What's next for Web3 & Digital Assets: How security and regulation are powering a new era for Web3

[Music] hello everyone and thank you for that wonderful introduction um I think as you said you know our esteemed guests are very informed about this very in my opinion obscure topic the more you learn about it the more you learn that you don't know so I'd like to jump right into it can you talk about what web 3 is and how and who is using it today Den sure um I previously come from Facebook where we're launching project Libra and our big opportunity there we saw was that if we can make sending money as simple as sending email then we've really done great for the world I think another element to think about is a world where if you don't have two or or more organizations who don't trust each other how do we get them to agree on a state of the world whether it means financial records Bank details whether it means identity anything related to information that you generally want to share but you do not want any one person to have overall ownership or governorship over it web 3 enables the facilit of that that is what really made us super excited about the opportunity as well like democratizing transactions opening it up so that everyone can check and you know be part of the process versus having it localized you know to one particular area absolutely if you think about the amount of wastage we have in financial services right I I I had the privilege of working at JP Morgan um HSBC and some of the biggest invest um hedge funds in the world and I know the process of sending a trade all the way to facilitating the finality of a trade and I know you compress that to math you've solved a lot of problems and I think that's what crypto does at high level uh at Facebook and at M our company we are basically building a platform to basically govern actors um assets and then the actions that they take on them that we could do that in an autonomous way amazing and Brad then I'll extend the same question to you can you specify a bit more about you know which Industries are using web 3 into what capacity yeah I would say that the biggest uses of what people think of as web 3 and it may not be as obscure as much as opaque or complex um I think it involves a lot of different technologies that come together and I think about the industries that are really leveraging what looks like web 3.0 today it's more about gaming Bitcoin crypto crypto um in general I think the healthc care space actually has elements of distributed Technologies like things in your body that could be measured and centralized so it's a bit distributed and decentralized because the devices are in you but then a lot of that information still gets centralized in a healthcare system like a hybrid yeah so I I think it's um it's on the come it's a more incremental iterative process Than People realize it takes 10 or 20 years for these Technologies to come together and the use cases to be logical and secure our business of symphony is a distributed decentralized network of collaboration technology but at the same time JP Morgan as a user has complete control over their environment we don't see it they see everything and they know what all of their employees are doing so for them distributed is not to the employee it's down to the institution and then they control what happens for those clients on on the platform on their side and how they interface with people on our Network so we're in it um but I don't think we would ever be characterized as web 3.0 and that's thing so it seems from my understanding like you mentioned you know certain industries that are using it but like how widespread would you say it is is it like gaining High adoption across you know different uh markets or is it still a bit nent exploratory in the R&D phase I I can touch on that the three industries were specifically focused on that miston um it's gaming digital Commerce and finance gaming because the idea of owning Assets in a way where you could transfer freely and actually use it for Commerce internally is very it's not a New Concept actually it's actually very well common it actually elevates a gaming experience significantly so we have 60 of the largest gaming companies building Inu already um Finance if you look at the the volume in web 3 the traditional if you look at most more than 50% of the volumes actually decentralized finance and that's only going to grow over time and commerce because there are new ways to to build engagement with fans uh and loyalty that have never been done before it's actually one of the reasons why Facebook love this because if I can on board 100 million people and then engage with them before actually getting them to play my game or before getting them to on board into my ecosystem that is a reduce in cost overall so those are the three pillars we're significantly focused on yeah and I I completely agree I would say on finance as as the space I'm in one of the gating factors there is regulation if you look globally there's a lot of differences on how The Regulators are approaching all this whether it's AI cloud data protection so it gets quite local in finance ultimately and even asset class specific stocks bonds loans um and even front middle or back office which are very different roles in the industry so there are definitely some places where are leveraging this technology today and we are doing that I think it will be a more gated walk-in finance and maybe more Consumer Finance and even mortgage world than sort of big institutional trading in equities or bonds or private Equity um but if you think about tokenization of assets assets and how you can get to information securely Finance is quite easy because it's quite virtual until you maybe get into real estate where it's a financial Market combined with the physical Market I would like like to dial in a bit more on the finance side because I think what we've had over the last eight years is not much as change in the crypto space we've been building using the same tools we've heard all sorts of amazing things of what is possible and not much has been delivered um one of one of the biggest gaps that we've seen is there needs to be a language for assets and language for money what we have today is extremely buggy we've seen hundreds of millions of dollars hacked as a result of just poor engineering so our team is full of Facebook Google some of the top engineers in the world we've built a platform if we've basically designed a language for money it's called move okay what do you mean by language when you say a language for Mone your assets so if you think about a financial ecosystem you want to control actors you want to control the actions that they take and you want to control the assets so a language for money allows you to govern describe what an asset does the what the where the assets can go who can act on those assets in a in in a in an autonomous way without a middleman being in place so we actually have a platform now where you can Define you can completely construct an asset natively sorry I'm trying to kill flies in Fr my face you could you could describe an asset you could Define the actors you and you can have that running in the in the biosphere effectively anyone can act on this asset as long as they have the right credentials and you can use a public chain to openly show your complying it's actually a great tool for compliance teams if you want to build a really compliant platform but do that in an open way you could do that using Code now that's an element of code and math being stronger than all the crazy systems whove built in finance over the years yeah I think that address because like the systems are still being created like that's I was asking about what language means it means like how how does it get from point A to point B those things are still being decided at the moment still being experimented with and I want to extend you know to the uh because as Brad mentioned regulation as well I mean there are a lot of things that you know especially in the finance space and crypto space uh you know last year we had uh the big topic was ftxs fall and like the drop of you know crypto I think was from like three trillion down to uh like a 700 mil yeah which is insane especially when you're an outside person you know uh looking at this and then also you know this week you know before we had the CEO of binance and we hear us speaking on stage and now you know with uh the current case you know that has been going on this week what does that do for the reputation of web 3 does it signal that this is still something that needs more regulation that needs you know more oversight like has that shaken up you know the web three space what what has been your view on that yeah I mean at miston we've we've been fortunate to be able to create a lot of technologies that help solve this problem um we created a algorithm called proof of solvency and reserves which most exchanges crypto exchanges are using today so you can actually mathematically prove uh a li the liability and reserves of any exchange using this mathematical model we've built and that's actually implemented on and other chains today um we think the fact that you can have code to govern movement of assets it's actually the most powerful way um the reason why you had the ftxs of the world and the problems back then is because we had no visibility there was no transparency it was actually happening but if you had again I hate honing in the fact that this matters but you know the amount of cost we can save and we can prevent the you know the crashes of 2000s or the early 90s as a result of having a record that we all have visibility in and Mathematics ultimately solve the issue around Trust um yeah and I if I could add I I would say one thing I think the things that crash markets are fear and greed I think there's the boom bust and you know the 75% crash of crypto is interesting but the NASDAQ crashed 90% in my lifetime I was actually pretty old he man um in ' 87 I went to state school because of 87 uh and the Japanese Market because of real estate crashed and they didn't get back I think for 40 years so these things go through boom boss they're actually healthy um a lot of lives are you know destroyed and value is coming and going so that's horrible at the end of the day it's somewhat natural in the cycle one thing the language point is great because I'll I'll say one one word cobal um that's a language in Computing that I don't think people know much about if you want to hire a Cobalt programmer they will look like uh um something out of Lord of the Rings Gray beard so um there's 5,000 mainframes in the financial services industry a lot of banking still actually runs on main frame corre those are cobal um my yogis tell me you don't get get hurt in yoga in a in a position you get hurt when you move between your positions things happen when you move data from A to B that's where things break that's where things could be in um intercepted and and taken basically and that's where trust goes down so I've spent a lot of my career helping build mapping tables you know translation of that qip to that Rick code to that identifier that's a transaction ID in your firm that you built particularly for that deal that is very unique to your firm that nobody in the world knows that ID so how do you do all of that it's a lot of mapping tables what is language it's a lot of mapping tables if you look at Google translate I can speak to people now without any knowledge of their language and almost culture and we can have a fluent active dialogue without any translator making it a very stilted conversation but these are all these Technologies exist it's just going to take another decade for them to really pull through yeah I think both of you gave uh together a comprehensive answer where as you said Brad that this is natural I mean this is like one stage like it's happened before it's not the first time and it's not going to be the last with EV with every new I guess development you know whether in the finance space or otherwise it's there's going to be a crash there's going to be a learning curve and what is what's being learned it's creating the language the systems things that didn't exist it's been a bit halfhazard maybe at the uh at the beginning you know with uh people creating their own rules and allowing more room for uh you know more elicit activity or just uh you know not uh you know protecting people's money the correct way I would even say um we've we've um had we now have the benefit of the big boys getting involved right like I think the kids have had the fun but now I think if you look at the talent that's leaving the the metas the Fang companies in the world to go into web 3 I'm super excited about that because now you have distributor systems world leaders crypto world leaders um phds in economics you name it are all coming into web3 to help solve the problem if you look at our team for example we have the top cryptographer in the world in Costas um we we have some of the BR brilliant mind who actually built the stuff that uses your iPhone the compiler the lvm compiler in your iPhone who work at our company the inventors of that technology work at our company so we're bringing some of the best Minds finally to build infrastructure and now our platform that we've built can take the the throughput of Facebook of MasterCard Visa Swift all at the same time and not fall apart we've actually had the most am transaction in a single day of any chain without any issues and that's because the right science behind building platforms and distributing systems is now here it wasn't here two years ago it wasn't here five years ago and I think it's only going to improve the security and Trust in the area over time and if I could just bring one the iot right if you think about UAE specifically clearly it's made a big bet on a financial center and we're all here because of that there's also a big Healthcare movement here and I already mentioned the fact that there are distributed things that you could put in if you look at another sector like energy if you have an oil well and it's thousands of feet below and you have a well tip why would you want to send something to a cloud in back to know if there's something rupturing at the bottom of the gulf you'd want that to be a closed loop where you can really understand that there's something happening right in that system and you need to act on it even going to the cloud and back is too much time and actually uses energy so I actually think the energy sector is going to be a major user of a distributed World farming agriculture Etc but if you look at what UAE is doing specifically and what they've done with Healthcare here and finance here and obviously energy and you have adock and Cleveland Clinic like there's a bit of an epicenter Center here plus it's a it's an area that's trying to introduce volatility into Innovation but not wild volatility the US tends to introduce more volatility I think based on our model Europe tends to put a bit more regulation and sort of hold it then there's other countries that have other government models that tend to really smooth things out over time UAE seems to be trying to find that balance of innovation risk-taking but you know some saw tooth in the Innovation but not these wild boom bus swings I love that yeah because it's rare that you hear that type of characterization and I'm curious to see like what the UA is going to be uh how it's going to Define itself in terms of its approach uh because i' I've done a lot of reporting on this in terms of taking healthy risk you know working with uh players in in the field you know to uh like with sandboxes you know here at abgm to find Solutions so yeah it's it's more like working with versus creating regulation from from a distance or yeah going really harshly on as you said like during in Europe or taking more risk as you said uh sandbox pilot live that's MVD MVP ga yeah and you um because I like what you said Den about um that this is the next level when you're bringing the big players and uh you know bringing in key people into the mix to make it sounds like to make it more like scaling up right when you were talking about like a a startup in a sense like this is just starting up this is taking it to the next level but what I'm curious about is and what I've also uh discovered from speaking to people is that the skill sets don't necessarily exist yet so people are adapting uh skills from other Tech sectors or even traditional Finance into you know this web 3 space or you know gaming as well you know since that's where a lot of this is coming from but are the skills NE uh currently there to be able you know to do this properly or is that still part of the learning curve with the system so the reality of it is look the people building this stuff early on weren't as skilled as the people who are getting the big bucks from the biggest companies in the world right that's just the issue but now the Intrigue is there and we're certainly seeing a big concentration of talent jumping out of these big companies into web 3 um to talk a bit more on the regulatory side of what you mentioned for example if you think about what is absolutely going well here in in Abu Dhabi on the first day of um of um Hub 71 um opening up we were here um we've actually brought three startups into this ecosystem because we have a platform that you build assets on we've we plan to build a plethora of BU of brand new startups into this space because what you can do for the first time ever is you can now create an asset build rules about that asset and wherever that asset goes the rules will be the rules will be maintained irrespective of who operates on that that is the first time that's possible and for us we think you know with the fluidity and regulation that's happening here and the openness to actually make things happen um we are fully invested here and I think we're making we're only going to keep increasing the amount of footprint uh we bring down to this area but from a talent perspective I do think the talent exists I'm we're seeing them coming now I think the Allure of web 3 seemed very concerning and confusing at the beginning because if we build all this wonderful tech and all we do is sell an image or a JPEG I mean look they're better applications for for the world out there and I think now the promise of solving Global skill um problems are are there and I think we're seeing the talent actually jump in and Brad and because uh on the spirit of scaling you mentioned as well like the resources around you know web 3 so when we're talking about cooling systems we're talking about electricity is that going in tandem with the growth of web 3 and with this you know push for mainstreaming for scaling up bringing the big players do you know if that is accompanying it uh at at the same rate well my personal view is we have to be a lot more thoughtful about experimentation that use this huge amount of compute and there's a lot of that going on um you know building 10 avatars for yourself in a minute is fun but is it really that useful like in terms of just the footprint on the talent side and I think this is part of it we need more import export immigration migration what I mean is 30 plus years ago when I started it was very particular jobs and you went into Banking and that was that or trading 20 years ago you maybe saw somebody go from banking in the hedge fund um 10 years ago it was a bit broader than that now in the last three to five years you have people going from Goldman to Google the ceso of Goldman Phil venables is now the ceso for Google Cloud um I left banking 10 years ago maybe a little earlier but there's a huge amount of movement now between countries uh between large te te ology firms startups Banks hedge funds again UAE is a really interesting uh Melting Pot of that and I've seen in the last I love the fact that we now have large technology companies in our space 10 years ago Microsoft Google Amazon they did not know or care about us now they're here um and I think that's a really good thing because we need a lot of skill sets and a lot of views to build this stuff quickly but securely and with purpose and uh we have two minutes left I just wanted to ask you the impossible and predict the future can you see like because you know last time this year you know we were talking uh about crypto and it was the uh you know uh how much regulation should be involved how much should you know get with FTX fall at the time uh you know now you're mentioning that the big players are coming and that's going to really change the game what can we expect uh to to happen new next year when we're you know on the stage having the same conversation are there things that you're anticipating that are going to become a reality that me that weren't in the web three space yeah um we recently launched a technology called ZK ZK login it's the ability to create stable identifiers or kyc with any email address any phone number any existing identifier you have I think with this technology what you're going to actually see is new forms of payments companies you now have a way for anybody in the world to send money as easy as email I think you think about Mass dropping um tickets for an event to people Mass dropping coupons or reward vouchers to people that's actually possible web 3 for the first time I think that's going to be exciting it's going to be great for loyalty it will be great for Commerce absolutely like to the same level of Libras like you know from what I remember it's what we tried to achieve of Facebook didn't quite get to do but we finally managed to crack it while we were out of Facebook without the shackles of of Zug but yeah it's it's it's great to innovate outside of that cycle for sure definitely Jiu-Jitsu now so you're glad to be out of that I'm a fact I would say the word of next year will be tokenization in finance a lot of things will be tokenized dematerialized made into something that could be fractionalized just to go with the full so that's going to be a big topic I think next year of a lot of assets and that will be the beginning of EAS easier um access to things digitally that are maybe natively you know very physical or private Equity transaction so I think tokenization will be the near-term theme of the enabler of the financial services world I think identity is the other big thing who has access to what when and when your role changes your entitlements need to flip at a moment and we should be talking about that actually as a potential Partners so oh definitely 17 seconds right exactly no I think just no I think this is great I mean I think we covered as much as we could in you know in I think it was a 20-minute period so no thank you for for that and I I think that's what's interesting to me it's that um you know we this will be the topic of discussion next year I'm curious to see about how uh High the adoption is going to be because I think there's a learning curve around that I mean with myself for example like just even being able to access my crypto and uh you know when talking about like uh from you know things ranging from nfts to to what on the web 3 space it's um I had to educate myself a lot with it and I think those tools are going to become more available U you know as it becomes as you said the mainstream players you know are coming in I think the conversation is going to be different and it's going to be something that more of our audience members are going to be aware of and have more of a Hands-On feel on so I think I'm really looking forward to that conversation can I make one radical prediction go for it I think in three years wallets won't exist oh say that wallets will not exist the idea of wallets is actually nonsensical it's something that's actually a friction to the majority of users we think technology is right here to make it possible for people to use whatever they want as an interface to engage with assets I think wallets are something that will be done trusted systems talking to trusted systems the wallet is where you steal stuff oh you heard it here I mean three years no no more wallets thank thanks so much uh for this great conversation and thank you our audience for paying attention