RealFi Bridging the Gap Between Crypto & the Real World| John Paller | Patrick Hudgins | Hannah Laut

[Music] hello everyone all right yeah we're on uh my name is Hannah oreskovich and I am currently serving as the advising com Steward for eth Denver uh you might have seen during Opening Ceremonies long and stored history with the event have worked in many verticals in uh marketing and comms in the space and today we're going to be getting real with realy so I'm excited to bring you into the discussion we're going to start off with some intros from our lovely panelists here John kick us off I'm not going to intro myself again I'm John I was at Opening Ceremonies I'm the founder and chief executive Steward of be Denver and also the founder of opis here to talk about bringing healthc care insurance on chain I'm l kazinsky founding contributor of Renzo uh I've been building in the space since 2017 uh if you're not familiar with Renzo uh one of the biggest Integrations that we have that we'll be talking about today is igen layer uh so we were one of the first projects in early 23 to start building uh significant infrastructure on uh enan layer to make restak and easy and accessible for uh users to be able to access uh yield on top of igen layer I'm Patrick hudgin I'm the C of alpha growth Alpha growth is a private Equity Firm that helps run the protocols we currently are at the helm of compound Finance um we also do business development and Partnerships for variety of protocols uh mostly sort of later stage more mature but also uh younger uh Labs projects that need to get started off on the right foot great so I think we're at a really interesting in inflection point in web 3 right now if you've been with us for a few years or more I think you're probably likely to agree and what I find so fascinating about realy is that it really bridges that gap between crypto and traditional Financial Financial systems so we're bringing o hot mic hot mic thanks uh so uh diving in I am curious to hear how you guys think about the transition from defi into realy who wants to kick us off yeah I could take that one so uh when you think about Igan layer when igen layer came on the scene um especially last eth it was very um the it was the main uh kind of narrative uh in the ethereum space we first started building on top of igen layer to bring uh Defi and liquidity into the ecosystem but at Renzo what we were trying to actually do is build the rails and prove product Market fit to be able to bring different kind of liquidity into the ecosystem and what we're starting to see with our conversations with opalis and Alpha growth is that now they're the the ecosystem is becoming a little bit more mature and we're starting to see real life applications that want um essentially when you think about restake is access to Capital uh for insurance like purposes so we've started to cook a little bit uh with the opalus team and the alpha growth team to figure out what the demand is um on the healthcare insurance space what kind of problems they're trying to solve and on the other side of the marketplace Renzo uh has rails that we've built out and that could adapt to different use cases so don't just think about liquid reaking as a token uh I personally believe that it it's actually not a very good fit for everything that reaken has to offer uh because some of the leverage that's built up with defi Integrations and like lending protocols and but we could use those same rails to essentially create bond-like um structured vehicles that could bring in capital that are um served like an insurance pool for healthcare um so that that's uh how we've been thinking about it and working with John and uh Pat's team yeah and I mean it's obviously just a very cuttingedge place to be working in right now so I'm curious maybe Patrick this might be a good one for you on the risk management side what are kind of the biggest hurdles that you're seeing with integrating these traditional Financial systems into these decentralized protocols and kind of you know how are you seeing some of the projects in the ecosystem overcome those challenges yeah good good question uh I mean Mike up higher oh sorry there you go there you go uh so practical application is the I think what the industry is looking for like throughout uh you know it has there's practical application in dii for defi use cases but bringing those to the real world uh requires a ton of regulatory understanding and like uh but also understanding sort of the the risk thresholds being able to uh uh make practical application and lower costs for end users so um defi is great but if it's not you know boots on the ground rubber meets the road uh you know we we we're still pigeon hold in our own industry so that's that's what I'm passionate about um great so in terms of kind of you know bridging that Gap what are what are you finding are the key regulatory hurdles currently yeah I mean it health insurance for example has some pretty big ones um we talk a lot about Progressive decentralization over the past five seasons um we're going to have to do the same uh I think in the end what ends up happening is you'll have to just become the insurance company so you'll have to play by whatever regulatory rules exist there but there's ways that we can kind of lead up to that like we've been self insured uh one of the things that we learned about the existing regulatory framework is it's highly favorable to the capital providers and existing incumbents who provide like things like stop-loss insurance and all the things that kind of exist under the hood and it's designed to make those guys a lot of money and it's you know the players in the front end both the providers and they're the ones who are getting and the payers right the people the actual like consumers are the ones getting hosted so it's a progressive approach the regulatory challenges are are not insurmountable though I mean they they've got a pretty the biggest thing is capital because you know to compete with the the likes of Blue Cross and Signa they call these the bua companies like it's it's really size and and they throw their weight around a lot so and they use the regulatory stuff to their advantage but there's there's actually a lot more players that exist behind that but you've got a one of the key strategies that we we've got to make that work is not only you know presenting a regulatory compliant protocol but also giving them the right incentives to compl in terms of you know bridging that Gap with regulation and then kind of more on the solution Innovation side um this the question for you Lucas you know Renzo is building liquid reaking infrastructure and so how is that helping increase some of the capital efficiency of stake ethereum and um you know providing liquidity for these daps the best way to think about it is we've built out these rails that now we're able to customize and apply towards different use cases and when you think about what John just said around the problem one of the biggest problems they need to solve outside of uh regulatory is liquidity um well that's what we do we we Source liquidity um we work with Partners like Alpha growth we also work uh with chaos uh labs to assess the risk and provide information to people that are willing to put up their capital in order to get some kind of yield but what we're essentially doing is we're streamlining the process and we're bringing the the players that are are needed together uh eliminating all the middleman and what happens is um the the capital becomes a lot more efficient and not only is the capital more efficient but anybody could could participate so if you're a user of opis at a health plan and you want to be able to contribute to the insurance pool uh it's very easy to it's very easy to do that now so you could benefit from that as well where the premiums that are essentially the yield for people that deposit um you could be on both sides of the marketplace um as as individuals so I think the tech is efficient and mature enough now where um we could actually go through these use cases do a proof of concept very easily um I think the the challenge is going to be really understanding data from a risk perspective and being able to form inform you users who are willing to put up Capital to understand what the risks are and potentially what kind of returns they they might get for allocating Capital into an insurance pool sure and Beyond Insurance pools and and Patrick maybe this is one for you kind of overseeing so much of the ecosystem like what other realf use cases are you seeing drive real economic impact right now well there's an opportunity for insurance not just health health insurance but insurance throughout the industry that I think is available now that wasn't and that's that's a that's a testament to the technology and like the all of the the the trials and tribulations that the te the technology has gone through the for reaking and like that industry has developed to a point now where you can now offer different products in a unique way that we're excited about uh Insurance uh health insurance um yeah yeah go ahead yeah I could add there we're saying insurance but it's just underwriting risk so when you think about what kind of risk out there it to underwrite you could have uh different Trad five strategies that are on chain that might need uh underwriting um we were also talking about monitoring on chain of like smart contracts that's underwriting risk right so when you think of it that way uh insurance is a much broader term we're just simply trying to underwrite different kind of risk so protocols have things that they operate outside of uh outside of web 3 to to make a company run and now there's this pool of capital that is looking uh for different kind of yields and they could underwrite that risk in in different ways yeah I'm also thinking about like you know loans credit applications like anything there that that you've seen that you want to mention yeah uh there's definitely a few credit cards coming on board uh the the insurance stuff is the piece that I'm like most interested in because it's such a strong cor corollary to the financial industry I mean like it's it's essentially that what he said which is underwriting risk at the end of the day and if you can do so in a way that provides real economic value to Everyday People then you strengthen the industry overall because you're you're growing the pie you're growing the the end base and user base I mean I'll just add that I from my point of view on the user front end side is dealing with the actual consumers we learned this pretty quickly we've been live for four years and you know with over 1,000 members to date $60 million in payroll it like the business works I said in my keynote earlier as it works but like the problem is the existing Financial architecture is designed against you and if we were to actually scale it to let's say 10x that they could just flip off the lights because like there's no incentive to actually make the capital more efficient the way they underwrite risk and the way they manage the entire Financial flow is just corrupt and so having transparency I think transparency in financial markets is probably the biggest benefit because now you know you can really streamline incentives you can make Capital more efficient you can make capit more Capital more High frequency and in the end that just translates to cost savings and right now there's no incentive for cost Savings in the entire health insurance industry I don't know if anybody's noticed that but like health insurance premiums went up for for opis on the base pl's like 40% we had to like hip and shake and negotiate everywhere just to try to survive so having it on chain I think you the transparency in the markets you know these risk pools insurance is a obvious use case for reaking and realy coming to fruition where we really Bridge those worlds I think is going to be one of the most exciting chapters that we see the way that you guys are talking about collaborating together definitely reminds me of the regenerative Spirit here this year at eth Denver uh so I'm curious how can the eth Denver Community contribute to scalable realy Solutions like are there roles that Builders could play right now in accelerating this transformation what kind of products you know would you want to see builders working on this week on on the Renzo side we've built these open- Source Solutions and it's the infrastructure that's very heavy and very difficult to maintain uh from a security standpoint to get in and out of igen layer we've created sdks and essentially these these vaults that make it very easy for anybody to be able to deploy so we always take the lead and try to build and innovate in the space first to show that things could be done uh but we shouldn't be the bottleneck um others if they have different kind of ideas and are looking for underwriting risk can come to to Renzo and we could help you use the Renzo Tech stack to deploy some of these things in the safe and secure manner did you want to speak yeah yeah I'm just making sure we don't go over I got you cuz she'll get mad at me if we do fair enough uh for us I think come engag with the opis team I've got my two co-founders down here we're at the uh sparkwell Lounge in and around there if you're in the front where the kind of main entrance is uh become a member you know that's actually how you can contribute be a consumer of the product um we're going to be accelerating our team in spring into the summer so there's going to be a lot of opportunities to contribute to Bringing Health chair healthc care Humane and on chain to reality so just come talk to us I mean I'm around you can't miss me wearing all this bright stuff so um that's how we can benefit from that great any final thoughts that any of you want to share on what you're most excited about for the potential of realy I I mean I think John said it earlier but the bloat in the insurance business is massive and it's a moral hazard at this point with regards to price pricing and it hurts everybody it affects everybody um the same thing that defi is doing for uh the finance industry which you know the incumbents aren't appreciated of uh we're hoping to do the same for health insurance and now the regulatory climate is more preferable or more more uh favorable for that and we've got a real opportunity so um yeah please engage with the opis team we'll be around if you see me around please tap me on the shoulder um lots of ways to get involved great thank you thank you guys thank you thanks everyone [Applause] [Music]