Real World Assets - Rachel Mayer - Circle

hey guys nice to see all of you excited to be at East Denver my name is Rachel Mayer I'm VP of product at Circle if you don't know who circle is we put dollars on the internet we're the issuer of usdc the largest most trusted stable coin right now in the world um and we're going to talk about all things real world assets today uh real world assets is a kind of a buzzwordy term these days what is a real world asset anyways um the way that I like to think about it is any assets that's not necessarily native to a blockchain network where digital assets like ethereum or Bitcoin or native to networks there's tons of assets sitting all around you right now whether it's uh you know a t-bill an invoice factoring a carbon credit startup carbon credit anything that is an acid in the real world we're tokenizing it putting on the blockchain putting it on ethereum coupled with stable coins this Mark contracts to reap benefits to reap utility to reap access and remove middlemen and remove fees all the core value props that we want to see for the next wave of growth and users all around the world so with that in mind I'm super we're excited to have our esteemed Builders and panelists today I will let each one of you introduce yourselves who you are what's the name of your project and Company and then we'll get started so Bill hey everyone I'm Phil Fogle I'm one of the co-founders of flow carbon at flow carbon we're looking to build blockchain infrastructure for the voluntary carbon Market the voluntary carbon Market also known as the offset Market is a market that's used by largely corporations and individuals to offset their carbon emissions to reach Net Zero goals that everyone sort of has in order to fight climate change this is a market that's been around for 20 years but has built very little infrastructure to help that market scale and being that carbon credits are a digitally native asset to begin with they're they exist currently today in SQL databases it's a very easy asset to move on chain and it should move on chain there the market today is plagued with a bunch of problems largely being access transparency liquidity the standardization and price Discovery all of which we can help alleviate immediately by bringing this asset on chain and once we bring the spot asset on chain we can actually help and this is another project that flow carbon is working on is to build the Capital Market stack for investing in carbon projects before they actually produce their carbon credits tranching that risk and building out the trillion plus dollar financing Market that's necessary for carbon projects over the course of the next couple decades hi everyone I'm Taylor I'm early business operations at goldfinch and currently lead investor insights and relations as well Goldfinch has a mission of connecting the world's Capital to the world's growth and we started doing this by building an on-chain Global private credit Marketplace um what this means is that we connect Capital providers on chain with private debt deals to real world businesses and entities globally so I think about all the crypto volatility kind of all of the crypto markets the yields that we're providing are stable uncorrelated to those crypto markets and to real world businesses that are fundamentals driven to scale their businesses reach more users Etc and then generate kind of real economic value both kind of in the real world and then also back to the investors on chain to date we've learned about 120 million in usdc loans to more than 14 companies globally to ultimately affect more than 2 million end users hello everybody this is erbil one of the co-founders of human Finance we were actually born here at eat Denver last year have you heard the the five Trek winners at the hackathon and very you know pleased to be back at eatonbury again as sponsors and we just launched ahuma as a public pet time at the beginning of this week Huma is the income-backed DFI protocol for 99 uh Huma is able to utilize income any type of income on channel of chain this can be you know on chain invoices on-chain payment streams on chain stick income yield income game for income but also of chain income of revenues and cash flows and receivables and invoices as well to be called tokenized and culturalized on the on-chain markets to create a completely new on-chained lending Market we since we our lunch we have about 30 000 users probably more right now I couldn't count since last last last night and we have about three lunch partners with circle requests largest crypto invoice Network and super fluid the streaming payments network but also to any other projects being built right now on Huma thank you awesome all right so one of the things that we talk a lot about at Circle is moving away from the speculation phase of crypto into the actual utility phase of crypto and blockchains um and so you know one in order to deliver utility you have to solve problems you have to solve problems for users for Developers for businesses and it seems quite basic to even say that but we have this technology and very often than not we put the technology first but not the user problem so I just want to hear in your own words what are the problems that you're solving for who and why does tokenization make it better yeah so I'm definitely and have been for a long time a Believer and tokenize all the things and so but when you actually start looking for the use cases that are going to propel the market forward you have to go and find where there's actual problems so 100 agree that this is the next wave up is all going to be by building out use cases that actually solve problems that is had by a large number of people and the carbon markets are a great example of that this is a market that three years ago was about 200 million dollars and last year was about a two billion dollar market so 10x scaling in three years with an estimated growth to 100 billion by the end of the decade and that market right now has no settlement layer right so you have these assets that are created by you know a disparate group of ngos that actually issue the assets and by the way these are totally digitally native assets right the asset is carbon credit is created because a project goes somewhere in the world and does something that prevents the emission of carbon or removes carbon from the atmosphere that is captured via a data stream right they have to prove it via data which is then applied to a policy framework or methodology which someone then says great you met the criteria this data backs it up here's a carbon credit all of that stream of data and that policy can be brought on chain and be stored with the carbon credit for the life cycle of the carbon credit none of that exists today it is this Market is at generously two percent digital 98 analog all of the trading takes place OTC between Brokers there is no settlement layer so the blockchain can be the first true settlement layer for the carbon markets and so if you're actually going to solve a problem price Discovery because there's no settlement layer also doesn't exist any pricing tools that people have in the carbon markets are done off of a self-reported basis someone's saying oh yeah Rachel and I I sold her carbon credits and I she paid 12 dollars a ton for the carbon credits I can go in that report that at 14 a ton to then Mark up the other credits on my books at 14 so there's no transparency and no real price discovery that takes place this is something that we've seen in D5 time and time again that we can just do when we solve that problem so transparency liquidity and settlement layer that's more efficient exactly um herbal or Taylor you want to talk about sure it's very similar when you look at around the world access to Capital is still very limited you know people talk about the Capital Access Gap being in the tens of trillions of dollars um especially for you know businesses and people who might not necessarily have access to a lot of ethereum or rapid PTC you know D5 doesn't offer you anything at all but the technology um the instant settlement the transparency actually enables you to provide instant credit if you have the right Last Mile Partners so we built a protocol in a way that any of the fintechs in emerging markets were providing this you know real lawn services and lending services in Emerging Markets can immediately you know plug into the default ecosystem to instant settlement provide transparency to their long books which means that they're you know connecting a very local need with the global Capital markets and we have some of those fintechs you know in the audience with GI providing you know services to small businesses in Philippines and Kenya and that doesn't necessarily have a lot of other types of access and these businesses actually need access to Capital right now the normal um you know processing to go through to get access might take anywhere from weeks to months and those weeks to months actually make a clinic shut down and that might be the only clinic in a village in Kenya and that's a horrible thing for the whole village if you have an instance element layer you can have instant credit access and that solves a huge problem and creates so much efficiency for you know Bots obviously uh you know crypto ecosystem but also solves real world needs you know for real people and businesses yeah and we're seeing the same or we're solving the same problem on the borrowing side so access to Capital is much quicker it's much more Global um and so these borrowers for the first time ever are being able to access Global Capital markets whereas before a borrower in Kenya may only have access to the banks in Kenya or Berry Niche um kind of like one-of-a-kind lenders that there's kind of a high coupon because there's no competitors to lower the coupon down I think one other problem that we're solving is on the investor side as well so for us private debt Global Lending is a seven trillion dollar market private debt is a 1.2 trillion slice of that and most of those 1.2 trillion dollar deals are actually only available to the ultra high net worth family offices Global asset managers other debt funds as well and so by bringing it on chain you're allowing access to exclusive deal flow that otherwise wouldn't be available to investors and so I think I think a lot what you know what problem are we actually solving for investors and I know there's a lot of fintechs who are also kind of democratizing access to some of these more alternative Investments but a lot of times those are kind of I would say limited to U.S investors and now I think we're expanding that access globally due to blockchain all right let's talk a little bit about stable coins because you all occupy very different asset classes very different regions but underlying the theme that I see that all connects to is aetherium and B staplecoins and usdc so maybe in your own words how do you see the role that usdc and stable coins play in in the access at the settlement layer and and helping and helping you reach the next set of users I mean I think we're all ultimately building institutional grade markets right there are lots of interesting retail use cases and everything that we're doing but at the end of the day it's going to be an Institutional grade market and while I think a lot of us here myself included with love Dave institutional markets were priced in ethereum I don't think that's happening anytime soon and so they're going to continue to be priced in dollars and in order for them to be priced in dollars and to bring the large institutional players and the large institutional Capital into that system it has to be done via a dollar system that they trust that it is regulated that they feel incredibly comfortable with and is incredibly stable and Incredibly liquid and you have the ability to move on and off chain as easily as you want yeah plus one to that like even if you think about any of our asset classes if they were to be on open seat like the default currency there is ethereum and that is really tough to be able to price in real time I think in addition um the benefit of working with a stablecoin is the fact that it's stable I think on the business side for a lot of these businesses it's the first time that they're ever interacting with cryptocurrency and they all operate in their local jurisdictions with their own regulatory Frameworks and so being able to work with uh kind of a stablecoin that is transparent all of the information is on chain kind of quick access kind of reputation from there I think all the kyc elements that go into sir oh that circle is doing with usdc sanctions gives them the confidence that moving money in and out of the traditional Financial Financial ecosystem is still going to be regulatory compliant for them and so that's a huge plus one uh one side of our Marketplace what not be coming to US unless we were working with stable coins just to add to that um you know four of the co-founders uh three of the co-founders at Huma we all come from the same fintech earning that was providing cash advance type Solutions earned wage access to tens of millions of Americans who wanted to make ends meet without any credit score checks non-records no collections zero percent interest even when you try to build something that's awesome that help people access to more than 8 billion dollars in earned wage access the problem with money movement was like mountainous it's like every time you wanted to move money you had to go through you know this banking infra you had to exchange FTP files that didn't match at the end of you know the weekend when anytime there's a banking holiday everything was messed up people couldn't access you know their pay on time even with debit rails that has been around for so long should be working reliably was never working reliably and and when something goes wrong you have no traceability of like what's going wrong and as we're building you know Huma protocol for all different fintechs globally um we could never imagine doing that without the usdc and the circle you know ecosystem and circle platform that literally you know took away probably two years of Technology Building uh from us uh and you know we were able to get the market so quickly you know a year ago we were just hacking a year later we have a full Market through poster called people building um and you know that's mostly because the programmable money and the infrastructure you guys provide has been uh amazingly amazingly helpful sweet thank you um but as a smart contract and as a builder and especially as a product person myself I know that it's it's still a new technology and it's oftentimes challenging to even build on the stack um let alone you know introducing a new user who has never touched a wallet or has never hold a stable coin so what are some of the challenges that you see in building your products and building the solutions and what might be the solutions for those challenges in order to you know bring on the next set of customers a unified system of Fiat on-ramps and off-ramps into wallets right right now if you're building an application in the space as we are you have to go and integrate directly and it's not the simplest integration in the world and you have to integrate in every jurisdiction that has a different Fiat on-ramp and off-ramp and so having a single connector point that will ultimately allow us to just basically with hopefully one line of code add to an application or a front end that we're building and say yep now I whoever you are in the world it's going to integrate with wherever your Fiat on-ramp is and also have a single source of kyc across all of that so if I have kyc'd using that single connector Point um that and I'm now using it in a different application it's already kycb I don't have to scan my face again I don't do that and as I move around jurisdictions um there's actually an interesting project called wallet connect out of C Labs that's working on this that's a pretty interesting one one other really quick hot take which is maybe we should stop using the world the words real world assets yeah yet so the off-chain assets and there are assets that are on chain ethereum and Bitcoin are real world assets they exist they have a price they have a value they have a utility and for the rest of this you know there are digital assets money at this point Fiat money is a digital asset right so these are all real world assets let's go yeah it's like plus one to that I think every real world asset event or panel I've been to has mentioned okay we need to redefine real world assets but um no one's necessarily made a branding committee yeah yeah um I think in terms of pain points or what the challenges are uh the way that I think about it sometimes is for us at least I think it's a little bit different for you because there's no primitive in place per se is that private debt is like already a product that people want and so what we're supposed to be doing with blockchain and crypto is making it into a superior format and if you're basically trying to evolve that from what currently exists and works relatively well there's going to be a lot of pain points that come up for investors who are used to kind of the traditional Market way and so I do think Fiat on and off ramp is super important I also know ties into what we're doing is kind of having on-chain cash flows so one of the biggest questions we get from investors is like hey I want to see the borrowers like loan tapes I really want to dig into the details and so I think it's really I think high level like what's the largest challenge is making sure that all of these projects who are building real world assets are actually interoperable with one another and I think that's something that maybe we weren't so good about two years ago but as more and more players come into the space it's something we're getting much better at 100 I think that's going to be one of the largest on-chain markets you know once we actually bring these things in a standardized way in terms of how they Define those Commodities how they're backed and you know what is the process to liquidate them I think there's going to be a huge huge enablement maybe last thing to add is that we're very excited about the last mile problem Solutions so you know even though we're working with amazing fintech Partners even you know they are trying to also provide access directly to their borrowers versus being the middlemen in between and with account obstruction wallets actually we're seeing some of these Solutions being prototype right now so we have some applications being built where the wallet itself is solving some of these last mile problems and kind of creating a credit line behind the scenes so you're turning debit card like experiences to critical experiences and you know businesses and people can actually start using them to kind of abstract away all of the complexity of the last mile or North chain and exchanges awesome well that was it for our panel super short and sweet thank you everyone for being here and please come up to us and let's go all assets on chain thanks thank you