Fireside Chat: Raagulan Pathy & Alex Svanevik - TOKEN2049 Singapore 2022

hi everyone how are you we're actually going to start standing and I'm going to ask everyone to stand I'm gonna play a little game because everyone looks like they're falling asleep um I can understand you talking about Dows and green credentials so my question for everyone because I know everyone went to an after party last night for sure so you're gonna sit down as I say the time that you went to bed last night 9pm oh my God Jesus 10 P.M 11 P.M midnight 1am don't lie now okay no lying 2 am I mean we're both down by this time by the way 3 A.M 4 A.M 5 A.

M he didn't sleep okay congratulations now that we're all a little bit awake um we'll do introductions a second so my name is regolin pathy I'm the VP for Asia Pacific at Circle uh most most known for usdc um but we also build a bunch of stable coins and I've got Alex here I'll let you do an intro yes my name is Alex I'm the CEO of nonsense which is a blockchain analytics platform and I'm sure we'll talk a bit more about that in a second sure thanks Alex um so first question for you Alex do you know where do Quan is okay let's go neither does anybody else no okay we're getting that out of the way see I promise you'll be awake right um no getting down to real business Alex told me what inspired you to start an answer and tell me a little bit about your business yeah so when we started back in 2019 with uh Nelson we saw that there were kind of two products uh at a spectrum on the one hand you had a lot of free products that uh catered to investors Traders and crypto etherscan coin market cap and so on but they weren't particularly focused on what actually happens on the blockchain at a very granular level at the other uh extreme you had anti-money laundering tools like chain analysis elliptic and so on that were focused on the blockchain itself figuring out what was happening but we was it was always with the focus of illicit use uh of crypto and blockchains and we figured that there should be a product that allows investors and Traders to understand what happens on the blockchain itself um and something that helps them surface the signal when it comes to trading and investing and navigating blockchains and web3 so that that's what inspired us to create announcing and we basically pull in transactional data from a wide range of blockchains and we enrich the address information with labels so that we can know you know what are the different use cases for usdc where do you actually see usdc parked is it exchanges is it D5 protocols smart money funds that are perhaps hedging their positions and so on so that's that's how we ended up building nonsense okay and how many wallets do you inspect today um globally and how many wallets are there globally I don't even know that's a good question actually I think it's you know in the hundreds of millions um of wallets um we track or tag about 130 million different addresses and we have information such as you know entity information you might say this address belongs to binance it allows you to understand flow of funds if there's a deposit of tokens into that but we also have behavioral labels so we can say this address is a smart money uh wallet and you might want to follow what this wallet is doing because historically it's made good decisions when it comes to trading flipping nfts yield farming with defy and so on so really if you think about it there are hundreds of millions of addresses but you probably only care about a relatively small set of addresses and entities and we try to help you surface the signal and look at those addresses that are the most interesting and impactful let's talk about wallets and web 2 and web 3 for a second so you're saying there's hundreds of millions of wallets many people have multiple wallets so that might be 100 200 million users of web3 but just Facebook itself has nearly three billion users right two and a half billion depends how you count it um do you think wallets and the proliferation of wallets or the lack of proliferation of wallets in a way that's easy to use that web 2 companies feels very web too people can pick it up and use it and not know almost that they've got a wallet do you think this is a major impediment to us growing our industry to web3 Technologies being available for General the general public I think short answer is yes 100 um I think most of us who are crypto enthusiasts have experience trying to onboard someone who is not crypto native to the ecosystem only to have to spend you know 20 minutes to explain what a seed phrase is or a key private key and so on and this is pretty pretty frustrating there are some interesting products I think like origin that allows you to effectively manage or you don't really have to manage the seed phrase or the private Keys you can sort of distribute that with guardians and things like that but at the end of the day I don't think we have solutions that are ready for mainstream adoption when it comes to wallets my thesis is that at some point probably fintech as we know it which currently is mostly backed by you know traditional Financial infrastructure um will merge with crypto to some extent and I think a lot of the complexity will be abstracted away from users to the point where you're using something that feels like venmo or revolut and it might actually be these applications but on the back end they're using crypto rails right that's what I think is going to happen eventually you still probably want to have self-custody because there are some you know obvious uh benefits to that but if you want to have billions of people using crypto you probably need to have much easier to use wallets yeah and that's not just for for individuals like like us here but also for businesses right yeah and this is a real challenge if you try to custody crypto assets as a business I mean you have to you have to base basically find Solutions and you know three four years ago you didn't really have good solutions for this now we have fire blocks you know you have Anchorage a lot of good custody Solutions yeah um but yeah there's still we're still at the frontier of this understood um so today usdc is used by about 1.5 million it's in about 1.5 million wallets um but the US dollar is held in bank accounts by billions of people arguably today um do you see a world in the future where people will not open a bank account and they will just have a wallet right and I think people are doing it today but I'm thinking about when people start a business and and I I know speaking to you that when you first started your business it was hard to open a bank account yeah you wish that you could just natively uh you know pretty much had a wallet but it requires the ecosystem to be complete right yeah so do you see that this is going to be the future that people will just have wallets you'll be able to move your money between between wallets people may not even have a bank account at all yeah you know maybe may not even be uh The Preserve of one country you know you're not you might not even be attached to a country I mean I think that's the future you should strive for um I think a lot of us join the crypto space because we hate Banks to be quite honest uh I've had some bad experiences with with banks myself not that I've done it done anything shady but uh you get your assets Frozen uh you might have changed countries so now your money's stuck in some Bank in a different country and there's virtually no easy way to get your funds out um and you mentioned that it took a long time for us to get a bank account here in Singapore which is a very modern country you would expect that you know getting a bank account as a business that has I would say you know World leading VCS backing us and so on should be pretty easy but it took I think one and a half years before we were able to open a bank account it took you a year and a half to get a bank account yeah I can see why you hate Banks now yes exactly and then in the in the meantime we're using usdc we're using uh self-custody uh we used certain fintech Solutions as well like like wise or transferwise as it used to be called uh we ended up getting a bank account in the U.S before we got a bank account in Singapore yeah so that was a little bit frustrating and it kind of added to this feeling that we should strive to to get to a bankless future right yeah uh there's nothing wrong with people working in Banks and so on but there's so much paperwork and bureaucracy that I think the user experience uh when you're confronted with a bank is not very pleasant so I definitely think that that's something to strive for that you want it both as individuals and as businesses if you can get to a future where you don't have to have a bank account yeah you can you can custody your own funds on a blockchain uh or you can have alternative solutions to banks that would be a great thing and to some extent you can do it now but you still need banks for certain things you still need them for the on-ramp and off-ramp taxes yeah okay paying tax is a great topic with crypto confidence yeah um uh told me so usdc is used for a variety of use cases you know payments trading um for gaming for blockchains um do you re do you see the growth is going to happen or do you think I see that it's going to happen I'm biased because of Run Circle but do you think um you're going to see a future where stable coins are going to become the real digital dollars of the future whether it's us or others uh or do you think it sort of had a really fast run-up and then things are going to slow down and it's not going to continue yeah be honest it's not going to be offended I think stable coins are the unsung hero of the crypto space and the last four years uh if you think about product Market fit like when I started working in crypto in 2017 most of the concepts were just Concepts and white paper they they weren't really you didn't have evidence for product Market fit I think now you have product Market fit for D5 you have for nfts and you also have stable coins I don't think people you know issue or mint more than a hundred billion dollars worth of stable coins unless there is an actual use for it yeah and so um I definitely think that stable coins in that sense they're kind of the bass player in the band they're kind of in the background but they're keeping a lot of this stuff up when it comes to adoption and usage and if you if you invest you know in a venture round as an angel investor usdc in my experience is basically the default Choice when you want to send funds to someone who might be on the other other side of the world yeah in a fast manner without getting poked up with you know Banks losing money but transferring across borders and so on um so I think there's definitely that element and I think stable coins have found product Market fit if you look into the future I just see this trend continuing I do think that there's an interesting kind of play between the different stable coins you see binance USD you have obviously tether usdc uh you have algorithmic stable coins or um you know different models than the self or the custodial stable coins like die or maker Dao and it's going to be interesting to see how these different products can carve up the space and Achieve probably product Market fit within different customer segments and use cases um but yeah I remember when usdc was launched and uh you know the fast growth of uscc has been quite remarkable since I think it was 2000 late 2018 that you guys started issuing these USD sequence yeah it has been fast for sure um let's talk a little bit about entrepreneurship I know most people in web 3 even if they're working for a company probably thinking about well maybe I want to go and start my own company right I hear this all the time and I mean you're the model citizen for a startup here in Singapore I think latest valuation is 750 million or something like that something large um uh what advice do you give to people who want to go and start a company some may be thinking about starting one whilst they're working where they are yeah you know some may just throw it in and go all in and there's different things people are building for but you know what's your advice for entrepreneurs yeah I mean this is a big topic I'll try to keep it relatively short and concrete I don't think you should issue a token prematurely that's the first thing I would say because it leads to a lot of headaches later if you don't know what you're doing and building a product is hard enough if you also have to think about how a token fits into it you have to innovate you know in the in two Dimensions at once which is very difficult uh the other advice I have is to consider raising more money than you think you will need because you have Cycles in in crypto and you need to be able to weather the storm it might not be as easy to raise money in a bear Market than it is in a bull market um and then you need to manage your treasury just to survive right and so you need to be you can't Degen your your funds you have to think almost the inverse about how you manage your money in crypto maybe even being quite traditional buying t-bills perhaps or you know not putting money into some high risk yield Farm yeah and then obviously building a product that you know you have to get to product Market fit so you have to think about a real problem that is large enough that has a large total addressable market and then you have to work very diligent diligently with your customers and users to make sure that you have product Market fit and that they keep coming back using your product and ideally paying to use the product so that you have a sustainable future sure um I think one last topic I just want to talk about Singapore as a ecosystem for building uh the crypto economy blockchain web 3 I mean your Norwegian originally you've been in Singapore for some time you get to travel the world as as do I but it seems to me maybe we're biased about it that Singapore has this incredible Hub of of crypto entrepreneurs and crypto companies here right um I would say more than any other city in the world in terms of concentration of people in crypto Singapore seems to be winning even though there's other bigger countries out there why why do you think Singapore like why what what's the magic that Singapore was doing firstly do you agree with my statement yes secondly is uh what's the magic why why Singapore why not uh you know San Francisco or or London or Tel Aviv or these other places not that they're doing badly but why why is Singapore such a small City doing so well yeah I'll try to give it short I think we're being called off so I'll comment a few things I think Singapore is a place where Finance meets Tech you have both those spaces in Hong Kong for example you mostly have Finance you don't have Tech it's a place where East Meets West as well you have people from say China coming here as well as people from Europe and the US and then I think it is the DNA of Singapore is to be business friendly so it attracts entrepreneurs and investors and I think that's a great recipe to be one of the leading crypto hubs in the world cool well Alex from dancing thank you very much for spending some time with me thank you everyone