E139: Plasma Founder: The Truth About Raising $1 Billion in Crypto

0:00Why did you decide to focus on stablecoins? I think stablecoins are the single most interesting sector in all of crypto. The number one use for blockchains is to move value around globally and efficiently. I think stablecoins are the best means of achieving that. Can you go through the evolution of stablecoins throughout the years? Sure, absolutely. Paul Fex is the founder and CEO of Plasma. Building stablecoin infrastructure for a permissionless global financial system. Previously, he shaped derivatives at Deribit and co-founded Alloy. What is the trillion dollars opportunity? stable coins taking meaningful market share of global commerce in terms of payment flow and volume that is the trillion dollar opportunity how quickly do you think this can happen we are at 250 billion basically 100 probability we'll have a trillion dollars and now sending stable coins very soon explain to me plasma simply plasma is the blockchain still for stable coins why does the world need plasma you can make very different choices if you only focus on stable coins what is plasma vision winning stable coin settlement globally what does plasma success depend on crypto Crypto is an incredible execution game.

0:58You need to be very good at executing. What's a big risk for PASMA? Building anything in crypto has inherent risks. You have to be paranoid about security. We very much are. There's a very long list of risks to overbuilding. What's the end game for PASMA? The true end game is we can become the number one chain for Sablecoins and we can have the highest market share in settling Sablecoins on PASMA. So one of the key requirements for future infrastructure is fast and cheap. And you even said ideally free USD transfers. How do we get free USD transfers? How does that work in practice? Who pays for the transactions?

1:34Hi, everyone. This is the little bit that I know none of you like that can help us make a huge difference for this show. And we want to take it next. 71 % of the people who regularly watch When Shift Happens have not subscribed. And so all I'd ask you, if you want to make a huge difference, is the following. If you've seen this show before and you like it, help me, help my team, hit the subscribe button and we'll continue to build this show for you thank you how are you feeling good good what goes on uh through your mind when you see a billion dollar in deposits in a couple of minutes uh it's scary it's stressful i mean i i don't i genuinely don't think i've been i mean we opened deposits i was i was in in london in our office and we opened the the pre-deposits at at 2 p.m and i think at like 1 58 p.m was probably the most stressed i've i've been in my entire life um because like you're just so paranoid about going like things going well right but like uh the front end might get exploited the smart contract might get exploited and like you spend months kind of leading up to that and then going through audits and then doing everything you can but like pushing the the big green button um is is is just always scary because there's just so much at stake right and then you it was all over so quickly yeah yeah no i think it was like a minute and a half or something and then then it was it was over and and so like the the the yeah i mean like it was still like it didn't really like it you don't feel relieved right away right well like it's still you're kind of in the stress state of like oh we launched this and like we we didn't know what would happen truly like we we made zero private deals we had no pre-commitments um and then so um no one on on the team knew what would happen basically um and we had the kind of initial 250 million um cap and that was filled in a couple of blocks and then so we increased it right away and and uh um no no one knew how quickly it would fill if it would fill at all and but you had a plan you were saying if we get that field that quickly then we will go to 500 yes yes we didn't have that plan how did you feel after these uh 500 million were filled in within what three minutes or four inside yeah i mean kind of kind of a mix of relief but so i mean you still have like this kind of uh there's a responsibility to it right because you do have this this this contract uh that then holds holds a lot of value obviously and we um we built this with the beta who are fantastic and who've kind of helped us on all of the kind of smart contract vault side of things.

4:17And I mean, they are extremely experienced in building this. And then we kind of considered building it ourselves, but then met the beta guys who have three plus billion in these kind of yield contracts. And so we decided to work with them, but it just stays scary even after like it's done right because you you now have this value in in the contract and you um you're extremely paranoid um about like uh where's where's your ledger and who's on this multi-sick and like it's just um it's just uh yeah it's stressful but um it all went well and and we're obviously extremely extremely happy about that you were on the right side of the of the history i think it was february yeah february had been from baby just after the back and he was on the other side of the history 1.5 billion but not yeah not not arrived in uh what two minutes gone in uh yeah to be to be fair i mean ben and by but seem to be doing fine and then so i mean they i think actually they did a fantastic job kind of communicating through all of that and i mean it's horrific and like you you you don't wish this upon anyone but um and given the horrific circumstances i think by but handled it extremely well absolutely it was amazing to watch the level of calm of the dude and the level of humor he had also like yeah it was crazy no i respect that a lot if you had to explain what it is you do and why you do it to someone who's never heard of crypto or blockchain before what would you say um i think the easiest way to explain to someone who like has no idea about blockchain who doesn't know what stable coins is or um a really high level i mean i think plasma is basically a new more efficient way to move money globally i think that is kind of the the super short summary which is very abstract and it doesn't really actually say much um but um you can't really tell someone oh it's like stable coin settlement rails but like that like if you have no idea what crypto is then then that makes no sense let's say that person tells you listen i'm using this thing called wise transfer wise or Revolut.

6:26I'm happy with it. Why do I need something else? I think both of those are fantastic products. I think it really depends on the specific use case. My general view is I think domestic especially in the US and in Europe I don't think that's where the most interesting stablecoin opportunity is. Sending money from New York to LA I think is a fully solved issue basically And I don't think Sablecoins add much to, to be very honest. I think the highest kind of impact Sablecoins have is very much on the cross-border payment flow side of things. And so if you live in the US, but you have family in South America and you send money to them, that's still a horrifically inefficient and slow and expensive process.

7:15And I think Sablecoins are just the vastly superior tech stack to build that on. Who are you? who am i i'm paul the founder of plasma are you only the founder of plasma is this how you define yourself in in this podcast very much so yes um uh generally in life uh it's a very big part of my life so i think the like uh somewhat truthful answer is probably yes yeah your previous poker player what's one thing you learned in poker that you still use today i think a probabilistic frame of looking at the world where like you like most things aren't like pure binaries but kind of probabilistic decisions and and you have a limited set of things you can control and and nothing teaches you that better than poker well like the amount of times you just lose with like the better hand or you make the right decision and you still lose a lot of money um and then that does teach you to like deal with frustration and and and also with just kind of randomness um and variance what's your latest example of frustration due to randomness that you couldn't control i think this is like plenty of examples right um i mean like we probably have 20 different uh situations every day that like don't go perfectly well um and and and and and so um i know what the most recent interesting example of that is but like um like things don't always go perfectly and and and you kind of have to be uh in a position to to deal with that many of your friends went to traditional finance citadel flow traders but you didn't why i almost did i mean i i went to went to uni uh studied computer science and then in business and i was pretty close to going down the kind of trad fi um and path and and um very happy i i i didn't uh i mean i um i never finished my degree i was almost done um and and and so um that um kind of what was the the choice to like do do my own thing i've always kind of liked independence and like making decisions on on my own and and and just that's also why i like poker and and and so um i almost went to like one of the larger kind of hft firms and and then the last second decided not to uh because it seemed like i don't know such a like straight career path um but like you can you can be pretty certain you have like a pretty good pretty successful outcome but um it's not really on like on your terms to an extent and I think I've realized I don't want that.

10:04Quick shout out to our sponsors who make this show possible. I'd like to thank our friends at Jupiter, the most used decentralized trading platform on Solana and the largest DAO in the world. We've teamed up with Money Badgers, the lifestyle brand launched by Paradex, to give you a shot at winning an exclusive Money Badger NFT from their upcoming Genesis collection. Being in the trenches is more than a full-time job, it's a way of life. The Money Badgers was born to tell that story. Their flagship NFT collection drops in Q4 this year and we're giving you a chance to get one. Remember, supply is limited.

10:38Use the link below to get on the waitlist. EUR, a Swiss-backed and regulated neobank powered by Mantle that offers Swiss IBAN accounts with fiat currencies such as the euro, the Swiss franc, the US dollar and the Chinese as well as crypto all in one place to support this show please check the sponsors link in the description down below thank you what do you do what do i do what did you do what did i do yeah um i mean back then i was i was still playing poker quite quite a bit and then um founded a company called called alloy with a good friend of mine from from from uni and and so um that kind of then was the the choice on one hand not to not to finish my my degree fully and and and to just kind of go down the entrepreneurial um path or was this alloy uh business i think you told me they called your friend called you the crypto guy and through these experiences that you actually built this company yeah i mean it was like uh kind of basically came came into being because most of the it was like the uh 2021 2022 era of crypto right but like uh things were super hot um things were going up and and and and and and it was extremely volatile and so at a bunch of my like chat fi oriented friends ask like how do we do crypto basically and and in the fund and in like a professional manner and i would send them these like very long explainers of like how to set up custody how to manage private keys how to like basically build an entire system around that and um relatively quickly realized that like that requires an insane amount of work and an insane amount of just kind of set up and and and basically you need someone who you need a team full-time to really build like a good crypto setup if you want to trade it professionally and um relatively quickly realized that that is probably like a limiting factor for a lot of entities who otherwise would be interested in doing things in crypto and so decided to build that you became quickly disillusioned with this company trying to implement blockchain in uh in uh the business world right b2b yes very much b2b why did this not work out the way you wanted or you imagined I think in the enemy we saw that very much I mean my background is very kind of crypto native on chain um did a lot of things kind of in in in that corner of of the world and initially alloy was extremely crypto native too um and and uh we then pretty quickly realized that like the biggest demand is is very much on the kind of more grown-up institutional regulated um side of things um and and so it made sense uh to to just fully focus on that given that that is kind of where demand was and i think this is still us and then so um was it real demand or was it demand because these institutions or these companies need to show their investors or their clients that they're actually doing something in this blockchain space without actually really knowing and what the fuck they're doing.

13:53It's probably a mix. A bit of both. I mean, I think there's like one sad answer to that. And all of the ally clients were in it for the right reasons and fantastic people, obviously. Obviously.

14:12You mentioned the other day, you don't have to go as, you can go as deep as you want, right? But you mentioned some of the nonsense that you have to deal with to bring crypto to traditional finance. to still show people and this was like a couple of years ago right but it's probably still the same today there's a lot of nonsense to be able to bring crypto to traditional finance players yeah what's some of the example of the nonsense that uh that can actually make people who are watching this podcast grateful about the companies that that are pushing this towards traditional finance because it's really not easy big money might be there but to to get access to this big money is actually a mega challenge no 100 i mean i don't think this is a crypto specific thing but like it's just i think it's it's a fact of life that selling b2b sars to very large organizations is is not easy um and i've i've deep respect for anyone who like does it at massive scale and and succeeds and and doing it um because you do have you have a lot of politics to navigate you have a lot of just kind of complexity that is like feels removed from the actual product or or business and that is just kind of basically like random distractions um kind of around the the core of of what you really want to do and and and i mean it might also be a european thing to to to an extent right i mean like a german company does come with uh quite a bit of just kind of bureaucracy um around everything and then so um um you just spend a lot of time on just kind of doing stuff that you feel doesn't contribute an insane amount of value uh to to what you're actually trying to to achieve without mentioning any client's name do you have an example of things that you had to do yeah that make absolutely no sense and that ultimately made you stop or exit this company to build something else?

16:05I think, I mean, in the end, it has this long list of stuff. Like, it is like, you sometimes just have, like, frustrations with how quickly things happen. Like, things are, like, decided and then implementation takes six to 12 months, even though it could very easily take four weeks. And so that's kind of one side of frustration there. I don't think it's anyone's fault. I think that that's kind of just a function of like very large companies having very established processes and going through like extremely structured procurement processes. I mean, we had a bunch of like all of these ESG and compliance things to worry about.

16:46Right. Well, like I remember for one contract, we had to sign that half the team was diverse and half the team very much wasn't diverse, but it was mostly white males. and and and and so um is this in here to just enough or we had a conversation that everyone needs to be diverse now and make up a reason and and and and so um you just like that's just like something that like doesn't i like i think like most of that stuff comes from from from the right place and and is is kind of something i actually i'm i'm probably like i think the outcome that that is trying to be optimized for something i'm i'm very much uh kind of aligned with um sometimes you just like marvel at the inefficiency of of of of how to get there how did it end up for your company hello how did you escape this uh bureaucratic nightmare yeah look i don't want to say escape because that's that's too that's that's too negative and negative and then i'm still kind of very much um um available they have a kind of helpless helpless needed um um but uh in the end i think like we um like i and my my co-founder too just kind of came came to the conclusion that like it's probably not the kind of highest um upside um roi um thing to to to to do really and and and um um i think uh yeah i i don't i don't regret um that that that decision in in any capacity um it ended up getting getting acquired by a european asset manager um which is like was a fine outcome but like not incredible um and and and so um um no it was all good let's get to the meat of the subject why did you decide to focus on stablecoin i think stablecoins are the single most interesting sector in all of crypto um it's it's kind of it's very interesting to see now how like especially since beginning of the year um that has become incredibly consensus um it feels like and um even like like that shift happened incredibly quickly well like it didn't feel like that like even late last year um i think the number one use case for blockchains is to move value around globally and efficiently and any stable coins are the best means of of achieving that for people who might not have been in crypto for many years can you go through the evolution of stable coins throughout the years sure absolutely i mean um you had these like very early kind of wacky experiments of of stable coins um uct very much being the the first kind of real at scale used one um coming coming out of bitfinex um and originally mostly just being used as a as means to transfer value from exchange to exchange where you um you do that in bitcoin and like the early days i mean the early bit max days everything was just denominated in bitcoin which creates a long list of issues right if your collateral is also a very volatile asset um that you then use to trade a very volatile asset um that that's not ideal um and and and so you basically need a form of usd that is easy to move from venue to venue um for market makers and participants basically if you have money on betfinex and you need money on bybit um you want it to be very easy to just send usd from a to b um and and traditional like a wire transfer ic just takes too long basically and it's too inefficient and so um that is how how then bitfinex um originally built usdt which is uh now the by far largest stablecoin um and and then um Now you have really kind of a duopoly basically between USDT and USDC and then a kind of long list of kind of also relatively large stablecoins.

20:47I think stablecoin as a category is like pretty reductive. In the end, I think like stablecoins are not like one monolithic product, but like probably three or four distinct products. and really were like uh makers usds is a fundamentally different product than usdt is and then so is ethena's usde for example and they all get kind of bunched into into stable coins but i think they do have kind of different use cases different user bases and different reasons to exist what's the biggest problem with stablecoin today i think there's a there's a long list of problems um i think on on one hand um stable coins are like incredible network effect products obviously right and then so a currency that isn't basically accepted everywhere is worth much less than a currency that is like just accepted everywhere right and then so i think stable coins are still not deeply integrated into existing payment flows um and and that obviously leads to like just challenges and actually using them um and and kind of day-to-day day-to-day commerce um that's probably the the number one issue i think is getting solved extremely quickly um you still have quite a bit of like unnecessary inefficiency um and in a lot of places and it's still actually quite expensive uh to to to uh to use stable coins to pay for stuff i mean if look at like coinbase commerce or or a stripes um stablecoin product or checkout.com stable like none of them are like actually all that cheap um or actually all that good um and in my opinion um and and i think that probably changes pretty quickly um and and i mean your stripe seems extremely serious about winning and dominating stablecoin payments given that they acquired bridge and now they're just acquired privy um and and so i think that probably changes pretty quickly you said the stablecoin infrastructure is built for the past not for future cases what does the stablecoin infrastructure built for the future looks like yeah i mean if you look at the kind of existing if you look at where do stablecoins actually transact and and and and and and insert right now um overwhelmingly is ethereum mainnet and tron And that is mostly just kind of the path dependence of those things kind of being early and kind of getting to network effects and distribution very early on.

23:23And then Sablecoin just growing and then especially growing in the largest networks. I think the use cases of Sablecoins are changing pretty rapidly, where you're seeing actual kind of true cross-border commerce being settled on Sablecoin rails. I think it's one of those slowly and then all at once situations where, you know, seeing commodities transact on stablecoin rails and you're seeing not a big bank on planet Earth that isn't at least thinking about what does our stablecoin strategy look like and how can we kind of approach this to make our operations more efficient. and um i don't think they will use tron basically um and and and and so um i think that is like uh the the the way i i look at the world why would they not use tron which is the most used chain it's basically the stable going chain today right yeah i think it's a lot of baggage attached um to to to that uh right and and and a lot of just uh uh probably compliance challenges um If you work at a large bank and you want to settle a very large commodity trade, you probably have challenges doing that on Tron.

24:43Besides that, I mean, for consumer use cases, it's actually not that cheap anymore. I mean, it costs between$3 to$5 to send you a CT on Tron from A to B now, which is actually very meaningful. If you send someone$50 and then it costs$5, that is an insane take rate and a fee. and so I think you do price out a lot of use cases if it's just expensive so the vision for the future infrastructure there's a few points we talked about the other day the first one is permissionless what does a permissionless stablecoin infrastructure look like yeah I don't think there's like a one sentence answer to that really I think it needs to be I mean needs to be permissionless right so anyone can can can run a validator um and and anyone can kind of participate in in securing the the network um I think bitcoin has to play a role in that um as kind of the most lindy most um just kind of credibly neutral um blockchain that that exists and so I think inheriting some some of bitcoin security um is is is a useful thing um and then given that stable coins is such a kind of integrations network heavy business it needs to be extremely easy to integrate um so um you want to i mean we made the very conscious choice to be to be fully evm compliant um and and and incompatible um and and that makes it so much easier to just integrate plasma um into into existing workflows right because you don't need to build an entire new tech stack but you you can use all of the dev tooling that that exists for kind of the evm itself and and um you just have a 100x harder job if you have some like custom vm that doesn't have good tooling around it how can we have a permissionless stablecoin infrastructure if the most used stable coins today are completely centralized do we have another stable coin that is different or do we use what's being used today in a different fashion yeah i mean i think um in the end it's really hard to build a fully permissionless uh stable coin um i mean uh i went through the very early days of of defy summer with all of the algo stables and the esds and dsds and and they all failed in like um somewhat spectacular um fashion i think in the end um i've not seen a good design for a truly permissionless fully decentralized uh stablecoin um really um at least not in like i mean you can just way over collateralize um it and and some other asset right and then um um that that that works which used to be kind of the old die um a model um that's also changing to to an extent so i think in in the end um that is kind of a trade-off you have to make.

27:46Both USDT and USDC work incredibly well and have deep liquidity and have mint redeem that functions. And that does require some degree of centralization. Quick one. I want to thank our partners who help us make this show possible. Thank you, Trezor. My favorite cold wallet to store my crypto and make sure I sleep well at night. If you two want to sleep well at night and want to order a treasure wallet, you can use my promo code WSH10 to get a 10 % discount. Big thanks to Bitwise Asset Management for backing today's conversation. Bitwise is a crypto specialist asset manager with more than$15 billion in client assets across 30 plus crypto solutions, including ETFs, index funds, alpha strategies, staking and more.

28:33However, you like to invest in crypto, Bitwise has something for you. And SWI, a scalable layer one blockchain that's fast, secure and affordable, built by Facebook developers and that delivers the benefits of Web3 with the ease of Web2. Thank you. So your opinion is that we don't need to solve the centralized tablecoin problem? Or is that even a problem? Or we haven't found yet the way to do it? I don't have a super distinct view on that, to be honest. I think USDT and USDC work extremely well in the current fashion. There's a lot of sharp people building new and interesting stablecoins. Some of them are going to work, some of them won't.

29:20I think in the end, the beauty of crypto is you have so much experimentation and you can just experiment with a lot of things. and and um that probably leads to like incredible innovation on like the stablecoin asset um side of things itself and and i think that that that's a positive um it's tough to predict how that plays out i don't see a massive issue with the current state of having specifically usct be the largest and and leading stablecoin you mentioned before uh tron too expensive three to five dollars per transaction right so one of the key requirements for future infrastructure is a fast and cheap and you even said ideally free usd transfers right how do we get free usd transfers how does that work in practice who pays for the who pays for the transactions yes free i mean in the end as you said i think fast and cheap is is a requirement but very much not a not a right to win um well like it's uh you definitely lose if you're slow and expensive you don't definitely win if you are fast and cheap um and first having this um having this uh gasless transfers of usdt i think unlocks actual kind of net new use cases that they would be priced out um otherwise um and uh we achieved that by basically having a split block of architecture where part of the the block is reserved for just usdt transfers um and and we i mean the the the foundation is going to run validators for that and anyone can um and and um the biggest issue you have obviously is is protecting against spam well like if you have zero guardrails and in place um then anyone can just you just send 17 million usdt transfers a second um and and clog up the entire chain forever um and And so we're enforcing a minimum balance to do that.

31:16And there's going to be some kind of white listing implemented there to to to to to kind of ensure against spam resistance. And it's also something that's like going to be a very iterative process. I think the like the one is not going to be the the single best solution. I think it's going to be a step in the right direction. The next requirement is accessible to everyone. how do we make stable coins accessible to everyone i think for for one um you you do need extremely good on off-ramp infrastructure to to truly have stable coins be extremely accessible to to everyone um and and you need you need a way to actually kind of get in and get out of the ecosystem because otherwise um it's always going to be this kind of vacuum um that that is kind of it's on reality and so um i think all of the all of the payment stack around just the chain itself matters a lot um for that reason where you need to be um you need to be integrated into places where consumers kind of have existing relationships accounts and and and and then um kind of get access to stable coins in kind of basically the easiest way possible where you you don't need to like um go through like a fully separate process just to get to some to some stable coin rail

32:45very fably neutral what does that mean this is very very fairly neutral um i mean that that kind of is is the the same thing um as as we talked about on on the decentralization. I think you need things to be transparent and verifiable and permissionless and anyone can build on it. And you have a long history of permission chains failing. And I never fully understood why, like, if you can't deploy a smart contract permissionlessly on a blockchain, then I think it's really hard to make the case why it needs to exist and and and so um plasma's permissionless anyone can deploy anything and and and and that is um like that that needs to like transparency the last requirement for the vision for future infrastructure of stablecoin is highly scalable what does highly scalable mean in the context of stablecoins you just need to be in a position to support a lot of transactions um and then to to support a lot of small transactions and to kind of truly be be scalable i think again like that is it's a necessary but not uh sufficient requirement to to to winning where i think like that is all like you know it's kind of the the least important thing because it's kind of a given that you need that anyways where if you if you can't scale and you can't actually like if you have demand to to transfer something from a to b and it's slow and expensive then uh you're dead you're the co-founder of plasma explain to me plasma simply with no jargon plasma is a blockchain specifically built for stable coins why does the world need plasma you can make very different choices if you only focus on stable coins specifically.

34:49And you basically only care about stable coins in both tech architecture of the chain and go to market and strategy and like liquidity and incentives, all of that. If you only gear all of that towards stable coins, you have a massive edge against fully generalized chains. So you're saying that Solana and Ethereum and all these chains basically are not it. and we need another one whose only purpose is to make stablecoin better i'm i'm extremely well incentivized uh to to say yes to this um i think i think like this is not a this is not a not not an argument meaning that like solana won't win or ethereum won't win i think like that that is fully separate i think on the like specific like stablecoins at scale use case um we can we can do better job than any of them given that we don't have to care about anything else that's my stacking the what you call the trillion dollar stablecoin opportunity what is the trillion dollars opportunity for stable stable coins taking meaningful market share of just global commerce in terms of like payment flow and volume i think that is the the trillion dollar opportunity how quickly do you think this can happen stuff to predict um i think we we will have more than a trillion um and an outstanding stablecoin supply next year um pretty confident in that i mean we are at uh about 250 billion um right now um and and i mean it's been increasing extremely uh kind of steadily over the last couple of months and and um i think there's a basically 100 probability we'll have a trillion dollars in outstanding stable coins very soon what's the end game for plasma that's a very very broad um question um i think the the the true end game is i think we we can become the number one chain for stable coins um and and we can um have like just the highest market share and unsettling stable coins on on plasma we talked about tron before how can plasma compete with drone concretely we don't compete with drawn directly i think drawn is extremely good at what they do um currently um they're capable um justin is a sharp guy um i think you you just have a changing landscape of stablecoin use cases And I think the kind of world that leads to Tron winning exists less as like every day passes, basically.

37:36And I think that is where we win is on kind of net new use cases. I mean, we have 250 billion in outstanding supply right now. I'm highly confident we'll have a trillion plus. And I think that 750 billion delta, basically, I think we have a very real shot of taking a good chunk of that. Can you give me two or three examples of where you think these 750 billion are going to come from? In just kind of mostly cross-border, large notional value payment settlement. I think that is the most interesting area. You buy coal in South Africa and you want to pay for it. And you ship it from South Africa to the UK.

38:29And you pay for that in USD and you don't have to wait for five days and then pay 40 bips on that payment. What's your approach to... because you can go blockchain is global right but if you want to capture these these are part of the 750 billion dollars like you have to have a plan yes on how who do you target first how do you acquire customers market shares how are you going to do that i think for us there's a couple like key user sections that that matter the most um i i don't think us and europe is is where you really want to focus um because most of the stablecoin supply that kind of originates and in those jurisdictions is is relatively stale um and it doesn't actually have a lot of turnover and um i think middle east is incredibly interesting south america is really interesting turkey specifically is is incredibly interesting um and i think that is where you want to be focused um because that's also where like real stablecoin payment flow happens now and and uh i don't think that changes if we look at turkey for example that you say so interesting how do you capture these market shares and it's completely linked to you told me um a consumer blockchain is a b2b product yes right most people think actually my end user is the people right yes but which is true but by proxy right um i think every blockchain is a b2b product no one actually interacts with blockchain directly so if we look at plasma in turkey yes for example what's the approach to say we're going to conquer turkey stable coin market uh there's a very long very detailed answer to that that i'm not willing to give um and and uh and and and and so um i think like turkey being being one of the focus areas is incredibly interesting you need to be um you need to be integrated in places where stable coins actually get used um in in general if you look at like the actual kind of originators basically of stable coin flow it tends to be pretty top-heavy um exchanges matter a lot especially like to to a surprising extent local exchanges um in in in the interesting um jurisdictions and then so you need to work with them and you need to um and you you need to kind of be integrated into as as much as as you can um and kind of the the the highest value highest kind of uh turnover and volume um um basically like central nodes of stablecoin flow you have a very close relationship with tether the company behind behind the most used tablecoin usdt why do some people call plasma the tether chain or the parallel chain i mean first of all like plasma is very much not the official tether chain um by by by any means um and and we would never claim that that we are um paulo specifically has been incredibly helpful and and gracious uh to to us um and and uh um i i have incredibly deep respect um for him i mean but for next um um did our led our very first round um and and Paolo has been extremely helpful since.

41:55And for us, I mean, if you have a choice on like what stablecoin do you want to focus on as kind of the one canonical, like this is like the one stablecoin you focus on as a chain. And USDT is the very obvious choice and the stablecoin that actually has real usage. And so the choice for us was incredibly obvious. and we're very happy to be focused on USDT and USDT aligned. I think it's kind of the, you look at the data, what Sablecoin gets used and you focus on that. And that's also, I mean, you have a lot of other players who kind of also came to a similar conclusion. And so I think it just makes sense.

42:43I completely understand. And I think everyone understands why you would go for USDT and Tether. The question is, why would Tether go for Plasma Potential and be an early investor? I think in the end, I mean, Tether as a company is obviously interested to kind of have USDT distribution be as wide as possible and be omnipresent. And so it makes sense for them to kind of support projects that are kind of furthering that goal and I think PASMA very much fits that bill. You said before in crypto it's not about speed costs, everyone has that. What does PASMA success depend on? I don't think that's a singular factor.

43:33I think in the end like crypto is an incredible execution game and you you need to be very good at like just actually kind of executing, which is a horrifically boring and terrible answer to this question. But I do think it's true. And so in the end, like building a chain, building an ecosystem is a task that has so many variables and like so many complexities. But like, I don't think each like individual one is the make or break it factor. but all of them together very much are and and i'm very happy that we have an incredibly competent team who who are fantastic and and we have an incredible amount of things to uh to get right over the next couple of years what's a big risk for plasma i think it's a long list of risks by just like building in crypto Right.

44:40On one end, you have a regulatory risk on the Sablecoin side of things specifically. I think it's meaningfully lower now than it was a year ago or two years ago, but like it still very much exists. You do have, I mean, building anything in crypto has inherent risks. Right. You have to be paranoid about security. We very much we very much are. but um that that is still kind of a looming risk if you build anything in crypto um and and uh there's a very long list of risks to to over building what keeps you awake at night uh the answer to the question i just gave uh basically like uh and and and many other like it's just it's such a complex system right like you need to get so many things right one of the few uh points that you put emphasis on when we talked last time our brand and storytelling what's the story you tell everyone that makes plasma different and more trustworthy i think for us given this like laser focus on just stable coins um um we can just make choices that no one else can and i think that is the the the massive advantage we we have in in building plasma um and you have to communicate that extremely well i think you have to be like uh in crypto so much as like building out in the open and and then kind of um even even pre-product launch like you you have like so much content out there on like what you're working on and and what kind of the the vision for the whole thing is and um we we try to very actively communicate to to the public and then to everyone on like what our what our thinking is and then how we how we kind of approach um building building plasma itself and i think that actually matters a lot clear messaging and vision what is plasma vision in one sentence winning stable coin settlement globally we talked about a real user engagement not the vague community building which is just used and used and overused and everybody's tired of yes what do you see in crypto that you don't like and don't want to reproduce with plasma man uh um we have time yeah we we do have time um no i don't like it in the end like i'm i'm a pretty big like free markets maxi to to an extent um and then so um I think there's a lot of things I'm like not a massive fan of, but in the end, like most of the stuff that is like truly bad also ceases existing.

47:24And so I think like you do have like a lot of self-correction, I think, baked into and into things like that. um and and so um i think like you saw half uh there's plenty of things i i don't like in in crypto um and and um i think that that's never going to change there's plenty of things i don't like in tradfi and i don't like in like every other industry i just happen to know crypto the best if we think about what happened recently you getting one billion dollar in deposits that quickly it shows that people believe in you but it also puts some pressure on your shoulder you have to deliver right and not only deliver an infrastructure but actually show real user engagement otherwise why would people deposit money and then invest in the token and how do you feel about that i think the plan concretely to say okay like we're gonna have real we want to build a real user engagement and that's what it looks like i think for us we're comfortable having that pressure I mean, we're confident in our ability to ship and to execute.

48:33And I mean, this go-to-market path is a very conscious choice that we made. And I think it's fine. I think it's good pressure in the end to kind of actually execute and deliver. For us, we just have to get to as much actual real stablecoin payment flow as quickly as we can and we're in a very good position um to to to do that and then to get there uh but that's not a thing like that job is never going to be finished basically like this is like not a i don't think it's like a thing you you you arrive at but like that is going to keep being our job in two years in three years in five years what do you tell people who

49:22complain or criticize there is always a lot of them especially in crypto that this$1 billion come from just a few people or a few entities? It doesn't. I mean, we have 2 ,200 plus wallets that participated. And it was very easy to participate without any, like you didn't need any crazy gas costs. You didn't need a kind of MEV bought setup. And so for us, like the goal with our go-to-market was to give everyone like not just kind of very large funds an ability to to to participate and i think um actually relatively happy with uh with with how distribution looks like and and and i mean the second tranche of the second 500 um was open for about 30 minutes and then so anyone could get in um there's people that paid 80 cents in gas and then so um i mean you're probably extremely happy about the one billion dollar in deposit but if you look at this other number 2200 how do you feel about that based on expectation did you expect did you expect that you have many more people because it doesn't sound like a lot from someone external or for someone who doesn't necessarily understand crypto you go okay like you have 2 000 people that's great but yeah i mean i think for far as in the end we we didn't know at the beginning um and and we um we uh like anyone can participate um and anyone could could have could have kind of put money into into the the pre-deposit and um first we work with extremely imperfect information um i'm happy with that outcome um i think the the distribution all things considered is is is quite good um and especially given that like anyone who wanted to could have participated but like it wasn't like it just got sniped and in one block by like um some mev bot and then and so um i think that is that's a pretty good outcome another point you emphasized on is a focused on actual users what is not an actual user uh i mean i i think the the answer to that is is relatively obvious and relatively simple um like you you have a lot of this i mean if you look at the the activity of a lot of chain launchers and so much of it is is just uh airdrop farming um um and or just kind of fully fake users and and uh um for us we we didn't want that and then we kind of wanted like real people with real skin in the game which is also why we chose this this go-to-market um and and um i think in in in the end that is the superior way to to to go to market talking about go to market what are the next steps launching the chain um is is is very much item number one um um we're in the final stages of kind of rolling everything out and and um we're looking looking good on that um we're launching in late summer of of this year and kind of going through final audits final setup all of that but um next major milestone is very much launching um plasma mainnet beta how do you keep the hype because the hype was so huge right how do you keep the hype going when it's almost impossible to do better yeah i mean i i i don't think that is true but um so how do you make it even better it's it's always an ebb and flow right and like i don't think you you're not optimizing for hype.

53:06At least we aren't. We didn't set out to just build short-lived hype. And so in the end, you need to build real substance. And I think that that's the only way to sustain interest and to sustain people caring about what you do. Otherwise, everyone stops caring about what you do. And so I think what we need to do is very clear. And I think hype generally follows quality. I mean, Hyperliquid is still incredibly hyped and for good reason, because they're just fantastic and have built an incredible product and are very good at executing. And I think that is the only way to sustain hype. Because in the end, you can tweet as well as you want and you can do the coolest Discord quests.

54:02Like you have to build a product and it needs to be good and people need to want to use it. Yeah, you can't go on so many podcasts. Exactly. I mean, look, this is like, this is obviously a fantastic podcast to go on, but in the end, like you actually have to build a product and you need people to care about that. And I think that is the only way to like win long-term and sustainably. was the one thing that people should remember from today's conversation stable coins are the most interesting market and plasma is here to dominate it thank you paul for doing this thank you kevin thank you for giving when shift happens the trust and the opportunity to be one of the only podcast appearance in the foreseeable future this means a lot to me and to our team and hopefully we did a good job at demystifying the trillion dollars stable coin opportunity and the man behind it appreciate it thank you kevin As you probably know by now, I host some of the biggest names in Bitcoin and crypto on my podcast.

55:01But a lot of the best stuff never makes it on air. The Shift newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else. If you want the real insight take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.

55:26You