Debate: Are Corporate Chains a Win for Crypto? | DAS London 2025 | Day 2 | Main
Summary
Corporate Chains Definition: The panel discussed the evolving definition of corporate chains, highlighting the complexity in distinguishing between permissioned and permissionless systems and the emergence of hybrid models.
Investment Perspectives: Panelists debated whether corporate chains serve business needs or public goods, with some arguing that they may eventually support broader crypto ecosystems by generating activity and liquidity.
Mainstream Adoption: There was a consensus that while crypto's original ethos emphasizes self-sovereignty and flexibility, mainstream users prioritize user experience over the underlying technology's permissionless nature.
Traditional Finance Integration: The discussion highlighted the challenges and opportunities in integrating traditional finance with crypto, noting that incentives and regulatory clarity are key drivers for institutional adoption.
Corporate Chains vs. Generalized Blockchains: The panel explored whether corporate chains pose a threat to generalized blockchains like Ethereum, with opinions divided on whether they detract from or complement existing ecosystems.
Interoperability and Innovation: The potential for interoperability among corporate chains and public blockchains was discussed as a means to foster innovation and liquidity, although concerns about walled gardens and control remain.
Market Dynamics: The conversation touched on the potential for corporate chains to attract liquidity away from established platforms like Ethereum, depending on their ability to offer compelling commercial opportunities.
Future Outlook: Panelists expressed optimism about the long-term evolution of crypto technology, suggesting that a neutral, interoperable infrastructure could emerge as a standard for financial institutions.
Transcript
Good afternoon everyone. My name is Dave Rodriguez, head of Blockworks Advisory. And today we're gonna be talking about corporate chains. Are they good or bad for crypto? Um before we give or you know let the panelists give their introductions. Um I think you know just to I guess set the stage we've really seen the evolution of corporate chains over the past 10 to 15 years uh since the beginning of like I guess public financial rails. Um they originally started private permission. Think of like the onyxes of the world the hyperledger fabrics. uh R3 quarter so on and so forth and more recently we're kind of starting to see like a hybrid approach of corporate chains that are taking on some of the crypto ethos of like public permissionless but still ultimately do have some central operator that I think is essentially you know absorbing some of the value that those chains produce. So I think later to set the stage soon we're going to be defining what a corporate chain is because I think it's really important for the rest of the conversation. Um but with that being said Andrew want to start you with you giving your introduction and hand off to everyone else. So, Andrew Pill, I'm CEO and co-founder of TVR Capital. Uh, we focus on building technology and investment products to bridge the worlds between traditional finance, trady, and DeFi. Before that, I spent seven years as head of digital assets at Morgan Stanley, and I'm a board member on the Swiss digital exchange, SDX. Um, Santiago, I'm the founder, CEO of Inversion, and uh, yeah, excited to talk about this topic. I don't think 30 minutes is going to be enough to define what corporate chains are. I don't think the industry ever has defined that, but we'll take a crack at it. >> Uh Rob Hadock. I'm a general partner at a fund called Dragonfly. We're about five billion under management, mostly venture capital. Um yeah, glad to be here. >> Awesome. Okay, so when we first got into a Telegram chat to like prep for this uh this conversation, I thought it would be relatively easy to define a corporate chain to be completely honest. That was pretty naive of me. And then we proceed to go back and forth for like 15 to 20 minutes. And I don't know if we ultimately landed on what a definition of a corporate chain is, but the one that I felt most confident in, and I'm going to kind of like lay it out there and get your guys' immediate thoughts, is a chain that has an operator with equity value that absorbs any value generated by that chain. So I won't give any examples. Uh I kind of already did in the beginning, but you know, just kind of open it to the floor. Do you agree with that general definition of a corporate chain? So personal view is it's nuanced um >> and we yeah we spend a lot of time debating on what's the actual definition of the debate itself. >> Yeah. >> Which is goes to show it's quite an important detail. I think I personally went into the process thinking about the difference between permissioned which I think is pretty clearly a corporate chain typically in my definition and permissionless. But there's this hybrid approach like you mentioned and it's starting to evolve and will in my view continue to evolve. Look, I mean I think the most important thing is understanding like what are you solving for and then what is the purpose of this technology because if you have a chain where acts like a database can be controlled by someone to change that state of the ledger then it's very much corporate or just controlled. Um and I think that's how I draw a line. if if you have one particular entity or group you know that can control it then I think um it's a corporate chain now of course you have a continuum of like there are certain chains where there is this spectrum of decentralization of control like you have clusters of validators you have clusters of miners um but I do think that that's where that that to me is the most important thing >> so is inversion chain a corporate chain >> it's not in sense that we have validators in our chain. We're open. We're permissionless and we invite validators to to operate on our chain and we have a stream of you know we we acquire businesses, we retrofit them with crypto and then there's a a stream of activity that is being settled on the chain. We may run our own but we certainly have we'll have uh a group of validators. Um so we're definitely not a a corporate chain. Okay, Rob, what are your thoughts? >> Yeah. >> Yeah. I mean, I think the reality is is like what we're really trying to solve for here is like does this chain serve the needs of a business or does it serve is it more of a public good, right? Ethereum is clearly a public good. Like Salana in some sense is a public good, right? Like broader like crypto ecosystems aren't a public good and version is trying to be a public good. The chain itself doesn't operate for the interests of you know the core business, right? The chain itself operates as a permissionless public good. Right? The I think the point about nuance is is important because you there are different ways to do that right we have Robin Hood on the L2 side which is specifically saying this will be a permission change which will essentially be some sort of settlement layer for the broad things that we're going to do in tokenization okay like that's very clear-cut what that is right and then we have things like tempo which is you know in some sense uh you know partly incubated and by by stripe and but the way they're thinking about you know how do we uh put forth or how do we incentivize the transactions and the flow that we want is a way to think about block building right they're saying okay well we'll reserve 90% of the block for this type of transaction right is that different is that you know at the for the behest of stripe like probably not right and so I think there's a broad set of of kind of middle ground that we have to think through and like what that exactly that means but I think to your point and I mean the definition you started off with was the one that I proposed which was essentially like does this serve the needs of the business or does it serve the needs of a potentially a public good is in core infrastructure and so I think that's the best we're going to do at the moment. I mean on that point Rob like so if you're an L2 and you are running the validator and you're acrewing all of those the vast majority of those fees are acrewing to that particular organization that deployed the L2 is that a corporate chain because like you're still acrewing some value to the Ethereum L1 but in that instance where do you kind of draw a line like >> I mean Robin Hood is very clearly you know there an arbitum kind of like right and like that's very clearly going to like settle to Ethereum and share Ethereum security and that's a corporate chain right like everything on the OP stack. Like what is Bass a corporate chain? Like that's probably the the more interesting question because you know Bass is you know it's on the OP stack it's run by their own like centralized sequencer. Like there's an ability for you know probably Coinbase to do whatever they want there. They would I'm sure somebody from Coinbase is going to tell me that's not true. But um like that's but anybody can build on base, right? And you can build anything on base, right? And like you know that's where the middle ground it the question I maybe to propose is like really does that even matter in so much as what we're talking about. >> Cool. Um so as I already talked about it earlier about like this more hybrid approach where a lot of corporate chains and I'll put those in quotes are starting to adopt like some of the crypto ethos. They are now permissionless. They are now public. Um do you think like end users are actually going to be the end users not like the crypton natives that are already here that have been part of participating in the onchain economy for you know better part of a decade but do you think mainstream adoption is do you think public and permissionless chains are required for mainstream adoption like does that actually matter is there like real benefit for public and permissionless chains. So I personal view is the original ethos of the crypto ecosystem is self- sovereignity and complete 247 flexibility in terms of the platform you choose. Composability is a big benefit. I think there is a core group of certainly the OGs and and and recent joiners to have those aspects but I think a lot of people also don't really care about those things. I would I would argue that the majority of people just want a slick user experience and behind the scenes it's rather irrelevant for them about the permissionless aspect. >> But I think like so permissionlessness and trustlessness is down is is kind of upstream of building a good user experience, right? Like if you there's no way for us to build a database that gets Robin Hood and you know name your other fintech right on the same side of each other that wants to share liquidity and they want to share assets, right? And they want to share the broad set of potentially like they're you know going to socialize different types of like structured product risk, right? And like the different types of things they can do to build incentives, right? And that requires some level of trustlessness because otherwise whatever my centralized database is going to be is probably not going to be something that it's going to have control by people that aren't going to want to allow other persons to control it, right? Like we see this all the times in you know like bank consortiums, right? Like you know Visa came out of a bank consortium and you know we talk about the DTCC or the clearing network, right? These things come out and they kind of come out as public goods, but there's a lot of debate around who is the shareholder and like how do we build something that serves a broad set of use cases. The ability to do a global network that allows for everybody to interact with it, allows for deep liquidity, allows for, you know, permissionless asset issuance, like allows for the a lot of the automated like automated market, right? Which is a very clearly a step forward for tail assets, right? or things like you know um like an a right which like better collateral uh management right like those you cannot have those things unless you have trustlessness right unless you have perm some level of permissionlessness right so at the end uh you know the on-ramp offramp we could talk about okay maybe there needs to be KYC there needs to be some sort of gating there like I'm totally sympathetic to some conversation around that but at the core infrastructure layer like you cannot innovate without that and you cannot align incentives without that if you know the internet was built in a bunch of different silos, we would not have had the innovation that we've had today and we would not have you know everything that has come out of the internet as it is today. Well, potentially >> mean to sorry >> yeah to to Bill and Rob's point I mean I think the the example of the evolution of networks like Visa and Swift I mean these are all messaging coordination networks that required a herculean effort and you peel it all back crypto is is in some sense doing that it's just a better technology to coordinate a certain action but it it it starts and and ends with this trust that you're generating whether the end end user is going to appreciate that certainly maybe not you could argue but the institutions that are the user aggregators certainly will, right? And that's you need to have those guarantees of a credibly kind of neutral robust technology that has Lindy to build on it, right? Because if you're any corporation that wants to build on a network is going to certainly evaluate, hey, is there livveness in this chain? Is there security in this chain? What happens if these scenarios happen? Uh, you know, of a number of issues. So, like I think we're in a state in the industry where you're having those conversations at the board level. And it certainly matters and I think that's where the technology and how it behaves and who has the ability to maybe tamper with this permissionless transfer or the state of the ledger becomes incredibly important. Um so will it will matter. Um um >> I would I would personally argue though that certain institutions and if we think specifically about okay I'm coming from the trady world in terms of getting tradi comfortable to allocate or operate on public blockchains is still a very challenging problem. Um yeah but look at look at circle I think circle is a good example here where okay this technology is not perfect but it is a marginal improvement and a marginal improvement is a marginal improvement. So like USDC is is is a digital dollar that you have certain guarantees that you're trusting Circle and whoever's auditing their proof of reserves but Circle has the ability to mint, redeem and and and seize that asset and there are very specific reasons for that right um and at that you have a choice as a consumer to either interact with USDC or not and I think you know the proof is in the amount of traction that something like USDC or or USDT has has arised which is it's not perfectly decentralized but it serves a very clear purpose and and serves a need in the market that wasn't there um and you are trusting at some point someone right >> I think it's actually a bit of a misnomer to say that it's like hard to get institutions on chain right because it's all about incentives right the second that black rockck realized that they can make money on chain they were on chain in a permissionless manner right like the second that every single asset manager figured out I can issue this thing I can put it on chain and I get somebody to buy it and it's a net new buyer for me. They issued uh assets on chain, right? The what they haven't done is they haven't gone and said, "Okay, well, I'm going to do like some sort of like cost saving like backend ledger and like clearing and settlement and like they they there was really hard for them to see like what you know some sort of like future like economic benefit of that thing is, right? But but if there's if there's incentive net new revenue and you show them that that new revenue is coming, they're coming on chain. It's the same re reason Robin Hood's coming on chain, right? And like what did Robin Hood realize? to realize that they could sell equities through an somewhat, you know, greatly regulated uh uh kind of enterprise here in the UK through or not, sorry, in the EU through Bitstamp that, you know, couldn't have done that before and they can, you know, essentially make more money, right? So, if we increase the ways for people to build revenue, >> they're here, right? It's more about the overlay that to overlay that point. Yes. >> However, if you're Robin Hood, we're talking about unit economics backstage. I think um you have to then say, "Hey, we're gonna introduce this new product for users like a stable coin or a tokenized X or Y." You want to make sure that you don't provoke churn. You don't compromise the the customer relationship. And I think we're at a point in this technology where you look at Black Rockck, you look at some institutions like Robin Hood, and that's I think the signal which is yes, like they feel sufficiently comfortable interacting with this technology because it's it is very battle tested. It is increasingly regulated, and so they are now interacting. And so there's a whole set of incentives to do that. >> But I would argue that we are nowhere near real adoption of these markets with traditional finance because there's 300 trillion dollars of financial assets within the traditional financial ecosystem and there's 150 billion in DeFi and I would say a large amount of that is actually rehypothecated and double counted. So yeah, there is interesting opportunities evolving. There are some people like Black Rockck offering a money market fund, but let's be let's face it, we're far far away from full adoption. >> But to issues that exist currently for accessing those markets, >> but that's not enough of a reason to say that this is is I mean like November was a clear 180 in the regulatory environment and the evolution of technology always does that >> and I think we're going to be in a state of the world where clearly we don't we haven't solved everything in this. You know, >> we will eventually that's my view. I just think we're there's still things missing to get the vast majority of capital that's in traditional finance to be able to participate. Some of those points I I fully agree like innovation is far faster within fully uh permissionless environments and the ability to use composability and to innovate rapidly without asking for permission. But at the same time uh there is innovation with technology that's permissioned. it just takes a lot longer and it's still evolving is the main point. So most of the value in crypto is largely like housed under or valued under uh like generalized L1 platforms, the Ethereums, the Salanos, the avalanches of the world. Are they if you make the assumption that corporations are going to want to own their block space and obviously like the app chain narrative that's been around for like a decade plus at this point. Um are are gen do we think corporate chains are bad for generalized blockchains? Like Paradigm launched Paradigm and Stripe launched Tempo. Paradigm is like the most cryptonative fund in the world. like they've been around. They're OGs. They've contributed so much public goods to Ethereum. They go around and partner with Stripe to make Tempo Circle >> OGs. They make ARC. They're not even building on top of known current tech stacks. They're not building on top of Avalanche or Cosmos or OP stack or arbitrum. They're building their own tech stacks. Like what does that signal to you guys as? personal view is it's beneficial for crypto longer term because if you do solve for those concerns from traditional finance by building something that's corporate you generate activity you generate experience or they gain experience from that and then in the world where there's connection between um non-corporate chains and corporate chains then I do think some of the liquidity and activity that's been performed on these corporate chains will migrate into that world and they should support each other. It really just depends on like the form factor, right? Like it's unclear to me what form factor tempo will take. But like for Robin Hood L2 where somebody can only interact with that L2 like through the Robin Hood app, like that occurs no value to the rest of us, right? Or the rest of the ecosystem. Um like you could theoretically say they're renting some, you know, security from from Ethereum, but I I don't think that probably has any real value to to Ethereum. Um maybe over time as they open that up and there's like, you know, whatever there's interop through, you know, a bunch of Ethereum L2s, it does. Um I think the the so I think broadly though to maybe take it a step higher is yeah is it good that like people want to come on chain like absolutely is it good that we have stable code adoption like absolutely right um do I think that like Stripe is a potentially someone that we should trust with the future of how we think about open permissionless standards like absolutely not right and so like it's a bit of a a slippery slope in so much as like we want to invite everybody into the space but we also need to be steadfast in the way we think about building the future of of our Right. I mean, I can tell you from my perspective building in version, we're very focused on acquiring businesses with distribution and then bringing that activity on chain and we'll we'll launch an L1 on Avalanche as it stands. It is easy to spin up our own chain. >> Um so your question around will everyone want to launch their own L1. I think um you know launching your own one an avalanche is very different than doing like a monad route. Um, Avalanche sort of is out of the box and we want to focus more on the user aggregation layer, making sure we're buying the right businesses, making sure we're serving that end customer, making crypto invisible. Um, and then what happens in the middle layer, you know, we can, you know, we haven't talked about interoperability, but I think you can envision a world where look, we draw analogies with the internet like clearly there were permit like you know, private instances and then ultimately public infrastructure wins. I'm not sure I will go as far as saying that that's how crypto is going to manifest itself. But I will say interoperability um continues to improve in the space. So you might see a state of the world where you have a proliferation of corporate chains and experimentation and you have good connectivity amongst those chains, right? The reality is the end user may or may you know is not really going to care if they're interacting with Avalanche or Salana or Ethereum. you're just going to route that transaction to whatever it is that you want to do on chain or or a particular business function. You talk about liquidity. I think that's where you probably may see a consolidation where you know Ethereum continues to be the venue with the highest liquidity. So if you're trad then then that might really influence where you just have a very deep concentration of people building and that I think continues to be true for Ethereum which is that's where most of the TVL is. That's where most of the activity is. That's where most of the, you know, corporates have kind of expressed an interest to just tap into because that's where the liquidity is >> currently. Agreed. And liquidity begets liquidity and that's where the opportunity is currently. Uh there could be a world as well, I think, where a corporate chain reaches this velocity and has the most significant market opportunity and you could see some of the liquidity migrate from the now lower liquidity market which is potentially Ethereum. So I think there there is a world which could evolve um if a bulk of this majority of financial assets which exist within traditional finance coaleses around a new corporate chain and that's where the market is because ultimately traditional finance and banks and look at where it makes the most sense where's the most immediate commercial opportunity and then build for that and I agree at the moment it's it's Ethereum which is why the likes of Black Rockck have chosen in that venue. >> Yeah. >> The internet continues to be the right analogy, right? Like when I mean I'm old enough to remember like you know when I dial up internet and I used to go through like AOL for everything, right? Like there was an access point to the internet and then like all of these other things happened on the internet and now the access point is you know whatever I want it to be, right? But at there's a period in time where like you were only going through Netscape or you're only going through AOL and like that I think what's probably the same way that a lot of people were interact here which is that there will be an access point for them of which a lot of the you know stuff is abstracted away and eventually it becomes like okay there's all this other great stuff to do and there are other ways to access it that don't necessarily have to be through directly through my Robin Hood application or whatever else. >> Got it. that the only thing on Robin Hood is um you know they've restricted they allow inflows they restrict that outflow open they'll open I mean I think at some point if you want to be competitive you will kind of you know open the doors and allow your users to do more stuff right >> yeah can I double click into this so like let's look base is probably the canonical example they drove 60 80% of all economic activity in the super chain superchain interop hasn't gone live yet but like it will inevitably What does base benefit from superchain interop? Do they benefit at all? Like they is that going to create will will you know uh trustless interop across the op stack actually create a more black hauling effect of more economic activity going on base because all the liquidity gets liquidity all the economic activity gets more economic activity or like does bass actually lose out for having native interop in the open stack and then you actually see economic activity spill over into other areas. That's one of the concerns I you know as a crypto native I have right these walled gardens they don't benefit from interop and I will also like just to double into from an investment case corporate chains are they good or bad for our bags what what verticals will actually benefit from corporate chains is it is it interop protocol like the layer zeros of the world or um like will will an a benefit from a corporate chain because it'll deploy on that chain like I I threw a lot in there but I'm kind of throw it out there >> I mean but I think this goes back to like again like the software for example, we talked about before, right? Like theoretically, if you asked me in like 98, like if we'd be better off, if Microsoft would be better off, if people use any other software, right? Like they would tell you like no, right? Like you want to stay within the the Microsoft software suite, right? But as you know, technology grew, as the use of computers grew, as the use of the internet grew, right? Like that just meant that people did more economic activity through the internet and eventually through like Microsoft products, right? So the question is is like can all types of innovation that will happen on chain can it happen on base and will it be not just can it happen on base but will base be the best place for it to happen and for it to foster. I think the answer to that is almost certainly no over time, right? And so are they better with just more users, right? Are they better with just more innovation, more builders, right? And you know, if you project far enough out, I think the answer again is like almost certainly yes, but of course it's in everybody's near-term incentive to try to protect the pie, right? And it's about like having a longerterm view and making sure that we incentivize that type of of action. >> 100%. The reality is you know crypto is a a technology that allows us to coordinate and you know Visa took many many years to spin up and I think that that's really the novelty of this technology which is I I fundamentally do believe that we will coales around a Switzerland model of a technology that is credibly neutral for banks and other institutions to interact right if if you were JP Morgan you launch your own chain it's going some banks might for a variety of reasons not want to interact with that they'd rather interact with Ethereum if we have sort privacy and all this other stuff that needs to continue to be built. um you know value acrruel I I think the internet is an apt analogy where most value the internet has acred at the user aggregation layer like if you control the end user I think like a lot of things don't change and although we are in a world where you can one click spin up a new wallet one click send assets to many different protocols and interoperability is great and composability is great I just don't think that the vast majority of mainstream users are going to be a sophisticated or care enough cuz they're they're lazy you know, you have a bank relationship. You don't have 10 bank accounts for the most part. Um, unless you're paranoid. Um, and so I think like a lot of things don't change and people don't like to think about money. They'd rather interact in one platform, which is kind of an everything store, an everything app. That's sort of the thesis for inversion which is you know we we will just serve you our users whatever it is that they want to do on chain and we will own like the sandwich the the user aggregation layer the sediment layer anything that happens in the middle we'll route to wherever the the application may exist and I think that delivers value to the broader ecosystem >> I know it sounds like you wanted to say something >> u just to comment on the whole you know let's call it corporate chain or permission chains from some other um financial institutions certainly had the experience within Morgan Stanley in the former role that it was very hard to justify engaging with let's call it a major competitor using their technology which is completely controlled by themselves uh because you're essentially providing your liquidity and providing activity to that blockchain uh primarily acrru to the equity holders of the of the bank. So, it's a lot more interesting and potentially maybe being very diplomatic given I've always had to cover the topic on behalf of the bank uh historically. But the point being is really more potential to allocate to a neutral platform as a bank because yeah, you aren't effectively benefiting someone else who's developed the technology. >> Got it. Unfortunately, that's all time we have. Uh we probably could have gone on for another 30 minutes. Um appreciate you guys time. Thank you very much for coming and listening. Have a good day. [Applause]
Debate: Are Corporate Chains a Win for Crypto? | DAS London 2025 | Day 2 | Main
Summary
Transcript
Good afternoon everyone. My name is Dave Rodriguez, head of Blockworks Advisory. And today we're gonna be talking about corporate chains. Are they good or bad for crypto? Um before we give or you know let the panelists give their introductions. Um I think you know just to I guess set the stage we've really seen the evolution of corporate chains over the past 10 to 15 years uh since the beginning of like I guess public financial rails. Um they originally started private permission. Think of like the onyxes of the world the hyperledger fabrics. uh R3 quarter so on and so forth and more recently we're kind of starting to see like a hybrid approach of corporate chains that are taking on some of the crypto ethos of like public permissionless but still ultimately do have some central operator that I think is essentially you know absorbing some of the value that those chains produce. So I think later to set the stage soon we're going to be defining what a corporate chain is because I think it's really important for the rest of the conversation. Um but with that being said Andrew want to start you with you giving your introduction and hand off to everyone else. So, Andrew Pill, I'm CEO and co-founder of TVR Capital. Uh, we focus on building technology and investment products to bridge the worlds between traditional finance, trady, and DeFi. Before that, I spent seven years as head of digital assets at Morgan Stanley, and I'm a board member on the Swiss digital exchange, SDX. Um, Santiago, I'm the founder, CEO of Inversion, and uh, yeah, excited to talk about this topic. I don't think 30 minutes is going to be enough to define what corporate chains are. I don't think the industry ever has defined that, but we'll take a crack at it. >> Uh Rob Hadock. I'm a general partner at a fund called Dragonfly. We're about five billion under management, mostly venture capital. Um yeah, glad to be here. >> Awesome. Okay, so when we first got into a Telegram chat to like prep for this uh this conversation, I thought it would be relatively easy to define a corporate chain to be completely honest. That was pretty naive of me. And then we proceed to go back and forth for like 15 to 20 minutes. And I don't know if we ultimately landed on what a definition of a corporate chain is, but the one that I felt most confident in, and I'm going to kind of like lay it out there and get your guys' immediate thoughts, is a chain that has an operator with equity value that absorbs any value generated by that chain. So I won't give any examples. Uh I kind of already did in the beginning, but you know, just kind of open it to the floor. Do you agree with that general definition of a corporate chain? So personal view is it's nuanced um >> and we yeah we spend a lot of time debating on what's the actual definition of the debate itself. >> Yeah. >> Which is goes to show it's quite an important detail. I think I personally went into the process thinking about the difference between permissioned which I think is pretty clearly a corporate chain typically in my definition and permissionless. But there's this hybrid approach like you mentioned and it's starting to evolve and will in my view continue to evolve. Look, I mean I think the most important thing is understanding like what are you solving for and then what is the purpose of this technology because if you have a chain where acts like a database can be controlled by someone to change that state of the ledger then it's very much corporate or just controlled. Um and I think that's how I draw a line. if if you have one particular entity or group you know that can control it then I think um it's a corporate chain now of course you have a continuum of like there are certain chains where there is this spectrum of decentralization of control like you have clusters of validators you have clusters of miners um but I do think that that's where that that to me is the most important thing >> so is inversion chain a corporate chain >> it's not in sense that we have validators in our chain. We're open. We're permissionless and we invite validators to to operate on our chain and we have a stream of you know we we acquire businesses, we retrofit them with crypto and then there's a a stream of activity that is being settled on the chain. We may run our own but we certainly have we'll have uh a group of validators. Um so we're definitely not a a corporate chain. Okay, Rob, what are your thoughts? >> Yeah. >> Yeah. I mean, I think the reality is is like what we're really trying to solve for here is like does this chain serve the needs of a business or does it serve is it more of a public good, right? Ethereum is clearly a public good. Like Salana in some sense is a public good, right? Like broader like crypto ecosystems aren't a public good and version is trying to be a public good. The chain itself doesn't operate for the interests of you know the core business, right? The chain itself operates as a permissionless public good. Right? The I think the point about nuance is is important because you there are different ways to do that right we have Robin Hood on the L2 side which is specifically saying this will be a permission change which will essentially be some sort of settlement layer for the broad things that we're going to do in tokenization okay like that's very clear-cut what that is right and then we have things like tempo which is you know in some sense uh you know partly incubated and by by stripe and but the way they're thinking about you know how do we uh put forth or how do we incentivize the transactions and the flow that we want is a way to think about block building right they're saying okay well we'll reserve 90% of the block for this type of transaction right is that different is that you know at the for the behest of stripe like probably not right and so I think there's a broad set of of kind of middle ground that we have to think through and like what that exactly that means but I think to your point and I mean the definition you started off with was the one that I proposed which was essentially like does this serve the needs of the business or does it serve the needs of a potentially a public good is in core infrastructure and so I think that's the best we're going to do at the moment. I mean on that point Rob like so if you're an L2 and you are running the validator and you're acrewing all of those the vast majority of those fees are acrewing to that particular organization that deployed the L2 is that a corporate chain because like you're still acrewing some value to the Ethereum L1 but in that instance where do you kind of draw a line like >> I mean Robin Hood is very clearly you know there an arbitum kind of like right and like that's very clearly going to like settle to Ethereum and share Ethereum security and that's a corporate chain right like everything on the OP stack. Like what is Bass a corporate chain? Like that's probably the the more interesting question because you know Bass is you know it's on the OP stack it's run by their own like centralized sequencer. Like there's an ability for you know probably Coinbase to do whatever they want there. They would I'm sure somebody from Coinbase is going to tell me that's not true. But um like that's but anybody can build on base, right? And you can build anything on base, right? And like you know that's where the middle ground it the question I maybe to propose is like really does that even matter in so much as what we're talking about. >> Cool. Um so as I already talked about it earlier about like this more hybrid approach where a lot of corporate chains and I'll put those in quotes are starting to adopt like some of the crypto ethos. They are now permissionless. They are now public. Um do you think like end users are actually going to be the end users not like the crypton natives that are already here that have been part of participating in the onchain economy for you know better part of a decade but do you think mainstream adoption is do you think public and permissionless chains are required for mainstream adoption like does that actually matter is there like real benefit for public and permissionless chains. So I personal view is the original ethos of the crypto ecosystem is self- sovereignity and complete 247 flexibility in terms of the platform you choose. Composability is a big benefit. I think there is a core group of certainly the OGs and and and recent joiners to have those aspects but I think a lot of people also don't really care about those things. I would I would argue that the majority of people just want a slick user experience and behind the scenes it's rather irrelevant for them about the permissionless aspect. >> But I think like so permissionlessness and trustlessness is down is is kind of upstream of building a good user experience, right? Like if you there's no way for us to build a database that gets Robin Hood and you know name your other fintech right on the same side of each other that wants to share liquidity and they want to share assets, right? And they want to share the broad set of potentially like they're you know going to socialize different types of like structured product risk, right? And like the different types of things they can do to build incentives, right? And that requires some level of trustlessness because otherwise whatever my centralized database is going to be is probably not going to be something that it's going to have control by people that aren't going to want to allow other persons to control it, right? Like we see this all the times in you know like bank consortiums, right? Like you know Visa came out of a bank consortium and you know we talk about the DTCC or the clearing network, right? These things come out and they kind of come out as public goods, but there's a lot of debate around who is the shareholder and like how do we build something that serves a broad set of use cases. The ability to do a global network that allows for everybody to interact with it, allows for deep liquidity, allows for, you know, permissionless asset issuance, like allows for the a lot of the automated like automated market, right? Which is a very clearly a step forward for tail assets, right? or things like you know um like an a right which like better collateral uh management right like those you cannot have those things unless you have trustlessness right unless you have perm some level of permissionlessness right so at the end uh you know the on-ramp offramp we could talk about okay maybe there needs to be KYC there needs to be some sort of gating there like I'm totally sympathetic to some conversation around that but at the core infrastructure layer like you cannot innovate without that and you cannot align incentives without that if you know the internet was built in a bunch of different silos, we would not have had the innovation that we've had today and we would not have you know everything that has come out of the internet as it is today. Well, potentially >> mean to sorry >> yeah to to Bill and Rob's point I mean I think the the example of the evolution of networks like Visa and Swift I mean these are all messaging coordination networks that required a herculean effort and you peel it all back crypto is is in some sense doing that it's just a better technology to coordinate a certain action but it it it starts and and ends with this trust that you're generating whether the end end user is going to appreciate that certainly maybe not you could argue but the institutions that are the user aggregators certainly will, right? And that's you need to have those guarantees of a credibly kind of neutral robust technology that has Lindy to build on it, right? Because if you're any corporation that wants to build on a network is going to certainly evaluate, hey, is there livveness in this chain? Is there security in this chain? What happens if these scenarios happen? Uh, you know, of a number of issues. So, like I think we're in a state in the industry where you're having those conversations at the board level. And it certainly matters and I think that's where the technology and how it behaves and who has the ability to maybe tamper with this permissionless transfer or the state of the ledger becomes incredibly important. Um so will it will matter. Um um >> I would I would personally argue though that certain institutions and if we think specifically about okay I'm coming from the trady world in terms of getting tradi comfortable to allocate or operate on public blockchains is still a very challenging problem. Um yeah but look at look at circle I think circle is a good example here where okay this technology is not perfect but it is a marginal improvement and a marginal improvement is a marginal improvement. So like USDC is is is a digital dollar that you have certain guarantees that you're trusting Circle and whoever's auditing their proof of reserves but Circle has the ability to mint, redeem and and and seize that asset and there are very specific reasons for that right um and at that you have a choice as a consumer to either interact with USDC or not and I think you know the proof is in the amount of traction that something like USDC or or USDT has has arised which is it's not perfectly decentralized but it serves a very clear purpose and and serves a need in the market that wasn't there um and you are trusting at some point someone right >> I think it's actually a bit of a misnomer to say that it's like hard to get institutions on chain right because it's all about incentives right the second that black rockck realized that they can make money on chain they were on chain in a permissionless manner right like the second that every single asset manager figured out I can issue this thing I can put it on chain and I get somebody to buy it and it's a net new buyer for me. They issued uh assets on chain, right? The what they haven't done is they haven't gone and said, "Okay, well, I'm going to do like some sort of like cost saving like backend ledger and like clearing and settlement and like they they there was really hard for them to see like what you know some sort of like future like economic benefit of that thing is, right? But but if there's if there's incentive net new revenue and you show them that that new revenue is coming, they're coming on chain. It's the same re reason Robin Hood's coming on chain, right? And like what did Robin Hood realize? to realize that they could sell equities through an somewhat, you know, greatly regulated uh uh kind of enterprise here in the UK through or not, sorry, in the EU through Bitstamp that, you know, couldn't have done that before and they can, you know, essentially make more money, right? So, if we increase the ways for people to build revenue, >> they're here, right? It's more about the overlay that to overlay that point. Yes. >> However, if you're Robin Hood, we're talking about unit economics backstage. I think um you have to then say, "Hey, we're gonna introduce this new product for users like a stable coin or a tokenized X or Y." You want to make sure that you don't provoke churn. You don't compromise the the customer relationship. And I think we're at a point in this technology where you look at Black Rockck, you look at some institutions like Robin Hood, and that's I think the signal which is yes, like they feel sufficiently comfortable interacting with this technology because it's it is very battle tested. It is increasingly regulated, and so they are now interacting. And so there's a whole set of incentives to do that. >> But I would argue that we are nowhere near real adoption of these markets with traditional finance because there's 300 trillion dollars of financial assets within the traditional financial ecosystem and there's 150 billion in DeFi and I would say a large amount of that is actually rehypothecated and double counted. So yeah, there is interesting opportunities evolving. There are some people like Black Rockck offering a money market fund, but let's be let's face it, we're far far away from full adoption. >> But to issues that exist currently for accessing those markets, >> but that's not enough of a reason to say that this is is I mean like November was a clear 180 in the regulatory environment and the evolution of technology always does that >> and I think we're going to be in a state of the world where clearly we don't we haven't solved everything in this. You know, >> we will eventually that's my view. I just think we're there's still things missing to get the vast majority of capital that's in traditional finance to be able to participate. Some of those points I I fully agree like innovation is far faster within fully uh permissionless environments and the ability to use composability and to innovate rapidly without asking for permission. But at the same time uh there is innovation with technology that's permissioned. it just takes a lot longer and it's still evolving is the main point. So most of the value in crypto is largely like housed under or valued under uh like generalized L1 platforms, the Ethereums, the Salanos, the avalanches of the world. Are they if you make the assumption that corporations are going to want to own their block space and obviously like the app chain narrative that's been around for like a decade plus at this point. Um are are gen do we think corporate chains are bad for generalized blockchains? Like Paradigm launched Paradigm and Stripe launched Tempo. Paradigm is like the most cryptonative fund in the world. like they've been around. They're OGs. They've contributed so much public goods to Ethereum. They go around and partner with Stripe to make Tempo Circle >> OGs. They make ARC. They're not even building on top of known current tech stacks. They're not building on top of Avalanche or Cosmos or OP stack or arbitrum. They're building their own tech stacks. Like what does that signal to you guys as? personal view is it's beneficial for crypto longer term because if you do solve for those concerns from traditional finance by building something that's corporate you generate activity you generate experience or they gain experience from that and then in the world where there's connection between um non-corporate chains and corporate chains then I do think some of the liquidity and activity that's been performed on these corporate chains will migrate into that world and they should support each other. It really just depends on like the form factor, right? Like it's unclear to me what form factor tempo will take. But like for Robin Hood L2 where somebody can only interact with that L2 like through the Robin Hood app, like that occurs no value to the rest of us, right? Or the rest of the ecosystem. Um like you could theoretically say they're renting some, you know, security from from Ethereum, but I I don't think that probably has any real value to to Ethereum. Um maybe over time as they open that up and there's like, you know, whatever there's interop through, you know, a bunch of Ethereum L2s, it does. Um I think the the so I think broadly though to maybe take it a step higher is yeah is it good that like people want to come on chain like absolutely is it good that we have stable code adoption like absolutely right um do I think that like Stripe is a potentially someone that we should trust with the future of how we think about open permissionless standards like absolutely not right and so like it's a bit of a a slippery slope in so much as like we want to invite everybody into the space but we also need to be steadfast in the way we think about building the future of of our Right. I mean, I can tell you from my perspective building in version, we're very focused on acquiring businesses with distribution and then bringing that activity on chain and we'll we'll launch an L1 on Avalanche as it stands. It is easy to spin up our own chain. >> Um so your question around will everyone want to launch their own L1. I think um you know launching your own one an avalanche is very different than doing like a monad route. Um, Avalanche sort of is out of the box and we want to focus more on the user aggregation layer, making sure we're buying the right businesses, making sure we're serving that end customer, making crypto invisible. Um, and then what happens in the middle layer, you know, we can, you know, we haven't talked about interoperability, but I think you can envision a world where look, we draw analogies with the internet like clearly there were permit like you know, private instances and then ultimately public infrastructure wins. I'm not sure I will go as far as saying that that's how crypto is going to manifest itself. But I will say interoperability um continues to improve in the space. So you might see a state of the world where you have a proliferation of corporate chains and experimentation and you have good connectivity amongst those chains, right? The reality is the end user may or may you know is not really going to care if they're interacting with Avalanche or Salana or Ethereum. you're just going to route that transaction to whatever it is that you want to do on chain or or a particular business function. You talk about liquidity. I think that's where you probably may see a consolidation where you know Ethereum continues to be the venue with the highest liquidity. So if you're trad then then that might really influence where you just have a very deep concentration of people building and that I think continues to be true for Ethereum which is that's where most of the TVL is. That's where most of the activity is. That's where most of the, you know, corporates have kind of expressed an interest to just tap into because that's where the liquidity is >> currently. Agreed. And liquidity begets liquidity and that's where the opportunity is currently. Uh there could be a world as well, I think, where a corporate chain reaches this velocity and has the most significant market opportunity and you could see some of the liquidity migrate from the now lower liquidity market which is potentially Ethereum. So I think there there is a world which could evolve um if a bulk of this majority of financial assets which exist within traditional finance coaleses around a new corporate chain and that's where the market is because ultimately traditional finance and banks and look at where it makes the most sense where's the most immediate commercial opportunity and then build for that and I agree at the moment it's it's Ethereum which is why the likes of Black Rockck have chosen in that venue. >> Yeah. >> The internet continues to be the right analogy, right? Like when I mean I'm old enough to remember like you know when I dial up internet and I used to go through like AOL for everything, right? Like there was an access point to the internet and then like all of these other things happened on the internet and now the access point is you know whatever I want it to be, right? But at there's a period in time where like you were only going through Netscape or you're only going through AOL and like that I think what's probably the same way that a lot of people were interact here which is that there will be an access point for them of which a lot of the you know stuff is abstracted away and eventually it becomes like okay there's all this other great stuff to do and there are other ways to access it that don't necessarily have to be through directly through my Robin Hood application or whatever else. >> Got it. that the only thing on Robin Hood is um you know they've restricted they allow inflows they restrict that outflow open they'll open I mean I think at some point if you want to be competitive you will kind of you know open the doors and allow your users to do more stuff right >> yeah can I double click into this so like let's look base is probably the canonical example they drove 60 80% of all economic activity in the super chain superchain interop hasn't gone live yet but like it will inevitably What does base benefit from superchain interop? Do they benefit at all? Like they is that going to create will will you know uh trustless interop across the op stack actually create a more black hauling effect of more economic activity going on base because all the liquidity gets liquidity all the economic activity gets more economic activity or like does bass actually lose out for having native interop in the open stack and then you actually see economic activity spill over into other areas. That's one of the concerns I you know as a crypto native I have right these walled gardens they don't benefit from interop and I will also like just to double into from an investment case corporate chains are they good or bad for our bags what what verticals will actually benefit from corporate chains is it is it interop protocol like the layer zeros of the world or um like will will an a benefit from a corporate chain because it'll deploy on that chain like I I threw a lot in there but I'm kind of throw it out there >> I mean but I think this goes back to like again like the software for example, we talked about before, right? Like theoretically, if you asked me in like 98, like if we'd be better off, if Microsoft would be better off, if people use any other software, right? Like they would tell you like no, right? Like you want to stay within the the Microsoft software suite, right? But as you know, technology grew, as the use of computers grew, as the use of the internet grew, right? Like that just meant that people did more economic activity through the internet and eventually through like Microsoft products, right? So the question is is like can all types of innovation that will happen on chain can it happen on base and will it be not just can it happen on base but will base be the best place for it to happen and for it to foster. I think the answer to that is almost certainly no over time, right? And so are they better with just more users, right? Are they better with just more innovation, more builders, right? And you know, if you project far enough out, I think the answer again is like almost certainly yes, but of course it's in everybody's near-term incentive to try to protect the pie, right? And it's about like having a longerterm view and making sure that we incentivize that type of of action. >> 100%. The reality is you know crypto is a a technology that allows us to coordinate and you know Visa took many many years to spin up and I think that that's really the novelty of this technology which is I I fundamentally do believe that we will coales around a Switzerland model of a technology that is credibly neutral for banks and other institutions to interact right if if you were JP Morgan you launch your own chain it's going some banks might for a variety of reasons not want to interact with that they'd rather interact with Ethereum if we have sort privacy and all this other stuff that needs to continue to be built. um you know value acrruel I I think the internet is an apt analogy where most value the internet has acred at the user aggregation layer like if you control the end user I think like a lot of things don't change and although we are in a world where you can one click spin up a new wallet one click send assets to many different protocols and interoperability is great and composability is great I just don't think that the vast majority of mainstream users are going to be a sophisticated or care enough cuz they're they're lazy you know, you have a bank relationship. You don't have 10 bank accounts for the most part. Um, unless you're paranoid. Um, and so I think like a lot of things don't change and people don't like to think about money. They'd rather interact in one platform, which is kind of an everything store, an everything app. That's sort of the thesis for inversion which is you know we we will just serve you our users whatever it is that they want to do on chain and we will own like the sandwich the the user aggregation layer the sediment layer anything that happens in the middle we'll route to wherever the the application may exist and I think that delivers value to the broader ecosystem >> I know it sounds like you wanted to say something >> u just to comment on the whole you know let's call it corporate chain or permission chains from some other um financial institutions certainly had the experience within Morgan Stanley in the former role that it was very hard to justify engaging with let's call it a major competitor using their technology which is completely controlled by themselves uh because you're essentially providing your liquidity and providing activity to that blockchain uh primarily acrru to the equity holders of the of the bank. So, it's a lot more interesting and potentially maybe being very diplomatic given I've always had to cover the topic on behalf of the bank uh historically. But the point being is really more potential to allocate to a neutral platform as a bank because yeah, you aren't effectively benefiting someone else who's developed the technology. >> Got it. Unfortunately, that's all time we have. Uh we probably could have gone on for another 30 minutes. Um appreciate you guys time. Thank you very much for coming and listening. Have a good day. [Applause]