Thank you to everyone who was here today. I'm really excited about this fireside chat with Ty. New York is a special place for optimism. This is kind of, uh, our base. We have headquarters here.
Uh, so it's really nice to see such high-class events in our backyard our backyard . Uh, and, uh, it'll be nice to chat with you today. Thank you for your time. Uh, yeah, I'd like to get a quick introduction from you and we can get started. Yes, of course.
So, first of all , I appreciate, uh , I appreciate, uh , you joining me on this. First of all, hello everyone. I am Itai. Uh hello everyone. I am Itai.
Uh , I can go into a little more detail , if that would be helpful, about what dynamic is. Uh, but who here has heard of dynamic, by the way? Good. Who has heard of Fireblocks? Okay, great.
I will tell the Firebox team that we are not losing compared to Dynamic. Perfectly. Uh, but, uh, I'm Itai again, co-founder of Dynamic. Um, we launched Dynamic at the end of 2021. So, for those who don't know, we were acquired by Fireblocks in late 2025.
In short, Dynamic creates embedded wallets. Um embedded wallets. Um , you know, uh, the premise when we started was kind of a crypto crypto hype, and the premise was that, um , you know, every app on your phone would have a crypto wallet, and that was supposedly becoming a reality, and we could discuss that. Um, but this is a very short introduction. Perfectly.
Um, so I wanted to set the stage a little bit for the discussion, and, you know, the next frontier of cryptocurrency adoption is the point where the users you know are not thinking about cryptocurrency at all, about full blockchain and asset abstraction. Um, you know, we want to, we want to understand how embedded wallets how embedded wallets ... in this chat... ... in this chat...
you know, we want to talk about things like the specific use cases use cases that they provide, including things like cross-chain remittances, payroll, savings, and the defining challenge, which is moving away from the chain itself to hiding that aspect, hiding the underlying infrastructure that provides this whole user experience. Um, and when we think about enterprises, I think enterprises, I think whether it's a centralized exchange centralized exchange , a fintech, a payments company, a financial institution, they see the wallet infrastructure evolving at a rapid pace. They see DeFi reaching the top four and truly shaping or changing the system that underlies traditional financial infrastructure and financial services. So now is a great time to So now is a great time to be in the wallet space and provide this great abstract user experience. Um, and I think that's kind of a background, uh, for the discussion.
But to start, you told us a little bit about Dynamic, but I'd like you to talk about Dynamic from its founding to, you know founding to, you know , the recent, uh, acquisition of Fireblocks last year, and how the organization is evolving, you know, given current trends and institutional demands. Yes, of course. So, I think to your point, I hinted at it a little bit, but when we launched Dynamic, basically, uh, you know, cryptolitto, uh know, cryptolitto, uh , end of 2021, for those who were around, you know, we were all getting rich on NFTs, and the whole world, or some, I don't know if people were making money, I was losing money, but, uh losing money, but, uh , uh, you know, we were all having a great time, and cryptocurrency was a very isolated thing, right? You had a crypto industry had a crypto industry , it was very separate, uh. Again , you would have a lot of experiments lot of experiments , a lot of in-depth experiments, RWA experiments, something like, um, you know, we had the summer of DeFi and so on.
And that's when we launched Dynamic, and the premise was that, um, it's really hard for developers to build these tools, right? You needed to know about gas fees, and you needed to know about private key management, and you needed to know about all these things that don't scale very well. So the premise for Dynamic was that you need a developer toolset that abstracts all of that away from you. And you know, at Dynamic we said at the end of 2022, we did an internal presentation and said, "We're only working with crypto companies right now, and our goal for 2023 is our goal for 2023 is to work with one fintech one fintech company," right? That was our goal, and, um, fast forward to today, our goal is almost the opposite, which is it's mostly fintech.
And if we have several companies that are crypto natives, we are very happy because we can communicate with them on Telegram, not Slack. Yes. But we've seen this before, and we've kept saying throughout the conversation that every app on your phone will have a crypto component in a couple of years. So if you open your phone in 5 years, you know that every app you look at today will have a wallet. And in 2022 we said five years, in 2023 we said five years, in 2024 we said five years, and then in 2025 we said that's right.
And that has changed very, very quickly in terms of adoption and willingness of both non-crypto companies and fintech companies fintech companies to consider crypto to consider crypto rails and crypto infrastructure infrastructure . And, um, the types of use cases that are emerging all the way from experiments to now, what now, what we're seeing in payroll and remittances, and we'll talk about that. And this is a shift that has occurred in dynamics. You know, I wear more buttoned-up shirts than I used to. Uh, which is also, I think, a consequence of that shift, but that's what we saw in the acquisition of Fireblocks, which accelerates that significantly, right?
Uh, Fireblocks, for those who don't know, has about six, uh, uh, trillion dollars of annual volume that goes through their systems. About 10 or 15% of the total volume of stablecoins passes through Fireblock systems. And so, you know, when we think about collaborating with Western unions around the world, Moneygram, Visa, etc., it, you know, accelerates the dynamics. This is great.
I think as you said, this shift from crypto to more corporate, a lot of your clients now are mostly fintechs and financial institutions. I think, you know, this maybe sets the tone for the rest of the conversation, where we double- click on a few key topics, right? I think embedded finance is definitely a major topic for most, I'm sure, of your clients. Um, and you know clients. Um, and you know , we're seeing financial apps built into the everyday apps that we use, whether it's Uber, Airbnb, or DoorDash, uh, Grab, they're all starting to include some kind of financial app.
Uh, and everyone is effectively turning into some form of neobank, if you will, right? So if you will, right? So , um, embedded finance, I think, is the key theme here, and then another one is how institutions, um, actually build on crypto rails. So maybe we can double-click on those two points, and, um, you know, um, you know, we were in New York last year at ETH Global's Pragma, and you gave a talk on how to build, um, you know, a fintech application using stablecoins. We've seen stablecoins, um, you know, this is very relevant in cryptocurrency.
This is probably the first, um, you know, area where we've seen real product market penetration. Um, over $300 billion, and the total supply is, um, you know, in stablecoins. Everyone is paying attention to this is paying attention to this , including large fintech companies and financial institutions. Um, so I'd like to hear your thoughts, maybe we could touch on use cases. Um, what use cases do you see for stablecoins in embedded finance as you have these conversations and do research, um, with potential and existing partners existing partners ?
Um, and and you know what are perhaps some of the most promising, um, and you know how the dynamics, um, provide these specific use cases for your customers. Yes, absolutely. So I think to your point, and maybe point, and maybe this is the theme of this conversation this is the theme of this conversation , is that cryptocurrency has gone from being at the forefront to being at the back end, very similar to infrastructure and the way you build a global neobank, right? If you want to create a global neobank in a weekend, then pretty much the only option is to use, uh, crypto rails, right? And we're seeing a bunch of those use cases, and I also think we're seeing anywhere from agent commerce and things like that, all the way to more traditional, quote, payment use cases.
Two of them are extremely interesting to us, and we spend a lot of time on them. One is the “trade everything” use case, and I think this was mentioned in the Coinbase talk: we see this shift where non-crypto companies, Erades of the world and Robin Hoods of the world, etc., start offering more additional things to trade on their platform, and the way they do that is with crypto rails, and the reverse is also true. So very cryptonative companies or, uh, crypto-related companies like couches and polymarkets are starting to introduce more types of markets into their system, like prediction markets and so on, again using crypto rails. And so, one of the themes that we see is the theme of trade for all.
The idea is that you have an app on your phone that becomes your financial hub for trading anywhere from stocks to, uh, forecast markets, to yield, you know, uh yield, you know, uh , yield, bearing platforms, etc., to, uh, buying RWAs, etc., all in one place, and for that you need built-in non-custodial wallets in your system. And so we see ourselves working with companies like Bitfavo, which is one of the largest exchanges in Europe, and we see them essentially putting a non-custodial embedded wallet into their existing platform. He is invisible.
Nobody sees him. Coinbase, I think, does the same thing, but allows them to open up types of investments that their users couldn't do before. So, that's one big use case use case . The second big use case use case is essentially a use case for payroll or money transfers, right? We are lucky to work with companies like Western Union or Papaya Global like Western Union or Papaya Global .
And indeed, we have in mind the following case: I, um, want to pay someone in Argentina. This person today, if I want to pay them on Friday, this person gets their money on Monday; uh, for every $100 she loses a dollar or two, uh, some kind of transition. Uh, and they automatically convert to, you know, pesos or something. Uh, actually, I don't know what Argentine currency I can break, maybe a whole one, if you're Argentine, please accept my apologies. I'm terrible at this .
Uh, but, uh, basically, you know, you have no way of dealing with high inflation as a result of this. And so what we really mean is that Western unions and papayas and so on are saying and papayas and so on are saying : why don't I just give you this built-in, storage-free wallet built into your app? It looks and works like any other part of your app. You enter in the usual way. And when you get that money, instead of four days, you get it within a second.
They cost a cent. And, by the way, they stay in dollar accounts until you actually want to withdraw them. So you can make a profit on them , right? So you can, uh, add a card like Reap or Rain or Reap or Rain or any of those, uh, to this built-in wallet and spend, or you can even do more complex things. So, this is the second super interesting use case use case .
Again, cryptocurrency is nowhere to be seen. It's completely in the background, but it's a really powerful use case because it just allows people to access things they couldn't access before. I once worked for a company that used Papaya, and if they had more crypto and DeFi integrations under the hood, I would probably leave my earnings on Papaya. But, you know, we instantly give up on that because there are none of these useful features and products that provide profitability and fast and seamless payment systems. That is absolutely true.
True. If you think about it from their perspective, right? So, Papaya is perspective, right? So, Papaya is , you know, the creative economy, right? The TikTok of today's world is making payments and money is leaving their ecosystem, and that's really bad for them, right?
But if you can keep that money in your ecosystem, if you can keep those relationships, and you can do it globally, you get huge benefits as a company, as an end user, and so on. That's the power of it. Absolutely. Absolutely. I think maybe offering the Optimism perspective, you know, when, for example, that big use case that we see from a lot of our prospects and customers really revolves around monetization and supporting monetization products, whether it's in a fintech app or in the front end of financial institutions or in a payments company, that seems to be something that comes up again and again.
And we think about it this way: we approach it from two perspectives: there is a source of profitability that provides this income. And if you think about maybe one of the first examples of DeFi examples of DeFi mallets, you know, we've all heard of Morpho and the original original Coinbase D5 mallet where you could secure BTC. You borrow USDC. All this happens on Morpho. And we've seen, you know, more of these D5-malets around the world and other, uh, D5- world and other, uh, D5- protocols.
But we really look at the infrastructure that enables these revenue opportunities revenue opportunities . So we think about, you know, authoritative curators. Uh, we're thinking about, you know, blue chip protocols like the ones I was talking about. Uh, we're thinking about protocols that actually invest enough resources into strengthening their security. Uh, and you know, security is becoming more and more important.
I think Mythos just released a limited edition of this. But I mean, I hope we cross our fingers that it doesn't happen. But I imagine there will be more exploits on the horizon, and we need ways to mitigate all of that. So security is extremely important, uh, to power these revenue products that connect to businesses that ultimately provide a seamless, you know, uh, very fintech-like, web- fintech-like, web- like experience for users, uh, through, you know, the wallet, it's like a dynamic, of course. Um, in terms of security, I think that, you know, we think about a lot of the profitability infrastructure, whether it's the protocol or the storage, you know, everyone does audits.
Audits are important, but I think you, you know, take the next step to formally verify your smart your smart contracts, do testing do testing , um, you know, ongoing security monitoring. Many of us in the room who are developers probably use tools like Hyperative tools like Hyperative , Guardrail , or Zero Shadow . Um, you know, there are rewards for mistakes. And we can do much more in terms of security. And I think as an industry, we need to invest more in this so that we can eventually go to large enterprises and fintechs, know that where the money is going, it's safe, and you know they get that warm feeling inside that everything is okay.
Um, you know, nothing is ever 100%, but I think there's still a lot to be done in this area to strengthen our security posture. So, with that in mind, I'd like to hear from you, Ty, what is security, what are the security features in the Dynamics MPC wallet solution, and where are you investing your time and energy in this direction? Yes, of course. And by the way, regarding the issue of earnings, I think there are two, two, two important points. First, you have paved the way in many such things.
So it's really cool to see that we seem to have had conversations about a year ago about earnings integration earnings integration . So it's really cool to see this come to life and be revived, and on that note, for those who have n't seen, the Morpho team raised a tiny, I would call it, seed round of $175 million today. So thank them for that. They are incredible partners. As for security, that's one of the things we've been lucky with with Firefox.
Fire Firebox is a security company, right? I think I mentioned this before, right? We turn over $6 trillion a year. We protect, you know, most of the global brands, whether it's New Bank, Revolute, Robin Hood or others, they all run on Fireblock systems. So we manage this at an extremely high level, and we think about security in depth both at the supply chain management level and how discovery works, how you know about your switches and so on, all the way down to cryptography, right?
So we spent a lot of time thinking about the right cryptography to protect these things at scale. Firebox has an entire team that specializes in cryptography. We specifically use something called MPC; for the geeks in the room, you know, google it after multi-way calculations, it's a really cool set of mathematical solutions. These are zero- disclosure solutions, which effectively mean that there is no private key, but rather different shared resources that only work together. Uh, and this is really important.
This is really important both from a security perspective, these are actually very important parts of the world in Europe and others in terms of storage. Uh, that's normal. Can I guarantee that the end user owns the share and can export the, um, wallet themselves, right? So when we talk about all of these use cases, it's a combination of how do we secure this at scale, but how do we still provide self-contained ways for someone to export their keys and take them with them? So, that's how we think about it.
Almost 80% of the time we spend internally is security. It's good to hear that our money is safe, hmm, I want to spend maybe a little time, we can run through this because we have a few minutes left. Uh, just in terms of financial institutions and what they're looking for, in much the same vein, you know security is really important, but, uh, compliance audit logs, risk control is extremely important extremely important . Uh, you know, optimistically, we invested a lot in privacy solutions. You know, confidentiality is certainly an essential requirement for many financial institutions.
So, uh, you know, we recently announced enhanced privacy for confidential transactions. Uh, we have several built-in levels of compliance levels of compliance , including programmable locking, which allows you to configure many rules and policies at the sequencer level for transactions. Uh, you know, uh, as you like, I'd like to hear from you, uh, you know, what you're hearing from financial institutions on the front lines about these requirements and how this dynamically, uh, you know, allows them to do this. Yes. So we were lucky to be talking to financial institutions at the very beginning of their journey, right?
So they start by they start by saying, "Okay, we're getting a high-level use case use case , we're getting the kind of thing where you, you know, you can move money at scale around the world, and you can do it very quickly and very cheaply quickly and very cheaply ," right? And then, uh ," right? And then, uh , you start asking second- and third- order questions. And a couple of weeks later, the engineers at all these financial institutions come back and say, “Wait, this is all public on- chain? Well,” and at that moment it dawned on everyone that cryptocurrency is public, right?
You can use an ether scan or something like that, a database scan, or database scan, or , uh, um, any of the existing tools and see almost all the transactions. And that's a big no-no if you're moving transactions from a bank to a chain, or if you're doing payroll, if you're doing money transfers or accounts payable , right ? This is competitive information; This is someone's personal information. So privacy becomes a really non- negotiable thing, negotiable thing, huh? I think, uh, as you mentioned, you guys have you mentioned, you guys have led the way with a lot of innovation in terms of privacy protocols.
Their privacy-specific chains, such as Canton and Elio, have truly unique and sophisticated approaches; their privacy pools for things like Tempo and others. And, and what you see is that Salana has private transactions, right? You see it. I don't know if I can tell Salana at the ETH conference, but, you know, everything will be fine, uh. But essentially, you see all these types of protocols emerging, which is critically important.
I think this won't be a discussion for the next year or two; it will just be the default thing. I don't think fintech will take off, uh, you know, on a large scale without this. I think we're almost there . Uh, maybe one parting thought from you, Thalia, like, you know, just what comes to mind? Maybe something you're working on that's on the roadmap that you're looking forward to , or an interesting trend you see that's impacting the product roadmap.
Uh, what comes to mind in this regard? Yes this regard? Yes . So the main thing for us, and for many years we've been talking about this, and you know, as I said at the beginning, wallets will be in your phone in the next five years next five years , and it's always been five years away, and suddenly it's happening now. And so the main thing for us now is scale.
How to do this on a global scale global scale , right? We all have, um, five, ten financial apps at least on our phones, somewhere. And I think of Uber, or, you know, Airbnb, as a financial app in that sense. And I consider, um, Instagram and TikTok to be financial apps, and they're all going to have wallets, and, you know, inside of them you know, inside of them . And they all have to think about security, they have to think about entry and exit, privacy, and, um, you know, fuel costs and stuff like that .
So our plan of action is to make this work, making sure that when you wake up on a Saturday morning and want to create a global neobank, you can do it, and within a Saturday afternoon, with Mythos, to your point, or I think they have another name for it now. I feel like, um , um, they have a new name for this, a less scary version, right? Yes, exactly. Less scary. Eh, you can just do it really quickly.
That's what we're focused on. Surprisingly. Um, thank you very much for this conversation. It was quite instructive and thank you to everyone in the room. Um, we're happy to chat a little later, but, uh, yeah, it was nice chatting with you today.
Thank you very much for inviting me. Hooray.
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