "time": "01:00", "start": 59.87, "text": "Nice to be here, Stephan. I think, it's lovely being here and I think we are doing for the first time This podcast, and, yeah, it's great meeting you always, and it's great to be on your show. So Stalker, like before, just like going to Stalker, just a quick background about myself. I am, Arnab Naskar, I'm the co-founder and, the business lead of Stalker. my background is I'm, I have a legal background, I worked as a lawyer in the past, entered the Bitcoin rabbit hole in twenty fourteen, started the business in twenty eighteen, currently based in Germany and operating primarily in the European market. Stalker started in twenty eighteen, effectively with the concept of, bringing financial assets like securities, bonds, and those kind of, regulated financial assets on chain. That was a crazy idea back in the days in twenty eighteen, everybody was talking about ICOs and kind of avoiding any regulatory regime, and we thought, okay, why not issue securities on chain? And we started twenty eighteen, that was the time I would say, Bitcoin Layer two didn't exist, it was just kind of some thoughts were there, but nothing in concrete. Twenty nineteen, twenty- Onwards, we started looking into Liquid very deeply, and we issued our first asset, I would say, in twenty twenty, in that timeframe on Liquid. And then kind of ever since after that, we just purely pivoted, to Liquid. We right now have over one point eight billion worth of assets on Liquid. we are an asset tokenization platform, tokenizing financial assets, but also an investment platform where investors can actually participate and invest into those assets." }, { "speaker": "arnab_naskar", "time": "02:25", "start": 144.6, "text": "Okay, so now, look, obvious questions that most, you know, Bitcoin fellow Bitcoin Maxis will have is like, why haven With this stuff isn't just, you know, Bitcoin enough? Like, what, what's the benefit of this compared to just having like a centralized TradFi style database for these other non-Bitcoin things? How do you answer that?" }, { "speaker": "stephan", "time": "02:44", "start": 163.71, "text": "So it's a very interesting question, and this is definitely an obvious question. I see it in, this way, right? If you see the gold as a store of value, gold had a store of value and still has a store of value, but never had a settlement layer. You can't settle gold digitally or you can't, there is no chain or there is no infrastructure for settlement, you have to settle, take the physical gold, give it, and that's the settlement is. Bitcoin is a store of value and a settlement layer at the same time. The first time we see that interesting angle, right? You are a store of value and a settlement chain. Now, when you settle a store of value, it's definitely, you know, it's a wealth creation, wealth preservation in that angle. But the same settlement layer can be used for settling other assets, USD for example, right? That's where stablecoin comes in. But if stablecoins and fiat or money-like instrument is there, obviously there will be other financial assets which are also not gold, not Bitcoin, but can be bought, but can be securities, shares and everything. So I see it like this way, right? You have the layer one, which is effectively the Bitcoin store of value. And it should be as simple, as basic, as vanilla as possible, because that's a core angle. But in layer two, you can bring stablecoins, you can bring tokenized securities, tokenized financial assets, because this I see a new capital market stacks will be not built on a strike, like, I would say, a swift kind of infrastructure or some DTCC kind of infrastructure in Clearstream model or clearance house model, but it will be built on this blockchain infrastructure like Bitcoin. So you have the store of value in layer one and the- Of stablecoins, stocks, bonds, securities, everything on the layer two." }, { "speaker": "arnab_naskar", "time": "04:21", "start": 260.99, "text": "Out of curiosity, then, if you were to compare this with, let's say, just having a centralized-- because you could have a Bitcoin-denominated centralized database, right? Like there are other people out there, I think like Roqsum is maybe one example where they're trying to do like just Bitcoin-denominated, but it's a custodial platform. So how does that contrast with your approach where you're doing it more in liquid? And for listeners who aren't familiar, we'll explain liquid a bit later, but do Interoperability or what's the, what's the distinction or the benefit of doing it in an on-chain way?" }, { "speaker": "stephan", "time": "04:54", "start": 293.87, "text": "So the reason I think like, Stocker started on Ethereum, so because that time that was the only option twenty eighteen, but we were very conscious that Ethereum has its own limitations and when the Crypto Kitties came, the transaction fees like, we had some projects where the investment ticket size was hundred dollar, and at some point because of Crypto Kitties, the transaction fees went to sixty dollar. Unsustainable, you can't invest in that scale, right? ETH-L2 started coming later, and then we also saw Bitcoin L2s that time, Lightning was in discussion, Liquid just came in, and Liquid had the concept of between exchanges to move BTCs, but they also had a room to issue new assets, the Liquid assets, right? And that Liquid asset can be a stablecoin like USDT is now on Liquid, but also can be securities. Now, when we looked into that angle, for us was most important, our, our context was if Bitcoin, we are considering is the next money or like a new form of money, right? And this is a long discussion back in the days after the block size war and everything is Bitcoin as a money and Bitcoin as a store of value. These two angles and this, there was a debating topic, between right, which has precedence over what? If Bitcoin positions itself as a store of value and kind of a new form of money Free from state intervention, that infrastructure settlement layer can be used for other financial assets without any censorship, and this is where Liquid became very interesting. As Liquid said, okay, you know, you don't have to issue the assets on Bitcoin, but you can rely on the security principles of Bitcoin. Quite a lot similar code base. But additional element that you get is a confidential transactions, that is, a large hedge fund trading between themselves, they don't want a third party speculators to really observe the transactions and do a trade, sometimes they don't want. So confidential transaction was what Liquid introduced, and I think till date is one of the most stable platform that has a privacy infrastructure and is running for a long time without any issues, and that's Liquid is one of that. And they have the concept called confidential transactions. It means you know something has moved from somewhere to somewhere," }, { "speaker": "arnab_naskar", "time": "07:00", "start": 419.56, "text": "but you don't" }, { "speaker": "stephan", "time": "07:00", "start": 420.5, "text": "know the assets, you don't know the amount, you just know that some transaction happened. Yeah." }, { "speaker": "arnab_naskar", "time": "07:05", "start": 424.66, "text": "So just while we're here, let's just do a quick, for people who aren't familiar with what Liquid is, right? I'll just give a quick, you know, a minute or two, just basic explanation. So in Bitcoin, we have main chain Bitcoin, right? You can send and receive that. Liquid is what's called a federated side chain, meaning it is controlled by a federation, I think it's Bitcoin main chain, you can peg in your Bitcoin into Liquid and it's called LBTC, once it's inside the federation, and then you can trade it around, and it has a lot of similarities with Bitcoin because you can have an address and you can send Liquid Bitcoin and Liquid assets around inside of that, but it has different trade-offs, right? There's no mining, it's one minute block times and block signing, but not mining. it can have confidential transactions, there's confidential assets, there are, recently they have Simplicity on Liquid as well, so it just- It's a different, context, and then the idea is people are using it for different things, whether that's like transactional uses, whether it's like swapping in and out, like Samson and the guys at Aqua, or tokenized, products and services like what you guys are doing with Stoker. And then the idea is you can be trading around inside of Liquid, and then when you need to tr-trade out, you can swap out or peg out, and you might use a provider like Bolts or one of these guys who can help you swap out of Liquid. So that's Here. And so then taking that, into, you know, some of the trade-offs that Liquid offers, I guess it's probably a good spot here just to contrast Liquid with some of the other ways that you can do tokenization. Now, you guys have chosen Liquid, but as an example, inside the Bitcoin world, let's say there's Liquid, there's RGB, there's Taproot assets, there's, BTKN, which I think is the Spark one, there's, RSK, I mean, these are probably some of the well-known ones And then of course, you have like in altcoin or shitcoin land, you have, you know, Ethereum and Solana and Tron and Base, and Robinhood is doing their own chain, and Circle is doing their own chain, and so on. and then even over in TradFi world, you've got New York Stock Exchange doing their own tokenization. So I guess that's kind of a bit of the landscape of tokenization. So can you explain for us, you know, where you see Liquid competing with these other Ways of doing tokenization." }, { "speaker": "stephan", "time": "09:23", "start": 562.56, "text": "I think Liquid has come, along a long way, I would say, is one of the most stable infrastructure for tokenization. definitely education is, still missing for the market. but in Stockholm is kind of one of the, like, as a, issuer of tokenized securities, and we are one of the regulated entities operating the market for last seven, eight years, I would say. And, stocker is managing over one point eight billion, and we are exclusively issuing right now on Liquid Network, right? So we have kind of educated our user bases about the infrastructure and the strength. And as I was mentioning, is a confidential transaction is a very key element of Liquid, because for a long time, other infra-- like, large financial institutions, they went to private blockchain because of the lack of confidentiality. You can go to Etherscan, put a transactions, you can use some kind of, channelesis, kind of analytics to And then they can" }, { "speaker": "arnab_naskar", "time": "10:13", "start": 612.86, "text": "find out your balance or find out what assets you traded, exactly, exactly, and" }, { "speaker": "stephan", "time": "10:16", "start": 616.02, "text": "that's became so that this is imagine you're kind of a hedge fund, you have a one bill, like a few hundred millions of USDC, and you are moving between that, people can really monitor your transactions. You can create a proper analytics if you, pay and you have the right dataset in that sense. For financial institution, that's problematic. They don't want it. Liquid is effective, as you mentioned, is liquid is effectively sitting on top of Bitcoin, and you can issue LBTC and some native assets like Liquid Tether. But if you're going for securities, you go a different format. So on top of Liquid, they have this element called AMP assets, right? It's an asset management platform which is programmable, which is upgradable. So unlike in Ethereum smart contracts, once a smart contract is deployed, you cannot change And there are a lot of bugs and all the hacks, everything happens because of the rigidity of solidity and rigidity of smart contracts. Liquid doesn't have that rigidity, AMP is flexible. It's, you can based on new regulatory requirements, something you can upgrade, you can change some pro- like, rules and regulations, and that definitely need to be reflected in the legal documentation because these are regulated financial assets, but that gives the issuer, large asset manager, the flexibility that based on regulatory development, they can change the asset's logic. But on the other side, they get the confidential transactions, and as you mentioned, the block time is one minute, you have less low transaction fees, all this thing. So, o-if all these components comes in together, it's a perfect platform, I would say, for a new era of capital markets. Now, I think this is, to another point which you mentioned about the Rocksum platform, right? And issuing shares denominated in BTC, but there is no on-chain transactions for that. What stock our data, this is kind of we started in, I would say, two years back, we tokenized first publicly listed stock was like Bitcoin, treasury" }, { "speaker": "arnab_naskar", "time": "12:02", "start": 722.0, "text": "companies, yeah." }, { "speaker": "stephan", "time": "12:03", "start": 722.64, "text": "Exactly. So we started with Mic-MicroStrategy. The reason we did, because we got an inbound investor or, I would say, user request, I said, \"Hey, you know?\" MicroStrategy has a very interesting MNAV based on the BTC volatility, and I would like to trade against the BTC to generate some good alpha. And it's very interesting over the weekend when the Bitcoin is the most volatile, I can't trade MicroStrategy because the market is closed, but there, if I can trade against the BTC in and out, that can be very interesting alpha. I can generate. So what we did is we tokenized the CMSTR, we call it, it's a C four hundred, it's one CMSTR equals to hundred MSTR, and there is a platform called SiteSwap, which is a DEX platform for liquid, it's effectively, DVP delivery versus payment happening on chain, it's Atomic Swap, infrastructure where people were trading. USDT on, sorry, LBTC on Liquid and the CMS tier on-chain swaps without a central custodian infrastructure or something, you know, facing the transactions or becoming the middleman in the transactions. And that's the beauty. When you come to Liquid kind of infrastructure, you definitely can trade against stablecoins, but you can also trade against Bitcoin-denominated, Bitcoin-denominated products without that Bitcoin be wrapped by some cent like WBTC kind of infrastructure where only a one or two centralized custodian is holding it." }, { "speaker": "arnab_naskar", "time": "13:21", "start": 801.22, "text": "Gotcha. Yeah, so I guess the benefit in what you're saying there is that because Liquid has a-- has this federation, now we said, right, the, what is it, eleven or fifteen or twelve or fifteen multisig, I forget the exact number, and so these are the Liquid functionaries, they effectively custody the Bitcoin that's been pegged into the Liquid, you know, side chain, let's say. But what you're talking about here is individuals using Liquid, they can trade LBTC, which is-- which can be, you know, swapped back out to BTC on chain if you" }, { "speaker": "arnab_naskar", "time": "13:52", "start": 831.52, "text": "For CMSTR or some of the other treasury companies as well, and the idea is that they can trade on the weekend and if they believe they wanna be able to trade, you know, they, they believe they can earn LBTC by doing that or they, they might have their own reasons for wanting to trade on the weekends or whatever." }, { "speaker": "stephan", "time": "14:08", "start": 847.53, "text": "And the federation can't take out the BTC unilaterally, right? The user have to be involved in that because they have to sign the transaction is holding the LBTC. So that gives a huge level of comfort to trade LBTC. Now there is definitely question about the These things, but this nativeness that you bring the money like instrument, like stablecoin like USDT on Liquid, you have LBTC, which is more superior than a wrapped BTC, and then you have a securities on chain, you're creating a completely new capital market infrastructure." }, { "speaker": "arnab_naskar", "time": "14:37", "start": 876.89, "text": "Right. You can have like DEXs, decen-decentralized exchanges and this kind of thing, and who knows what people will build now that Simplicity has recently come to Liquid as well, so there's, there's opportunities there that people will build, and I think even some of the zk-rollup or zk guys City on liquid as well. So there's, maybe there's some other interesting things that people will do with that, but I guess let's try to put it into, what are some of the concrete benefits then? So as an example. You could be maybe a small or medium enterprise person who would otherwise, if you wanted to raise public money, you would have to go to an IPO level, which is like very costly, very time-- you know, can take a lot of time, there can be barriers to that, whereas I, I presume then, in a liquid- Assets context, they could, you know, now they have to, they might have to work with somebody, there may be certain regulatory compliances and things that they have to do, but they can do it in a cheaper and faster way. So I guess that's part of the appeal of what you're saying is that people can, instead of having to be like Paying twenty or thirty million dollars to do like a IPO in the TradFi world, they can do it at a lower cost in some kind of liquid or Bitcoin tokenized form. Is that sort of how you're-- or one benefit that you're seeing?" }, { "speaker": "stephan", "time": "15:46", "start": 946.47, "text": "That's the appeal of tokenization where it came in. Access to capital becomes cheaper and the investors get more liquidity and other angle. But I would say market, and we also learned a lot over this evolution and journey for the last seven, eight years, where stocker started effectively as a platform for SME financing, smaller, medium-sized company financing and startup financing, and then you sort of gone up" }, { "speaker": "arnab_naskar", "time": "16:06", "start": 966.2, "text": "to other areas like B2B and trading companies. Exactly. So," }, { "speaker": "stephan", "time": "16:09", "start": 968.7, "text": "and the, I think the first very interesting project that we financed is Infinite Fleet, that's the gaming company from the Samsung project, yes. Yeah. the challenge of the early stage companies are Very high risk, definitely high reward, high risk. So it depends on the curation, and the success rates are very low, the failure rates are very high. That's the reason in Europe, generally crowdfunding, if you see this way, didn't succeed tremendously. There is a plateau. Even in US and China, I think they still did a better job, but in Europe, it's kind of it struggled heavily. also like it's kind of a culture of, culture towards equity investments in Europe, it's also the culture of entrepreneurs raising equity investments, so there are a number of, psychological or historical factors are there and cultural factor. Where we felt more and more role of tokenization is coming and more and more this new era of capital markets is coming is, is infrastructure financing, it's private debt, it's private credit, we are seeing now treasury products, the money kind of instrument, right? If and this is kind of comes in is if you see tethers with closer to one, like two hundred billion AUM, where it grew, I don't think the full volume came from the crypto, but also from, I think the majorated volume is coming from the real industry, real FX trades. Commodities trade and those kind of markets where people really required in emerging markets and market which is not in US access to dollar, right? And stock markets is kind of in our journey for last seven, eight years, we kind of moved away from SME financing, but much more in infrastructure financing because also after COVID, people's disposable income decreased and it's decreasing more and more, so people are looking for high yield on a Immediate basis rather than a 10x, multiple, like, a huge moonshot project that they can invest. So we started looking for projects where people can get within a short duration a good amount of return, it, and structure as, normal private credit products, but we also try to be very innovative in finding, you know, if you want to get a tokenized products And this is a question is why I want a tokenized format and I don't go to my wealth manager to buy that, right? And we started looking which projects can come in, and there is a very interesting, I will tell you a story because that's how one of our biggest project on the platform came in, that is a blockchain mining node is. What is Blockstream Mining Note is effectively an energy and Bitcoin play, and as we know, Bitcoin and energy goes hand in hand. And in my previous life as a lawyer, I used to help energy companies to finance themselves A with, power purchase agreements. So power purchase agreement in a simple way is if you have an energy infrastructure and you're building something, you get a tariff from the government that, hey, at this price, I will buy it for you for next amount of months or next amount of years, that is your expected revenue. You can take that documentation and go to a bank and use it as a collateral to borrow money. Because now you have receivables effectively. In Bitcoin mining, this concept didn't exist for a long time. Twenty eighteen, I'm talking about, people were borrowing money against ASICs, which I always thought is a very crazy idea because ASIC is, is a depreciating asset, and we saw all this issue that happened, you know, after the FTX crash and everything in the market, a lot of things started collapsing. We figured out kind of way, okay, why not we connect these two world from the energy infrastructures where the energy infrastructure can finance against the power purchase agreement, why not Bitcoin miner can finance against the hash rate? And we started working with Blockstream very closely that time Sampson was there, Sampson, was, I would say, one of the key mind behind this, and Adam, and Sampson, they came up with this very interesting idea is why not issue a hash rate backed securities? From Blockstream mining infrastructure, and we tokenize it because they had a lot of family offices that were coming and saying, \"Hey, you know, I want to mine, I want you to be my hosting provider, but I don't understand all these details of energy uptime, which ASICs I have to plug in, what is, you know, the, which pool to be connected. I, I trust you that you have the technical capacity. Here is the money, give me a financial instrument with Izen number which my tax advisor will understand, and here is five hundred K. Raised two hundred k, raised two hundred k, and they couldn't take it because, yeah, they were doing hosting for larger players, but not for the family offices. And then Stocker and Bloxom team came together and we brought this concept of Bloxom mining node, which raised forty million in twenty twenty one. Effectively what it is, B M N equals to that point of time two peta hash, and, investors get two peta hash per day for one B M N note, and one B M N note was priced as two hundred thousand USD. It was quite high because it was targeting those family office segment. And one BMN was giving you two petahash per day for three sixty-five days multiplied by three years, it's about three-year product, and whatever Bitcoin is mined, you get as an investor. So it was effectively giving an opportunity for normal family offices to invest into Bitcoin mining without the hassle of managing the infrastructure." }, { "speaker": "arnab_naskar", "time": "21:08", "start": 1268.05, "text": "Right." }, { "speaker": "stephan", "time": "21:09", "start": 1269.25, "text": "Yeah. It was different than, what that point of time the cloud mining and all these things were there because the facilities are already live, so from the time you close the investment round, the next day the mining starts, so you don't have to wait for six, seven months. BMN started, raised forty million in twenty twenty-four, so twenty twenty-one, we paid out in twenty twenty-four, that is the maturity, over eighty million in Bitcoin. This product outperformed Bitcoin by thirty-two percent in a three-year period, and on a dollar basis it became one hundred and four percent, in a three-year period. It was the biggest payout in the history of the real world assets or tokenization space. I think till date is one of the biggest payout, but that's if-- and the entire product was issued on liquid, and when in subscription, you could have invested with LBTC, but what with the interesting part, when the payout happened You as an investor holding, let's say, the liquid, BMN- asset, the BMN- the BMN token" }, { "speaker": "arnab_naskar", "time": "22:02", "start": 1322.45, "text": "for that, yeah," }, { "speaker": "stephan", "time": "22:03", "start": 1323.37, "text": "you swapped that with the liquid BTC and was all done automatically. You didn't, and we didn't, so we can verify that you hold the wallet because you signed the transaction to send the LBTC, and in that wallet, affect-- sorry, you send the transaction to the BMN, and in that wallet we send the LBTC, and this- Made the processes, and we process eighty million amongst, I think, closer to hundred plus people. It's a massive operation, but we did it seamlessly because it is on chain." }, { "speaker": "arnab_naskar", "time": "22:33", "start": 1353.06, "text": "Yeah. And so because you were able to just do the payouts in liquid, and so then that investor can invest liquid BTC in and take LBTC out on at the end of the three years or whatever, even if they were trading, they can trade it in LBTC." }, { "speaker": "stephan", "time": "22:47", "start": 1366.75, "text": "And a lot of people traded, and interestingly, the trading happened more on a decentralized exchange than on centralized exchange." }, { "speaker": "arnab_naskar", "time": "22:53", "start": 1372.72, "text": "Right. So you- Do you think that was a friction thing? Like it's just less friction and therefore people felt easier to, felt like it was easier to trade it around, whereas maybe if it was on a centralized platform, maybe not everything has like a slick interface with the phone, like with an app and stuff like that. So, do you think that was it or why do you think it was? I" }, { "speaker": "stephan", "time": "23:09", "start": 1388.85, "text": "think it's definitely- Or people just play- They" }, { "speaker": "arnab_naskar", "time": "23:10", "start": 1390.33, "text": "wanted to play the market there. I think" }, { "speaker": "stephan", "time": "23:12", "start": 1391.51, "text": "they wanted to play the market, but on the other side, when they were using Dex, they didn't have to change" }, { "speaker": "stephan", "time": "23:23", "start": 1403.14, "text": "Interesting that people are open, because in, in traditional finance, you don't have a decentralized exchange. The concept doesn't exist." }, { "speaker": "arnab_naskar", "time": "23:29", "start": 1408.66, "text": "Right. Yeah. 'Cause I mean, most people just think of it as like, oh, they've got their brokerage app, they just log in and do their trades on that, and that's it." }, { "speaker": "stephan", "time": "23:35", "start": 1415.46, "text": "Now, imagine this thing, this is very interesting. I tried to move some securities from one brokerage to another, and last year, it sometimes takes more than two months. Oh," }, { "speaker": "arnab_naskar", "time": "23:42", "start": 1422.48, "text": "right. You got to fill out forms and you have to" }, { "speaker": "stephan", "time": "23:46", "start": 1425.59, "text": "wait and you have to do" }, { "speaker": "arnab_naskar", "time": "23:53", "start": 1432.93, "text": "Right. Yeah. So there's kind of this ease of trading around and transferring things around, when it's like in an on-chain world. So maybe that comes back to this kind of, this interoperability benefit, let's say. So even if it's not as theoretically perfect as having like just one centralized database where everything is-- 'cause, 'cause that's been the critique is, oh, if you're trusting these issuers anyway, just have a centralized database. Like that's been probably one of the main critique angles. but I guess what you're getting at is like, it And maybe this environment in which people can trade around more easily, like whether it's LBTC or Liquid Tether and the assets themselves of the equity or debt that's being tokenized." }, { "speaker": "stephan", "time": "24:35", "start": 1475.12, "text": "I, I see it in a different way. I see it in the ownership way, right? Right. What Bitcoin brought effectively the concept of ownership, not your keys, not your coins, right? you are today in Dubai, you have the Bitcoin, you move tomorrow to Hong Kong, you can just take the Bitcoin with you. You don't have to ask the permission for Dubai Bank to transfer it to your- Banking, Hong Kong. This concept, we started losing now in money in the bank account, as you know, fear how it is going, even if you try to move thousand dollar, soon they will ask for KYC in Europe, and they will ask, you know, why don't you get a thousand dollar? But, this concept is also problematic in a securities world because there's so much middleman that got created over the years in the name of, different regulatory requirements that we are coming into a systemic risk if one falls apart, things can crash down. Yeah. What FTL tokenization is doing, as I say, is it gives the ownership back to you, you own in your own wallet, you have the ownership, and you want to move, you want to trade, you want to interface, you decide. But on the other side, you also reduce a lot of intermediaries between you and the issuer of the asset." }, { "speaker": "arnab_naskar", "time": "25:38", "start": 1538.18, "text": "Okay. So it's sort of like you're creating, in a sense, some intermediaries, but you, you see it like you're reducing the net intermediaries. Exactly. It's kinda how I would, I guess" }, { "speaker": "stephan", "time": "25:48", "start": 1547.68, "text": "I" }, { "speaker": "arnab_naskar", "time": "25:48", "start": 1547.88, "text": "would understand that Still AML, there's still KYC, there's still like sanctions and these things. So a lot of that compliance stuff still exists, though. So how do you sort of balance that or how do you-- Like, 'cause obviously you still have to do that, can you explain how that works in the liquid context that like some of these users, let's say they're doing liquid BNM or CMSTR or these other things, they still have to do KYC, but once they've done that, then they can still trade things around. How does that work?" }, { "speaker": "stephan", "time": "26:18", "start": 1577.53, "text": "So if you are investing in any of the stock-asset assets, you need to create a stock account, do the KYC, do the AML checks, do any tr-uh, professional qualifications, it depends on the product's criteria, provide the information like tax IDs and what are relevant for reporting purposes for the issuer. And connect your liquid wallet." }, { "speaker": "arnab_naskar", "time": "26:38", "start": 1598.08, "text": "Okay. And this is like, this is your liquid address or you can get paid out there or things? So" }, { "speaker": "stephan", "time": "26:42", "start": 1601.73, "text": "we call the concept is called whitelisting, is whitelist that blockchain address. Now we know that Mr. X Owns this blockchain address, that the ownership is with Mr. X. This blockchain address is with Mr. X. Now, when you're subscribing to any of the stock or securities, the securities will be issued to that wallet. You can have multiple wallets, depends on how you manage your wallet infrastructure and everything. And when you use interfacing a Dex, what you need to do is, if you are on a stock or whitelist, that after you do And there are a number of investors are on stocker whitelist. You go to a Dex wallet, you can trade with another whitelisted investors without any permission peer-to-peer." }, { "speaker": "arnab_naskar", "time": "27:21", "start": 1640.52, "text": "Gotcha. Because once you're whitelisted, okay. Once--" }, { "speaker": "stephan", "time": "27:23", "start": 1642.8, "text": "If you're not whitelisted, transactions will fail." }, { "speaker": "arnab_naskar", "time": "27:25", "start": 1645.04, "text": "Okay." }, { "speaker": "stephan", "time": "27:25", "start": 1645.44, "text": "Right? what it helps also the issuer. Issuer has KYCAML obligation, so they need to know who are holding the securities at any given point of time. Now, as it's whitelisted, the immediately the trades are happening between the whitelisted investors from the stock or issuer's dashboard, the issuer sees, okay, now Mr. X has sent to Mr. Y at that fraction of second when the tokens gets transferred to that wallet. If they trans- try to transfer to some un- un-whitelisted wallet, yeah, transaction will fail. So effectively the, what is the Dex's role is, Dex's role effectively here is just a frontend interface and that relies on the whitelist of Stalker's, infrastructure. Now, in the tokenization world, effectively works like this way, there's issuers are managing the whitelist database, and we as issuer provides the infrastructure to the issuers effectively. So we provide the token whitelisting infrastructure to the issuer, and they manage that, the database. So it's compliant according to the rules and regulations, it give the flexibility for the investors to keep the control of the ownership of the assets. And still trade on their own terms or move to a different wallet on all these kind of things, but on the other side, issuers get the full visibility. Now tomorrow, if Stalker one need to be replaced by the issuer, they can replace us with some other, I would say white-listing agent who supports Liquid or maybe they want to go to some other chain, they can go it if they want, right? So they have that flexibility and the ownership and control, because effectively the investors are connected to the issuer. Bias talker, but it's affected the relationship between the issuer and the investor directly." }, { "speaker": "arnab_naskar", "time": "28:57", "start": 1737.02, "text": "Let's talk a little bit about the size of these different markets and how big you think they can get. I think the other big one is, for years people saw it like Liquid was just ghost chain, loans using it, this kind of thing. Do you wanna touch on that, like the size of Liquid and explain Liquid assets compared with Other asset platforms." }, { "speaker": "stephan", "time": "29:15", "start": 1755.37, "text": "So I think the, definitely, I think Liquid, took quite some time to come to a little bit, I would say, a traction, and that's also definitely it's, the marketing budgets of, you know, the EVM chains definitely are much more higher than the Bitcoin chains because you don't have a native shitcoin that you can just print the money out of thin air and pay for it. but I think now the volume is closer to five billion, which is growing, and I see a lot of institutional monthly or annual, it The, the, the total volume, but one of the interesting angle I would say always see the metrics between how much the volume is coming effectively from retail audience or smaller use cases and how much institutional adoptions. We are seeing some very interesting development happening with Aqua, as you mentioned, a lot of users are coming, transactions are increasing because we also see the transactions per block is increasing and it's a one minute block, so transactions are increasing. We had certain months where the transactions were quite like, in double digits, in each minute, so that was quite very interesting. Interesting, a lot of peg in, peg outs are happening. We're also seeing people are using quite a lot liquid for Bitcoin L2 transactions, which is also very interesting because Lightning is definitely one of the main use cases for that. But Lightning channels sometimes, the UX-wise, you have to generate the invoice and all these kind of things, and you have to be online. So there are a lot of factors that was restricting on liquidity, you don't have that, it's a bit seamless in certain way. And the Accord is doing a great job because they don't explain the users the complexities of Liquid lighting and everything, you simply say it's a Bitcoin L2, which is faster, just go ahead, right? so there, there I see a lot of demand coming, for stockers and as we are working in the tokenized security space, as I mentioned, it's one point eight billion. Last year, we reached to one billion mark, and then one point eight was very fast, and some of our assets are very much exposed to the Bitcoin value." }, { "speaker": "arnab_naskar", "time": "31:03", "start": 1863.02, "text": "No, of course, if, if a Bitcoin run happens, then you're" }, { "speaker": "stephan", "time": "31:08", "start": 1867.86, "text": "gonna be like four billion, you know, Focus, one of the strength is we tokenize securities, not just because of the sake of tokenization. I'm not super excited to tokenize real estate asset, right? Unless there's an edge. So our focus is tokenizing at the moment and for a long time, I would say, is Bitcoin derivatives and Bitcoin structured products. And thesis is, if Bitcoin is a two trillion plus asset class, you have few hundred billion of derivatives that you can tokenize. Why not we tokenize that? And that's the reason we tokenized hashed back securities, that is the BMN. Now, BMN itself is closer to one point one billion in size. We have another product that we launched, it's a fixed income product called PKH, which takes the BMN as collateral and provides twenty percent annualized yield, and there are some hedge funds that have subscribed to that kind of product because the high yield generated from mining infrastructure. we Farms as Aquarius Fund that provides Bitcoin-backed loans. Now there is a new fund called Goldstream, it's connects gold, tokenized gold like Tether Gold, yeah, and the Bitcoin angle, so the fund's asset is in gold It borrows dollars against the gold and gives the dollar as a loan against over collateralized Bitcoin. So effectively the fund is giving an exposure to the gold-minded people, like Peter Schiff kind of guys. Effectively they can, any gold bug can see, okay, we believe the gold is going to grow up, but this fund is effectively giving a bit of alpha, a little bit yield on top of the gold yield. Exposing itself to the over collateralized Bitcoin-backed loans. So that way we, it's managed already. So these kind of products are coming on the platform, and that's the thing, if you are a good exposure in Bitcoin and you understand a little bit and the philosophy, and you believe in that, economic, angle, which is, where we are heading at the moment of this realistic, we don't know where it's heading, but there is definitely some huge question mark in the global economy where it is heading. You, the demand of gold, the demand of And there may be some derivatives, so that's what Stalker is primarily focusing. And definitely we are quite keen into energy infrastructure, because, yeah, as civilization grows, consumption of energy will increase, not decrease, and we are seeing a massive, massive growth in energy infrastructure, and we are trying to also bring such projects on the platform and, bring it to- I see, yeah." }, { "speaker": "arnab_naskar", "time": "33:20", "start": 1999.99, "text": "Especially now with all the AI, I mean, there's like massive, it's like through the roof the demand for energy from these AI hyperscalers and even a bunch of the Bitcoin miners have pivoted into Center staff, and some of that was, as I understand, because, because they were Bitcoin miners, they had already been going around getting cheap energy contracts, and then these AI companies were interested because they want cheap energy or just energy, full stop. And so there's that angle. so with like Liquid and Stalker and doing these, you know, tokenized assets and things, do you see it as like most of your customers or the people who are buying these products, are they people who already have Bitcoin, or are you seeing it as like it's another way to bring in people who don't invest in some of these different projects, and as part of that, they have to get some Bitcoin and/or LBTC, Liquid Bitcoin." }, { "speaker": "stephan", "time": "34:07", "start": 2047.22, "text": "So what we see is most of our users at the moment very much deep into Bitcoin. Right. So these are like" }, { "speaker": "arnab_naskar", "time": "34:13", "start": 2052.64, "text": "already Bitcoin hodlers, exactly, and they maybe they see it like, \"I've already got this, this pile of Bitcoin, and they wanna carve off some of that and put that into whether it's tokenized equity or BNM or various things.\" I" }, { "speaker": "stephan", "time": "34:25", "start": 2064.63, "text": "don't think the most people also, but they are also constantly buying BTC. What they're seeing To accumulate the BTC as what cost basis, right? Okay. So they see it," }, { "speaker": "arnab_naskar", "time": "34:35", "start": 2075.26, "text": "this is like a way to stack Sats, sort of. Exactly, exactly." }, { "speaker": "stephan", "time": "34:38", "start": 2077.78, "text": "Like the BMN it output from Bitcoin, so for them, okay, I can buy the BTC on spot, but if you're buying BTC on spot, you have to be very, very confident that it's the bottom you're buying on that specific period. Or else you are overpaying it. Right. So" }, { "speaker": "arnab_naskar", "time": "34:49", "start": 2088.83, "text": "they, they don't fancy themselves as timing the market in Bitcoin. Exactly. They fancy themselves as investing in Bitcoin alpha generation, loosely understood. Exactly. So" }, { "speaker": "stephan", "time": "34:58", "start": 2097.7, "text": "that's kind of one audience. Then you have the audience like hedge funds who are generated, so who have some Bitcoin exposure and they want to have some high yield product from that infrastructure, kind of maybe Bitcoin beta, sorry," }, { "speaker": "arnab_naskar", "time": "35:09", "start": 2108.7, "text": "maybe I used the wrong word, but yeah, go on. Yeah." }, { "speaker": "stephan", "time": "35:11", "start": 2110.58, "text": "So like a derivatives exposure, this kind of guys are coming in, but also we are seeing some directly connected to Bitcoin, but have some flavor of it, like gold and BTC and everything, and they understand gold, but they don't want to get full exposure to BTC, so they can take this product which underneath gives you exposure of BTC without you actively taking the exposure in BTC. So this kind of products come in. One I'm very much interested, and this is some conversation that we're happening, is We need in Bitcoin Layer two effectively money market kind of products like which is a cash or cash equivalent, but can be used as a collateral, and this is money market like- Products that are tokenized at the moment we are seeing other chains, I see there is a huge opportunity for those, those products to come on chain, on the Bitcoin layer, because it, it will be effectively kind of a similar form of stablecoins, but that provides a yield. So sort" }, { "speaker": "arnab_naskar", "time": "36:00", "start": 2159.77, "text": "of like, I mean, now the big one, I think is gonna be really big is the whole stretch thing, which is the- Exactly. S T R C, it's the M S T R, probably the biggest, I think it's, you know, Michael has called it, the, it could be And we are on," }, { "speaker": "stephan", "time": "36:19", "start": 2178.83, "text": "actually working on it because it's right now eleven percent," }, { "speaker": "arnab_naskar", "time": "36:22", "start": 2181.55, "text": "yeah." }, { "speaker": "stephan", "time": "36:22", "start": 2182.15, "text": "they are providing and that's a perfect instrument, and we are tokenizing, I think in next few weeks, it will be also live on the platform." }, { "speaker": "arnab_naskar", "time": "36:27", "start": 2187.15, "text": "Oh, there you go. And then, so then I presume then they would, you know, earn that, that fiat yield, and of course, depending on the tax situation, I think in the US they have what's called ROIC, Return of Capital, so then there's like another tax benefit that like if it's eleven percent actually" }, { "speaker": "arnab_naskar", "time": "36:47", "start": 2207.3, "text": "Very" }, { "speaker": "stephan", "time": "36:48", "start": 2207.52, "text": "interesting what I see is this kind of fixed yield product or fixed income product, money market kind of, it can be some large asset managers money market or SDRC, you can convert the yield to Bitcoin." }, { "speaker": "arnab_naskar", "time": "36:58", "start": 2218.33, "text": "Right. So you're stacking the, the yield and then you flip it into BTC or dollar?" }, { "speaker": "stephan", "time": "37:03", "start": 2223.33, "text": "But you say I, so base principle, some guys, as you mentioned, they're conservative, they say, \"Ah, Bitcoin, I don't want to go into that risk at the moment, \" blah, blah, stuffs. But I can put in the money market fund" }, { "speaker": "stephan", "time": "37:17", "start": 2237.26, "text": "This then definitely require LBTZ kind of products because then it, it's a small accumulation, but it shouldn't be super costly in transaction fees, so that really makes sense. So I see there is quite a lot of room to really connect the traditional fin- finance with the Bitcoin, with the tokenization angle." }, { "speaker": "arnab_naskar", "time": "37:34", "start": 2254.04, "text": "In terms of how users actually interface, like, as I'm understanding this, it might be like they use a liquid-based wallet, so like Blockstream app is one example, but there are others who support, I think, and then they have, there's other, let's say, platforms where they're doing some of the swapping, so SideSwap is probably an example in the liquid world, and as an example, if they wanna keep the keys offline, that's, you know, that's where they get like the Blockstream JADE as an example, and they pair the JADE with the Yeah. And they're using that to manage some of their assets. Is that the normal way people are doing this or how do they, interface? What does the interface look like for an end user or even for these, you know, corporate or larger, like just not end user, but like not, let's say everyday pleb per se, but family office or small business or fund?" }, { "speaker": "stephan", "time": "38:23", "start": 2302.82, "text": "So that's very interesting. We are quite fortunate to have the users which are very sophisticated, as I mentioned. So they are very comfortable using a combination of Blockstream, Green," }, { "speaker": "stephan", "time": "38:34", "start": 2314.38, "text": "The old Lightning Network, now Lightning Map, yeah. Exactly, the Blockstream app and connection with the Jade, so the hardware device. Exactly, so they connect that and they structures with some two FA or something like that. Some are still using Sighs, Sighsop also has a wallet, so they're also a lot of people are also using- Oh, just like an app on the phone? Just an app on the phone, so that's also easier. I hope in this year there are some few other wallets that is coming, and definitely see the market is looking for" }, { "speaker": "arnab_naskar", "time": "39:04", "start": 2343.74, "text": "Challenges too with browser security. Exactly. Exactly." }, { "speaker": "stephan", "time": "39:06", "start": 2346.07, "text": "So there, there's, but the convenience question is always the paradox that you're trying to solve, right? we're also seeing now growing demand from institutional regulated custodians coming into the liquid space. There are some, very large institutions are looking into that space of providing custodian support to tokenize securities on liquid and tokenize assets on liquid that is still ongoing at the moment. But right now, most of our users, at least on Stalker, are storing it in a self-custodied way in the, by The wallets that they are controlling, like, as you mentioned, a J and a Blockstream" }, { "speaker": "arnab_naskar", "time": "39:36", "start": 2375.81, "text": "app and this kind of thing. J and" }, { "speaker": "stephan", "time": "39:37", "start": 2376.75, "text": "SiteSwap and likes of those infrastructure." }, { "speaker": "arnab_naskar", "time": "39:39", "start": 2378.57, "text": "When it comes to participating or interfacing with a DEX, as an example, there may be like standing orders, and they can like take that order, like this kind of thing. Can you explain a bit of that? Like, I remember I was chatting with Adam a bit, and he was showing me some of these, like, 'cause he, he loves, as you know, I'm sure, he, he Like an order book and then saying, \"I wanna take that order, or I wanna make an order, or take an order.\"" }, { "speaker": "stephan", "time": "40:07", "start": 2407.11, "text": "So on Sightswap, like the infrastructure is similar to a normal trading platform, it will be a bid and offer, and you choose whether you want to participate, do you want to buy or do you want to sell. it can be also, and you put the offer, of purchase or offer to sell, and it can be also partial filled, so it doesn't have to be fully filled. So you want to buy," }, { "speaker": "stephan", "time": "40:26", "start": 2426.04, "text": "X amount of CM Definitely, a lot of things are getting improved over the time. Its experience is similar to normal trading venue, effectively, it's nothing different. The only difference is there is no login on Sideswap. To use a side swap, you have to connect to that whitelisted wallet that I mentioned, which is whitelisted on Stalker." }, { "speaker": "arnab_naskar", "time": "40:47", "start": 2447.05, "text": "Okay. And" }, { "speaker": "stephan", "time": "40:48", "start": 2447.71, "text": "on that side swap, you get even the notification that, hey, are you sure your wallet is whitelisted? If not, please register on Stalker." }, { "speaker": "arnab_naskar", "time": "40:54", "start": 2453.71, "text": "I see. So in that context, you could be using either the SideSwap app itself with, with its own in-built liquid wallet, or you could be using, let's say, Blockstream app with its liquid wallet, but whitelisted, and connecting to the SideSwap platform" }, { "speaker": "arnab_naskar", "time": "41:10", "start": 2469.62, "text": "to do This is like, if" }, { "speaker": "stephan", "time": "41:13", "start": 2472.62, "text": "you go for more sophistication, then Bitfinex Securities comes into picture." }, { "speaker": "arnab_naskar", "time": "41:16", "start": 2476.05, "text": "Oh, right. And they have their own Bitfinex app and" }, { "speaker": "stephan", "time": "41:19", "start": 2478.93, "text": "so on. Exactly. Like, Bitfinex is normal, like they have, there's one of the biggest trading interface and so on. Like, web interface is one of the most sophisticated. They launched Bitfinex Securities few years back. The first asset that got listed was actually Bloxlink Mining Note one, and the BMN two is now listed on Bitfinex Securities. So if you want to get more sophistication of the trading angle" }, { "speaker": "arnab_naskar", "time": "41:42", "start": 2502.08, "text": "And if you're just kind of doing some smaller trades, you might be doing it on your phone app or kind of connected stuff. And I" }, { "speaker": "stephan", "time": "41:47", "start": 2506.85, "text": "think the Bitfinex Securities is also a very interesting piece of the puzzle of tokenization, because that's the first large exchange who went in the direction of Kind of the angle is every sec- every exchange will be a tokenized securities exchange or securities exchange to an extent, and they embraced it, and now they have some very interesting assets. But I think what they build the infrastructure, the infrastructure is built on the existing Bit- Bitfinex infrastructure, which is one of the most stable and sophisticated one, and I see a lot of demand is also coming there, so we are bringing quite some assets now over there. So I, I see the future of this market will be a dance between the DEX platform and the centralized exchange, and there will be different audiences targeting these two platforms. And" }, { "speaker": "arnab_naskar", "time": "42:26", "start": 2545.51, "text": "it's sort of like you can have your wallet and play in the different-- I mean, you could be on both, right? You could have your Bloktery app or your Sideswap app, but also connect with Bitfinex and do stuff or put some stuff there and be trading around on there. And we'll just see a competition naturally evolve over time of like centralized platforms, as you said, and then some of these" }, { "speaker": "arnab_naskar", "time": "42:47", "start": 2567.16, "text": "Real forms of doing this kind of trading, but it's like programmatically done where people can put in like orders that can be like a standing order or various things that they could set up with simplicity. I," }, { "speaker": "stephan", "time": "42:57", "start": 2577.13, "text": "I see simplicity coming in, in a minute, but before I go to the Bitfinex securities, I think one of the use cases where I see the market can massively grow is, let's say you are having, fifty million worth of MicroStrategy shares in tokenized format, right? You can go to Bitfinex and theoretically, definitely Bitfinex has to support that and That can be very interesting is you can actually borrow against your microstrategy shares on Bitfinex Securities and then trade BTC or something else, right? A lot of trading, liquidity providers, trading proprietary trading firms, hedge funds, they would love such a trade." }, { "speaker": "arnab_naskar", "time": "43:33", "start": 2613.11, "text": "That could be interesting on both sides of that trade, right? Because you could be on the borrower side or the lending side of that house. Exactly. And you might be like, let's say you're a big family office or some fund and you've got fiat and you wanna get yield, then what kind of plan? And to Like the DeFi world where they've got like similar kind of, they're, they're doing like a platform where borrowers and lenders can meet up and do liquid based trades of like Tether for Bitcoin and borrowing, similar kind of thing, right? Exactly." }, { "speaker": "stephan", "time": "44:01", "start": 2640.67, "text": "And there's, I think their role is, the microstrategy kind of shares, even STRC can be a very interesting product, people can do arbitrage between if you're getting the right," }, { "speaker": "arnab_naskar", "time": "44:09", "start": 2648.99, "text": "because if Stretch is paying eleven percent and they can get loaned somewhere else at like lower than that, you're gonna see people who are Eleven percent?" }, { "speaker": "stephan", "time": "44:18", "start": 2657.86, "text": "Exactly. Exactly. There are a lot of things can happen, and this is, I think, I see there is a good room to bring all this thing together, and that will massively explode. Now coming to simplicity, you have in the Ethereum the idea of vaults right now, right? There are different vaults, means it's kind of liquidity pools where liquidity providers participate and put liquidity, and if you borrow from that, the yield gets generated and distributed to the liquidity providers. This kind of vaults concept in a smart contract basis did not exist in Bitcoin world, but with simplicity," }, { "speaker": "stephan", "time": "44:47", "start": 2687.12, "text": "Infrastructure, and you can bring, and the, the best part is in the Bitcoin, you have the pristine collateral that is a Bitcoin, with that you can create a number of interesting stuffs, and I'm quite excited, you know, what gets built, using Simplicity in that side." }, { "speaker": "arnab_naskar", "time": "44:59", "start": 2699.15, "text": "Interesting, yeah, 'cause I think this is another thing for a long time, as you were touching on before. A lot of, even like, even, even in like shitcoin world, they're dealing with a lot, it's like borrowing against this to borrow against that, but, underlying some of that may be like a wrapped form of Bitcoin. So WBTC is probably a big example from BitGo, and I believe Justin Sun is like, you know, he's, they're, they're kind of the main players of that. But I guess instead of having WBTC or some wrapped or CBTC, which is the Coinbase base form of wrapped Bitcoin, it could be like LBTC, which" }, { "speaker": "arnab_naskar", "time": "45:33", "start": 2733.02, "text": "Of course, it's not the same thing as main chain Bitcoin that you hold in your multisig or whatever, but it's ca-custodied by that federation and you're trading liquid Bitcoin against these other assets, whether it's blocked through mining node or treasury companies or tokenized equity and debt or energy investments and these other aspects of it. So it, it is kind of fascinating to see that this kind of, this broader world is sort of being built up. There's this competition though of like, you've got the Bitcoin ecosystem in space, and then you've got like altcoins and tradfi world And they're kind of all, in some ways, meshing together or in some ways competing against each other, and so I guess where do you think it all goes, like with things like even New York Stock Exchange, like we mentioned this earlier, they're doing a tokenization platform now, and they're gonna have like their, their kind of normie nine to five or whatever thing, and they're gonna have a twenty-four seven tokenization platform. Where does it all kind of shake out in like a Bitcoin liquid world? I think" }, { "speaker": "stephan", "time": "46:30", "start": 2790.16, "text": "tokenization is happening, right? This is, no question right now. I think institutions are understanding, and it's a very interesting angle if you see this way. In the last couple of years, the banking sector required a lot of regulatory capital, and that is creating a lot of problem for a lot of banks and much more smaller banks and mid-sized banks. And think like this in traditional market, the settlement doesn't happen instantly, right? T plus three or T plus two or whatever, yeah. For those days, the liquidity as, is a big problem. You need to have some kind of reserve capital or regulatory capital to support that delays, right? Like" }, { "speaker": "arnab_naskar", "time": "47:07", "start": 2827.06, "text": "Basel capital requirements kind of things, yeah." }, { "speaker": "stephan", "time": "47:09", "start": 2829.2, "text": "Now, if you because of tokenization, what is very interesting is we can do the transaction instantly. A lot of people says, \"Ah, okay, you are creating a lot of problems because a lot of infrastructures are relying on that T plus three Just too. Yeah, it's correct to some extent, but I think it's protectionism. Principle, you are not getting any efficiencies, you're trying to protect your existing players which aren't relevant. But see this way, if you have instant settlement, you're coming to the phase where banks may not be required to keep those regulatory capital. That means those assets can go to the market, and that's the reason I think players like Nasdaq, DTCC, and all these guys, and BlackRock effectively, they're all pushing to that angle is if the settlement is instant, you don't require those regulatory capitals, and that can effectively go to the market and generate more yield and can more liquidity, right? So I see tokenization isn't just an efficiency of an infrastructure, but effectively a drastic systemic shift, in" }, { "speaker": "arnab_naskar", "time": "48:03", "start": 2882.87, "text": "regulatory capital required, you think?" }, { "speaker": "stephan", "time": "48:05", "start": 2884.97, "text": "In, in, in the completely, i-i-it's a fundamental transition of the infrastructure where it's going, where we are bringing a drastic amount of, massive change in not only efficiency, but also how we see the risk management process of, the whole infrastructure. So," }, { "speaker": "arnab_naskar", "time": "48:18", "start": 2897.75, "text": "I guess summing up a few things that we've spoken about, like earlier days of tokenization, I guess part of the message was like- \"Quote unquote democratize the access and let anyone be able to issue and I guess people would sort of argue, \"Oh, it's unjust that only so-called accredited investors can do this. Why can't anyone do this?\" Whereas now I think what you're saying is it's, it maybe that was an earlier narrative and maybe to some extent that's still true, but now maybe the focus is a little bit more on Let's say high net worth, family office, funds, and people like that who are interested in Bitcoin-denominated projects that can get them some Bitcoin yield" }, { "speaker": "stephan", "time": "48:56", "start": 2935.99, "text": "That's one, that's a very narrow approach. What I would say is bigger approach is there is a systemic change coming in the financial markets, capital markets. Stablecoin will be one of the leading player and leading this, and this is what with USAT. I personally believe there will be a massive growth in those things, and we are seeing the stablecoins is actually creating a huge positive impact in every angle. Now, if you have now money on chain, you'll definitely require the securities on chain to be in the capital markets. Now, this is a systemic shift. This is not about just a Bitcoin as, asset class, but how-- and this is what I think the Bitcoin, as you mentioned, why Bitcoin then, right? Why can't you not do it some, public, other pro-public infrastructure or decentralized database? Yeah. The Bitcoin as a tech will be used, because that's the store of value, that is, all the xHash that is supporting that infrastructure. That infrastructure will be required to support the global capital markets infrastructure. You don't want it to be supported by a few guys and few data centers, right? You want the global infrastructure supporting that, and that's what Bitcoin is providing, the settlement layer. So effectively, what we are trying to install here is effectively using the Bitcoin infrastructure and the security of the infrastructure, building a new capital markets that not only small- Other companies can access, but also asset managers, large institutions can also come in over the time. So it's creating an infrastructure for the new capital market which isn't centralized and controlled by few players." }, { "speaker": "arnab_naskar", "time": "50:16", "start": 3016.11, "text": "I see, yeah. So, but, but it's kind of a nuanced vision as you said, because there's still like KYC whitelisting, there's still some of these elements of it, and there's still certain compliance elements of it where, let's say, the state or a particular government or regulator may say, \"Hey, this guy, we don't like this guy, so you know Exactly. Well, two, you can be a sanctioned individual and not allowed to hold certain, whatever, or you're, or certain companies maybe blocked from providing service to even the ex-foreign shares, ex-foreign" }, { "speaker": "stephan", "time": "50:45", "start": 3044.85, "text": "bonds also went down, right? So, so it's happened, but what is kind of what I see is the UAE maybe using the same capital market infrastructure as in US or maybe same in, Venezuela or something like that. So this accessibility of infrastructure isn't restricted because you as a country can't pay that money, but it is, you just require some technical infrastructure to plug Seeing a systemic shift and systemic visibility and systemic infrastructure change because of tokenization rather than few efficiency gains. This is where I am, kind of more and more getting concerned." }, { "speaker": "arnab_naskar", "time": "51:16", "start": 3075.95, "text": "So and in practice, do you see that translating as more people can invest or more people have, you have more opportu-- you have a broader universe of investment opportunities, or is it that more people can invest, or how-- or all of the above, you're saying?" }, { "speaker": "stephan", "time": "51:27", "start": 3087.18, "text": "So I, I would say the first is definitely your investment opportunity in this, let's say, for example, in this region, as we are in It's very hard for people in Europe or people in US or people in Latin America or something to identify and invest, right? Now because of stablecoins, they can move the money Instead, now if it's tokenized, they can also access the data, reporting and everything on real time. They" }, { "speaker": "arnab_naskar", "time": "51:50", "start": 3110.31, "text": "can access equity or debt investments in that particular country that they otherwise it would be a bit like they would need their local stock broking app to support, let's say, UAE securities and the custody in" }, { "speaker": "stephan", "time": "52:01", "start": 3120.82, "text": "that stock broking app and all these kind of things. Now this becomes kind of, I would say, more accessible. Definitely the question is accessible at what price point that's Democratization an angle comes in, that definitely depends, but people need to create wealth, people need to get the opportunity to create wealth, right? And tokenization, I think will slowly, slowly bring that opportunity. In your wallet, you'll see the Bitcoin, you'll see the tokenized gold, you'll see the tokenized shares, and you move the country, you take it, you don't take a permission from somebody to, you know, to close your account or open your account, and that's what actually is bring is this ownership concept back to your financial" }, { "speaker": "arnab_naskar", "time": "52:32", "start": 3152.48, "text": "assets. So yeah, so it Listing and even some of the regulators in some countries may not be okay with that. They may say, \"Oh, we, we don't want any investor from X, Y, Z country.\" Exactly. So there's still gonna be certain levels of whitelisting involved, but the broad net, net, even, even with that, you're saying in, on net, there'll be more investment opportunities and you can maybe people from, other countries can access opportunities that they couldn't have otherwise. Or maybe they could have done it, but it wasn't practical." }, { "speaker": "stephan", "time": "53:09", "start": 3188.58, "text": "Or you require a number of middlemen to go and know that." }, { "speaker": "arnab_naskar", "time": "53:13", "start": 3192.62, "text": "Right." }, { "speaker": "stephan", "time": "53:13", "start": 3192.98, "text": "Now you don't require, because if I'm transferring from Latin America to UAE investment, the USD, how many banks, steps and everything, and bank compliance and everything. With the stable coins, it's very accessible. I can see the assets, even the reporting as I'm holding the token, I transfer the token, the issuer can see now you are the owner of the token, they send the reporting to you, not to me. These kind of things, The back office cost will go massively." }, { "speaker": "arnab_naskar", "time": "53:38", "start": 3218.48, "text": "I see, yeah. So it's kind of a more expensive vision, yeah. It's interesting because I think in earlier years, I'd sort of shunned this kind of tokenization because I saw it as like, oh, it's just kind of a bunch of shitcoin people grifting. And but now I, I sort of see, of course, I'm still a Maxi, I still believe, you know, Bitcoin is gonna be the money of the world, but in that world, there'll still be Bitcoin-denominated securities and other investments and equity," }, { "speaker": "arnab_naskar", "time": "54:05", "start": 3245.06, "text": "Might happen on Liquid as a side chain of Bitcoin, and so I, I, I think I'm sort of coming around a little bit on that aspect of it. And I think the other big thing is, in all of quote unquote crypto, really it's Bitcoin and stablecoins, right? Like, I think basically everything else in crypto is a shitcoin, but like stablecoins, we can't deny that, like, there's hun-- like four hundred, five hundred million users of Tether, like, around the world. You just can't deny that there's a clear product market Of understanding that aspect of it, of course, with that long term view of everyone's going towards Bitcoin and Bitcoin denominated things, that's kind of the long game, isn't it?" }, { "speaker": "stephan", "time": "54:46", "start": 3285.84, "text": "No, I, I think I totally agree. I think there was one interesting, I think, session, it's a long time back between Paolo and Jokomo, I think, back in the days when, TetherFod was a big thing, right? And I still remember, I think Jokomo was mentioning, I think Paolo also mentioned. Stablecoin can actually expose a lot of people to the idea of private, keys, pair and, blockchain assets, crypto assets. But once they are there, then it's easier for a lot of people to understand Bitcoin and store Bitcoin, right? And the same thing I see tokenized securities, right? If you are into a stablecoin already, for you, it's the next is definitely you should go into Bitcoin. After that, definitely you should go to tokenized securities, private debt like STC or kind of an energy infrastructure of your own country that is providing, you dollar basis or the local currency basis, and these infrastructures you couldn't have done without a private bank in the previous era, now you can actually do it in a much more tokenized format, even with ten k or fifteen k or something, but that's opening up accessibility, and that I'm quite excited about. And, and the other thing is like exchanges like Bitfinex Securities, right, which are some of the largest users of digital assets and crypto assets. Now they won't trade all the time, so how many things they can trade? Bitcoin, Ether, and a few other assets, and the rest are all volatile crypto speculative coins. So they're looking for other assets like maybe tokenized STRC, tokenized microstrategy, maybe energy infrastructure, maybe fixed income, and then they can move between these two infrastructures, the crypto digital assets exchange infrastructure and securities tokenized infrastructure, borrow against it, do different stuffs and different kind of stra-investment strategies and everything that can get developed. I think that will change quite a lot of the market how we see it's, it's a new era of capital markets and Wall Street, I see." }, { "speaker": "arnab_naskar", "time": "56:23", "start": 3382.53, "text": "No? Excellent. Well, I think that's a great spot to finish up. So just, let everyone know where they can find you online." }, { "speaker": "stephan", "time": "56:29", "start": 3388.95, "text": "you can find me over Twitter, you can find me over LinkedIn. My email ID is arnab a r n a b at stoker dot io. Please feel free to drop an email and, yeah, thanks for inviting me, Stephan. It's a pleasure." }, { "speaker": "arnab_naskar", "time": "56:41", "start": 3400.94, "text": "Thank you." } ] }