My name is Thibaut. I am the CTO and co-founder of Fermints. And today I'm going to introduce you to the Open Capital Protocol. The world seemed to change a year ago, did n't it? Like it or not, like it or not, the new administration has completely reshuffled the deal when it comes to cryptocurrencies and opened the floodgates when it comes to asset tokenization.
And Wall Street listened. Wall listened. Wall Street heard this message loud and clear. And they started figuring out how to tokenize everything. And you've heard it here, uh, on the main stage, like DTCC and all the market participants are now trying to tokenize practically everything.
So, as a crypto guy, I've been in this industry for too long. Uh, it's not visible yet, but uh, it's been too long. Uh, is that all? Is all the work we've done over the last 16 years now being co-opted by Wall co-opted by Wall Street, and uh, they're using it to build faster horses? Was it all in vain?
I don't think so, and I'm here to explain to you why. Everything they do today, everything Wall Street does, tokenizing stocks, they do it in the public market. They tokenize public shares, and they can do it they can do it because the infrastructure is there . And this is what it looks like. This is old.
This is complicated. By the way, this runs on a mainframe. It's as if there is a monopoly in the center. It is similar to DTCC. So , DTCC is a huge monopoly that performs post-trade operations.
And so, you can say whatever you want, but it works. It works. You go to Robinhood, click on this button. Regardless of whether there are nine middlemen between you, when you make this deal, it works. And so what Wall Street is doing now Street is doing now is really like low- hanging fruit.
And the easiest path to success is: “Okay success is: “Okay , we’ll take all of this. We will add another layer, another intermediary, and essentially sell US securities abroad. This is great. But what remains? What can we do?
Because it doesn't change anything. As I said change anything. As I said , it's something like, " , it's something like, " Okay, faster horses." We cannot fight this infrastructure. It is too big.
She is working. But what we can do is create a better one, a simpler one, one that has other uses. And the wedge on which we are going to do this is the private market. Because everything I said before happens in the public market. In the private market, for example, the market is literally exploding because it is so difficult, so expensive to become a public company now, that every action is happening in the private market.
And the proof of this is that now the number of secondary shares is about the same as the number of technology ICOs, sorry, IPOs. So, this shows the amount of activity that's happening in the... happening in the... private market. Every company is now mostly private mostly private .
There are over a thousand unicorns in the world. The private market is valued at over $4 trillion. He literally explodes. However, here is the infrastructure of the private market. This is the infrastructure today.
For example, all this value, when it comes to moving shares, we use legal services. We use PDFs, Excel spreadsheets, sometimes databases, okay? But lawyers are the expensive glue that keeps this market moving. And this is an opportunity. Now the challenge is, because it's a private market, okay?
It seems like there is no infrastructure, but it is also much more difficult than on the public market. In the private market, shares are much more limited. For example, stocks are limited. For example, uh, the possibility of transmission must be subject to certain rules. The ownership structures are much more complex, layered inside the capitalization table, as well as outside, because now you see all these SPVs emerging.
Um, privacy is a stable share, which is not a fact, as it does not exist in the private market. And all the intermediaries you need in the private market to make shares move off- chain. And we can say this firsthand , because Fairmint, that is, we have been doing this for 7 years, and we started, like everyone else, doing what seemed simple at the time. Hey, let's issue tokens that represent equity on the blockchain. Well, it turns out that once you do that, there's nothing anyone can do about it , because if you want it to move, you need to interact with a transfer agent.
Guys outside the blockchain. Capitalization table software. Guys outside the blockchain. Maybe a broker-dealer. Guys outside the blockchain.
So why did you even issue a token on the blockchain? You just created even more complexity. And so the solution is to put the source of truth about the source of truth about who owns what in a company on the blockchain company on the blockchain , which is the capitalization table, right? So, Fairmint is bringing capitalization tables to the blockchain. And so , this is the only way to really have end-to-end transactions on the blockchain, because now you have a source of truth on the blockchain.
And that's why we created the open capitalization table protocol. So the Open Capitalization Table Protocol is essentially a protocol that turns these... turns these... tables of constraints into programmable smart programmable smart contracts. And to that end, we also became one of the first transfer agents registered with the SEC in 2023, specifically to 2023, specifically to help our clients manage and leverage the Open Capability Table protocol .
What is the open captable protocol? I won't go into detail, but you need to know that this is not a new standard. This is not something people need to learn, what we need to teach people. We took a standard that already existed. In 2023, we joined the Open Captable Coalition.
This is a coalition that brings together all the leading securities law firms, such as Cooley's, Gunderson, and every as Cooley's, Gunderson, and every law firm you can imagine. They are part of this coalition. And we created the open captable format, which is an open source format for representing captables. So, the open captable protocol is an extension of this on- chain format. This means that from day one, the open captable protocol is effectively industry-compatible.
There is no need to change anything. If a lawyer change anything. If a lawyer , law firm knows the Open Captable format in the Open Captable coalition, it is actually compatible. And it provides everything you would expect from a blockchain protocol. It allows self- custody, so you can have direct ownership of the assets.
It allows programmability, i.e. instant calculations, automatic matching. It allows for limitless markets. Obviously, everything is on the blockchain, full traceability.
And also composability, the ability to use smart contracts, so we call it regulated smart regulated smart contracts DeFi, because that's something that there's still regulation for securities. But it's actually a protocol built to place your own asset as shares on the blockchain, as opposed to just having the asset off the blockchain and then creating wrappers or creating some representation that's not your own. He is working today. So, today, through Tokeny, our clients have placed over $1.5 billion worth of shares on the blockchain.
And we are just getting started. Because in the coming months we will evolve, as will the protocol, to include many more new features, because we grow with our customers, right? We embrace our customers, grow with them, and deliver the features they expect from us . And what is the ultimate goal? The ultimate goal is to make IPOs great again.
This is where this new, simplified infrastructure can come into play. So the goal is to say: remember this big infrastructure that I showed you earlier. Here it is. Uh, all these layers exist because today it is technically impossible for everyone to trade on the capitalization table. The is with the transfer agent at the top, and the transfer agent says to DTCC, "Okay, now you hold these shares."
" hold these shares." " And then there are these layers and layers of intermediaries that allow you to trade stocks. Our goal is to simplify this infrastructure so that everyone can trade directly on the capitalization table. And do it through a system that is compatible with the existing system. So if you're a founder and you're going public using, let me back up .
Yes. And if you go public using this new stack, not only will you be compatible with your existing system, but we will also provide new use cases. I'll tell you an anecdote about Fermat. When we started in 2018, we interviewed at Airbnb. Airbnb was about to hold an IPO at the time was about to hold an IPO at the time .
And we asked them: " . And we asked them: " What would you dream of?" " If you had a magic wand, what would you do?" And they said, "Well, one of the main things we don't like about going public is that going public is that we're going to lose touch with all of our shareholders. " Suddenly we go from a capitalization table where we know everyone at the capitalization table to a system where we don't even know who our shareholders are."
although our best shareholders visit our website and use our app and our service every day. And that's typically the case, which will be possible with this new stack of shares that we're developing. If you want your stocks to trade in your brokerage account, fine. If you want your shares to be traded directly on your website in a completely decentralized way, that will be possible. These are use cases that are not possible with today's infrastructure.
So, a native infrastructure for placing shares on the blockchain that allows for self- custody, for example, immediate mobilization of collateral. This is what we are in . If you want to join us, it's very simple us, it's very simple . You can go to fermin.com.
So, Fermint—it's essentially us building all the tools that founders and investors need to be able to use the Open Capital Protocol. So you don't need to interact directly with Open Capital Protocol. You just switch to Fermint. And if you're your founder and you're dealing here in the room and you're dealing with other founders, or you want to integrate Open Capital Protocol, come and talk to us. It's very simple.
and we will be happy to help you integrate this protocol into your product. Thank you very much product. Thank you very much .
Automatic transcript — names and jargon may be misspelled.