[ { "i": 0, "speaker": "Speaker 1", "text": "All right, guys. Welcome back to the rollup. We have a special recorded episode podcast style, DeFi Slate 2022, the rollup style with the lighter CEO, founder Vladimir Novakovski. Vlad," }, { "i": 1, "speaker": "Speaker 2", "text": "welcome to the tokenization tower." }, { "i": 2, "speaker": "Speaker 2", "text": ">> Awesome to be here. This is [laughter] this really uh really special." }, { "i": 3, "speaker": "Speaker 3", "text": ">> Yeah, man. Awesome." }, { "i": 4, "speaker": "Speaker 3", "text": ">> Do you make it to New York much or mostly just in time for the conference and doing the traffic circuit?" }, { "i": 5, "speaker": "Speaker 2", "text": ">> Yeah, time for a conference. um trying to come up here, you know, uh a couple times a year. A lot of uh interesting partnerships going on with folks in Tradfi these days. So, you know, and I" }, { "i": 6, "speaker": "Speaker 2", "text": "started out my career in in Tradfi, so it's always good to be back." }, { "i": 7, "speaker": "Speaker 3", "text": ">> Feels feels good coming to crypto. Still happy with that decision." }, { "i": 8, "speaker": "Speaker 2", "text": ">> Yeah. Yeah, definitely. [laughter] Uh you know, well, it's interesting how like now and we saw this at at the Ethcon uh events too, right? A lot of people in in Trafi are like really" }, { "i": 9, "speaker": "Speaker 2", "text": "serious about blockchain and uh and it's not, you know, it's not like just like, you know, one person's pet project somewhere, but it's like the leadership of a lot of the biggest organizations is" }, { "i": 10, "speaker": "Speaker 1", "text": "really serious about it." }, { "i": 11, "speaker": "Speaker 1", "text": ">> Yeah, man. They are. And I think they've they've caught like PERPS has caught their attention. Khi is just hit I think a billion dollars of volume on their onshore per offering." }, { "i": 12, "speaker": "Speaker 1", "text": ">> Yeah. you know, their CEO was on CNBC talking about it. I I like like Vlad, where do you think we are in the uh market awareness for Tradfy of like the idea of per like where do you think we" }, { "i": 13, "speaker": "Speaker 2", "text": "kind of generally may be?" }, { "i": 14, "speaker": "Speaker 2", "text": ">> Yeah. Well, there there are a couple of aspects to that, right? There there there's just like the concept of a perp as a whole and then there's like what assets um are the underlying assets and" }, { "i": 15, "speaker": "Speaker 2", "text": "there's like kind of what most important to us is like having it be onchain. Um, I mean, I think it's uh it's really great and you know, Tar is a is a is a friend and you know, we're happy to see" }, { "i": 16, "speaker": "Speaker 2", "text": "the big win they had with getting kind of the first license for PERPS. Um, and I think we we always knew it was going to be kind of, you know, first um more of the the centralized per" }, { "i": 17, "speaker": "Speaker 2", "text": "decentralized. I I think that's that's kind of the the sequentially makes a lot of sense. But uh yeah, I mean I think perks have definitely um if you if you talk to institutions if if you talk to um kind" }, { "i": 18, "speaker": "Speaker 2", "text": "of traditional exchanges like they're all thinking about their per strategy and >> uh it's um and obviously traders love it as well." }, { "i": 19, "speaker": "Speaker 3", "text": ">> My question is you know you you are talking to institutions right and they are deliberating their perpetual strategy. What is the elevator pitch of lighter or pers? Because we found that" }, { "i": 20, "speaker": "Speaker 3", "text": "as institutions get into this space, typically the way that some of these larger partnerships start is as an educator or kind of an advocator for a particular piece of technology or" }, { "i": 21, "speaker": "Speaker 3", "text": "platform kind of get in. Maybe it takes months to years of helping an institutional team understand, you know, what this space is before they ultimately, you know, do kind of jump in, but once they do jump in, they" }, { "i": 22, "speaker": "Speaker 3", "text": "typically do with the the person or the company that they trust the most that help them understand the space as a whole. So, does it start out educational? What is sort of your your" }, { "i": 23, "speaker": "Speaker 2", "text": "pitch or the lessons that you're teaching these institutions?" }, { "i": 24, "speaker": "Speaker 2", "text": ">> Yeah. uh I I think that um surprisingly or you know pleasantly surprised uh that you know many of them already understand the basics. So it's not I think I don't know like if if we had these" }, { "i": 25, "speaker": "Speaker 2", "text": "conversations like four or five years ago it would have been like okay like what what is what is this blockchain thing again like what's a token like now it's it's much more okay like we're" }, { "i": 26, "speaker": "Speaker 2", "text": "talking about let's say the way lighter works right is like we're on top of Ethereum we post proofs you know every half hour it's like okay well maybe in some of the traditional institutions" }, { "i": 27, "speaker": "Speaker 2", "text": "they settle you know t plus one right like day one day out like how how would this infrastructure sure posting proofs work in that context like those are the kind of conversations we're having and" }, { "i": 28, "speaker": "Speaker 2", "text": "yes I mean it is educational but it's like I think one or two levels deeper than just like what is all the stuff about you know my CIO told me to look into this you know it's like people who" }, { "i": 29, "speaker": "Speaker 2", "text": "understand these details it's like okay well what's you know how many transactions per second what's the cost like all all this kind of stuff is really part of the conversation >> yeah yeah man I mean I think that there" }, { "i": 30, "speaker": "Speaker 1", "text": "is also this education gap for within the industry as well as it pertains to the different fee designs that we spoke about on our last show on the on the trade-offs on the designs. After our" }, { "i": 31, "speaker": "Speaker 1", "text": "last show though, you guys had an announcement. I think you guys had an X spaces with uh Vitalic and just had this broader breakthrough on the ZK side that I'd like to get caught up on because I" }, { "i": 32, "speaker": "Speaker 1", "text": "think that there's still a little bit of a lack of understanding of the differences between the design of lighter and Hyperliquid or variational or other purpose platforms and why lighter's design specifically is" }, { "i": 33, "speaker": "Speaker 1", "text": "extremely compelling from a risk perspective from an for an onchain user or for any allocator that wants to deposit capital into lighter. what was the ZK breakthrough that you guys had" }, { "i": 34, "speaker": "Speaker 1", "text": "for the uh escape hatch or that kind of like emergency response and then talk to us about like the design again here operating from like a security first perspective >> right yeah I think it's fair to say that" }, { "i": 35, "speaker": "Speaker 2", "text": "kind of the some of the bigger institutions as well as regulators you know part of what they like to think about is like what does worst case scenario look like not just a kind of happy path right and I think in that" }, { "i": 36, "speaker": "Speaker 2", "text": "sense like the you know, building on top of Ethereum, you know, I mean, it is kind of the most robust L1. It's been around for uh, you know, over a decade. It's been stable for over a decade. You know, there's" }, { "i": 37, "speaker": "Speaker 2", "text": "there's already tens of, you know, over over 100 billion um, capital locked there. So that so it's trusted. But more specifically to us, right? Like the way this whole escape hatch concept works is" }, { "i": 38, "speaker": "Speaker 2", "text": "that again if you think about worst case scenario even if lighter you know if the protocol didn't work or our proofs were not generated correctly like after a certain amount of time every participant" }, { "i": 39, "speaker": "Speaker 2", "text": "can get their assets out through Ethereum and that um and actually L2B reconstructed that independently you know it's it's not just you know it's not like you just read the white paper" }, { "i": 40, "speaker": "Speaker 2", "text": "and look at our code which is open source but like they've like independently reconstructed that >> to be the case. And so I think >> that creates a level of security where it's like okay like even in the worst" }, { "i": 41, "speaker": "Speaker 2", "text": "case scenario no you know folks aren't going to lose their assets and that that's um you know we'll um that creates a lot of um a lot of confidence in in the in the design." }, { "i": 42, "speaker": "Speaker 1", "text": ">> Yeah, I agree. I mean I think that that's something that people are start like will start to come to kind of understand and realize in terms of the the awareness about these specific" }, { "i": 43, "speaker": "Speaker 1", "text": "components. I saw also another interesting product spec thing was a a expansion of the lighter design into uh some of the RFQ systems to enable faster and more breadth of permissionless asset" }, { "i": 44, "speaker": "Speaker 1", "text": "listing specifically around different like RWA per different kind of like non-crypto asset pairs and um you know we talked a bit about the vision on the last show and kind of thinking about" }, { "i": 45, "speaker": "Speaker 1", "text": "like this exchange for uh finance in general this this kind of any asset onchain. Talk to us about the expansion plan here for the uh RFQ model and what that kind of enables for Lighter to be" }, { "i": 46, "speaker": "Speaker 1", "text": "able to list a lot more assets and really keep the premium liquidity that you guys are known for." }, { "i": 47, "speaker": "Speaker 2", "text": ">> Right. So bootstrapping liquidity is an interesting problem, right? It's like, you know, um kind of a cold cold star problem in a way, right? It's like for some of these markets that let's say" }, { "i": 48, "speaker": "Speaker 2", "text": "like you know Bitcoin perpetuals like those markets have been around for a long time. I mean, if you're a new entrant to the space like we were a year and a half ago, like there's obviously" }, { "i": 49, "speaker": "Speaker 2", "text": "work to be done to bootstrap that, but it's like um pretty clear playbook like if if the tech works, the costs are low, you know, the um you know, using things tools like the LLP um work pretty well" }, { "i": 50, "speaker": "Speaker 2", "text": "there. Now, once you look at like new markets, it is um a bit different. I mean, you could just kind of grind it out. It's like eventually you know capital will come to like the lowest" }, { "i": 51, "speaker": "Speaker 2", "text": "cost platform but there are some ways to accelerate that process right and that's kind of where this this RFQ system comes in that we build and the idea here is that okay the we don't want this to be" }, { "i": 52, "speaker": "Speaker 2", "text": "like settled like offchain somewhere it's still part of the order book primitive but if um you know market makers like especially for RWAs where they also have to hedge it at least for" }, { "i": 53, "speaker": "Speaker 2", "text": "Now, these assets aren't tokenized yet." }, { "i": 54, "speaker": "Speaker 2", "text": "Like when they trade the perp, they're going to have to hedge it somewhere else like on Trafire Rails, right? So, they don't necessarily want to take that risk unless they know that there's a big" }, { "i": 55, "speaker": "Speaker 2", "text": "taker is coming. At the same time, you don't want adverse selection. You know, if you just say, \"Hey, like um you know, if if there's a directional if they know which which side it'll be on," }, { "i": 56, "speaker": "Speaker 2", "text": "like somebody can just pick off the market maker.\" And so the way we design like you they they know that a big trade is is is coming but they don't know which side. And so then um like market" }, { "i": 57, "speaker": "Speaker 2", "text": "makers can kind of temporarily provide more liquidity than normal and then they once the trade hits then they kind of do what they need to do to hedge it on on the other side. Um I think you know" }, { "i": 58, "speaker": "Speaker 2", "text": "eventually once the underlying assets themselves are tokenized and uh you know lighter already supports different forms of collateral besides stablecoin like we have ethus collateral um we're adding" }, { "i": 59, "speaker": "Speaker 2", "text": "more uh you know in the coming weeks but still like you you know is is uh you know crude oil isn't tokenized yet right you know um the tokenized gold is a thing I mean that's happening but like" }, { "i": 60, "speaker": "Speaker 2", "text": "you know SpaceX you know, preo like there there's some efforts on that, but like point being like a lot of these assets are not really tokenized. You need to do the hedging. And so this RFP model is like a" }, { "i": 61, "speaker": "Speaker 2", "text": "really good way to bootstrap liquidity." }, { "i": 62, "speaker": "Speaker 2", "text": "I view it like to me like the orderbook model is the is is is the basic primitive you need to run um you know efficient markets. But in bootstrapping markets sometimes an RFQ model can help." }, { "i": 63, "speaker": "Speaker 2", "text": "Sometimes like an AMM can help. Right? M >> we've seen that obviously as well in the earlier days of Ethereum. So it's it's great that I mean the nice thing about DeFi, right, is all these things are" }, { "i": 64, "speaker": "Speaker 2", "text": "composable." }, { "i": 65, "speaker": "Speaker 2", "text": ">> So it's not necessarily something where you know like in Trafi, you know, an exchange we have to decide, okay, we're like we're an order book exchange where we just do RFQ, right?" }, { "i": 66, "speaker": "Speaker 1", "text": "Whereas it's like here you can actually compose all these things and run experiments. And so is is it fair to say that the order book then is primarily for price discovery of assets especially" }, { "i": 67, "speaker": "Speaker 1", "text": "like on lighter for the larger pairs with deeper liquidity. Price discovery is kind of like the main priority and the RFQ provides the extensibility of asset listings to be able to almost" }, { "i": 68, "speaker": "Speaker 1", "text": "trade anything with decent liquidity or enough for your order size. Like is that the right way to think about like the the functional use cases of an order book versus an RFQ model? I think for us" }, { "i": 69, "speaker": "Speaker 2", "text": "it's less about like completely left tail assets and more about assets that are RWAS where the market makers like we're not talking about trading like um completely like esoteric assets" }, { "i": 70, "speaker": "Speaker 2", "text": "here right it's more like for the market makers even for something like um you know the the preipo perfs or like you like Nvidia or like things like that or like again they they have to hedge that" }, { "i": 71, "speaker": "Speaker 2", "text": "in Trafy. So they for the market makers like right now it's more efficient if they only take that risk when they know that a big trade is coming and so that's kind of what the RFQ model bootstraps." }, { "i": 72, "speaker": "Speaker 2", "text": "It's not necessarily to list like you know markets where like the market cap is like 10 million or something like that." }, { "i": 73, "speaker": "Speaker 3", "text": ">> Yeah. How durable do you think some of these preipo markets are given that we have this w you know initial wave of IPOs? There's going to be three that are in the trillions." }, { "i": 74, "speaker": "Speaker 3", "text": ">> There's going to be more public offerings afterwards, but it really feels like a lot of the attention is on these initial three, >> right?" }, { "i": 75, "speaker": "Speaker 3", "text": ">> Do you think preIPO markets are going to sustain after the IPOs of SpaceX, Anthropic, OpenAI?" }, { "i": 76, "speaker": "Speaker 2", "text": ">> Yes, I think that there's a lot of um there are a lot of reasons why it it makes sense. I mean I I think for it to become like [snorts] uh a uh integral part of like the financial world will need some more" }, { "i": 77, "speaker": "Speaker 2", "text": "regulatory clarity around this piece too because like even though there are there are lot a lot of there are a lot of things that are being worked out. But this is like kind of a whole another um" }, { "i": 78, "speaker": "Speaker 2", "text": "you know a whole another ball game because it's like how do you even treat these markets? like are they it's like something that's a security or it's like something that's not a security yet," }, { "i": 79, "speaker": "Speaker 2", "text": "right? So like it's like a it's a commodity, you know, it's it's a derivative. We'll we'll need I think um for these to receive like adoption you know at at the scale of of trafi like I think the you know the regulatory" }, { "i": 80, "speaker": "Speaker 2", "text": "agencies will need to figure this out and uh you know they've had a lot on their plate right between prediction markets and just like per broadly speaking and >> you know commodity pers and now preipo" }, { "i": 81, "speaker": "Speaker 2", "text": "ps I mean that's that's a lot for so so I guess I I think I think they will be um They they are here to say like it is interesting. We have like three back to back right now." }, { "i": 82, "speaker": "Speaker 2", "text": ">> And then maybe it'll >> slow down a bit after that. But but like there there going to be lots of IPOs. Uh I mean AI >> there you know there there are some very fast growing businesses um with AI and" }, { "i": 83, "speaker": "Speaker 2", "text": "other new technologies. So I think there'll be a lot of IPOs like I think once there's like clarity and institutions can actually trade these with that clarity on chain like this there's a world in which this will" }, { "i": 84, "speaker": "Speaker 2", "text": "actually become like where the price discovery happens." }, { "i": 85, "speaker": "Speaker 3", "text": ">> Right. Right. And so as you're thinking through this asset class there's fundamentally different market structure that makes sense for this asset class." }, { "i": 86, "speaker": "Speaker 3", "text": "You know, we talked about maybe there's native crypto assets. Those may be for the order book price discovery, right?" }, { "i": 87, "speaker": "Speaker 3", "text": "There's the kind of market structure relative to asset class matches that make the most sense. And you know, you're kind of talking about how these components are composable on chain maybe" }, { "i": 88, "speaker": "Speaker 3", "text": "offchain or in tradable." }, { "i": 89, "speaker": "Speaker 3", "text": "How much do you think about verticalizing that stack of composable components versus kind of taking in third parties, bringing them together, outsourcing different components >> and generally the question is around you" }, { "i": 90, "speaker": "Speaker 3", "text": "know prioritizing features, >> right?" }, { "i": 91, "speaker": "Speaker 3", "text": ">> What are some of the most on demand features and how do you think about verticalization as lighter grows and scales?" }, { "i": 92, "speaker": "Speaker 2", "text": ">> Yes. So there are some decisions we're making around product roadmap right now. It's like how how do options fit in, right?" }, { "i": 93, "speaker": "Speaker 2", "text": "How do prediction markets fit in? How does lending fit in? I mean, we we are um as as you know, working on lighter VM, right? Which would allow kind of lots of uh developers to programmatically tap into the you know a" }, { "i": 94, "speaker": "Speaker 2", "text": "lighter liquidity and kind of the the same balance sheet as the core. And so we'll see how it shakes out. But but I think um from our perspective like the closer it is to kind of the primitives that um" }, { "i": 95, "speaker": "Speaker 2", "text": "require really like efficient you know high frequency high throughput type operation probably more of those will be done kind of inhouse by the core team where if it's stuff that's more in the" }, { "i": 96, "speaker": "Speaker 2", "text": "periphery of it we'd love to kind of see other builders come in and and work on those. So I think at a high level that's how we see it like options we're you know prioritizing to work on inhouse." }, { "i": 97, "speaker": "Speaker 2", "text": ">> Okay. But again there options there are many different kinds of options right like there's everything from um you know binary options to kind of traditional calls and puts to like more exotic" }, { "i": 98, "speaker": "Speaker 2", "text": "options like >> I think the nice thing is that it is all composable so it's not like we're going to try to make the best decision on this on this but like if we get it wrong we can you know different compos components" }, { "i": 99, "speaker": "Speaker 1", "text": "can can be you know mixed and matched." }, { "i": 100, "speaker": "Speaker 1", "text": ">> Yeah. Yeah. Yeah, I mean I think you know the product's been an amazing success and we've seen a lot of growth in purpose as a whole kind of question becomes like how do we how do you grow" }, { "i": 101, "speaker": "Speaker 1", "text": "this thing to you know 10 billion OI 50 billion OI like that like like the whole industry is going to grow into hundreds of billions of dollars of OI on chain it's matter like now you have that" }, { "i": 102, "speaker": "Speaker 1", "text": "capital in the protocol then what do you do right and so you know you also bring up a good point on the regulatory side which I think I want to double click on I had in here one of uh uh you the GP of" }, { "i": 103, "speaker": "Speaker 1", "text": "Dragonfly, one of your investors, and spoke to me about the his hot take on domestic purpose and and and I basically asked him, look, lighter, Hyperliquid, both looking at the same reality of" }, { "i": 104, "speaker": "Speaker 1", "text": "like, we need to have a regulatory regime to offer these products in the states. I mentioned to him that you guys have a very interesting setup with a Delaware CC Corp, a very US native" }, { "i": 105, "speaker": "Speaker 1", "text": "founder and team in terms of like your your uh seat in in one of the larger SEC kind of uh committees. uh w with this kind of crypto group and then all the kind of features that you guys have" }, { "i": 106, "speaker": "Speaker 1", "text": "focused on in the states whereas Hyperliquid's much more outside the states and I asked them basically like are are we going to see two instances of Hyperliquid and lighter like a US version" }, { "i": 107, "speaker": "Speaker 1", "text": "and a non- US version are we going to see like a different order book KYC process so we talked about it and his take was look I think domestic per are actually like being way over inflated in" }, { "i": 108, "speaker": "Speaker 1", "text": "terms of their importance I think they're actually not going to have that much uh you know they're not going to be as much of a big catalyst for per's growth as as people think. He says that" }, { "i": 109, "speaker": "Speaker 1", "text": "basically he thinks that the offshore exchanges will continue to grow in the same way that they will and um that he's not really that that he doesn't think domestic per as as large basically let's" }, { "i": 110, "speaker": "Speaker 1", "text": "just put it that way like what is your take on this onshoring of per regulatory situation your advantage over other per dexes uh as well as just generally like what you think the future of lighter" }, { "i": 111, "speaker": "Speaker 1", "text": "might look like. Is it going to be bifurcated? Is it going to be two order books, one with KYC, one with not? I know it's kind of like looking looking out into the unknown here, but your" }, { "i": 112, "speaker": "Speaker 1", "text": "takes on the on on domestic per kind of your regulatory advantage and kind of how you see it playing out." }, { "i": 113, "speaker": "Speaker 2", "text": ">> Sure. So, one way I try to think about this, right, you know, I started my career at at Citadel, right? like what would it take for Citadel and other firms like that to be active on lighter" }, { "i": 114, "speaker": "Speaker 2", "text": "and and so I think a big part of the answer to that is is having a pathway to to to do that kind of well within the regulatory structure and kind of through a process of um of of you know having a license you know" }, { "i": 115, "speaker": "Speaker 2", "text": "having the rules in place again I think for us like the fact that the rules are open source and all that that that that we believe is going to help the process but ultimately like you need that" }, { "i": 116, "speaker": "Speaker 2", "text": "framework and so it's not I think that to me like all this stuff feeds into each other so it's like if you want institutional kind of level liquidity I think a lot of these markets already" }, { "i": 117, "speaker": "Speaker 2", "text": "liquidity that's uh attractive to many traders but there's orders of magnitude more you can do and and the way to do that is like these biggest pools of capital you know the US is like by far" }, { "i": 118, "speaker": "Speaker 2", "text": "the biggest market right especially for the institutional side for the firms you know for kind of the biggest hedge funds and all that and so like right now those guys can't trade on lighter I think with" }, { "i": 119, "speaker": "Speaker 2", "text": "regulatory frameworks figured out and yeah have been working with you know the CFTC on their innovation advisory council there but um and again I think they've the fact that they move so" }, { "i": 120, "speaker": "Speaker 2", "text": "quickly on um the um process of having per work in the US for you know for Ky and others like and we're you know it'll be a heavier lift to do it the decentralized way we can talk about you know what that means but" }, { "i": 121, "speaker": "Speaker 2", "text": "like again to have the liquidity um that's institutional grade like you need those institutions you need the u the the US not like an offshore uh you know uh silo of the institution that's kind" }, { "i": 122, "speaker": "Speaker 2", "text": "of trading like a smaller part of the book but like the actual the core part of the institution right and so that's you need that right and so and once you do have that the there'll" }, { "i": 123, "speaker": "Speaker 2", "text": "the liquidity will be much better than anything we've seen so far and that will be like very attractive to traders. So that that's kind of the vision I have right and I think ultimately that's why" }, { "i": 124, "speaker": "Speaker 2", "text": "we got into the space to begin with is to kind of use these amazing technologies to uh you know to be a part of like the the rails for the future of finance." }, { "i": 125, "speaker": "Speaker 3", "text": ">> Yeah. and the regulatory structure in order to make that happen is an important component. You know, you're very technical. You've been able to, you know, you know, configure these systems." }, { "i": 126, "speaker": "Speaker 3", "text": "I I bet, you know, the the regulatory complexity might be even even more complicated than than some of the, you know, technological complexity at least." }, { "i": 127, "speaker": "Speaker 3", "text": "Maybe there's a different path in order to affecting that change. Maybe it's slower kind of kind of more in the control of, you know, the regulators." }, { "i": 128, "speaker": "Speaker 3", "text": "But given that you're on this advisory council, you have a uh a path to suggesting how you think it should be done. Um how do you think the regulators, what would the best possible" }, { "i": 129, "speaker": "Speaker 3", "text": "configuration look like to allow institutional liquidity to come in? You mentioned open source would be an advantage for these institutions that are looking at uh edge cases and whatnot." }, { "i": 130, "speaker": "Speaker 3", "text": "What is the ideal structure for the CFTC to to potentially put into place for opening the floodgates of institutional liquidity into per?" }, { "i": 131, "speaker": "Speaker 2", "text": ">> Yeah, so you know this is obviously an ongoing conversation. And um I I think that you know the industry has you know previously like when there's been a lack of clarity right I think the industry" }, { "i": 132, "speaker": "Speaker 2", "text": "has done a lot of things kind of on its own to kind of self-regulate right like and uh you know off offshore but but like kind of put some principles in place in terms of um you know like" }, { "i": 133, "speaker": "Speaker 2", "text": "around leverage right around how ADLs work around um how you know transparency, verifiability, all these kinds of things. I I think the more that we educate the regulators on that and kind of codifying some of what" }, { "i": 134, "speaker": "Speaker 2", "text": "the industry already does like some of the best practices into kind of mapping that to the rules kind of the the the rule book that you would have to kind of comply with the core principles like and" }, { "i": 135, "speaker": "Speaker 2", "text": "you know they're not the same right I mean obviously some of these principles were designed um not only before u blockchain technology they were designed like before electronic trading was a" }, { "i": 136, "speaker": "Speaker 2", "text": "thing so like it there is an educational process to this but right now we're seeing you know we um with the you know the the chairman and the others on the team there as well as SEC and treasury" }, { "i": 137, "speaker": "Speaker 2", "text": "like some very forward thinking people there and really are very open to understanding this and you know there there are some of these questions to be proud but it's like again the" }, { "i": 138, "speaker": "Speaker 2", "text": "conversations I think are happening about the right topics and at the right level right it's not like wait all this stuff is a scam like why are we talking about this that's not how it is right" }, { "i": 139, "speaker": "Speaker 2", "text": "it's like okay like let's for example the KYC question okay like is there a way to like you know match KYC um users with other KYC users is there a way to have some kind of hybrid model" }, { "i": 140, "speaker": "Speaker 2", "text": "how does that work for um an order book how does that work for an AMM does that work for an RFQ like like th those are those are the kinds of things that are being discussed >> uh And you know I I certainly don't have" }, { "i": 141, "speaker": "Speaker 2", "text": "you know all the answers a lot of you know smart people in in you know that are being part of the conversation but it's like the agencies are not just talking the talk they're walking the" }, { "i": 142, "speaker": "Speaker 2", "text": "walk as we've seen with you know the kind of the action on >> um Koshi and and I think they're engaged um in in a way that's really thoughtful and like I think folks from industry are" }, { "i": 143, "speaker": "Speaker 2", "text": "also doing a good job, you know, educating them." }, { "i": 144, "speaker": "Speaker 3", "text": ">> Yeah. And I mean, they're they're certainly involved and there's an open dialogue. You mentioned the the advisory uh council for the CFTC, the innovation council. We have uh Commissioner Hester" }, { "i": 145, "speaker": "Speaker 3", "text": "Pur uh on the show Friday. Um and so they're certainly open. There's a dialogue. Just curious like you know you have an open dialogue not to ask like what your conversations are like but" }, { "i": 146, "speaker": "Speaker 3", "text": "what do you think we should ask of you know Hester Pur to help inform the industry's best practices?" }, { "i": 147, "speaker": "Speaker 2", "text": ">> Yeah. Well I I think that um uh she in particular I think was kind of very early to thinking about these hard problems even when like her colleagues weren't right. And so like but but I" }, { "i": 148, "speaker": "Speaker 2", "text": "think probably what would be useful is to get at like kind of the the nuances like okay like what's um you know how to think about like tokenized stocks right like what exactly what are" }, { "i": 149, "speaker": "Speaker 2", "text": "what what's under kind of more like SEC what's more under CFTC what's more treasury like I think we've through these conversations I think have gotten um good understanding of this. I think" }, { "i": 150, "speaker": "Speaker 2", "text": "in the industry there's still some uh I mean to the extent that you guys want to inform the industry like I think getting someone like her and others to like educate on okay like here's how this" }, { "i": 151, "speaker": "Speaker 2", "text": "works and fits together and um you know of course there there's there are a lot of uh new ideas being discussed right now but but there there are still like structural differences between what each" }, { "i": 152, "speaker": "Speaker 2", "text": "agency does and what its mandate is and >> yeah I I think I think that's important." }, { "i": 153, "speaker": "Speaker 1", "text": ">> Yeah. Um but switching gears a bit here um into kind of the the ins and outs of lighter the team yourself the culture um I assume a lot of the team is remote dispersed globally is that is that" }, { "i": 154, "speaker": "Speaker 2", "text": "correct? So the our office is in Miami like about a third of the team is there." }, { "i": 155, "speaker": "Speaker 2", "text": "Um and others are global, right? Like some in the US, some outside. That's right." }, { "i": 156, "speaker": "Speaker 1", "text": ">> Yeah. Yeah. And then how big is the team now?" }, { "i": 157, "speaker": "Speaker 1", "text": ">> 40 people." }, { "i": 158, "speaker": "Speaker 1", "text": ">> And so you you you know you you guys started this with with a you know small team you know let's call it a dozen or or so and you guys have scaled this now to 40 people. you you know you're kind" }, { "i": 159, "speaker": "Speaker 1", "text": "of managing both the technology side, the uh team side, the the uh regulatory side. I'm I'm just curious like when you're in Miami, um like what is a day in your life look like? You go to the" }, { "i": 160, "speaker": "Speaker 1", "text": "office, do you do a lot of calls? Are you coding a lot? Are you >> you're in Miami? Are you on the beach?" }, { "i": 161, "speaker": "Speaker 1", "text": ">> Yeah. Like what is it what does a day in your life look like?" }, { "i": 162, "speaker": "Speaker 2", "text": ">> Um right. Well, I think on the the coding side, you know, we have um 25 engineers like most of them did uh you know, the IIM imo some cases both. I mean I did those Olympiads too back in" }, { "i": 163, "speaker": "Speaker 2", "text": "the day but like I think you know our our team you know certainly we have people who are uh a lot uh stronger at this point you know on the coding side and plus we're using um as um" }, { "i": 164, "speaker": "Speaker 2", "text": "you know as as we've talked about like we're using tools like Devon where you know I'm founding adviser of you know that team as well and and so like we use a lot of the AI tools. So I I think on" }, { "i": 165, "speaker": "Speaker 2", "text": "the coding side I'm not, you know, thankfully uh too involved. I mean I think uh but um >> yeah it's like every day is different right? Like I think um >> you know ultimately it's like" }, { "i": 166, "speaker": "Speaker 2", "text": ">> my view at least is like as a founder of you like focusing on product is the most important thing. Yeah. and like having done trading before like actually like being in you know in the markets like" }, { "i": 167, "speaker": "Speaker 2", "text": "seeing what's going on spending some part of the day on that and like being able to relate to the customer it's like okay like all the different features we ship like actually like working with the" }, { "i": 168, "speaker": "Speaker 2", "text": "product team um figuring out the road map like that that's really important um I think having enough time to think about some of the the big picture is important uh like I think it's healthy" }, { "i": 169, "speaker": "Speaker 2", "text": "not to have like every you know like just meetings back to back to back where you have like no time to really like step back. Um >> so yeah I mean it's um >> it varies. It's been great, right? But" }, { "i": 170, "speaker": "Speaker 2", "text": "but I think I would say like just as far as like like some insights I've gotten about, you know, like learnings as a founder is like um being like close to the customer, close to the product, um" }, { "i": 171, "speaker": "Speaker 2", "text": "like having enough time to like really like think through some of these hard problems and um and yeah, just kind of always moving forward, right? I think that's that's important, too." }, { "i": 172, "speaker": "Speaker 3", "text": ">> Yeah. When when you say close to the to the customer, close close to the product, are are you trading per and are you doing so on lighter? Like what is your are you a trader at heart, you" }, { "i": 173, "speaker": "Speaker 3", "text": "know, given your experience at Citadel?" }, { "i": 174, "speaker": "Speaker 2", "text": "like what is your how much are you trading on a daily basis or are you >> I mean you know not like nothing significant but not you know maybe like a couple of [snorts] uh you know small" }, { "i": 175, "speaker": "Speaker 2", "text": "trades a week just to like you know make sure that I know what's going on with with the product right >> okay >> so yeah not certainly you know not not with the goal of uh uh you know" }, { "i": 176, "speaker": "Speaker 2", "text": "doing any like significant strategy but like just just kind of you know, more as a retail trader, right? Not not like not like what I would have done as a professional portfolio manager. Right." }, { "i": 177, "speaker": "Speaker 1", "text": "Right. Right. Trader at heart." }, { "i": 178, "speaker": "Speaker 1", "text": ">> You know, Vlad, I'm curious. You know, you talked about this roadmap, right?" }, { "i": 179, "speaker": "Speaker 1", "text": "You talked about the the the customer a lot, the product a lot, the team. Do you have like a do you have a decision-m framework that you operate within of how do you make decisions for, you know," }, { "i": 180, "speaker": "Speaker 1", "text": "hiring, for product features, for what you're going to eat, what time you're going to go to bed, who is, you know, what trade you you're going to take, how you manage risk, how you think about" }, { "i": 181, "speaker": "Speaker 1", "text": "scaling, how you manage your runway. Do you have like a broad life decision-making framework that you use as a founder?" }, { "i": 182, "speaker": "Speaker 2", "text": ">> Yeah. Um I I think like thinking about decisions on time scales is is important, right? Like there there's some decisions that are like will play themselves out in like months or years, some is like like weeks and" }, { "i": 183, "speaker": "Speaker 2", "text": "then there's like day to day. Okay. Like what like what were like the three things I really need to accomplish today? Like I think having like those time frames um is is important and uh it's easier" }, { "i": 184, "speaker": "Speaker 2", "text": "said than done, right? But like for example when when we started building lighter like it's like okay like it's going to take us year plus to build the core infrastructure and like we're not" }, { "i": 185, "speaker": "Speaker 2", "text": "necessarily going to see any result from that for a while. But like setting kind of milestones and uh figuring out like on what time frames you want to see different outcomes like I think that's" }, { "i": 186, "speaker": "Speaker 2", "text": "that's important. Um and uh also just like synthesizing a lot of information >> like like talking to different people on the team getting different perspectives and then like instead of like rushing into" }, { "i": 187, "speaker": "Speaker 2", "text": "decision like stepping back letting things synthesize a bit." }, { "i": 188, "speaker": "Speaker 2", "text": ">> Yeah. um I think is is also key." }, { "i": 189, "speaker": "Speaker 2", "text": ">> So So yeah, but it's always that's um you know um I think you know as a founder like you're always growing in in this regard, right? Like I think the decision- making like what separates the" }, { "i": 190, "speaker": "Speaker 2", "text": "best founders from ones who are still you know have some ways to go I think is like the the quality of the decisions." }, { "i": 191, "speaker": "Speaker 3", "text": ">> Yeah. Yeah. Because decisions compound." }, { "i": 192, "speaker": "Speaker 3", "text": "Um and and so you know those good and and bad will will reinforce themselves." }, { "i": 193, "speaker": "Speaker 3", "text": "Um you mentioned uh you know on on an adviser for Devon and you know they're doing great as an AI company. Curious about the the strategy of of AI and lighter how you how you see AI just" }, { "i": 194, "speaker": "Speaker 3", "text": "affecting the space and affecting per you know crypto at large. Sure. But maybe more generally how you see AI over you know a time scale of a longer time horizon." }, { "i": 195, "speaker": "Speaker 2", "text": ">> Right. Well, I think kind of you know AI agents I mean Devon was actually one of the first. I mean maybe they they were um very early to that. Uh I think there nowadays there all sorts of agents." }, { "i": 196, "speaker": "Speaker 2", "text": "Obviously, coding is one that's very familiar, but now like like there there's um trading agents for quant agents, right? Like we're plugging into some of those um APIs like um I think that" }, { "i": 197, "speaker": "Speaker 2", "text": "we'll we'll um see how you know how that takes shape. Like one of the interesting things on lighter now is you can actually trade the um H100 uh kind of compute per and so >> you know like imagine a world where an" }, { "i": 198, "speaker": "Speaker 2", "text": "AI agent is trading something to hedge its own compute costs >> right >> right like that I mean I think that opens up a lot of really interesting possibilities where you can actually" }, { "i": 199, "speaker": "Speaker 2", "text": "have these systems that um are truly autonomous uh and are able to hedge even that risk. But but I guess like yeah you know to to zoom out um you know I think kind of the intersection of AI and" }, { "i": 200, "speaker": "Speaker 2", "text": "crypto um like there there are a bunch of different things there like one one is is like formal verification right to actually AI can be used to formally verify smart contracts and ZK circuits um that's something" }, { "i": 201, "speaker": "Speaker 2", "text": "we're we're working on right to make sure that the system is robust Of course, there's the flip side of that coin, which is like, you know, I think there's some expectation that like" }, { "i": 202, "speaker": "Speaker 2", "text": "Mythos will potentially find some problems in uh you know, certain parts of of uh the DeFi stack. I think thankfully that hasn't happened yet. And we we we we actually we we think like" }, { "i": 203, "speaker": "Speaker 2", "text": "the builders we know who who are kind of working on the most um critical parts of that have been very like um ahead of the curve on that. So we we actually think that'll come out in a good spot, but" }, { "i": 204, "speaker": "Speaker 2", "text": "obviously that that's another area, right? Um and um yeah, I mean I think between agents kind of um formal verification and and then also of course like per can be a vehicle for um being uh you know" }, { "i": 205, "speaker": "Speaker 2", "text": "participating in the upside of these AI companies. I mean that's another dimension. So I think that they're like I think I feel like two or three years ago if someone said okay like a AI and" }, { "i": 206, "speaker": "Speaker 2", "text": "crypto intersection it's like it's like one thing actually I feel like there's like lots of small pockets where these two fields intersect." }, { "i": 207, "speaker": "Speaker 1", "text": ">> Yeah. Yeah. No, I mean I think so. Have you have you thought about um a like a ll like a chat interface for trading purps? It do you think that that that would ever catch on? Like just writing" }, { "i": 208, "speaker": "Speaker 1", "text": "to an agent to to execute trades on your behalf almost like back in the day you'd call a broker to like get a trade done, but like writing to one like is that is there any part of the like like do you" }, { "i": 209, "speaker": "Speaker 1", "text": "see that catching on? I I suppose from like a because you know you're you're a trader, you talk to traders, you you have a product for traders. Do you think that that most people just like trading" }, { "i": 210, "speaker": "Speaker 1", "text": "on the traditional like lighter UX or do you think that there would be a cohort of folks that want to do like a chat interface based trading experience?" }, { "i": 211, "speaker": "Speaker 2", "text": ">> Yeah. Well, I I think we haven't seen that as much. I think it's more of like a barbell that we've seen like there there people who just want to trade kind of the the traditional way just kind of" }, { "i": 212, "speaker": "Speaker 2", "text": "being in the product having all the dials, you know, having like their their finger on the button and like kind of like kind of the uh what's the tried and true way of trading and then there" }, { "i": 213, "speaker": "Speaker 2", "text": "there's a whole other side which is like where you're using the AI agent not just to tell you not not just to tell the agent like get me into uh you know BTC position over the next few hours, but" }, { "i": 214, "speaker": "Speaker 2", "text": "like you're actually asking it to develop a whole strategy. Like give me like build me a strategy that's going to run, you know, um funding ARB >> strategies uh with like this time" }, { "i": 215, "speaker": "Speaker 2", "text": "horizon and this level of acceptable risk like go right. So I feel like it's >> make no mistakes." }, { "i": 216, "speaker": "Speaker 2", "text": ">> Yeah. Yeah. So it's been a little bit more of a barbell that way, but we're you know for for you know this is kind of back to the point about like being close to the customer. These are the" }, { "i": 217, "speaker": "Speaker 2", "text": "conversations we're having all the time." }, { "i": 218, "speaker": "Speaker 2", "text": "I mean, if that changes and there's like a um some of those other interfaces become um something that traders want, like we're we'll you know, our team will be on top of it." }, { "i": 219, "speaker": "Speaker 3", "text": ">> You know, one one of the things that I like love about Per is that it's so multi-dimensional. Like, you know, we're kind of talking about the AI side, but then there's the regulatory side. you've" }, { "i": 220, "speaker": "Speaker 3", "text": "got sort of these incumbent exchanges that are starting to explore per um and it feels as if there's sort of like three sectors of the perp industry right now. You've got um sort of the you know" }, { "i": 221, "speaker": "Speaker 3", "text": "the the per exchanges, you know, that are are well known onchain right now and and decentralized um lighter being, you know, uh one of the leaders in that cohort. Then you've got the centralized exchanges that are" }, { "i": 222, "speaker": "Speaker 3", "text": "they have a lot of market share but primarily for cryptonnative assets and and pers for those assets. Um and you know Binance is sort of one of the leaders in that category. OKX and BBET" }, { "i": 223, "speaker": "Speaker 3", "text": "are doing well as well. And then you've got incumbents like like trady incumbents that like CME you know and others that are starting to get into the [clears throat] per game as well. And so" }, { "i": 224, "speaker": "Speaker 3", "text": "maybe those have been hindered by regulation, you know, but given that they're incumbent, they have distribution, you know, the onchain has maybe navigated regulatory complexity in" }, { "i": 225, "speaker": "Speaker 3", "text": "a different way, but has technological and technical uh agility and that's an advantage. And so as we look at a longer time horizon, I'm curious where you think some of these advantages and" }, { "i": 226, "speaker": "Speaker 3", "text": "disadvantages offset one another. you know, and I may may have asked you this last time we were on, but I'm I'm I'm just curious to re reiterate. Do you do you think, you know, the power law ends" }, { "i": 227, "speaker": "Speaker 3", "text": "up kind of playing out where there's maybe two or three? Do you think it's a very distributed market in the long run?" }, { "i": 228, "speaker": "Speaker 3", "text": "Where do you where do you see the most significant advantage or disadvantage for any one of these three cohorts in the in the per market?" }, { "i": 229, "speaker": "Speaker 2", "text": ">> Right. Well, you know, we're technologists at heart, right? So we definitely like our long-term bet is that more and more of uh you know finance will adopt you know decentralized rails and we" }, { "i": 230, "speaker": "Speaker 2", "text": "think like the architecture of lighter like again top of ethereum verifiable open source like is something that is um a um you know long-term kind of the right technology to do that but how you" }, { "i": 231, "speaker": "Speaker 2", "text": "know how that'll happen like you know we're there's some centralized um integrations we've we've done right like um for example you know the telegram wallet I mean that that's there" }, { "i": 232, "speaker": "Speaker 2", "text": "we're certainly um looking at others like that um and some kind of big partnerships that'll be announced the weeks to come >> um I mean I think in stratfi we're right now it is more around like" }, { "i": 233, "speaker": "Speaker 2", "text": ">> you know educational but also there kind figure out strategy and you know we um us you know the kind of being a technology partner in in in that um is another path I mean I think like this is" }, { "i": 234, "speaker": "Speaker 2", "text": "going to be a the process won't be a straight line right I mean I think there there there are lots of competing dynamics here there are lots of like to your point the fact that like real world" }, { "i": 235, "speaker": "Speaker 2", "text": "assets like the decentralized exchanges actually, you know, got into those earlier than the centralized >> ones did. I mean, that's like that it's that's not necessarily obvious that" }, { "i": 236, "speaker": "Speaker 2", "text": "that's the way it would have played out, right? Because like centralized exchanges could have experimented with real world assets years ago." }, { "i": 237, "speaker": "Speaker 2", "text": ">> Totally agree." }, { "i": 238, "speaker": "Speaker 2", "text": ">> So like >> I think it's hard to know exactly how it will play out, but >> like our long-term bet is like best tech kind of wins in the long run. But but winning doesn't mean that there's like" }, { "i": 239, "speaker": "Speaker 2", "text": "you know one platform right or like like it's not you know it means that um lots lots of different types of markets lots of different institutions you know as much of as much as possible is composable like and I" }, { "i": 240, "speaker": "Speaker 2", "text": "think a good example of that right like let's say somebody's building Ethereum L2 um you know like it's easier for lighter to compose that and you know be interoperable like right there's less" }, { "i": 241, "speaker": "Speaker 2", "text": "less risk there and kind of bridging uh between lighter you know is an Ethereum L2 another Ethereum L2 versus like something where you need to like bridge between a different L1's all these" }, { "i": 242, "speaker": "Speaker 2", "text": "different things are consideration so >> I think kind of in the long uh run it'll move towards capital efficiency right it'll move towards verifiability into towards security, composability, how exactly" }, { "i": 243, "speaker": "Speaker 2", "text": "it's going to play out like you know some of like those decisions a lot have to do with like it's like path dependent right it has to do with particular you know realities on the ground with" }, { "i": 244, "speaker": "Speaker 2", "text": "like regulatory policy in different countries and like like I think it's really hard like multi-dimensional problem but our bet is like if kind of we build the the right tech we are close" }, { "i": 245, "speaker": "Speaker 2", "text": "to the customer we're close to partners we um iterate together. Uh and you know there's some core principles that we um that we commit to but in other areas we're happy to kind of iterate and be" }, { "i": 246, "speaker": "Speaker 2", "text": "flexible and learn from partners and that that that's our view on it and I think we we we stand to be in a good position if we do we do that." }, { "i": 247, "speaker": "Speaker 1", "text": ">> Yep. Vladimir Novakovski live from the tokenization tower New York City Empire State Building. Amazing show. Thank you Vlad for joining us. Um, congrats on the success of Lighter. Uh, long way to go." }, { "i": 248, "speaker": "Speaker 1", "text": "There's a lot of paths. We're yet to know what's going to be the solution." }, { "i": 249, "speaker": "Speaker 1", "text": "There's going to be a lot of combinations happening as well between these sectors, I think, Rob, that will be surprising, I think. Um, and I look forward to watching Lighter grow and," }, { "i": 250, "speaker": "Speaker 1", "text": "uh, thanks for your time." }, { "i": 251, "speaker": "Speaker 2", "text": ">> Thank you so much. Appreciate." } ]