Moving Modern Money: Sphere (Breakpoint 2024)

0:01Picture yourself on a beach, retired early and enjoying financial freedom. If this is your dream, then now's the time to level up your investing game, and Real Vision can help you. We arm you with the knowledge, the tools, and the network to succeed on your financial journey on your own terms. Take control of your future and visit realvision.com forward slash free. That's realvision.com forward slash free. Hey, everyone. But as you know, Solana is one of the ecosystems I'm the most interested in. I've been incredibly bullish. I love to see the vibrancy of what is happening in the space. Unfortunately, I couldn't make Breakpoint this year, but the stories have been amazing.

0:49I heard the talks are incredible, and we're really proud of Real Vision to give you talks from Solana Breakpoint 2024 in Singapore. I really hope you enjoy them.

1:09GM, GM. So I'm Arnold, co-founder of Sphere. We got our start on Solana way back doing crypto payments. And what I'd like to talk to you about today are some of the lessons that we've learned building a payments company. Usually ask people what they're bullish on for real-world use cases within crypto, and they'll tell you payments. And that was me too, until I decided to build a crypto payments company. Then you start to run into some obstacles, which I like to call great filters, that show you why getting money in and out of chains today is extremely hard. Today we work with a lot of amazing Solana companies, Helios, Helium, Squads, Latitude, the list goes on.

2:01But over the last year, a lot of our focus has been in cross-border payments, especially in emerging markets, where through happenstance, the DNA of the team really concentrated when crypto is down bad. We do orchestration. We're essentially a money transmission aggregator and really get into the low level of bank messaging. over the last few years a lot of my conversations have been with bankers regulators compliance officers risk officers and trying to convince them to more natively support the amazing things that can be built on top of open loop permissionless chains so you know what are some common I suppose obstacles that we see when interfacing with these types of counterparties.

2:50I like to call this a suffering from success because as these ecosystems have grown so much in size, and you know, now all of you are here. I remember a couple of breakpoints ago, it was a much smaller crowd. Reputational risk becomes quite important because the quiet part out loud is that it's very hard to move a lot of money recurringly in and out of crypto because of the open risk vectors that exist within open loop permissionless chains. Why is that? Well, you know, it turns out if anyone in the world who has a computer and an internet connection can kind of do what they want on chain, there's good stuff and there's also bad stuff.

3:34And, you know, it's a separate question of philosophy of what you define as good or bad. What I will say is that there is a category of activity that is considered higher risk because you don't know who you're interacting with, who is building your block, who is confirming your transactions, who are you paying fees to, who is interacting with your accounts and sending you coins. When it comes to the Bank Secrecy Act, this law that has driven money laundering and counter-terrorist financing principles across many different countries, this notion of risk starts to really matter. So, you know, people make up trilemmas without formal proof, so I'll give you another one, which is between regulators, blockchains, and banks.

4:21It's really hard to get all three of these counterparties to give full approval on allowing you to move a ton of money in and out of crypto. You've probably wondered, why isn't there a way for me to just use Apple Pay and get a lot of money into crypto? Why do I have to KYC so much? Why are the auth rates so low? and it's been convincing and finding the overlap between these three, the blockchains that want to work with banks and the regulators that oversee bank activity. Here are a couple of examples that you probably know of. You could have a CDBC, P's, regulators, and banks. There are centralized exchanges like previously FTX that found middle ground between regulators and blockchains and older chains like Ripple that find the middle ground between blockchains and banks.

5:13Despite that, it's still really hard to move money in and out of crypto. Satoshi's original vision was a peer-to-peer payment system. And yet, 8 billion people, how many use crypto? Today, I'm going to introduce a couple of key things that we think are part of the solution. Naturally, you want a very high-performance virtual machine. There's a ton of TPS in the world. You want fixed and nominal gas fees. Something that people don't really talk about is that regulated institutions that have to report their financial activity each year are hesitant to hold coins that could go up and down in value, and where a source of funding is unclear.

5:53And the last is built-in privacy and compliance. This is the way that you make this technology truly interoperable with the fiat, with the real world. One analogy that we like to use in order to describe the system is a decentralized wise, where you have local experts coming in from all different jurisdictions, regulated by different agencies in the world, and you give them a credibly neutral platform in order to find each other. That's one of the biggest headaches as a fintech, trying to service things that are happening on blockchains. So this is a QR code for what we'd like to publicly introduce today more formally, which is SphereNet.

6:32If you're a fintech in the crowd, you might have heard me talk about it. It's a way for us to bring us all together, leveraging the most performant distributed system that humanity has ever created, Solana Virtual Machine, in order to make it so that the users, the app builders who are trying to innovate in open finance, consumer apps, gaming, and so forth, now have a clear channel with the banks and the infrastructure that is required to really make this technology mainstream. If you're interested in contributing as a regulated institution, as a fintech, we'd love to talk. Some of the greatest challenges that we've seen can come down to language, culture, and in convincing foreign entities to really give you the best service possible without it taking a lot of time and money.

7:22So thanks for listening, and I hope that some of this was mildly interesting to you.

7:55Thank you. com forward slash free.