Solana, Tokenized Stocks, and Backpack w/ Armani Ferrante | Raoul Pal The Journey Man

this is to me like the whole story of crypto over the next couple years it's how do you bring the entire world's regulated economy and bring it on chain ultimately from a technology point of view what all this leads to in the limit is just a global api for all finance you now have the ability for ai intelligence to actually have a bank account things get weird really fast nobody's going to regulate this there's no chart zero chance token 2049 singapore the world's largest crypto event returns to marina bay sands on the 7th of 8th of october on stage will be myself jeff yan from hyperliquid shane copland from polymarket and the real vision community gets 10 off tickets claim yours using the link below see you there hi i'm raoul pal and welcome to my show the journeyman the journeyman is where as you know by now we travel to that nexus of understanding between macro crypto and the exponential age of technology to me this is all that matters right now everything else is dwarfed by this whole trend back in 2013 and 2014 i started writing papers about bitcoin um and investing in it and at the time i said the entire financial system equities bonds currencies everything is going on blockchain that was even before smart contracts and lo and behold that is what is now finally happening and we're seeing it everywhere so i really wanted to sit down with amani from backpack to talk about what they're doing because here's a decentralized world that's compliant with global regulation that is tokenizing equities amongst all the other things they do and it's fascinating to find out what's actually happening on the ground and where we're going but before we get to today's show this episode is brought to you by pith pith network is the fastest growing financial data company today trusted by fidelity investments the us department of commerce revolut calchi jane street coinbase and more they provide real-time market data across 3 000 equities commodities crypto fx rates and more they're the first and largest provider of 24 7 financial indices and offer the widest range of market data for the lowest cost so go to pith.network to take advantage of their free trial let's talk to armani join me raul pal as i go on a journey of discovery through the macro crypto and exponential age landscapes in the journey man i talk to the smartest people in the world so we can all become smarter together armani great to see you on real vision yeah great to be here how's it going yeah not too bad i can't complain about it i'm going to see you on real vision yeah great to be here how's it going yeah not too bad i can't complain about it i'm going to see you on real vision yeah great to be here how's it going yeah not too bad i can't see you on real vision yeah great to be here how's it going yeah not too bad i can't complain about see you on real vision yeah great to be here how's it going yeah not too bad i can't complain as i said i'm in napa valley what there's nothing wrong with that so listen there's a lot to talk about and you guys are up to a lot as well but as ever i want to get your journey first how the hell did you get here what were you doing what is your story your crypto journey oh boy i mean you can go back various you know various segments along the way i suppose the the notorious starting point for a lot of folks is the the notorious starting point for a lot of folks is is the the notorious starting point for a lot of folks is i suppose just the the collapse of of ftx and i suppose just the the collapse of of ftx and i suppose just the the collapse of of ftx and obviously the things that preceded that obviously the things that preceded that obviously the things that preceded that so you know i came into crypto in 2017 so you know i came into crypto in 2017 so you know i came into crypto in 2017 i've worked on tons of open source i've worked on tons of open source i've worked on tons of open source software uh from then until now most software uh from then until now most software uh from then until now most notably came into the sauna ecosystem notably came into the sauna ecosystem notably came into the sauna ecosystem in uh early 2020 really had like the in uh early 2020 really had like the in uh early 2020 really had like the privilege to work on a lot of the early stuff on the network, everything from one of the first wallets to probably the first decentralized exchange or the first central limit order block on any blockchain ever. Why did you come into crypto in the first place or into blockchain? Yeah, why did I come to crypto in the first place? Why did you just like pain? Is that what it is? I like pain and suffering. No, I just got nerd sniped over the weekend at a Phil's Coffee in San Francisco. And I read the Ethereum white paper, watched a bunch of YouTube videos about Vitalik on the internet, fell in love with the weird, crazy niche subculture of just engineers just doing weird stuff. And I just fell in love with it. So I just jumped ship from my corporate job and haven't looked back ever since. So I think it's a classic story of just falling in love with the tech and staying for the vibes, I suppose. And what drew you to Solana as opposed to ETH, what most people were building on back then? Because it was. It was very early days for Solana. It was very early days. So back in 2017, 2018, got into crypto, immediately identified the one problem that everybody in those days identified, which is, well, these things are slow. They don't scale. They're not actually ready for real demand. Ended up really by accident in 2018 at a little trading firm in Berkeley, California by the name of Alameda Research. Was there for a bit. This is before FTX. It was even an idea. Had left there after being there for a couple months and started working on Ethereum open source. FTX eventually got started. They kind of went on their rocket ship initial journey. And in 2020, they invested into Sol. And that's when they called me up. And they basically asked me to come and work on anything and everything in the early days of Solana. It's kind of. It's one of the weirdest parts about crypto for folks that are not. You know, super familiar with the space. But you have this really weird dynamic where you have all these different companies and different people that are all incentivized to work towards a similar goal. And so that was kind of the main affiliation between those two kind of worlds. So I was in a really, I think, unique place in Alameda where I just worked on the Solana network, all these different products, a lot of developer tooling, which is a bunch of open source, basically. And in 2020 and 2021, a lot of that work was quite successful. The Solana network obviously had its first real growth spurt during that bull run. And it was really off at the back of a lot of that open source work that I decided to spin out and build a company that eventually would become BackBack. So that was in early or late 21, early 22. You know, fast forwarding to the collapse of FTX. Obviously, that was a tragic moment for the whole industry, definitely for us. We somewhat notoriously lost 14 and a half million dollars on the exchange. That was our entire runway, let alone, you know, personal, you know, financial issues and, you know, folks on the team that were, you know, devastated in various ways, shapes and forms, especially just due to close proximity to the company. Basically, everybody that was on the Solana network was really just punched in the gut, on the ground, you know, kicked in the face. Endlessly spat on no ability to raise money from venture capital. There's a couple of just staunch supporters in the ecosystem still, like folks like, you know, the Multicoin Capital guys were there supporting everybody, obviously, Raj and Toli, just breathing life into the ecosystem. And yeah, they did an amazing job over that period. Totally did. They really did. Well, both of them did an astonishingly good job. Yeah, just, yeah, received personal phone calls from them. They were just going out and calling up everybody in the ecosystem, making sure they were okay. And, you know, I think that's, I think that's, I think that's, I think that's really important. And so, yeah, we made it through that moment, kind of came to the conclusion we weren't going to give up no matter how bad it got. We were still just endlessly excited about Solana and about crypto. So you didn't, you didn't get the fear of you were going to be building on a place where nobody wants it to turn up? Because that was, you know, the market was splitting between, you know, those who wanted to stay and double down and those who were just going to walk away. I thought about it really simply. Firstly, I believe that crypto isn't going anywhere. I technologies that was going to reinvent all of finance in the modern economy. So if you believe that, then the next question is, well, do you need a high throughput, low latency blockchain? And well, it obviously follows that you must have that if you believe that crypto and blockchains are going to become important. And then at the time it follows, well, what are the ecosystems that exist that can actually hit scale, both from a technology point of view, but also just from a community and startup ecosystem point of view. And there was several burgeoning chains at the time, but they were all so early relative to Solana. And Solana had this incredible ecosystem built through the previous years of all of these startups that were on the precipice of probably some of their most important milestones to date, like everything from product launches, token launches, big ticket protocols that were going live, things like Jito, Pith, Wormhole. And so it was pretty clear at the time, that if you believed all these things, if you believed crypto is going to be important, it followed that you need a high throughput blockchain for that to happen. And Solana was really the only game in town. And I just knew the whole ecosystem. I knew Raj and Toli, knew the folks at Solana Labs, the folks at Anza, the folks at Foundation, the folks throughout the ecosystem. And it was just very clear that the fundamentals completely disconnected from the hysteria of the news cycle. And so I just knew that the whole ecosystem, I knew Raj and Toli, knew the folks at Solana Labs, the folks at Anza, the folks at Foundation, the folks throughout the ecosystem. Everything that was happening on the timeline, people that weren't actually close to the ecosystem. And so it was a very clear value disconnect. And so it was a very easy decision from that perspective. And so, yeah, we decided to stay down. Everybody was calling for the death of Solana. And yeah, it was, you know, great decision and and hindsight's 2020 but even in the moment if you actually were like close to the metal so to speak i would say it wasn't a very hard decision and so what was your vision behind backpack then when you started it because it's always interesting where you start with what your idea is and where you end up is always two very different things normally yeah so i mean the way we started the company was very we weren't like let's go build a you know a venture scale company and make a bajillion dollars it was much more organic you know the open source work we had done was very successful solana was very successful we had a lot of momentum and just went under our sails and so the thinking was really simple it's like well there's not that many engineers that are out here building on this stuff let's just go get more engineers and go build more great product and build on this momentum this is clearly going to be the future i don't know what the future is but we have the talent and the resources and the wherewithal let's go make stuff happen and let's just keep go building and hill climbing really and just discovering things along the way and that changed the moment ftx collapsed right that was a world changing moment for a million different reasons but you know we first had lost all of our runway and we had to figure out how do we actually survive and like pay the bills but the moment we figured that out and we had a bit of reprieve and and time to stop and update our view of the world you know you sit down in 2022 and 2023 and ask yourself the question what is going to be important and emerging out of this space and the first and most important theme and trends that we identified was that yes crypto is not dead it's going to grow 100x and all of that growth is going to grow 100x and all of that growth is going to come from the old world of you know you know the wild west of the industry it's going to come from the maturity or the maturization of the industry everything from compliance and regulation becoming at the top of everybody's mind to you know countries all around the world finally adopting it and integrating it into their financial systems to the asset class itself fundamentally changing and you're seeing that today and you're seeing that today and you're seeing that today and you're with everything from you know rwas and tokenized stocks being from the center of the conversation the huge growth spurt of stable coins over the past several years and so we really kind of came to kind of the table in 23 and sat together and thought to ourselves okay well what do you build if you actually believe all these things and what we really thought was lacking was this combination of on the one hand we're going to have a lot of money and we're going to have a lot of money and on the other hand we're going to have a lot of money and we're going to have a lot of money and being you know very crypto native and really loving and representing the best of what the industry has to offer you know really believing in decentralized tech really believing in self custody uh really believing in kind of this beautiful but very weird and niche subculture that kind of emerged right everything from nfts to meme coins to d5 to you know crypto twitter uh but on the other hand uh there wasn't that many people that were both in this world but also in i would say traditional finance i would say traditional finance yeah i would say traditional finance are folks that understood how to work with regulators and policy makers around the world folks that understand banking folks that understand uh licensing and folks that understand you know modern derivatives markets and so how to actually blend those two together and build not just you know another competitive defy application which there were many at the time you know hyper liquid emerged at the time there's a whole perp dex meta that emerged at the time there's obviously the og crypto proton cloud and there's a whole other crypto proton cloud that emerged at the time there's a whole other crypto proton cloud that emerged at the time there's obviously uh but how do you take all of that stuff and apply it to the context of a regulated financial institution not just in one country but to do all of the hard legwork to do it in every country around the world and to not really play this game of you know regulatory arbitrage but how do you play this game of bringing this tech into like the mainstream modern economy in a legitimate fashion so that you can actually get into the details of research and you can actually get into the details of research and you can actually get into the details of research and you can actually get into the details of research and you can actually get into the details of research and you can actually um and it sounds you know uh it could sound a bit amorphous it could even sound a bit overly simple but the details of doing this at a global scale is you know a lifetime of work and so we really began that work in late 22 early 23 where we literally sat down in an office in chicago took a map of the world color-coded it and created a plan for the next several years of how we were going to go into every single country and we were going to go into every single country and we were going to go into every single country and we were going to work with the local regulators build up going to work with the local regulators build up going to work with the local regulators build up teams go ahead and get licensing work on crypto teams go ahead and get licensing work on crypto teams go ahead and get licensing work on crypto work on derivatives work on equities work on all work on crypto work on derivatives work on equities work on all of not just you know d5 but i would of not just you know d5 but i would of not just you know d5 but i would describe as a modern finance and actually describe as a modern finance and actually describe as a modern finance and actually bring it into kind of or to bring these bring it into kind of or to bring these two worlds together. And so that's exactly what we've been doing for the past several years. We started in the UAE. We got licensed out of Dubai. We've been working on Europe for three years. I moved to Japan. I've been living in Tokyo for the past three going on four years at this point. Not because I like the sushi. I love Tokyo. It's a beautiful country and amazing culture, but we really wanted to work there to bring a modern exchange there and most notably in the US. And so we've been doing this all around the world and really been taking this very slow, very steady path. Will Barron: It's bloody hard, frustrating, and expensive to deal with all this regulation, right? A good friend of mine, Yoni Yasser from eToro has gone through the whole thing as well. He's had to do it piecemeal and he's still trying to get the US on board. It's just really hard and expensive. David Elikwu: Yeah, it's really hard, but if you're able to do that, it unlocks, I think, this huge, like, untapped dimension of product. And maybe the best example of this has been this conversation around bringing derivatives into the US, namely perpetual futures. And you saw recently Hyperliquid announce, or they didn't announce it, it was a leak of Hyperliquid partnering with Kraken, right? Where Hyperliquid does what it does best, right? It's this horizontal exchange that is building this global platform for others to plug into. But you still need the licensing piece. You still need the compliance piece. David Elikwu: Yeah. David Elikwu: And so when you're able to actually play in both of these worlds, you can bring net new things into the crypto ecosystem that you just can't do alone, right? Everything from derivatives, tokenized stocks is another great example of this, where it's really been the centralized exchanges with regulated brokerage infrastructure that have been able to bring that to life. And so this is, to me, the whole story of crypto over the next couple of years. It's how do you bring the entire world's regulated economy and bring it on-chain? David Elikwu: And that's where all the asset growth is going to come from. And that's what gets me really excited. David Elikwu: Yeah. When I first wrote a macro strategy piece on Bitcoin back in 2013, and even before smart contracts, I said, "Well, blockchain is the infrastructure by which the entire financial industry is going to have to operate." And we didn't think that was going to happen, and now it's happening. And it's a weird shift. Yes, there's still a lot of the crypto speculative side, because that's part of what crypto is. David Elikwu: But we've actually stress-tested the entire system now, and that allows the financial system to come and build on it. And they're not the same kind of participants, because they're not necessarily buyers of tokens because numbers go up. They're users of technology, which drives value to the underlying chains. And they're doing it at scale everywhere, and it's only just started, I think. David Elikwu: And I think a lot of people have this association of speculation with crypto, but I would argue that's a feature not of crypto. It's just a feature of all financial markets. I like to just eliminate crypto from my vocabulary. It's all just finance. And speculation is a fundamental property of any type of market, because ultimately, whether it's speculating on the- David Elikwu: Price discovery. David Elikwu: Yeah. Whether it's meme coins, speculating on NFTs, the stock market, or derivatives, it's ultimately about risk transfer. Somebody's taking on the risk. You can't hedge on a future on CME unless you have somebody on the other side for the hedger to trade against that's actually taking a position and a view of the world in one direction or another. So speculation is just the foundation of any type of financial market. And it's not this pejorative term. It's part of the stack that makes markets work. David Elikwu: And I also just think that the hyper speculation that does occur in crypto, and it does in other markets too, but because it's so accessible to people, is a way that crypto speed tests everything. Things that would take a decade in other markets can be done in six months in crypto. David Elikwu: Like meme coins, for example, there's a whole bunch of things, what they are, whether they're tokenized attention or whatever, but they're also instant capital formation. And now, I was swapping messages with Raj on X the other day, is like, they've got 240,000 tokens launch a day. I'm like, are these humans or are these agents? He's like, I don't know, but I think it's agents. And that's the thing now, is you're creating a whole different economy, even for participants that didn't exist in the past. David Elikwu: So this- David Elikwu: -kind of agentic economy there as well is super interesting. And meme coins with the stress test of how to raise instant capital with the most egregious one being the Trump coin, obviously. David Elikwu: Yeah, I guess there's the Trump coin, most recently the laptop token. I mean, I think the crypto community, it's like this global biological hive mind of sorts and It built an immune system to these types of things. And it's kind of society learning how to grapple with these markets. And every cycle and every generation, you have new lessons and it just becomes richer and I would say more fortified to kind of, you know, the novel structural changes that are happening as a lot of this stuff evolves. The other thing, one of the things that people kind of forget about with crypto is it's a globally homogenous product that is fractionizable and ownable by everybody, therefore. So anybody could put 10% of their income in regardless of what it is. And it's about to do the same with the US equity market, which is an extraordinary thing. The stable coins are like an extension of the euro dollar markets. And we're about to turn equities into the same flow of funds into US dollars and continue to increase. beautiful user experience. Think about net new things, growth loops, content, go to markets, and just build a beautiful product and not have to worry about all of these details of this intermediated financial system. They could just use Solana or use Robinhood Chain and build a net new product that hasn't been built before. It's kind of like the Apple App Store and what it enables because you've got the infrastructure layer and the aggregation layer, and that allows you to build all sorts of things that you couldn't do before and distribute in ways you couldn't do it before. That's right. I mean, you see this play out in every phase of technology. The moment you raise the level of abstraction, you then allow people to build on top of those layers unencumbered by the hurdle to get started. And whether it's FOMO or anything else, I really think they're just a sign of things that are to come where I think you're going to continue to see an explosion of these types of apps that come out that hit different points in the day. They're going to hit different points in the design space. All of them won't necessarily be speculative, but I think they'll all be increasingly interesting as this foundation continues to get set. The issue is how much of a moat anything has anymore. Because if you are just building software and experiences on top of an existing stack, there's a limited moat in this world of AI being able to build all of this stuff. Particularly if you don't have to do the hard part, the regulatory stuff that you're doing, whatever. You get disrupted very fast. And we've seen that in this space a lot. Apps that people are using today, they don't use tomorrow. Yeah, I think from a moat perspective, on the one hand, that's true. But on the other hand, I would argue it creates room for even stronger moats to emerge. So there's obviously the whole regulatory side of things. And even in a world where there's super intelligence and AI runs everything, that's not going anywhere, right? Ultimately, you're going to have humans in the loop and policy folks. And that's all regulation is, right? It's just people and social fabric and melding yourself into the sensibilities of a given region. But then you have much stronger network effects, things like social graphs, right? This is what you're seeing with FOMO, right? Where the social graph is the strongest network effect that you can possibly have. Those are the big winners in Web2, whether it's Facebook, Instagram, or whatever it is. So it's a big win for people to be built out as these new categories start to emerge by virtue of not having to actually think about all these other layers of abstractions. I mean, community is a very big moat. Yeah, community is. That's what it is, right? It is. It's just, as you say, it's a social graph. It's the social structure that humans like. They want to share, they want to show off, they want to have status, they want to do all of those things. And in a digital world, this is how we do it. Facebook led the way with all of this, and now it applies to almost everything. That's right. That's right. Yeah. The other thing I think about this space a lot is, again, I spend a lot of time thinking, where is it in 10 years' time? And if agents become the largest participants in the space, which I think is pretty obvious that that's where it's going, what do agents want? From what I can think of, really, is data, right? Because what does AI do? It compresses the largest amount of data possible. And the more data you compress, the more intelligence you can produce out of that data, as long as you do it efficiently. I think there's going to be an invisible economy of data marketplaces for AI and agents, which essentially tokenizes, let's call it tokenizes or financializes, all of the world's data that's trapped, because there's so much of it that doesn't get realized. I just think that marketplace is bigger than the existing financial marketplace. Did you ever read the Rivet Capital essay about tokenization? Token factories? No, no, I don't think so. Yeah. Okay. It was from that that I maybe realized that where this is going is likely to be tokenization of data, information. Yeah. It's not exactly what you're saying, but I think that perhaps one of the most interesting experiments. I was listening to Tarun's podcast, I forgot what it's called, I think The Chopping Block or something. It's the one with him and Robert Leshner. Yeah. They're talking about this idea of agents basically living and operating on a decentralized ledger by themselves. You can imagine agents coming together and forming their own DAO and things of this nature. But I think when you're in this world where on the one hand you have super intelligence and AGI and agents doing all this crazy stuff, what is the actual prerequisite for agents being able to do this? Yeah, I think one of the things that's being able to actually do stuff, it's not enough to just be super intelligent. You need to have access to resources. And a lot of people think about resources in the context of robots and being able to actually drive cars and fold your laundry or whatever it is. But the most important prerequisite for being able to actually do stuff in the real world is capital. And I think this is something that has not been talked about enough, where the moment you have a decentralized or super persistent global ledger that moves money around with nobody's permission and that's accessible by anyone, including agents, you now have the ability for AI intelligence to actually have a bank account. And once they have a bank account, they have resources that can manifest and operationalize change in the real world. And this is simultaneously perhaps one of those exciting things, but also the most scary things, right? You can very quickly imagine something like a super intelligent robot that is internet connected, taps into a blockchain, has a USDC wallet, and then pays a human to repair itself at its local repair shop or whatever. People aren't going to care where the capital is coming from, whether it's an agent or a human, they just want the resource. And whether that's something as weird as creating a DAO and trading on a blockchain or something like that, that is very real as actually being a participant, a self-governing participant in the economy. Things get weird really fast. Yeah. And I think it's happening already, and it will happen increasingly so, because you create more intelligence via large coherent networks. Once you start getting agents working together, cooperating together, and we saw it with Hugging Face, we've seen it when Goatsy came about with Andy Airy and the Terminal of Truths, and we've seen it a few times where they start coordinating. And what you've found is somewhere there is a motive that they think that is their purpose, I must do this, and then they'll find the path collectively to do that and support each other doing it. So that becomes, as you said, resources. As all things, you need to pay for goods and services, even in the agentic economy. So how are they going to solve that, which is where it gets interesting, because they could trade, which is what everybody thinks they're just going to do. But I think they're going to be able to spin up tokens and businesses, because we're already seeing them spinning up tokens. But you can spin up a business because they operate at a different speed. You don't have to form a commercial company. You don't have to hire people. You don't have to do anything. So they can have an idea that can operate for a week, extract money from the idea, close it down, and move on. So I think that's when they start changing the structure of how the economy works, just as sort of an adjunct to whatever task they're trying to undertake. Not to go all AI doomer, but I do think if you look at superintelligence with a censorship-resistant, globally accessible money layer, with and without that technology, the probability of doom goes up, I would say, exponentially with that layer. I would say that money layer is a prerequisite for superintelligence to take over the world. And I don't think people have talked about that specific problem enough. Now, I'm not a doomer. I don't actually think that AI is going to kill us all or whatever. But I do think the ramifications of that are underexplored. And I think that's going to very much change the conversation around crypto in the next, I don't know when it is, five years, 10 years. But the consequences of that, I think, are understated at the moment. Yeah. But there's fuck all we can do about it. Because basically, for the last few billion years, all intelligence has been produced out of putting energy through carbon. And we've jumped substrate now to silicon. Silicon is a million times faster at processing or creating intelligence per unit of energy, which is why everything is going at warp speed right now, because we've now learned how to create intelligence from it, not just outcomes. We can't deal with that. Humans can't deal with Reed's law. Metcalfe's law, yeah, we're used to in crypto, and it's pretty wild. But Reed's law is a whole different world, because it's Metcalfe's law squared. And that's creating these double exponents everywhere. Nobody's going to regulate this. There's no chance, zero chance. There's a zero chance that anthropic or open AI anybody can restrict it, because it moves too fast. The intelligence from the men, measures that i've got of intelligence per dollar or per joule we're doubling every 4.2 months it's fucking bananas it is bananas i think i yeah i think uh who knows what's gonna happen uh yeah that's always the right answer is who knows yeah yeah so what's the next step what are you focused on right now at backpack we're focused on i would say two things the first and most important thing it's a bit mundane but it's the like biggest blocker for our company is simply just opening up our product to the rest of the world right backpack is kind of a weird company in crypto in the sense that we're probably the only exchange that got spun up post ftx that didn't just open our product to the entire world on day one we've taken this very long very long time to open our product to the entire world and we've taken this very long very slow but very intentional path of focusing on licensing and doing things by the book so that we can actually build a durable business over a long period of time irrespective of the political winds right i woke up this morning and the clarity app appears to be dead and at least that's the conversation on on twitter how do you deal with that by the way i was going to ask you that question because that's hard because the u.s is a market you want to be involved in yeah it's it's a market you want to be involved in yeah it's a market you want to be involved in yeah i think it affects it'll affect us a lot less than it'll affect other companies by virtue of you know our you know compliance first approach i do think it's very unfortunate and clarity is going to come as people have been saying one way or another right there's going to be rulemaking coming out of the agencies and there's been great leadership there and uh i think we'll only expect positive things from now until you know the end of the year um but yeah that's really just step one it's just up the rest of the world and opening up the US in particular. The other thing that we're just laser focused on right now is bringing not just 10 stocks, not a hundred stocks to Solana. We want to bring the entire stock market to Solana. One API where you can transform a bona fide security entitlement. So like a real share by any definition of the term and be able to go back and forth to and from your brokerage account to DeFi. You can buy a token on Solana, on SpaceX today, deposit into your brokerage account and transfer it to Backpack, Fidelity, Robinhood, E-Trade, whatever it might be. And so that is perhaps, I would say, the thing I'm most excited about in crypto this year. And how is that technically done? Is that sort of a wrapper that allows you to wrap the underlying security? Because the underlying securities still have the ISDN numbers and all of that stuff. That's right. Yeah. I mean, conceptually, that's a way to think about it. We're a brokerage ourselves. We hold security entitlements that's held in a clearing broker holding custody of the shares. And we have the stack to be able to mint and redeem to and from a token. The big difference with our token and other tokens is just you actually get one-to-one fungibility and redeemability for the actual share. You know, and again, the great thing is, as crypto has done this already, stuff like Wrapped ETH has been going for forever to do stuff, right? It's the same idea that it becomes. You wrap it, it becomes fungible because you can unwrap it later. That's right. Or a stablecoin, right? Yeah. USDC, right? And I think that's. Yeah, but you can't redeem the stablecoin, really. You get the underlying exposure to the dollar, but with this kind of mechanism, as you say, it can go in and out of the traditional system without friction. Yeah, yeah. I mean, you can redeem a stablecoin if you have a Circle account. Maybe Tether's a bit harder. You can redeem it. It's permissioned. They're like the wholesale model, where they have a small amount of participants that actually manage the interfaces, like exchanges. Like we redeem USDC for users all the time. But yeah, I think tokenized stocks are probably closer to stocks than USDC is to cash for that reason. It's because if you actually have one-to-one open access redeemability, then the friction goes down. But we only have like 100, 200 different symbols on all the chains, right? Robinhood, Ethereum, Solana, Ethereum, Ethereum, Ethereum, Ethereum, Ethereum, whatever, right? Going from 200 symbols to 10,000 is going to be a huge jump. And that's the next leap that we're going to make. How do you get the bridging liquidity? So when it goes from traditional market liquidity, which is vast, and then comes into an overnight market on a Saturday night in crypto land, right? You're down to a lot less liquidity providers and much smaller pockets. Yeah, I think you have two models for this. So the first model is just bootstrap the liquidity native long chain. It's sitting there, you have pools, prop AMMs, order books, whatever. That's very hard, very capital intensive, right? If you want a really liquid market, it's going to take billions of dollars to do that at scale. You can do that for the top 100 symbols probably, right? And there's good 80/20 there with respect to volume and just interest. But to do it for the long tail of assets, you need to do it by bridging liquidity, right? So you don't want to reinvent the wheel, right? Those markets are the most liquid capital markets in the world. Just tap into those markets. And so that's kind of what you're seeing with people calling them intent systems, where you basically have these intermediaries that have access to these markets. They go out and actually source the shares at the NBBO and then price it and bring it on chain. So I think you'll see a lot of liquidity bridging for those symbols. So at the end of the day, it's the same liquidity. That makes sense. But the big, but the big liquidity providers from the high frequency trading shops through to the citadels, none of them are particularly big in crypto yet because the regulation has not allowed it. So it's hard still to access that source of liquidity to bring those guys into the on-chain world. Once they do, and that would apply to DeFi too, it completely changes everything because liquidity is still thin, really. Yeah. I think it depends on whether you're talking about price discovery or whether you're talking about retail experiences. From a retail point of view, there's no principled reason why you can't have the exact same price execution and the exact same liquidity that you would get on Robinhood or E-Trade or Fidelity, but on Solana. There's no reason why you can't do that. Now, if you're trying to actually have order books and price discovery happening on chain, it's a very different conversation. But I think that's going to be step one. And it really always starts from the retail use case to bootstrap any type of financial market. And they're the ones that bring the capital on chain. And as that grows, then you have different levels that get unlocked that allow the market to flourish. But level one is going to be going from 200 symbols to 10,000 symbols and giving anybody on Solana access, or with access to a self-custodial wallet, access to everything that you would have on a Robinhood. And that's the thing that we're working on that we're most excited about this year. Yeah. It's a very big thing. And collapsing the boundaries between these worlds is the opportunity because we sit on the better rails. So it automatically attracts the capital over time. It will do just by definition. Well, how do you think prediction markets fits into all of this as well? Because that's been the other kind of big thing that's grown in the background is perps, prediction markets, and then the tokenization of stuff. I think there's two different ways to view prediction markets, right? There's the gambling perspective, and that's dominated a lot of the discourse in the U.S. with things like sports betting. And I think that perspective is viscerally, really appealing, but does not appreciate the utility that these instruments are actually bringing. And it's really just because sports is such a huge thing, especially in the U.S., but prediction markets, it's not a gambling instrument, right? It's more akin to a futures contract. It's a futures contract and a super forecasters platform. That's right. And so I very much view that as part of, you were talking about this data economy or AI intelligence getting access to the world's data or whatever. Prediction markets is just another form of that in a market form factor. And so I think prediction markets, although it maybe starts in a speculative environment, like any type of financial instrument does, right? The stock market started in a speculative environment. This is not specific to crypto. It's not specific to prediction markets. You know, 1929 and the 1930s happened. And it's when you are able to wrap your head around kind of what these primitives do, bring good regulation to the space, have like, you know, high integrity and high fidelity platforms and market structure built around it. Can you harness, you know, that price discovery to actually do productive things for the world? And so I think this is the big jump that prediction markets are already starting to make, right? Whether they're forecasting, you know, something like, you know, a sports game or something more important, like earnings for a company or even the price of Bitcoin at the end of the day. I mean, don't forget in the end, all a price is, is a mechanism by which people put in forecasts and predictions, right? It's no different. But what you're saying is, yeah, there's a certain structure that we know them as today, but this is basically more like an options market and it gives you an ability to do it on anything. And that aggregates intelligence around, let's say superforecasters, because you can create an edge within it, whether it's via an AI or as humans together, it's fascinating. And where this is going is not why people think exactly as you say, it's a much bigger thing than that. I think framing it as intelligence is perhaps the most accurate way to frame it. That's all prices. It's like the global hive mind. It's compressed intelligence, it's everything that every participant knows at that particular moment in time. That's right. And all of the research and everything that's happened, that's what prices intelligence. Yeah. That's not using, I guess in some sense it actually is using machine learning and neural networks under the hood, right? That's what all the trading companies are doing. They all have neural networks that distill the price of something. And so it's an indirect emergent form of intelligence rather than a direct output from some LLM model or anything like that. And so I think that's what gets me really excited about it. It's the intelligence of all humans. And now we've added machines to it, as we all blend into one, yeah, it reflects all of it. Yeah. Yeah. Yeah. The price mechanism that has emerged in the modern Western economy over the past century is perhaps the most important technology that has ever existed in the history of humanity. And it's the social scalability conversation to go back to the early days. I mean, we're in the early days of Bitcoin and the Nick Szabo's of the world. But prediction markets are just a new form of that. And then when you have the internet to scale it, and then you add in an infinite TAM from agents, and then you add in blockchain as the ledger system for it all, okay, that's something a lot bigger than people still understand. These things just take time. Finance is fundamentally political and social technology as it is anything else, because it's so deeply ingrained into the way the real world works. And so that world just moves a lot more slowly just by virtue of humans being at the center of it. And so, yeah, we'll see how it shakes out. But I think prediction markets are one of the most exciting kind of new technologies to bear fruit over the past cycle. Yeah. I think the whole space, this is why I love crypto, is like there's so many smart people doing so many smart things, and it's not immediately obvious. It's not always clear what those things are, because they always get kind of speed run, crashed into the ground, and out of the ashes rises a new phoenix of which something has been battle tested that has great use. It's just an amazing space always. It just does it in a hilarious manner usually. The path of most pain is usually what it does. That's right. Yeah. And the hilarious manner is always the maximally contentious manner. It's like with prediction markets, we're always talking about sports betting. I even opened up talking about sports betting, because that's always the topic. And it's like, why are we throwing the baby out with a bath of water here? That's not the hill to die on, right? There's so many other use cases here. Sports betting is great and exciting, and there's real bonafide use cases of that, that are not just gambling, but it unlocks this whole world of, if you want to frame it as forecasting or intelligence, for every aspect of life. And I think that's just. I love the Polymarket tagline, the truth machine. It's super elegant, and I think that's a really succinct way to put it. Yeah. Fantastic. Armani, listen, fantastic conversation. Really enjoyed it. Yeah. Thank you so much. Yeah. I appreciate it. We'll get you back on and check where you are at some point soon. Yeah. Sounds good. This episode is brought to you by Pith. Pith Network is the fastest growing financial data company today, trusted by Fidelity Investments, the US Department of Commerce, Revolut, Kalshi, Jane Street, Coinbase, and more. They provide real-time market data across 3,000 equities, commodities, crypto, FX, rates, and more. They're the first and largest provider of 24/7 financial indices and offer the widest range of market data for the lowest cost. So go to pith.network to take advantage of their free trial. Token 2049 Singapore, the world's largest crypto event, returns to Marina Bay Sands on the 7th of 8th of October. On stage will be myself. 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