Making Open Finance Real on A Global Scale - TOKEN2049 Dubai 2024

hi guys thank you for being here uh so today we would like to talk about you know a lot about Finance basically and I think it's been a very good introduction uh you know the previous session the the drift team did mention you know that there was a transition between you know centralized exchange to De decentralized exchanges right and somehow it feels like everything is moving towards permissionless right and and today what we want to discuss is how we feel like trfi is maybe on a path or in the direction of moving towards permission list right so let let Mo kind of open up and and and tell you guys where here right yeah it's a it's a really good point Alex I think um if you look at where defi is today you know coming off the last panel we are certainly seeing some interesting signs you know $30 billion of tbll is impressive but if you look at the entire Financial system in the globe whether you're sitting in in UAE or in Hong Kong or you know parts of the US if you count all the money that moves all the economic value that moves across the globe in one year it's not measured in billions it's not measured in trillions it's measured in quadrillion and so you know if you look at where money is today in in financial ecosystems relative to where blockchains are we are just at the starting point I started my career off early at consensus I worked at places like black rock where we build Financial systems and you know I'm constantly reminded about the potential of this technology and when Cindy was talking about congestion and the challenges that we still face within this ecosystem there's no way that one quadrillion dollars of value is going to move into defi or into blockchains and so we started designing a very different kind of system at at Facebook that eventually evolved into what is Aptos today we designed for three billion people we designed to be completely upgradeable and scalable and that network is out today and we're starting to build some really cool Financial Primitives that I'm sure we'll get into exactly right so we've been traveling for for a while now for the past month I feel like a lot of the the folks in this room have as well there's been Hong Kong there's been Japan and now everyone is in Dubai and along the way we've been talking to builders projects exchanges we've been talking to local Enterprise we've been talking to regulators and really we sense a big shift we're talking about yes this is a bull cycle but also we feel like in our conversations with decision makers among Regulators in big Enterprise in financial institutions there is starting to be some sort of an appetite to consider something more than hey we're going to build everything on a on a permission private blockchain maybe there we can start discussing about what is the future of Finance that's right I mean it's been a long trip I've been uh in seou Hong Kong London Paris today Dubai and then we'll be in Riad and Singapore and each one of The Regulators that we speak with all the financial institutions that we speak with all the different components of the value chain understand that separate uh private permission networks they all existed for the last century they don't want another one and you often hear that you know hey we need an L2 we need a private permission Network well what problems are you really solving you're recreating the same problems that existed in the real in the old world the conversations that we've had is how do you take a permissionless network and let money move freely with the same private components that you might need the permissions that you might need and even the security and compliance that you might need and by doing that you can enable a lot more money to come into these uh these permission list networks institutions might feel a lot more comfortable Regulators might have a be able to provide a lot more clarity in fact might be able to provide a lot more Safety and Security along the way for their uh their consumers that they're protecting and so what we're building now is a much more advanced version of that permissionless Network it's designed and I can I can probably talk about this it's designed to give all of these insurances if Alex has is a bank the bank of Alex and he wants to send money here to you know mo who lives in Dubai cuz he is stuck in the rain somewhere how can how can I get that money as fast as possible I can't go to my bank account because it's flooded well I can get that money directly on you know the Telco Network that's working today and it needs to move through the proper kyc components it needs to be able to operate in the same speed that visa and MasterCard networks operate and I need to be able to put it to work immediately that means if I get 15% of that money is lost because of fees in other protocols or imagine you try to send that money and the network is congested I'll be walking in water right and so this is just not an acceptable environment today we created a new network apos is designed with all these permission features together we announced it a little bit uh um uh in in in a preview environment with a few uh parties in Hong Kong but today we're here to Showcase Aptos Ascend apos Ascend is built with a combination of partners that understand all of these challenges can be solved with blockchains but only if those blockchains are designed for billions of people abas Ascend is built with folks like South Korea Telco that help us custody assets it's we're partnering with Brevin Howard on how assets and financial uh com uh assets actually come onchain and we're working with Partners like Microsoft on powering this infrastructure so it doesn't go down and all of these all these folks really understand the power of what a blockchain can do and we're excited to unveil that uh today here on stage exactly and we are extremely excited about this we've been working with the cour team with our engineering team in the bay for the past 3 four five months on this and and we do really feel that apus has a right to win in this very specific vertical and yes we mentioned that we have a huge partnership right with the likes of Microsoft uh brev Howard SKT BCG um to really fles out and SC scope out new use cases to potentially bring onchain more and more institutional Capital to educate Regulators a lot more so that we can really start the next wave of mass adoption we've been talking about Mass adoption a long time so mo why do you think you know we kind of are positioned to be a leader in the space and really help transition towards Mass adoption and when will Mass adoption come yeah yeah it's um I I think Mass adoption comes when you have reliable infrastructure first and foremost you to your point where uh we have over 25 pH s on our team that are solving some of the most complex problems across things like consensus mechanisms to Smart contracts to even how we think about upgrading uh storage on uh on the protocol all these things are being put into implementation Beyond just research allowing us to have a network that's 247 available that moves at the speed of the market we don't have to wait for congested highways and we've designed it in a way that it works with the market market today so if you look at existing protocols they all want to be paralyzed paralyzation was actually invented by our team with things like block STM in fact we're the first ones to have a paralyzed blockchain in market today and so if you look at something like you know other uh per High performing networks they don't process transactions in parallel in fact if you're sending money to me someone else over there needs to wait for that transaction to settle and if tooo many people are sending money back and forth that line gets really long it's a on Lane bicycle Highway and we don't want to deal with New York City traffic we don't want to deal with Dubai traffic we want multi-lane highways that move in parallel that is what abas is exactly and we we we talk to a lot of the banks right and and and they do say listen everyone says that you know TPS and throughput is extremely extremely high uh they always tell us everyone says that they're extremely reliable and then they say yeah but something shuts down and then that that's never going to get get past our risk assessment profiles why do we have such a stronger product in your opinion is you know and I really want to to kind of elaborate on kind of the days that we we had at Facebook right and some of the things that or cultural things I carried over and so so that we really showcase what is why apas is the most suitable blockchain for something like this yep so so we we talked about the performance of the network in terms of uh congestion and uptime but I think what really matters is you know imagine all of us in this room need to transact you know if you think about all the transactions that take place in different dispirit Financial systems you can add them up and tally them relative to where we are take take Visa for example how many people know have a sense of how many transactions Visa processes per second okay nobody one person okay two people I'm not going to put you on the spot but they process in real time around 1,600 transactions per second how many people are tweeting every second almost two times more close to 2,200 tweets per second add that up Twitter and Visa alone are roughly 4,000 transactions per second apos supports 30,000 transactions per second we can easily support all of the financial transactions that exist in credit card networks in payment networks and on social networks concurrently but we're not happy with that we'll be putting pushing transactions uh transaction throughput close to a whopping 1 million transactions per second in the coming 12 months 1 million transactions per second and there's a reason for that you know we are not going to be living in an environment where we're just sending money back and forth we're actually going to be trading AI agent data back and forth and that data is arguably just as valuable as money and in fact it needs to be on chain because your agents need to be able to verify that and so the transaction throughput for blockchains needs to consistently be increasing and that's what we're doing here at apos we have in order to do that you have consensus mechanisms like hot stuff today we'll be evolving that to something called sh it'll be far more uh performant and not only will you get more throughput but will be able to reduce latency latency on our Network so if you wanted to send me money again how long do I have to wait am I waiting 20 seconds am I waiting 5 minutes is that transaction filling all together on appas that transaction settles in under one second that's faster than Visa right so we don't compare ourselves to other blockchains we're comparing ourselves to the financial system that's out there today and then the last thing you know if you think about you know someone like drift right they're building a new paradigm transaction fees go up when there's congestion on the network you know imagine you're driving on a highway and there's traffic and someone says Hey for you to drive on this tra on this highway because there's traffic you need to pay a bigger toll what that makes no sense and so for us a transaction on our protocol is a micro sent it's 0.00006 a free so we we have a little bit of time left and sometimes we we we do this more and more we feel like some people do argue that hey at some point maybe the tech is no longer the differentiator maybe the tech is already good enough in a lot of chains and what exactly are you going to what use cases are you really going to unlock by making the chain even faster by having time to finality even even lower we in our ecosystem in our defi ecosystem we have you know per daps such as Merkel right that offer 100 200x leverage but you know they came to our team and our engineering team and said hey guys if you actually reduce that time to finality even lower and the time to latency even lower we can do a THX leverage right so those are all very exciting D5 products that we can unlock by continuing to improve our blockchain but then I want to stay on this topic and and and kind of come back to the Ascend Suite what are the products that we have right now that we feel will help unlock the P potential of finan of Institutions to come on chain and what is next for us yeah it's a excellent point to talk about the inspiration that we see within decentralized Financial uh products whether they be per Dees whether they be new types of protocols like uh that are out there the challenge though again is how do you actually bring real forms of money and new Financial products or existing Financial products you know take the equities Market here in the UAE or in the U in the US these are trillion do markets right and so if in order to bring them on board you need to work with the large financial institutions some of this work has been made public where we are already in conversations with the world's largest trillion dollar asset managers on bringing things like money market funds on APS and guess what if you had a money market fund on apas that could be made available today in the UAE that's not there aren't any uh money market funds uh available at SC here in this market by making these products available on chain allows for much more uh distribution it also brings down a lot of the administrative costs for these asset managers to be able to extend these Assets in new markets and so someone who lives here now might be able to get access to you know us investment returns highgrade products at the click of a few buttons you can't do that in the existing Financial systems now that you have access to money market funds this is a high crade uh Financial product you can lever that you can put it put it up as collateral for you know other Financial products and these aren't new Sci-Fi Financial systems these Financial systems exist today we're just not exposed to them you don't need defi just go talk to Goldman Sachs or City Bank or some of these other folks that are running all of these trading desks and so by H increas by bringing these products online you're actually reducing the cost and increasing ing distribution and in fact you know we can potentially even grow the entire pie for blockchain and these digital assets and this is something that Aptos Ascend is really excited about and just to maybe close this point out someone like Microsoft is going to help provide this infrastructure for us someone like Alan Howard uh and brevan Howard's team is going to be working with us on helping think through a lot of these Financial assets which one should we start with which ones should be made available in different markets you know having a multi-billion dollar asset manager with abas is a really power compelling and Powerful message for for the market and then of course how do you think about custody well you can either download a wallet on your phone and go through all the different wallets that you I'm sure many of you have or you have one Telco provider that you work with on your phone we chose to work with someone like South Korea Telco who's already building a web 3 wallet imagine ET the slot or do or Saudi Telco had their own wallet a ailable for digital assets you would have money made available for you in the palm of your hands without having multiple wallets now you can take that money converted into any type of digital asset you want whether that be a money market fund whether that be local debt uh government back debt or that could even be equity and bond products or debt products within thein the C broader uh Capital markets within the region and and I would like to add on that on that point right we're not saying that or probably between us maybe some people in this room might resonate with that how are we going to unboard the next billion of users we don't really expect every single person that right now is a web to person to understand how to download a wet create an account maybe the way to do that is to go through institutions and Enterprise that already have access to this this large group of people and by replacing the existing Legacy systems with blockchain that's how we inherently bring everyone on chain without them realizing and maybe that is the way forward and just to close it out 30 seconds some might say you know you guys are talking about permission you guys are talking about institution kyc but isn't that against decentralization and maybe I think it's important for us to reiterate again that our Theses is very much permissionless right so this is what we see in the future and and I will it will be great for you to close close close on that yeah permissionless is one of the most important ethos of web 3 you should be able to own your own assets and do whatever you want with them you should be able to take them with you free of borders free of any particular ecosystem and that's why you have you know these types of wallets structured in a way that they're you know full you know fully available to you as a um you know self- custodial wallet and so user experience sits at the heart of this too you can't have a painful user experience and expect people to be able to own their own assets it's often a trade-off the beauty of app TOS though is we're designed to have both of those things so if you come and create a Wallet account I would urge all of you to take a look at Petra download Petra get some AP play around with it and have some fun but what you'll see there is signing up is completely seamless and going forward you can have everything from Google Facebook Twitter login just like you do today in fact we enable things like pass Keys which make it even more secure same standard as your iPhone or your Apple or your Android device so when you log into web 3 you don't need your seed phrase you don't need a very complex password you just log in with identity that we're familiar with and that's the way the web 2 world transitioned or that's the way the world transitioned into Web Two to begin with and that's how they transition to web 3 now if you create your ID using your Google uh your Gmail address or your Twitter uh your xid you have a wallet that's created for you on the back end and when you get money when you get digital assets when you get a when you get other financial instruments you custody them by yourself that's cool and you can take them with you in a circumstance that you may not be able to access your bank that doesn't mean you replace the bank but now we can work closer with the bank and have the options that we need and so now for the first time you're seeing permission components working together in the same way the internet works today you don't need to go to your bank to log on to the Internet it's completely permissionless why do I need to do that for my own Financial products this is my private property and so permissionless is absolutely the present but certainly in this environment going to remain the future and so apos is probably the best position blockchain to help facilitate that great and that is time thank you so much and thank you guys