Revolutionizing Markets through Asset Tokenization - TOKEN2049 Dubai 2024

all right good morning first session looks like the party yesterday was pretty good because uh we are still waiting for some people so the the topic of today's session is uh tokenization of real world assets we just talked main stage about the meme coins I attended yesterday's session about me coins and pbon fun and those were full so uh we are actually doing um um you know value when we put on chain uh assets like real estate stocks equities credits but let's start with introduction of the panel so guys you know you're pretty well known in the space can you introduce yourself sure hi everyone sorry please thoughts I yeah Sergey you can start thanks um hi I'm Sergey co-founder of chain link the leading uh the centralized Oracle network uh powering most of defi rwas all the more advanced smart contracts hi everyone I'm Justin Schmidt I'm president of Ando Finance um we're the largest provider of tokenized cash-like assets like T bills um yeah my background is I think we actually cover the background right they did that beforehand so yeah I'll just pass it over you Max thank you my name is Max buan I'm the founder of pvo one it's a tokenization startup prior to that I founded a market maker in crypto uh b2c 2 and just before that I was an interest rate Trader at common Sachs yeah thanks a lot and let's actually do a double click on the introduction and tell me why are you excited about putting real world assets on chain like what's your story let's start with you Max because you told me yesterday about a very interesting story yeah I um I sold btc2 in 2020 and I took a couple years doing more or less nothing which was quite Pleasant um but then one day I wanted to buy a specific Italian Government Bond it was a liquid Bond I wanted to buy a large size so nothing unusual about that trade um but I looked up my two professional Brokers that I use well I name them interactive brokers and sexo they're big brokerages impossible to buy the bond on those platforms they just don't really have Italian government bonds are not at prices that make any sense so I called up my bank and my bank could do it but the Fe were absolutely insane and you know it's a major European bank and I'm thinking I'm a resident of the EU I want to buy the debt of one of the biggest nations in the EU and that's n impossible and something something doesn't doesn't really work there because if I'm on Robin Hood in two clicks I can buy the shittiest stock in the US or any major country which is the click of a button and I myself indeed I lost like some some others you know 90% buying dropbox at the top and and and I I would say coins like that um and for some reason that's considered to be perfectly suitable and the pipes all work but you want to buy uh government debt of course if you're a US citizen you want to buy us reg this kind of works but anything else it's a it's a it's a huge headache and I thought that there's something wrong there it can't be the case that in 10 15 years time you cannot buy fixed income at the click of a a couple buttons and that's how we set out to start pv1 Justin what's your story why are you excited about real world assets oh man um I mean it's obviously not as exciting as meme goings but um yeah I think that people really see this application of blockchain for finance uh and so real world assets is a crypto term for these assets to have some sort of like Financial Nexus that is offchain um the vast majority of the world's finance and productive assets are these real world assets so bringing them on chain is just I think a a natural development of where we're going with a lot of these Technologies um and we've had RWS on chain for you know north of 10 years now you know so certainly tether's usdt is the sort of original real world asset bringing the Dollar on chain in the way that they did um so it's been around for a while I think you know we'll probably get into this more later on in the panel but I think there sort of interesting narrative is more about why now and why we're starting to find product Market fit in particular with things like t- bills and why that's been one of the themes that we've been seeing here the conference okay understand setay yeah so real world assets was actually one of the first things I I worked on in smart contracts in this industry back in 2014 uh and there we were trying to tokenize cash flows from content websites so that if you owned a token you would get a portion of the advertising revenue from the content site oh interesting so it was a pretty advanced form of of rw8 um so it's just a very logical idea for me that you would create fractional ownership of things that can't uh be fractionally owned today because the people that have the asset they want liquidity and the people that um want the asset want the asset but they don't have the capital to buy the entire building or something like that there's like a whole bunch of assets at the edges of the financial system that can't be purchased can't be owned can't be fractionally divided um so that was interesting and then there's also all kinds of Dynamics I've discovered about real world assets over the years where they create a lot of economic efficiency for things like collateral management uh so Atomic settlement allows you to move assets very quickly and so you can earn interest on the asset for longer and that matters if the asset worth $100 billion and then the thing that I'm really focused on now with real world assets is uh turning them into what we call unified gold and Records so the real world asset is an ownership receipt but also in addition to being an ownership receipt it's in a data container that has all kinds of information about the underlying asset so the traditional model of of asset ownership has been um that value transfer system the ownership rights transfer system is one system and the data systems describing what's going on with the asset are a different set of systems and if I transfer an asset from me to you your responsibility is now to learn all these things about the asset in various Data Systems yeah and that's where a lot of marketing information asymmetry appears where some people learn and some people don't learn and you know people make money that way but I think a better model is the unified golden record model where the real world asset is both an ownership receip and it's a bunch of pieces of data history well history and also just the current status of the asset like here's a gold coin let me tell you every once a year if the gold is there or let me tell you every second if the gold is there here's a carbon credit let me tell you if it's still valid here's a piece of real estate let me tell you if there's additional debt that appeared on the real estate here's a tokenized fund let me give you the nav valuation not every month or every quarter but every second there's all this data about the underlying asset that is really really critical to understand understanding it buying it selling it managing the risk of it and I think what I'm excited about now is packaging all of that into the asset itself on chain yeah so that you need absolutely no expertise about the asset you just need to look at the onchain record and know what's going on with the asset at that moment in time and I think that's a much that's a very big big Advantage yeah so we are completely automating the traditional Finance here this is like really the future yeah yeah and they want it too so we're not just automating them away they're a customer of this and then the web three people are a customer of this and then all of them need to get connected with each other which we also do through ccip uh and the real world assets and the payment systems and everyone connected uh call creates what we call the uh internet of contracts okay understand and ccip stands for cross chain interoperability protocol it uh serves a similar function to tcpip which UniFi different Technologies to create the internet yeah so on the internet I don't need to contact you and ask you what database you're on and in the future and even now with ccip you should need to worry about what blockchain the other contract or the counterparties is on because you have a protocol that simplifies that relationship um on both the level of transferring value and on the level of transferring the data uh related to the value okay together with the value yeah um that's another big problem where if you transfer if you generate the value in one chain and then you transfer it the data needs to continue to reach that asset in the other chains which is a problem that most people ignore but is quite important okay exciting so I want to step back a bit from the future and talk about the current market so you know for the people in the audience uh Max question for you how big is the market today which Real World assets are we actually tokenizing as of now I think if you want to look at the market as a first approximation you look at stable coin balances um because stable Co balances and real world asset organizations they're sort of they should add up to the same number roughly speaking right yeah so if a dollar out of stable coin going into reward assets so because reward assets kind of small for now um you can imagine that the potential pull of capital today is all of stable coins and you're talking between 100 and2 200 billion dollar that's kind of what we're looking at of course the end game is supposed to be that uh the money allocated to stable coins and um assets that are as their denomination a stable coin hopefully grows beyond $200 billion yeah but that's where we are today okay with most of that value being captured by tther and circle and coinbase with their partnership with circle cool Justin what's your view on the market size and like the different segments yeah I mean certainly Max is right um yeah I think the the potential here is obviously much much larger not to talk about the future but undoubtedly the the eventual Tam for putting these cash like Assets in particular I think is what we're doing right now which is very exciting so we have two main products uh they're both the same concept they're both yield bearing dollars in token form there's different structures for the two because there's different regulatory reasons for where we can issue them um but in in essence they're really just dollars on chains they're very similar to the first generation of stable coins um we're around 300 million in TBL now we're at an all-time high it's been growing but um still very small comparison to a lot of the other activity on chain um but I do think that the first things that you need to build if you're trying to sort of bring Finance on chain are the really basic Primitives like dollars and being able to send people money those types of things and then once you have that you can start to tokenize a longer tale of you know sort of more exotic more interesting harder to reach accet harder to reach assets that you didn't have Market access for uh but we've been very focused on you know tokenizing cash like assets yeah okay so so how I look at the market is the real world assets tokenized is around 200 billion so most of it is stable coins that's the number one then there are t- bills like you guys are doing at Ono then there is tokenized credit like centrifuge Goldfinch Maple then um there is tokenized real estate and tokenized private Equity I think we all uh read about KKR willing to tokenize their Healthcare private Equity Fund reducing the minimum investment ticket from five five million to 1 million so it tokenization helps to access um the real world assets for us you know crypto investors what other advantages do you see Sergey in addition to the Cross chain ccip that you talked about versus the thread f tokenization um well yeah there so there's two worlds right and even on the market size numbers we just discussed there's the public chain rwa world and then there's the private bank chain rwa world the private bank chain rwa World those numbers are not really disclosed so they're doing a lot of internal collateral management I wouldn't be surprised if the internal collateral management within Banks was well past 200 billion um in addition to the stuff you see on chain in the rwa world but that's they don't make that public so um I think the the real advantages are basically that you get certain efficiencies with how these assets can be handled in the banking sector and you get previously inac accessible Assets in the web 3 world so in the web 3 world everyone for a long time has been interested in diversifying risk through things like a multic collateral die like multic collateral die for maker is a good example of this concept of let's diversify our Risk by um creating a basket of assets that back something um which is a very logical idea and if you look at certain systemic uh failures in our industry like Tera basically it's because there wasn't um a good amount of collateral varied collat Al backing something backing a protocol so in the web3 world I think there's a fundamental um interest in both generating new assets for a consumer base that never had access to them before like that's the KKR example and then I also think there's a big market for protocols not individuals but protocols stable coin protocols all kinds of protocols that want to diversify their underlying collateral Beyond crypto so that they're not so exposed to crypto Market volatility yeah um and that's where you know Ando and the good work they do can come in where where people can diversify but can they divers they can diversify at the Smart contract level on chain that's the thing people have been looking for for a long time on the protocol side the one of the longest running examples really multic collateral die if you look into the history of that um and then on the bank side it's about efficiency it's about efficiency of collateral management it's about Atomic settlement it's about things that we all take for granted in web 3 like 24/7 365 markets um that's like one category of value and then another category of value is the ability to create uh real world assets that you can charge a premium for to your existing client base yeah so not to the web 3 client base but to the existing client base um because they they like that the real world asset um is somehow constructed better than the traditional version of that of that asset um and then I think we're going to get to a world where these two worlds interact uh and the barrier for that is the legal system and compliance standards and Regulatory Clarity but that uh barrier is uh reducing it's going down relatively rapidly and so I think both of these groups are each other's biggest markets so I think the web 3 people want high quality collateral and I and and I think the bank people want access to high yield High return Innovative cuttingedge products for their client base and so the question then for us is how do these two groups interact over a shared set of standards for how to transmit data how to transmit the value how to basically structure transactions in a compliant way irrespective of what blockchain they're on so they can all be on 5,000 different blockchains they should be able to transact with each other and for that they need uh Market related data identity related data for compliance and uh method of connection that's secure and meets everyone's security standards M interesting Justin for you what are the advantages of tokenization TS you are the largest issuer yeah um I mean it's almost too stupid to say but and we're at a place called token 2049 so obviously tokens are very front and center for a lot of what we're talking about but like you actually have to do something with the token in order for the tokenization of that asset to be worthwhile right if you just token organize something that you're going to buy and hold and then later redeem when you know the the the asset matures like that was stupid you didn't really need to tokenize that you could just use a PDF in like a web 2 form and like you actually don't get any real benefit from tokenization the major benefits of actually tokenizing these assets are you do something usually we call this defi yeah where it's sort of one of two forms you're either using the token as a means of payment so you know stable coins come in here very strongly or you're using it as a form of collateral for some sort of other Financial activity so one of the there are two major uses of stable coins right now they're largely used as dollars on crypto exchanges in terms of pairs tether is primarily used in this context so if you're trading BTC versus usdt on uh exchange like binance or okx or byy bid Etc you're trading against the usdt and so you need to have the usdt on that exchange usdc is more used in defi where you're trading things against uh a cach leg say lping in a unisat pool um but you know we very much believe like those dollars that you're using as collateral you should be earning that yield yourself you know so our our version you know our main product is called usdy it stands for US dollar yield the main differentiation really is that the token holder themselves is the one who earns the yield that is generated from the TS yeah interesting and for you Max the advantage we talked about it briefly you know acccess any additional advantages you see well to me you have to go back to the the first principles 24 like s said 247 Market yeah 247 yeah that's interesting maybe not so much because we want to trade all the time but the idea of accumulating yield in real time that's kind of cool actually yeah um and and and so that that's the first one uh other than that we're in crypto at the end of the day so I think censorship resistance transferability is nice and uh you mentioned you buy a token for Buy Buy and whole strategy why did you do that well transferring security is is totally possible in the real world if you're a big bang you can do it but if you're you and I it's complicated so as with many things Finance it's a big club and you're not in it and I think that tokenization is also in a sense a rebellion against that state of fact because what we all do well at least the two of us is we take some existing assets put them in a box and give give you some more transferable version of that box but the boxes that we create they operate at a more institutional level and they can transfer Securities and they have access to services that everyone else doesn't and I think that we're providing a gateway to having access to simple things like the ability to transfer a Government Bond uh which you can't really do if you're just a normal individual and you're not institutional so that I think um it it it um J with the E the the ethos of censorship resistance in crypto because if you've got um if you want to buy fixed income as an individual you have to go through funds at the moment you know you can't buy um even even if you're wealthy and everything you just can't go out and buy a bond of General Electric that's almost unheard of and I think that we need to unb unbundle all that stuff and you know companies like Uno started with us treasuries but you would hope that in the future other things would be unbundled Serge talked about real estate uh personally I'm not interested in you know getting fractionalized real estate but maybe others are it's just the case that today you know if you want exposure to commercial real estate if you do maybe you don't probably not um then yeah unless you're a very big fund you can't buy like $10,000 of of real estate so for me as a fund manager it would be exciting actually back in 2018 we discussed with Justin which try to tokenize one of our funds we got quoted $500,000 by Alan and overy you know like copy paste the spice VC PPM if you remember spicy VC back in the day but um so there is definitely friction when you do this versus traditional Finance system where you know it's cheaper it's it's faster then your fund is actually in the clear stream process of the traditional Finance you have an icy number you can subscribe very easily but tokenization would give me two super important benefits number one access so I could access to you know new Target groups of investors who could invest stable coins usdc usdt into my fund number one and and number two is liquidity you know in some of our funds the VC funds investors are locked up for a 10-year period some of them want to you know trade their stake a bit earlier and tokenization would allow to have the secondary market so I'm actually a big fan of tokenization I still think as we all know stable coins are right now the number one market Max question to you uh what are like still the misalignments between like stable coin issuers and like tokenization players can I quickly say something um yeah on what you said the benefit of of tokenization as opposed to the way the world Works in finance now is that in finance it's an accounts based system so when I wanted to buy those Italian government bonds my broker did not offer the Bond that's it the bond exists but it's not offered on my broker I'm stuck if everything is a token if the token exists I will be able to get it maybe I have to go to Unis swap but I will get the token right and so moving from an account-based ecosystem to a token based ecosystem enables you to deal directly with all sorts of players that compete for your wallets rather than you having Accounts at all sorts of players and that's the beauty of Unis swap it doesn't matter if you use metam fire blocks whatever your wallet system is you can access Unis Swap and all sorts of other apps obviously um but to answer your second question on uh the alignment of stable conures and and and companies like condo and pv1 well really they're aligned and dis aligned uh they're aligned in the sense that it's good for business that when you are you a user of a stable coin you have access to basic Financial Services like investing in in us treasuries that's quite important um but it's it's important in the same way that you know Amazon is sort of aligned with independent book sellers that sell on Amazon because even though they all sell books you know it's better for Amazon as a platform if a lot of people are on it because then users are going to come um a lot of providers are on it so users at the end consumers do come uh but they're also clearly dis aligned in a way that I don't think everyone understands is that when you do a real world token a mechanically every dollar in your product is a dollar out of the stable coin it's mechanical because what we do on pv1 when we get some usdc turn them into dollars and then we buy an asset and in doing so the balance the balance of the stable coin goes down by one um and not everyone seems to understand that but in reality if you look at the long run the economics of stable coin should be that you don't need a dollar more of float of a a stable coin not $1 more than what you need to make payments and that's why 247 markets and 247 hour yield is interesting because normally once you've made your payments whoever receives your money your stable coin they should immediately put it in something that generate yield and the the float in the long run I think should be driven by some type of monetary economics you know the velocity of money the size of the trans the of the GDP of the economy uh should determine how much money how much stable coin you need to process those transactions and the bad thing for the current Revenue model of stable coins is that they're highly highly uh the velocity is very high they're very easy to transfer we can transfer a stable coin back and forth between the two of us 100 times a day if we want and so that should call for a low float in comparison to an economy of of a given size so I feel like in the long run probably stable cor Revenue models move from something that is you know AUM based they just capture you know the interest that's that's paid to something that's more transaction based so maybe they take a very very small fee of transactions and in fact I believe that in the smart contract for tether there is indeed an option for a fee on every transfer but it's set to zero at the moment I feel like we're going there and I actually spoke to a a well-known stable coin the the found of a wown stable coin yesterday and he he thinks that all the big stable coin issuers actually are going to offer yield bearing stable coin themselves because they feel like if we keep earning 100% of the interest someone is going to come and take our business our profit margins are too big so someone's going to cannibalize us maybe we should do the cannibalization or sales by you know moving from a revenue model that doesn't depend so much on on the float yeah it's actually happening yeah so and I think so Justin you kind of like disrupted this Market because you know tether Circle they are known for like you know keeping the collateral and then you know like real world asset and then generating yeld on it and you know they are massively profitable company so what's tether um profit last year I like $4 billion do last year so one billion per quarter without the profit they made on bitcoin Holdings which is additional $2 billion on top of it Circle also you know um is a profitable company we are disrupting that business model in your view you know what is the what is your economic model yeah so we um we effectively take a very small spread so um like right now I was looking this morning so I'm also the portfolio manager and buyer T bills that are are are prime Brokers um our current portfolio is yelding about 5.28% we pass 5.2% of that on CZ token holder and so we collect that remaining residual spread we aim for around 10 basis points um so you know our business business model is one at scale so very much agree with Max in terms of you know these these existing stable coins um we really created in a in a zero interest rate environment where it was a very different sort of economic time and that interest rates are significantly higher there's a lot more actual demand from the people whose dollars they are to actually get that yield um and you're seeing that percolate out in sort of various different parts of where the stable coins are used particularly amongst the exchanges um so I don't really expect that to be able to persist for very much longer I think that's a little bit of a legacy artifact um but yeah I mean the I think these things do need to be incredibly Capital efficient in order for them to make sense you know I think when we're talking about these the tokenization of these things in general why do you have rwas on chain I think by far the most reasonable answer is a little bit less so like 247 markets like I don't think you know the KKR private Equity Fund needs immediately liquidity on a Sunday afternoon um but it would be really nice to have all my assets be on the same Rail and then be able to use them in some sort of like cross asset margin where I can borrow against that and so you know I think one of the things I always sort of ask myself and try to be ruthlessly honest is like what is so bad about trafi right what are what are the pain points that actually are being solved here and one of the very simple things is and this goes back to what Max was saying is really taking all these assets from all these different rails and all these different countries and really consolidating them down to this one rail which is this interconnected multi-chain public blockchain world that things like ccip are stitching together and then having those tokens all be interoperable and all of your different assets can be used and all these different various protocols I think that's sort of the exciting thing about where we're going that's the exciting thing to me about tokenizing say real estate is you can sort of see what your entire portfolio is you can effectively borrow against that in a lending protocol Etc um obviously that's a little ways off but I think that to me is the much more exciting part of tokenization for these larger less liquid Financial assets that just really don't need you know crazy 24/7 liquidity yeah for sure and S what's your um what's your experience right now you we are speaking you are speaking a lot with financial institutions like AZ in Australia what's their view on tokenization of assets what's their view on the usage of of blockchain are they there do they understand yeah so the thing that's changed in the last two years is is that most top Global Banks now have a dedicated digital asset team so maybe two years ago I would be working with people in The Innovation group who would be doing experiments now as of maybe three years ago then more two years ago and now much more in the last year there's a digital asset Tech lead product manager and so on and so they are dedicated to the digital asset World which is basically our world mhm there are two sides to that equation really there's the asset ass side the real world asset side so banks are basically Financial product creating machines they specialize in creating Financial products they make a lot of money doing that um onchain real world assets are basically Financial products so it's a new category of assets they just call it digital assets because cryptocurrency isn't like a popular word over there but it's really all the same they don't like the name yeah yeah and they don't like cryptocurrency but they love digital assets and if you ask them what's a digital asset it's a cryptocurrency it's thing in in any case on on the other end there's the payments leg so there's the asset side and then there's the payments leg and they're also interested in the payments leg and so a number of them have generated their own stable coins once the commercial Banks began generating stable coins the central banks started to try to understand what that is because there's different models for how central bank money operates uh for example in Hong Kong there's private Le issued bank money right so in Hong Kong you can actually get a H Kong dollar $20 bill and it'll say HSBC on it or you can get another Hong Kong dollar bill it's a standard Charter on it you get another Hong Kong dollar bill say Bank of China on it so you can literally get the same dollar bill with the same value but it's it's generated by three different entities and you can get it in physical form um so this this question of what happens when Banks start generating currency Solutions payments methods is concerning and rightly so to the central banks and so now they've decided that it's important to step in and and create Clarity around how those payment methods will work and all of this is actually very positive in many ways because you now have an asset side right you have more people generating real world assets that transactions will be generated around whether that's tokenized carbon credits tokenized real estate tokenized money market tokenized funds tokenized private Equity whatever basically in terms of like Market size I think the market size here is hundreds of trillions of dollars it's basically everything uh in the Financial system just the whole financial system and then you have the payment side and banks are interested in both uh and then the final piece that I feel is missing is uh secondary markets so the the emergence of higher volume secondary markets into which you can pump in more and more inventory in the form of an asset issuer whether that's a fintech or bank or an anonymous uh whatever thing um and the payment methods will also then interact with that secondary Market once the secondary markets take off you know that's fundamentally actually one of the things that made crypto take off is the fact that there are large high volume secondary markets that people can participate in once that happens in the real world asset space it's going to take off big time because then you you have a place into which to send more inventory and there's no shortage of people that can gener or institutions that can generate that inventory and they're going to generate it they're all you know launching their own chains building their teams I mean just look at the amount of career postings that Banks asset managers have yeah like that's one good barometer how many how many smart contract developers are the banks hiring go look they're hiring a lot yeah you know those people are going to be building all this yeah like the secondary Market would be a huge unlock like I would love you know if we tokenize share of our fund and then there would be a secondary Market super liquid it like Justin you said people could borrow against it you know also against their stake so this is what like we call the convergence between Defi and capital markets do you see Sergey these conversions like are the banks actually understanding defi as um as a product not at all no I can maybe chime in here if you want but um I have a little bit of a hot take at least for the American Banks I don't think they're close to coming to do any of this in the capacity that we at in public blockchain World think about yeah um I do agree a% on the liquidity front we're like supremely focused on getting liquidity uh in particular for usdy um but really there's if you if you look at the major financial institutions like regulatorily they actually split into really three main categories one of which is Banks and like you know Bank bank where like you deposit money then there's like the investment Banks or broker dealers and then there's the asset managers and so and and that really is like slow to fast I think in terms of adoption of where we're going we see the major asset managers right we see black rock coming in with both uh spot Bitcoin ETF as well as bidle which most recently is a tokenized liquidity fund um but the asset managers have the least regulatory burden and complexity in interoperating with this new technology and as you go from asset managers to broker dealers to Banks it becomes more and more regulated more and more controlled and more and more difficult to embrace anything that's novel um so I I actually think that we're not that much closer than we were a few years ago for the the bank bank part of them because they're the most regulated they're the most conservative um but we're really seeing I think real green shoots of interest from not just black rock but obviously Fidelity Franklin Templeton was a Trailblazer in particular with their Benji token um and seeing real interest in particular from the asset managers that are that have these assets and want to distribute them to novel markets and they they look at tokens as a novel distribution mechanism interesting and Sergey how about Regulators you were just in Hong Kong you're right now here in Dubai you know UAE maybe Abu Dhabi so are there is it like by geography different countries different Regulators are in different stages how what's their view on the advantages of this technology you know exess liquidity secondary markets 247 yeah it's it's very different all over the world um I think there's two two um two reasons for that that I've really detected the the first one is the countries that had a big consum uh a big failure good crypto failure that impacted consumers generated a you know the Hammer's coming down effect from Regulators where they're basically doing their job right so the two countries that are that are most opposed to all crypto kind of stuff basically the US and South Korea both the same places that had multi- tens of billions of dollars in consumer loss from Terror in South Korea and FTX the US so both of those events very much color I think the thinking in those countries about what crypto is what blockchain technology is is an extension of that and therefore what regulation can be about that technology and it's very consumer protectionist focused understandably so because you know that market experienced you know very traumatic negative thing that politically Regulators have to deal with right so that's that's one of the first Dynamics places where that hasn't happened uh Singapore Hong Kong Dubai hasn't had a big failure like FDX or or Tera are largely positive right so they've just been on a trajectory of gradual positivity um and then the other big factor that I see that separates these jurisdictions is whether they want to be a financial Hub right so there are certain parts of the world where they have a domestic Financial system the domestic Financial system is involved in you know a local equities market and foreign direct investment activities and it's kind of just like a part of the economy and it's kind of there but you know they they build ships or they make grain or the country does a whole bunch of stuff right and then there are places like Hong Kong Singapore and Dubai that position themselves and are are basically based on being hubs on being Global hubs for shipping asset ownership legal entities and digital assets cryptocurrencies right interesting so if your existence as a as a country right as a like your point of existence or your goal your strategy to exist in this world is to be a hub and digital assets and cryptocurrencies are the next generation of how all value is secured transferred and managed then yeah so you you you want to be a hub for that and so there's this big motivation in Dubai Hong Kong and Singapore to be that Hub both on a legal level on a transactional level on an issuance level on a payments level on all these levels and I personally feel that all three of these regions will begin to transact with each other okay and that's what we're kind of in the process of setting up we're in the process of setting up transactions within each of those regions between the in region entities and Banks and asset managers and getting them on systems that they're on the same system across regions right so ideally there's Banks asset managers um web3 startups on ccip in Dubai in Singapore and Hong Kong and they're transacting with each other in each region and because they're on the same set of standards they can also transact across regions yeah so that's the thing that I find very interesting that would be a great unlock and um my last question is how big this Market can get so right now we said you know tokenized real world assets is around $200 billion which is small it's 78% of the overall crypto Market versus you know thread f is is much much bigger equities 100 trillion real estate 300 TR trillion and we can disrupt all of these markets together so let's assume you know the crypto Market will grow over the next four years from 2.5 trillion to 10 trillion for X are we still going to keep our market share as real world assets on chain 7 to 8% or are we going to outgrow this Max what's your view I think that wherever we can end up it's important to my opinion at least is that first and foremost we depend on the size of the crypto Market because some people think that if we tokenize real world assets then that's going to grow the pie I actually don't think so because what is interesting to crypto investors is more of a barell strategy so if you've got stable coin or crypto and you switch back and forth you need to have access to us treasuries um but you need to have access to real estates from the crypto ecosystem maybe not and I'll give a personal example example until recently I was one of the biggest users of Uno personally no I'm not but nothing against Uno the reason is simply that whereas for a long time uh other startups of token that tokenize were offering me some sort of um trade Finance deals at 12% a year I was like I don't understand it I want none of that I'm very happy with my 4 and a half% on Ono but then come the bull market one or two months ago and now you can get you know 15% on a I personally consider a to be roughly risk-free and so I was like 5% on undo 15% on a so I switched but that's that's what made me switch it's not the fact that I had access to and I won't name the startup in question you know some 12% whatever deals that on paper looked okay but I just couldn't this not my business I I don't understand it and so that's why I think that it's important that crypto first grows and that we have access to very simple products like condo not in a demeaning way you know but basic financial risk-free investments and on the other side we've got deals within crypto and that's what at P1 we're doing we're creating bonds so if tomorrow um you know call me if Galaxy wants to issue a bond on the blockchain let's do it let's have unsecret bonds of crypto companies on the blockchain and then the stuff in between will figure it out Justin your view on the give me a number um yeah I mean youve talked yourself so you know thank you for being being a client you're always welcome back obviously um yeah I mean I think that uh you I think he's exactly right I think this this this stuff all succeeds together or or doesn't um you know I have no idea what the future will hold but you know the incredibly you know multi-trillion dollar estimates for ours on chain in the next six years or so it seems achievable to me um I think there's a lot of like really basic groundwork that we still need to work on like better user experience better interchain operability you know we are a multi-chain token and we're still making it easy for our token holders to be able to do what they want to do with their money and that's still actually quite difficult so there's a lot of very basic things around the fundamentals that we still need to improve broader in the ecosystem but I do think that number is achievable enablers yeah okay and Sergey your how big this can get in the future just take the entire Financial system all of it all assets equities Commodities real estate gold all of it and then assume there's another 10 or 20% of assets more that haven't been generated because it's very hard to turn them into an ownership receipt so there's an additional 10 or 20% of new things shares of a farm shares of a solar panel operation shares in restaurant shares in owning a piece of real estate carbon credits car credits so just take the whole thing and move around 10 or 20% depending on the creation of more assets at the edges um of the of the financial system nice yeah a big godamn number yeah that's a that's a big number thank you so much guys it was a pleasure thank you thank you thank you