Chris Yin I Why RWAs Are Going To Zero I Plume Network I Pragma San Francisco 2024

[Music] and we are ready for our second talk so what I want to do next is bring up our second speaker and that's going to be Chris and Chris is going to tell you about why rwa are going to go to zero so without further Ado please welcome Chris [Applause] hey everybody can you hear me good good good all right so let's rip through this today um and talk a little about rwa um so yeah talk is why RS are going to zero um and maybe really quick on ourselves and who I am uh you know I run a project called plume we're the largest R and the biggest r e system out here but we can talk a bit about why um it's going to uh it's going the wrong way we'll figure this out soon maybe really quickly on us um this is just a bit of background on our team and everything so um you know I'm uh Chris I'm the co-founder and CEO of plume um you know we've got about 30 people today across a bunch of these places great folks from you know great crypto businesses like coinbase and dyx um you know binance Galaxy and those things and secondarily then um you know we also recently raised or not recently a couple months ago we raised uh $10 million for our round from great folks like Han Ventures Galaxy uh CTE capital and a bunch of folks like that so we've been really uh you know happy and and uh and fortunate to get to this place now maybe let's jump forward so you know the fact that we're running an rwa product in RW chain and and also saying that R is going to Zer is always the contentious Point here and we'll get to what that means in a second but maybe before we get to it I thought it'd be worth to Define and Worth to start talking a little bit about what are RW right I'm sure some people have heard it some people have not but maybe let's just get on the same page RW right there's a chain link report uh that came out somewhat recently that just said look RW are just you know tokens um that represent physical and traditional uh Financial assets things like currencies bonds equities and things like that right and what this really means is if you look at two types of assets one are Crypton native assets right things like eth BTC uh Soul whatever might things that are born and live natively on the blockchain uh and number two you have RW right rwas are things that have a tie to the real world in some sense right maybe they're backed by something maybe it's equities maybe it's watches wine whatever it is right that's what the start of this is and what um what RWS are right and you know the thing that's been uh sort of exciting about RB in the last year we've seen a ton of growth in this market in this area right RB currently are at about 13 billion in market cap right we've seen you know after basically zero activity for a long time it began to pick up and this is the result of two things one was on the macro side of things you had a big change this year right we can see the mark on the here the btcf came out right so the btcf and the EF means that institutions are now allowed to sell these products to their clients and be able to sell things and if we know anything about institutions they want to sell new things to their clients right and so they have a new thing in their bag to go sell to people and that means it's a new opportunity for them so it Nows more money to come in and more stable and consistent money to stay into these assets so that's what was exciting but even back before that there was a unique moment in time about two years ago the sort of rwa stuff happened then which is is um two years ago there was um a unique moment where the uh offchain assets uh offchain yields for the first time printed better than onchain yields right so you had a 5% treasury that did better than 2% on compound and Ava by lending it out and what that led to was an enormous amount of sucking uh of these assets on chains you see treasuries getting put into different products you have even things like die that are backed by treasuries now so a lot of Protocols are using real yields and real things on Shan to pass those yields back to users right and that's what's led to a lot of this excitement and a lot of the growth here right and so you can see even in tokens when it comes to rwas right that you know Des uh excluding meme coins looking across the entire landscape this is just q and actually for the rest of year it's actually much more Stark um RS are by far the number one performing token uh and the number one performing asset uh in the market right and um so you know we've really seen that it's grown there's a lot of excitement and there's a lot of hyper on it and it's really driven off a bunch of these things this is the core story as to why people are excited about it right because when you look at crypto today crypto is a23 trillion asset class give or take depending on where things are right and if you look at every single one of these things outside of it derives real estate equities whatever it might be every single one of these things where the world's money is actually tied up where users are actually tied up where there's networks use case all things around it all of these things are several orders of magnitude larger than all of all of crypto today and so the idea is very simple if we can take some of those things put them on chain in theory we'll all be rich right that's what everyone thinks is going on that's why everyone thinks Ras are exciting right that's the truth of it now the truth also is like if if you look at this um and the headlines will tell you something similar as well right we going to look around there's been a lot of news and a lot of noise around tokenization R in the last year or so right especially in the last six months right so you see things you know for example number one the the probably the largest thing here is Black Rock right Black Rock and Larry think right1 trillion doll asset manager said they're deploying a bunch of things on chain they're taking uh the first thing that they did was and more importantly they're doing things on public blockchains right so they deployed their fund bidd which is a money market fund on eth mayet right which is a huge first step and one of the first institution to do things on public blockchains you have things like Franklin Templeton deploying a $300 million fund called Benji their own money market fund on a bunch of different evm chains right and then even recently you have things like Visa announcing a tokenization platform you have State Street giving out a credit card so you can then spend against your money um that's on chain as well right so you have all these things happening where the institutions in theory are beginning to come things on chain and beginning to bring a bunch of the stuff that they have in their reserves on chain and again the idea is very simple if we can take some of these assets put them on chain it will grow the entire value of crypto right from 2 trillion to 3 trillion to four trillion right and the size as we saw is massive right Black Rock alone is A1 trillion dollar asset manager right so Black Rock a single company is worth five of all of everything in crypto today right so if we just take a fraction of this put to crypto it should grow it's as simple as that right now I asked a friend somewhat recently what they thought was exciting in RW and we're talking and that's how like how L talking about R and like he was asking me what was going on and what was actually exciting about this and what was happening and he pointed me to this which is there's a recent headline from uh from the DMV saying that they're tokenizing a bunch of um a bunch of car titles right and so uh on Avalanche right and so avax apparently in theory is getting 42 million car titles onto a subnet somewhere right um and that's cool and it makes sense and it sounds interesting and it sounds great because you have things like 42 million titles right you have words like Avalanche you have words like subnets you have things like oh we're doing a real thing and putting on chain it's bring R case right now unfortunate truth though is the reality is actually if you dial a little bit back you can actually search for the exact the article the contents of that article and go back in time and find this exact same thing almost two years ago which is they they announced the exact same nonsense but on on tesos right um right and so it's very classic you know the institutions are coming right and they're going to save us and it turns out it's right um and that's what this really comes down to right the exact same story happened two years ago right and people think it's a thing and so it goes back to the same idea when we hear things like Black Rock we hear things like Franklin Templeton you hear things like you know the DMV or all these things we sort of throw our logic to the wind and say oh look it's a lot of things coming it's a lot of User it's a lot of math it's all these things that are coming that's great and we forget the reality of the world right and how things actually change and how things work in technology right if we Flash Forward again take a look at this is's another example right flashboard two years ago Salesforce said they're going to launch an nft Cloud right um and this is like a a perfect example of a top signal right like if you look at Salesforce against the NFD Cloud right everything just dumps after that right and so sure you know we can look at today's headlines and say black Rock's bringing a bunch of money you know um Franklin is blah blah blah right and it might happen and look I genely believe it will this time and maybe it's because I've lost my mind as well but like I genely think it is happening but I think we also have to look in the mirror and realize that generally speaking the way technology changes the way things work and move is not by relying on things like the DMV even just saying it out loud sounds stupid right to like we're hoping that the DMV is going to come save us right it's just a ridiculous thing to think right and so the truth though is like how does technology actually change it's things like uber so I always use this as an example of how things go when you move from one technology Paradigm to another right it isn't about carbon copying the same thing from one to the other right it's not like when the web came out we just took the newspaper and put on the web sure I can read New York Times on chain on the web on the web today but the thing that actually is better for my my reading experience is using things like social things like Twitter right it's it's a new thing built in natively to the internet that you couldn't do before same thing with Uber as an example right when the mobile phone came out sure today I can access Xfinity on my phone I can go to Bank of America and do all this nonsense on my phone but the thing that actually drove us to the beginning outside of the beer app and these types of things right was the idea that you could use something native which is Uber right you could do you could use things that are native to that technology which is things like mobile things like location things like push notifications right you designed a product that was focused and fit for that use case at the time to give you an experience that could not be done before right and then of course over time we carbon copy a bunch of the same on here right that's how this thing works and that's how things actually change in technology right when you look at anything from from sort of like you know um old stuff to the web from web to mobile right and when we go from um you know where we are today to crypto it's going to be the exact same thing right you have to build things in a Crypton native way right in order to make things actually work in that fashion and if you look at the problem with RW today right the problem with rwas is 99% of rwas are just tra people coming in to do Trad things on Shan and it's not a problem it's actually not an issue I don't think I don't say that pejoratively even though it may sound like it right the problem is it's a sequencing issue and it's a ux issue it's a format issue right Biddle today arguably one of the biggest R products out here is a $500 million tvl product with 21 holders so it's nothing right and if you look at volume it's zero no one trades this thing right the minimum to participate this is $5 million right um and you have to QP and do all this nonsense to get involved it's a very difficult product to get a hold of Ando same thing right arguably one of the hottest projects in RW right 200 million tvl 52 holders no volume right that's the problem with this stuff today is Tak an existing product and put it exactly on chain right exact same thing on chain and if you compare it to a Crypton native version of this type of stuff right maker as a simple example right is uh over $5 billion in tvl 100,000 holders right if you look at Pendle which is not even that big of a product right Pendle is $2 billion tvl and and a couple and 40,000 holders right so you look at these types of things you get a very clear sense that doing one thing in a crypto native way allows you to tap into a different Market different environment different audience rather than tapping into classic Trad stuff right and it's a very simp simple idea when you understand why at the end of the day the crypto audience today is 99% dents and people that are Crypt native right there's 1% Trad people and I think it's being pretty generous to the 1% right there's not that many of them there right and so it's coming it is changing but if you're building a product for that 1% you're taking a tiny market and making it even smaller so no wonder that nobody uses this stuff right so you have to build for the audience that's here and then begin to change and adapt over time right and so what does that actually mean right in my opinion there are two things what are the sort of formats and unique aspects of being Crypt native versus on chain tradify or rwas number one is in in the sort of if you go back to maker versus Biddle right the things that we all know there one is liquid it's permissionless it's composable right that's the sort of core feature and the core uh aspects of of um of crypto right versus the other side we do on Trad fight it's actually the entire it's the exact opposite right these things are usually illiquid right you're locking your money up for a long time you've got to go through an incredible process to actually get access to thing You' got a kyc it's gated up it's qpd all this nonsense and third it's usually like very hard to use you can't actually use this with anything else it's it's not composable right and so if you look at all these things today right like you know if I wanted to just replicate my bank and on but put it on chain like we would we could just do that but the problem is nobody uses that and that's not what we want to do here right and we've seen with the stats and the proofs in the putting it does not work yet and that's not and that's why arties in the current format are not going to work right now everyone always ask me what is the AR that's going to work right and what's the asset that's going to work and I would say look you guys are getting the whole thing wrong it's already here it's arguably one of the best products in crypto today right it's a stable coin the stable coin Co is an AR it's an asset that is backed by a US dollar right and if you can take a look at these two things everyone always forgets that the stable coin is an Rua right and it's because the stable coin has transcended R branding right because a stable coin at the end of the day everyone thinks a stable coin as just crypto I don't even need to Define it or make a distinction that it's an rwa because I buy and I use a stable coin like I use anything else in crypto right I just buy it on a I just go to any decks I swap in and out of this thing I can use it across for looping I can do anything I want with it I can send it to people it's not something I need to think about in a different manner than crypto right so the word RW by definition is distinguishing it from all the features of crypto and that's why the word rwa has to go to zero and has to die because it it signifies all the things that is wrong with how we're doing doing things today in RW and again the proofs in the pudding if you look at the stats here it's very simple the stable coin is $180 billion in in uh in market cap RW are 12 and if you look at the growth that's not growth right the stable coins are growing right and it's very clear the stable coin Right started off solving problems for crypto natives it was a defi product in the beginning right using for that it was a hedge it's tighter trading pairs blah blah blah and then of course after that right now you can bring other people on board right and people can hold the dollar right use case number two right and that's bringing net new people in right then use case number three is now we have institutions that are trying to do cbdcs and all kinds of stuff off the back and learning from the stable coin as well right and so that's the idea here is we have to focus on the market that exists today right build a use case build volume build momentum and show what's happening and that will allow other things to come in versus say a bunch of words and expect and hope that Larry fin comes in drops a bunch of money into this and Saves the Day right that's not what's going to happen that's not going to work right and so by definition we have to get away from this idea of using the word rwas to talk about this because there's no other world in which a bunch of things that are completely um uh in separate categories would be grouped together right RB today means anything on chain that's related to the real world which is Collectibles things like watches cards um watch whiskey wine whatever it means things like financial instruments right equities bonds it also means things like houses right and alternative assets right there's nothing in the world there's nowhere else where we group all those things together right so rwas as a name and as a parand is a very obtuse way of describing things and a and a very uh poor way of categorizing and things will evolve like the stable coin we just say the stable coin we don't have to say the stable coin is an rwa right because you know what it is it's descriptive on its own and it's useful and you can understand it by using it not by having to describe it right and again it goes to these three points and so really going back to it's not about AR base it's just onchain assets and we follow the path at plume right what uh what we believe that has been shown to us by the stablein which is one you got to build for cryp you have to build for an audience that exists you have to show usage adoption everything and then of course after that that brings people an economics Drive Behavior it's as simple as that right and so when you show people that it can be used you show people how to make money here you show people how it can be useful then people will figure out what to do with it right versus telling people in theory all this blockchain is going to be good for you for you right showing people is the only way that it works right and so that's why we're building up plume here and it informs our our our strategy and our plan we're building the number one RW ecosystem around here and um focus entirely encrypt natives at first right and maybe the very quick stat sheet on us to Showcase how we're different again look at Biddle look at these other things look at the number of holders look at the dollars look at the uses right when you look at this slide for us for a simple example we've got an ecosystem of 180 projects right which represents over a billion dollars in assets on chain uh from a l from a um tvl perspective these numbers a bit outd now I didn't update this morning in time we're over $400 million now right we and then we've also built a real Community right 21 holders for bidd I've got a little bit under four we have a little bit under four million Wallets on chain right over 280 million transactions in the first eight weeks of this right half a million followers on Twitter right so these are more crypto numbers these are more aligned and in tune with how we expect things to perform in crypto versus this rwa nonsense right and that's how we build this thing and that's what we're focused on and the reason why we have to do this today is because RBS need Network density right you need to be able to bootstrap an ecosystem and have these things line up having liquidity is not the same thing for every type of use case right for example salon right is a great ecosystem right they've done very well but the salana community the way I think about it and the reason why pump. fund works well there is because the salon Community tends to be right someone that Apes you know maybe like DCA five five bucks into like a 100K market cap token right and that's why the the sort of pump. fun audience works well you can copy pump. fund into any ecosystem right but the reason why it works on salana is because of the the sort of Community liquidity and protocol alignment right and they've done a great job with it so it's not not a knock at all right if you look at base it tends to be more Normy which is why you have socials right and you have Ethan ARB all these types of things out there right and so you have to focus on network density to bootstrap an ecosystem and to bring these things into focus and you can see that you know the market agrees with what we're doing here we have a bunch of protocols saying hey we went out we went to go talk to Bas right and they realized that there was um you know they had a bunch of support from the team they had a bunch of support from from everybody and they want to talk about this thing and they realized that as they went out there the unfortunate thing was that they got no new buyers right no n used no new buyers on this thing and they came to pluma we gave them a bunch of transactions over 100,000 over nearly 400,000 transactions a bunch of wallets right and connect them with LPS to get some real money in there right and same thing with asset managers asset managers also realize the same thing which is like look I'm an asset manager I don't know anything about crypto I don't know about distribution I don't know about protocols I don't know about ecosystem composability I don't know to build here I don't know any of that right so by providing a full stack ecosystem top to bottom that makes easy to tokenize distribute make it composable and find your users we can actually on board a bunch of these folks right and the only way they come to you is by having a network already right because otherwise they would say you know there's two choices if I'm trying to decide where to go I can go to one ecosystem with no usage or one with real usage it's not even a question right and so that's what we've done at plume here we built the you know the number one AR ecosystem here we've got a bunch of projects a bunch of uh people in here A bunch of liquidity blah blah blah so you can go check us out and the idea is very simple plume should be the easiest place for anyone to both bring assets on chain right and also utilize those rwas right and we've seen um a bunch of types of things here right Collectibles alt assets and financial instruments of course as I mentioned but really again we're focused on Crypton Natives and what are Crypton and this is the thing I do think is important to talk about artas for Crypton means it's a simple things like you know most people think about oh now I can buy access to XYZ or I can do ABC thing on chain again if you have to explain what's going on that means you've already failed right the way that we should be interacting with Aras on chain is the way the stable coin works today which is you shouldn't have to think about it it shouldn't be any different than how you do anything else on chain and it's purely just happens to be backed by something else and so you should be able to do all the same things that we do on chain today which is yield farming which is trading which is speculating all these things but mixed in with art of as well right and we can talk a bit about these use cases but broadly speaking you should be able to very simply swap into a token begin earning yield on real things in the real world and get out anytime you want you can loop on it you do anything you want right we can do this today we have a bunch of mineral fields on Chan we've got a bunch of um you know uh solar Farms we've got a bunch of uh GPU Farms whatever you want right swap into it swap out do what you got to do doesn't really matter trading same thing right you should be able to trade cards trade watches trade one trade anything right and do that and third is speculate right you should also be able to do that right a lot of things in the real a lot of people think rwas is tokenization and you have to bring this thing on chain you don't right one of our protocols let you take out a 50x live long on Pokemon cards right and the reason for that right and the way that works is not because we tokenize every card in the world because you can pull a data feed right and bring this on Shan normalize it make it useful and a lot of people to bet on it right and the point there is to synthetics are faster it's more straightforward right it's a different format different way to engage with the asset as well right and so we bring everything there so it's the easiest Place interact with the real world on chain in whatever format and fashion you want so we really want to expand the idea of rwas and mimic what people are doing today right if you got a deck screener today right every single major world event there's a million tokens that get get thrown up after right but they're all 5K liquidity right uh 50k market cap tokens I get rugged instantly right that's not a very good experience but it does show you that people want to speculate and want to um imagine what's going in the real world but on chain right and that's what we're doing cleaning that up and making that use case easier what do people do when things go down today right when the market goes to hell what do they do they go into R BAS they go to stable coins and they find a way to farm them we're expanding the amount of things you can do but just following user behaviors that's all it is right and so that's what we want to do is make it easy for people to interact and come on to plume and build with RW and mix it with the real things we've built a really strong Community we've been excited about it and so um you know we've seen even like one of our community members got a tattoo of our logo on here um it's a it's it's I changed the logo like two weeks after so I felt bad about it but it's uh it's what we have um but uh but it is to say like we've built a strong community and we've bu we've that there's a lot of demanded interest for this type of thing and so would love to have um everyone come in as well we've built a bunch of stuff here I won't belabor you with a bunch of this nonsense my marketing team may me put it in here um but I will say thanks for for stopping by and listening to uh me talk about rwa today we're always looking for folks to join plume to help us build the future here or even just talk about RW in general there's a bunch of things that have not been explored here if you go back to that first slide right the idea is very simple crypto is two to3 trillion a day each individual's asset class with ARB is several orders of magnitude larger all we got to do is bring a little bit let it in and it works for everybody and we and we all win so again thanks for the time appreciate it [Music]