Ethereum as the World’s Settlement Layer? With Vivek Raman

20:39Alex Thorn:What is the benefit to either an issuer or an investor in having stocks, for example, in a tokenized format rather than a traditional format? I think the real benefit comes because the thing I want to be careful on is U.S. capital markets are the best capital markets in the world. So a lot of things are already very efficient. So we need a clear step function that's better. So this whole experiment only works if all assets are tokenized on public law chains. Because then what you can do is you can take tokenized stocks and tokenized bonds and mix them together into a tokenized ETF. You can take all these different structure products and create them using simple smart contracts.

21:15like the financial innovation that can happen is much, much better if you can bring all types of assets on chain. Individually, stocks are already pretty good. Stocks will obviously be better if they can trade 24-7, if you have more access and global distribution, if you can program them, if you can use them as collateral on DeFi lending apps. So that's all very clear and obvious. But the key unlock is we need to bring multiple asset classes all and make them all fungible and make them all usable within applications actually create utility for tokenized assets i think tokenizing something and putting on a blockchain was like step one and it was very important but that can't be the end state the end state is these things have to actually have utility and activity and that's why that's why we're focused not only on the infrastructure layer which blockchains love infrastructure but we also need to focus on the application layer right so applications using tokenized assets are also equally important yeah i think it makes a lot of sense i think the

22:05Alex Thorn:transparency and efficiency of blockchain. When I try to figure out how like pre and post trade works on Wall Street, it feels like I need like an archaeological degree to uncover it. It's hilarious. Like, you know how they say like, I don't know if this is actually true, you're a New Yorker, but like if you dig down in New York, you find like old versions of the city. Have you heard that? That they would just build on top of it. Or there are actually like ancient versions. Like, yeah. And that's kind of what Wall Street feels like to me. Even to the extent that you have like T plus one settlement today for stocks, like it's all just like hardwired in on top of another thing, hardwired.

22:37Alex Thorn:Everything's hard-coded, right? There's no formulae connecting it. Everything is hard-coded. Everything is, yeah, you still have like fax machines somewhere in the mix, phones somewhere in the mix. Some things are in Excels that are scattered around different. You're uploading a CSV over like SFTP instead of just like an API. I think everyone knows that. And I spent 10 years on Wall Street. So it's not like, and I traded credit products. I traded bonds. I mean, I saw the biggest innovation was it went from settling T plus three to T plus two. And after 10 years, I was like, that's the best we got.

23:06I know. I got to go find something else to do. It just feels like if we rebuilt the system from scratch, we would definitely use public blockchains. But there was so much inertia and so much regulatory uncertainty. And the system was good enough for a lot of asset classes, especially in the US, that honestly, you just need a real forcing function. Now's the forcing function. Like now all the winds are at our back, like the regulatory landscape is let's actually upgrade the financial system, banks are racing new blockchain strategies, deploying public blockchain. So I mean, you see these opportunities, I don't know, when's the last time we saw a big market structure shift?

23:42It was like 30 years ago around dotcom. So now we have that shot and that's why we need to go really, really big, really, really fast and actually try and effectuate this change while the window's open. Window won't It won't be open forever. So while it is, let's do as much responsible innovation as possible.

23:58Alex Thorn:Yeah, I agree. It kind of feels like especially Chair Atkins and Commissioner Peirce at the SEC, they've sort of like put their foot in the door and kept it wedged open now. It's like wedged open. You can see through the other side from a regulatory standpoint that it's possible. And they're kind of begging people to come kick it open. Yeah. Right. I mean, if you read and listen to what Chair Atkins has said and what he said in his Project Crypto speech, he's basically calling the troops like, OK, you're going to be allowed to do it. Like, show us show us what you're going to do. Help us let you do it.

24:28Alex Thorn:And so I think it is really important. The time kind of is now. I feel like actually, I mean, depending on what happens with the administration, you've got three and a half years of the current administration. And obviously, whatever other issues people have and issues there are like set aside. On crypto and on crypto regulatory stuff, it's very clear that the window is open. And so I agree with the – there's some urgency. And it needs to be done responsibly. That's the important thing. We had our shot last cycle and it didn't go so well. So we're not going to get infinite shots. And it's too good of a technology to not have it reach its full potential.

25:04So, yeah, I mean I applaud the new SEC. I applaud Congress, the whole government for being open to this. But they're all making a bet. They're saying that crypto technology actually is better. So part of Ethereum is let's show that it actually is better in a responsible way, working with institutions, working with their needs, solving their problems. Actually, Ethereum should be a backbone. It should be invisible. It should just be a system that's abstract. It shouldn't be like some front and center flashy thing. No, it's just infrastructure, but it's global infrastructure. And if it's done correctly, then once you rewire everything with Ethereum, you can't go back.

25:40So the system's just upgraded. Just like when you put the world on the internet, no one's going to go back to the pre-internet era. So that's what we want to achieve.

25:48Alex Thorn:No one's like, can I call a horse Uber over here? Yeah. I agree with that. I think one more sort of question here on this topic. How important is it to Ethereum's future success that you mentioned, we talked a lot about Wall Street and tokenized assets, but say social, these things. Like, none of them, I feel like, and this isn't a story of only Ethereum, like, all of the general purpose blockchains, to the extent they've had adoption, and many have, several have, I should say several, I wouldn't say many, several have, and Ethereum certainly has, has been very, like, crypto native, right? It hasn't – there isn't like the – we're still waiting for the Fortnite on the blockchain, right?

26:25Alex Thorn:Like we're still waiting for the social media to really take off. You've got Farcaster, Bitcoiners use Noster and whatever. But like again, not like a mainstream, true mainstream use case outside of really what most people use them for, which is like swaps and lending. How important is it? Like can we continue with just like launch pads and lending and DeFi lending or does – do we need to deliver this for Ethereum to succeed? in the future. Yeah, the thing I don't want to downplay is how important all those crypto-native applications are. Like, Ethereum, at the end of the day, our lead, Avishal, says, he said, the world computer still is the end state.

27:03It's just you have to do a lot of things to get to the world computer, and capital markets is one step on the way to the world computer. So I don't ever want to, like, downplay the CypherFunk vision of where AI agents will be using Ethereum and all our social graphs are on Ethereum and Fortnite should be on Ethereum and gaming should be. But I think the most important and impactful thing is to bring the financial sector and financial infrastructure and the world of assets digitized onto Ethereum. That's just the biggest and clearest product market fit. And once you do that, then people can use this Ethereum economy to go build everything else.

27:37But I think we flipped the order for a long time because you didn't have regulatory clarity. People ask why now, and it's a pretty simple answer. Just now we have the regulatory air cover and so everyone's rushing in. I mean, Tom will use this chat GPT moment. And we always thought, I mean, Chad GPT moment was genius act passing and people saying, okay, public blockchains are open for business. So now we can use them. Yeah. It's that simple. I think it makes a lot of sense. And I agree the future of these things.

28:04Alex Thorn:Well, actually, I would say that capital markets are particularly suited to move on chain because these are ledgers. And so they're sort of financial in nature. You can store other things, like you said, social graphs in a ledger like that is effectively. It's similar. and doable, but their financial ledgers, even at their core, all their native assets are financial. Exactly right. And all of Wall Street stuff, despite the way it may be an interlocking series of tubes, is basically natively digital for the most part. So it's not like you're trying to tokenize a house. Remember all those efforts to tokenize real estate?

28:39Alex Thorn:Something may still come of that. But that was a lot harder because it's like, well, if I lose my digital keys, I haven't lost my physical keys. So, like, where is the connection, the provenance between the physical and the digital? But, like, a stock is a ledger entry of ownership, right? It seems perfectly ripe for... Exactly. I mean, a transfer agent, it's archaic tech. And that's why, I mean, SC's put out guidance saying, okay, maybe we should use the blockchain as a transfer agent. That's why you're starting to see stocks. You could literally just, like, run a node and pull the data down.

29:06Yeah, exactly. And it's distributed. It's not controlled by anyone. It's actually... Decentralization just means security. So, I mean, the more decentralized you are, the more secure it is. And so it's just harder to take down if you have these thousands and thousands or tens of thousands of nodes everywhere. And that should be better than a traditional transfer agent. So, I mean, the thing we had to prove is that blockchains are strictly superior to the way that the existing financial system is run. And I think we're finally at that point.

29:32Alex Thorn:It does seem like the tech is more ready, obviously, than it's ever been. The regulatory doors open. And the entrenched intermediaries are not gatekeeping as hard. There have been a little bit of gatekeeping. still? There's been a little bit, but I just I mean, pitched a lot I'm up a very positive some person if you tell anyone they're going to lose their revenue or jobs or something, like, blockchains aren't a charity they shouldn't just adopt it because it's some idealistic thing no, I mean, the banks will make more money if they, by cutting costs by adopting blockchain it's just like every bank is adopting AI to cut costs and then create new revenue lines, blockchains create new revenue lines, this is why I'm sure we'll talk about layer twos, but layer twos allow for a high margin profitable blockchain that you can have that's plugged into the Ethereum network.

30:23Why would you not have that as a bank versus use a closed system where you don't have network upside? So why would you not have digital settlement and have faster velocity of trades unless you make more money with trades? You flip the question and it actually helps the banks. Yeah.

30:39Alex Thorn:It does seem like the modular design of Ethereum's ecosystem, I'll say, today, but also its roadmap, which is very similar, by the way, to what mostly Bitcoin's design theory has also been, which is to maintain and preserve the fidelity of the layer one blockchain and extend its composability and features through these layer twos. Yeah. It does seem like that is a very simple concept that makes a lot of sense. It sounds like intranet versus intranet, right? Like, sure, you got the Galaxy intranet, but, you know, it connects to the internet, like, in the end. And I guess with L2s, it's, you know, roll-ups in particular, it's actually a stronger connection than just that, right?

31:21Alex Thorn:It's not just a permissioned area with a bridge to the permissionless, but it's actually relying on the permissionless L1. It is. I mean, the way I look at it is, A, I just fundamentally believe that the end state is not just one single purpose blockchain where it's one size fits all. That's just not how society scales. I mean, I look at the U.S. a lot. You have 50 different states. They all have their own different governance, but they all have shared security if you want to look at it of U.S. nations. You have companies that build in the U.S. because you have the best property rights in the U.S., which is like Ethereum.

31:58but you can customize as a company and make all your profits. I mean, yeah, society scales modularly. In this sense, L2s can be the whole spectrum of what you want them to be. You can have fully permission, like very, very, very weak connectivity to Ethereum. Maybe you'll have a social network or something that needs super high TPS there. But if you want security of Ethereum, you can have full composability with Ethereum in the layer 1. You can fully inherit the security of L1. You can have an escape hatch so all your assets will always have property rights on L1. And the fact that you can have this marketplace of L2 designs is really, really powerful.

32:30And then every bank, every company can choose their iterations. And, yeah, I mean, that seems hard to compete with in the long run. Customizability is important.

32:41Alex Thorn:So I had messaged you about this. And I've complained about it as well publicly that I worry that the Ethereum L2s are extractive rather than aligned to the L1. There's no doubt that they extend the Ethereum technology stack and that they can be, you know, composable back and forth, that the address format can be identical. So like one set of keys, which I think is very powerful, by the way, that that one, the fact that I can have one set of keys control assets on base, on Linnea and on all these other on optimism. And that's just one of the things. I mean, the design is elegant for sure. But one of my worries so far has been that increased usage on the L2 is not accruing value to the L1.

33:24Alex Thorn:And one of the data points I was using for this is Base, which is the most widely used L2, wholly controlled by one company, effectively a computer in Coinbase's basement, which to your point isn't a wrong thing. That's a feature. You can create one like that. they paid in Q2 445 ,000 in transaction fees on the L1, a combination of blob fees and transaction fees, to post their base data to the L1. At the same time, they charged, I guess, or received transaction fees of about$14 million from their base users. So it's a huge multiple between their cost. I mean, sure, there's some additional cost of like running the computer in the basement or whatever.

34:10Alex Thorn:and maybe some other compliance or back office costs. But if we just take those two very clear, like cost to post data, cost charge to post data, talking about like a 28x multiple, that's a very high margin. Shouldn't more of the value when users, especially when Base is being marketed, and I don't mean to pick on Base specifically. It's just they're also a public company, so I can see their financials. And by the way, I should point out, it's a very small part of Coinbase's actual business in the scheme of things. For now. But I worry about that because they're by far the largest and they're actually paying more in licensing fees to the Optimism Collective for the tech than they're paying to Ethereum L1.

34:45Alex Thorn:What if that never changes? You know, what if it's – It's – well, the thing I'll flip around is why would every company not do this then? Like why build your own blockchain and have to run consensus if you can use Ethereum's consensus for security, be plugged in the whole network, and then keep your profit margin? So the thing is, people being incentivized to use blockchains, having your own L2 with super high profit margins is, I think, strictly superior to standing up your own L1. So the one thing it does is it brings more and more chains into the Ethereum network over time. I mean, Robinhood picked Ethereum, bases on Ethereum, you have Sonium, et cetera.

35:23I just think we're very early in the adoption curve. I don't hear enough about Sonium, by the way.

35:27Alex Thorn:They launched that a while ago. Sony, one of the biggest technology companies in the world. What do they do? Do you know, just as an aside, not that you need to speak for them. I just, you know, I feel like I don't hear enough about that. No, and that's, I mean, that's part of the marketing that we want to just show the different diverse cases you can use L2s for. I think they're working on some IP, cool IP things on chain. I don't know enough, but some cool IP. Ant Financial is launching their L2 Jove. The thing is, if you look individually, the base is not, quote unquote, paying too much to Ethereum.

35:58But if you look holistically and you say that every company every institution does. There's going to be thousands and thousands of L2s. That'll add up. But the other part, too, I'll slightly push back on is you say it doesn't accrue value to Ethereum. I actually think they accrue tremendous value to Ethereum. They extend Ethereum's network effects. What you might be saying is it doesn't accrue value to ETH. That's what I mean is the ETH token holders. But ETH is a store of value. I mean, there is no value accrual to Bitcoin. Yeah, Bitcoin is a store. It's decoupled. It's a store of value asset that people hold in a portfolio.

36:28And it belongs in every portfolio. ETH is also a store value asset. It just has this added call option built in where you can get some benefit from transaction fees. You can get some yield. Even if transaction fees are zero and all the ETH staked, you get a 1.5 % yield. So, like, I don't know. I think separating the asset from the actual network is important. And that's started to happen. I mean, you're seeing treasury companies. You're seeing, I mean, today one of Jack Ma's companies bought ETH as a corporate treasury asset. So, I think if we decouple the two, ETH belongs in a portfolio just like Bitcoin.

36:59But the L2s are the only way to extend network effects and make it so corporations are incentivized to use blockchain.

37:07Alex Thorn:I think that's reasonable to separate. I guess my point is because I hear a lot about the argument that everyone's going to be building on ETH or ETH L2s being a bull case for ETH the asset. And I'm saying I just don't see that connection at the moment. I agree. To be clear, like if there are, let's say, 450K a quarter in ETH L1 transaction fees paid by base, if you multiply that by 1 ,000, it starts to look a lot more meaningful. There's no doubt. And I guess – and that's pretty much the – I think that's the most compelling retort that I hear because like there's so much blob space to be used by these roll-ups and not that much of it is being used yet.

37:48Alex Thorn:So they're saying, look, we're building the highway for the future. More cars are starting to drive. And when it's full, it'll be able to carry a lot more. It's the Amazon strategy. No one's on chain yet. No one's using on chain. I mean, that's something that hopefully we can tip the scales. I mean, almost nobody owns crypto. I mean, nobody owns Bitcoin or ETH. I mean, you go and talk to normal people. They still just don't. No one really does. We're in a bubble. I mean, we're in a niche. We're in a tiny niche and we forget that. And that's why I feel a lot of urgency for Ethereum, because we can hopefully be a small part of tipping the scales towards Wall Street and institutional users actually moving on to blockchain rails.

38:27If that happens, I mean, if activity 1 ,000x or 10 ,000x, it's just very hard for me to believe that at the end of the day, we're not going to have orders of magnitude, more fees. And ultimately, that'll roll back to ETH. But I do want to also separate, like ETH, the asset, it's a treasury asset. Ethereum network should be as extensible as possible. It should be as cheap to use as possible. and L2s should be as high profit margin as possible. It's the only way we're going to get real adoption. No one's going to pay to use someone else's chain.

38:54Alex Thorn:It is interesting, the debate, the argument Bitcoiners would make about the asset quality, the store of value quality, is that one, Bitcoin has never altered its monetary policy. It's gold-like in that sense. And some of the criticisms, I've heard Danny say this too, or Justin Drake, who says it a lot, right which is like that it's a pet rock basically that's it is sure it's like gold and gold is pretty much useless um whereas eth has you know staking and so there's some yield or some apy you can earn and the burn is an elegant mechanism that allows um the apy to be earned um and the supply to stay relatively i mean actually if you look at it it's been basically flat it's been basically flat yeah since the merge um so i hear these arguments but i do i wonder is it how how How are you, what level of success are you having selling ETH, the asset, as a store of value versus Bitcoin?

39:49Alex Thorn:I mean, you've said you should own both. I don't necessarily disagree with that. But like when you go into Wall Street types and whomever, Bitcoin is so much easier to understand as like a gold-like asset, is it not? Or how are you explaining that? It's another positive something. I mean, I think a portfolio should have both. I think they're differentiated. And recently, especially with the treasury companies rising and showcasing what you can do with ETH, Wall Street understands ETH pretty intuitively. They say, okay, there's this platform Ethereum where all assets are tokenized and you'll have all these different real world yielding assets and crypto native assets on there.

40:21That's great. We understand that. That's where we'll have trading and transactions. You have this underlying asset ETH that gets some benefit from all the different stable coins and tokenized assets and activity that's happening on this network. Plus as a yield, Wall Street, everyone loves yield. It's incredible. Plus it has right now lower inflation than Bitcoin. since the merge. And it has predictable issuance. So Bitcoin is predictable supply. ETH has predictable issuance. Like you can never issue more than 1.5%. So it's actually pretty scarce. And it's a really, really interesting yielding store value asset.

40:55And we're starting to see it. I mean, look at the ETH ETF inflows for the last three months versus Bitcoin. I mean, I think there's rotation going. It's not rotation because that's, again, it's zero sum. It's more diversification. Like the space is so big there. I don't think there's just going to be one store value asset. I think you'll have multiple and ETH is the next one to sort of reprice that level. So I would say we're seeing a lot of success. We put out this digital oil report and that's been the foundation for a lot of different reframings of ETH. I think this whole like revenue price to earnings multiple meta is going away because you can't use that for infrastructure.

41:31You can use that for software companies. You can't use that for infrastructure. I would argue ETH's infrastructure. So people are beginning to get it and you're seeing that going to the price. And there's a lot more repricing to happen.

41:40Alex Thorn:Yeah, I would think of it, at least at this point, as more of like a catch-up trade, which I think is fair. And I don't mean that to belittle. I mean, ETH is up 3x since April. That's undeniable and impossible to ignore. And absolutely, the shine from markets to the extent that it's on crypto has been on ETH for several months now for that reason. But ETH, you know, Bitcoin's been making new all-time highs for 18 months. And ETH only finally broke its prior all-time high. Recently. Just barely, yeah. A couple weeks ago, two weeks ago-ish? Yeah. Two weeks ago? Three weeks ago? Or I guess I should say in the beginning of August, beginning, middle of August.

42:20Alex Thorn:Which, I mean, feels good for Ethereum people, no doubt. My gosh, that was... Actually, one of the other things that I had mentioned to you, I'm surprised that that was the case. I thought I'd called for ETH's new all-time high at the end of last year. because the shifting regulatory environment, Bitcoin was already a commodity. It was the only one that Chair Gensler had ever said was a commodity. And that's why, though. That's why it's done so well, because it's had no— it's been clear skies for a long time. I know, but I was saying, once that pivot was obviously happening— It takes time. I guess, I mean, yeah, because it seemed like the— well, and yeah, it may still be happening.

42:53Alex Thorn:I mean, I think that's fair. Maybe it just takes time. All of the relaxation of, you know, attacks on DeFi, the SEC withdrew its change definition of the exchange rule, which was going to make communications protocols, register exchanges. I actually wrote a comment letter about that two years ago saying that was terrible and the SEC shouldn't adopt that, that one specifically. And all these things, right, the Genius Act and obviously Clarity, almost all of that is net more newly beneficial to Ethereum and its applications and ecosystem than Bitcoin, which was mostly fine. and so I think people that must have contributed to the frustration as recently as you know April and May April yeah right it did but that's that's why being a little bit steadfast it just takes time everyone like especially financial institutions move very slowly because they don't have the incentive to move fast and break things tech companies have the incentive to move fast and break things because they're less regulated you don't have money at stake here you have money at stake and you have a system that already works pretty well so you need a lot of signs for them to actually start moving so it's one of the few places is where banks might move slower than the crypto natives.

44:00But when they do move, then it's changing the whole infrastructure for how they operate. And I don't know if Wall Street is running on Ethereum, it's hard for me to think ETH won't be a multi-trillion dollar asset. It's just very, very hard to say that you're going to have all these tokenized assets, stablecoin activities on this whole new economy, and ETH won't be up there with Bitcoin as a multi-trillion dollar asset. Here's another thing I wanted to mention

44:22Alex Thorn:to you were talking about the L2s and tokenized assets. I think I believe pretty strongly that tokenized, let's say like public equities, should be tokenized on the L1 and not on L2s. Agree completely. Yeah, because one, two primary reasons. One, the optimistic roll-ups as sort of the main L2s today. Obviously, there are other designs and ZKs and stuff like that. But the optimistic roll-ups are controlled and ordered and sequenced by one company currently. And I know it's been a hope or an ambition for L2 developers to build decentralized sequencing, but we don't actually have any of them. We don't have that, yeah.

45:00Alex Thorn:And by the way, it's a tough technical problem. So it's not like because they don't want to. And I fear that if you are trading tokenized securities on a centrally sequenced L2, that really doesn't look much different from a regulatory standpoint in my mind than like NASDAQ, which itself is, why doesn't NASDAQ reorder your transactions and cause you slippage? Well, because they're strictly regulated not to. Right? But like, and I'm not saying that base or optimism or arbitrum would, but it does feel like they can. They also can kind of arbitrarily charge transaction fees. Right? And those are highly regulated in the context of stocks.

45:41Alex Thorn:That's one reason. Yeah. And then the second reason is that the security guarantees of the optimistic rollups rely on your ability to unilaterally exit and and which actually is most of the core issue so like i get why ethereans are like mostly okay with that like in the context of crypto and and and defy um but if the asset doesn't exist on the l1 because it was issued on the l2 then there's nowhere to exit to and by the way even if you were forced to unilaterally exit in the context of a stock trade that could cost you money which is highly regulated right and so like i i wonder about because you mentioned hood this is a great example robin hood said they want to do tokenized stocks on their own l2 and to me i can't imagine that a regulator would allow that without some form of oversight and registration unlike the decentralized l1 should need in my view so i just i think there will be different standards it's the cool part is we get to rewrite how finance is being re-architected which is why it's such an exciting time but it makes sense that people would start and say okay let's do an L2 native token, let's issue on the L2, etc.

46:44At the end of the day, all issuers should want to tokenize on L1 because it future-proofs you everywhere. No one just wants to go on one L2, not just the Robinhood L2 or the Coinbase L2. You want to be able to travel between all of them. And so having one universal property rights ledger, which is the L1, makes the most sense. And especially as more and more of the Ethereum landscape gets CKA-fied, which is happening. I I think updated their, they're going to use Sysynct to move towards potential ZK integration. As you have more and more ZKification of different L2s, you're going to have better interoperability.

47:18And so L1 assets can actually transact on L2s. That's a pretty beautiful architecture. So I think we're getting there. I just think we've seen a lot of initial iterations, but it's positive sum for all assets to be issued on L1 and then trade high frequency on L2s and then be composable across different L2s. And I mean, it's a really cool architect. I think we're going to get there. That's something that we believe very strongly in as Etherealize, and we're going to help facilitate that. And we also say tokenization is shopping on L1.

47:44Alex Thorn:I agree. I think if you do the issuance on L1, that makes a lot of sense. And then you potentially could unilaterally exit. You could unilaterally exit. You can standardize where your contract lives and then travel across the Ethereum economy. It's more composable with DeFi apps everywhere. It makes all the sense in the world, and I don't think it's going to be that hard of a leap for people to get there. I think to start, people want walled gardens to start to know that they're safe, secure, everything, and then the point of Ethereum is to future-proof and open up to broader distribution and to a global audience and to more permissionless networks.

48:22Alex Thorn:Yeah, I like you've talked about doing this in the, what do you say, not regulated way, but also the responsible way, right? For tokenization in particular. Because we see some, and I get why, because it's been a real slog with the prior regulatory environment. But these offshore wrapped equity structures, to me, you could have done that at any time. In fact, people used to do that with CFDs and stuff and have their domains seized by Homeland Security and not in the context of blockchains, but in general offshore stock trading platforms like those have been a thing for a long time and I just I really want to see I want people to be focusing on how to regardless of the architecture or the infrastructure focusing on doing it in a way that brings the SEC along with them because that's what could be durable right we don't want to like that's the only way we want to do things we want to do things in partnership with institutions in partnerships with regulators That's why we made such a big policy push is because everyone wants this to happen, so let's do it the responsible way.

49:28And yeah, let's not use wrappers on wrappers on wrappers. My heuristic is if any of the actions we're doing makes the financial system worse, then what are we even doing here? but there's native tokenization actually working on new standards and setting new principles like tokenization on L1 and being able to trade on L2s and having ability to exit to L1, having future-proofing towards where the markets just get better. I think we can do that now. I think that that window is now open. So I agree completely with that.

50:00Alex Thorn:We talked about it a lot here. It's been great, Vivek. What else should we be excited for? I mean, I know you mentioned ZKs have some ability here as well. You guys plan to build some zero-knowledge technology, it sounds like. That or what else should we be looking forward to from Etherealize for the rest of the year? I think privacy is a really big thing. And it's because just like everything, I mean, it's the perfect storm of positive catalysts finally after a lot of negative catalysts for a lot of years. But privacy was largely illegal and people didn't want to touch it. And the problem is when you talk to any institution, they're not going to operate on fully public zones.

50:37That's just a non-starter. You need to protect customer data. You got to protect trades. You don't want the whole world seeing what you're doing. We're not going to be able to follow like John Q. Smith's wallet on Orkham. Unless they want you to. But it needs to be optional. And that's the important part. It needs to be optional and customizable. You have a lot of things that are just fully private with no ability to be public. And you have most blockchains are just fully public. so there's just a huge design space now that privacy is finally allowed and even the sc is saying that you should have privacy on blockchains um to build customizable privacy and that's something that um that we've gotten the best zk players in the world together on i mean danny is leading the charge on this along with zach and saying let's upgrade the privacy stack so we can have optional privacy for tokenized assets for institutions that want it you can have things in public and that just recreates the financial system pretty well zk is such a playground that um And I think the potential for ZK is as high.

51:30It's synonymous with blockchains, but it's as high as blockchain. So being on the forefront of ZK development is a very, very high priority. So it's going to be a big proponent of all the products we create. Yeah, very cool.

51:40Alex Thorn:And when I first started looking at ZK, I know they're technically different, but ZK didn't really exist. It was only homomorphic encryption. Yeah, yeah, yeah. That was only like seven years ago. And the stuff that people are doing are able to verify with zero knowledge proofs today. It's crazy. It's so far beyond where we thought we would be. I remember when I first started looking at this. And that's because of blockchain development. Blockchains were like a playground for ZK development. It led to the hardware acceleration. Now you can use GPUs to do ridiculous ZK proofs. I mean, yeah, it's all weapons-grade in the best way of technology.

52:15But ZK got developed because of blockchains. And the ZK space probably extends past blockchains. AI can use ZK for verifying models and everything. But the real product market fit is with blockchains for scalability and privacy. And so we will use them for scalability and privacy and educate policymakers, educate institutions. And this is how we get to the ultimate blockchain vision.

52:38Alex Thorn:Well, it's very cool. It feels like Ethereum narrative has its mojo back. And I know a large part of that is because of you and your team at Etherealize Vivek. I appreciate that. Congratulations on the new raise. And I can't wait to stay in touch and see what's next. we're going to hopefully build a lot together. So yeah, thanks for having me. Yeah, Vivek Raman from Etherealize. Thank you so much. Thanks. That's it for this week's episode of Galaxy Brains. Thank you to Vivek Raman from Etherealize and our friend Bim Netta Bibi from Galaxy Trading. As always, everyone have a safe and happy weekend and we will see you next week.

53:16Alex Thorn:Thanks for listening to Galaxy Brains, the weekly podcast from Galaxy Research. If you enjoy the show, please like, rate, review, and subscribe wherever you get your podcasts. To follow Galaxy Research, sign up for our weekly newsletter at gdr.email, read our content at galaxy.com slash research, and follow us on Twitter at glxyresearch. See you next week.