In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
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Raj Gokal & Anatoly Yakovenko, Solana
In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
Co-Founder of Solana, CEO Solana LabsSolana + Solana Labs
Raj Gokal
Co-Founder of Solana, President of Solana LabsSolana + Solana Labs
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John Furrier
>> Hello everyone. I'm John Furrier, host of theCUBE here for the Crypto Trailblazer series, part of theCUBE and the NYSE Wired program and community. Got two great guests here leading the way, and blazing the trail in crypto. The co-founder of Solana here, Toly's here. And Raj, Raj is the co-founder, president and COO. And Toly is the co-founder and CEO, inventor. Well, thanks for coming in. Appreciate it. Congratulations.
Raj Gokal
>> Thank you. Thank you for having us.
John Furrier
>> So ETF, first listing, you're in the building for the closing bell. Is that mind-blowing?
Anatoly Yakovenko
>> Yeah, it's very mind-blowing that there is, in United States, a staking protocol that I built is now listed on Wall Street. It's crazy.
John Furrier
>> And they're eating it up, and heard some of the stats. The numbers looking good, the retail market wants this. The financial markets we've been covering has kind of gone mainstream. If you go back a decade, it was the mercenaries and the missionaries, more mercenary kind of mindset. "Yeah. Beat the old guard." Now you got here, the old guard is leaning in, and with the climate, you're seeing massive mainstreaming of infrastructure kind of things. Qualcomm background, you know that movie. Raj, you see the business models. What's happening in your mind? Because your guys are succeeding.
Anatoly Yakovenko
>> I think crypto is creating a new infrastructure for finance. So blockchain and cryptography solve a lot of the same problems that you've solved in the United States with legislation and law and regulators, but now you can do it with software. And a lot of this, to me, kind of just hearkens back to Mark Andreessen saying, "Software is eating the world." So we're starting to see software start to eat a lot of the financial stack, as well.
John Furrier
>> Raj, I want to get your thoughts on the entrepreneurial opportunity. And one observation coming from the West Coast, and coming to East here is, the financial market has never really seen true entrepreneurship. We're talking, maybe there's been some hustle entrepreneurship, but now it's like structural take down opportunities for people who could move fast, create a great value proposition. And then, what you guys are enabling is a market on top of Solana, for literally two friends, college roommates or people working together that could be old like me saying, "Hey, let's go create X, a credit department, and take down Goldman Sachs." Or compete, structurally.
Raj Gokal
>> Yeah, there's a good argument that there hasn't really been a ground-up rebuild of finance at a software level, and it takes internet-native protocols around money and assets and things, and like stablecoins, to be able to actually do that ground-up rebuild. So the problem that we really focus on is performance. We wanted to build a network that supports consumer and enterprise-grade performance, that feels and looks like the usual internet, or the high performance and low latency systems that institutions are used to working with. And that's the problem that Solana's solved, so far.
John Furrier
>> I want to get into the founding story, but there's a lot of other videos people could watch that talk about all the history. But I want to context this with something I heard you talk about Toly, which is the world was, built the internet before crypto came. And I think you call it the fax machine, at one point.
Anatoly Yakovenko
>> Yeah.
John Furrier
>> Which means it's old, inadequate and antiquated. Yeah, the internet, technology. Also built on standards and openness. If it wasn't for funding, DARPA, all this wouldn't exist. So protocols matter. Talk about the funding story, founding story, and the origination and how you guys built it to the success level with that context in mind. Because I say disruptive enablement, companies like NVIDIA used the word accelerated, because they don't want to give that disruption, it sounds like winners and losers, but. It's enabling, but you're disrupting an existing thing, just like fax machines that... If people don't know what a fax machine is, that means they're probably 25, but it's just some old goes away, and some stays. Let's talk about that, how that vision connected into this rebuild moment.
Anatoly Yakovenko
>> I think a lot of this kind of parallels the internet. You had, in the '90s, this massive growth. And there was this idea of a global search engine, something that could index all of the internet. And at that time, people didn't think it was possible, because of how hard that problem was. Well, right now with blockchain and cryptography, there's an opportunity to build a single financial rail for the entire world. And it might not seem possible to a lot of people, unless you solve the engineering problems. And Solana has solved them. So we can deliver the throughput and the latency, to basically cover every market in the world at the same time. And this has never been done before, and I think it's a transformative change for the world. And what I think of when I think of, what does a science fiction version of finance look like 20, 30 years from now, it's a single, giant, global state machine that's synchronized at the speed of light, that runs every market everywhere at once.
John Furrier
>> And the transformation, just in the first five years, what's happened? What was the trajectory?
Anatoly Yakovenko
>> So, Solana launched in 2020, in the depth of the bear market. This was like the COVID crash. We literally had our launch announcement two days before everything crashed.
Raj Gokal
>> Before black Thursday.
Anatoly Yakovenko
>> Yeah.
Raj Gokal
>> Great time to launch.
John Furrier
>> And now, you've got an ETF, now. Look at that.
Raj Gokal
>> Yeah.
John Furrier
>> You know?
Anatoly Yakovenko
>> So we didn't even think about delaying, because we were so exhausted in the process to get there, that we had no other choice. But four years later, we've come to a point where Solana does more transactions than every major Layer 1 combined, and sometimes more revenue than all of them combined, which is I think a pretty astounding metric that we're both pretty proud of. And this is before crypto has been adopted by mainstream finance. So we always joke, there's only one more hard quarter left. So.
Raj Gokal
>> Yeah. We say that every quarter.
John Furrier
>> You guys dug in on the engineering side. And Raj, I want to get your perspective on those early days too, because you also had some early adopters jump in. Brian Baumann, with the NYSE and the NYSE Wired created that with theCUBE community. We've interviewed all the trailblazers, they all have the same kind of tune, which is adoption matters, right? Adoption creates that virtual cycle, and then gets better. Talk about the adoption days, the early adopters. Obviously they gravitated towards the speed, speed was key, but there was also other factors. Can you share some of the thinking around what made it work? Was it lucky by accident on purpose, or was it intentional? Take us through your thoughts, there.
Raj Gokal
>> Yeah, at the time there were a lot of networks and founders that were trying to solve the problem of speed and performance, but very few had actually taken the time to build something in production that was demo-able. So we had a demo in the early days that was really popular called Break, where we had a global permissionless network with nodes all over the world, and you could strike keys on your keyboard and watch the transactions propagating every time you hit a key. And that really turned people's brains on. So in 2020, after we launched, word started to get around that there was actually a performing network you could build on. And then I think the surprising thing was, we were some of the only folks that just took the time to get on the phone with everyone that wanted to build on the network. And they all came for the same reason.
John Furrier
>> What was the big aha moment for them? Was it the speed?
Anatoly Yakovenko
>> Speed and price. I mean, these are always kind of like that, Jeff Bezos says, "What's constant 10 years from now?" So people want things faster and cheaper.
John Furrier
>> Yeah, that's always a good phrase, he calls it the flywheel, too. I want to get your thoughts on the innovation now. Obviously, the success has gotten, grown. Can you just throw some stats out on what Solana is today? So the ETF's the big news here, you guys are going to close the market with the closing bell, which is a huge accomplishment, validation, it's a feel good but also a momentum moment of real value. But the innovation today, what are some of the stats, communities, for the folks watching that might not know what's going on? Give us some numbers, give us some insight to the numbers.
Anatoly Yakovenko
>> I mean the number that I always keep track of is transactions. So a hundred million transactions per day, which is more than I think the top-
Raj Gokal
>> Every other Layer 1 and Layer 2 combined, on most days.
Anatoly Yakovenko
>> Yeah.
John Furrier
>> So a lot of action.
Raj Gokal
>> So most of the transactions in all of crypto are happening on Solana.
John Furrier
>> You guys had certain use cases that adopted, like gaming, was one. Communities.
Anatoly Yakovenko
>> Yeah, there's NFTs, trading, so every kind of market that you can think of creating people can create. And permissionless-ly. We had 50,000 tokens created per day, at one point. So we always joke that OpenAI is our biggest competitor in tokens being created.
John Furrier
>> There's other tokens. You're beating me to my NVIDIA question. I was trying to think of a way to kind of scope the value of Solana. I was talking to a friend, I was just at the NVIDIA conference. NVIDIA is kind of like a darling right now, $5 trillion market cap, but they were misunderstood for 20 years. I mean, you go look at the early gaming stuff they did, now their Omniverse simulation technology really came out of that core competency that was an extension of, essentially video games. Guys from Hollywood came up and did some things, and they stood around, and it was not obvious to many. But obviously, they called it right. But what they're doing for AI at the infrastructure, and then enablement on top of it, is unbelievable. But it's a different playbook, to your point about how things are changing, the fax machine comment. So I think you guys are the NVIDIA of crypto infrastructure because you're engineering, same kind of discipline. And you're enabling, accelerating change. So what's your take on that? What's your reaction to that? I mean, it's not apples to apples, but from an impact standpoint.
Anatoly Yakovenko
>> I think what's interesting is thinking about how these two things are converging. So, AI is reducing the cost of intelligence, and for markets to function you need intelligent participants. So as the cost to process and create intelligence goes down, you can actually create many more markets for many more things than you could possibly before. And Solana is all about creating markets, and trading them globally everywhere at once.
John Furrier
>> What's your reaction to the NVIDIA ?
Raj Gokal
>> Yeah, I think the misunderstood label is definitely relatable. Solana has been branded as the NFT chain, and the meme coin chain, and the deep in chain. And the reality is, the use cases keep coming and forming organically, but they all benefit from a relentless focus on performance over years and years.
John Furrier
>> I mean, NVIDIA was pigeonholed as the gaming card, but what they were really doing was mathematics and computer science, matrix multiplication on steroids.
Raj Gokal
>> Right.
John Furrier
>> And they keep on adding more things, and as they get better technically, their virtuous cycle increases. I mean, long-term thinking is happening. Is there a power law that you guys see, or measure, relative to your thinking around that same kind of dynamic as you get better technically?
Anatoly Yakovenko
>> Yeah, we call it IBRL, Increase Bandwidth Reduce Latency. So we got to work on both. So both scaling up the technology to process more things in parallel, that's a similar problem to NVIDIA. And then, cutting latency. And there's folks that are literally laying fiber optic cable to optimize the distance between validators, and stuff like that.
John Furrier
>> So you're going to ride that wave, keep that tech.
Anatoly Yakovenko
>> Absolutely.
John Furrier
>> All right, so if I wanted to jump on and do some Solana app, theCUBE coin, or build some cool community thing. How is the ease of use going? Because you guys also get good marks on ease of use, in terms of deploying.
Anatoly Yakovenko
>> I think, in the industry, people consider Phantom as one of the best wallets for all of blockchains, and that's Solana native wallet. I think Jupiter is probably one of the best marketplaces in the world for crypto. So you will likely get better pricing in Jupiter than you get on centralized exchanges, but you have full decentralized markets powering that.
John Furrier
>> Raj, what's the innovation strategy on your end? You got to run the trains at the company, and as the co-founder, you got to keep the eye on the prize, and the vision. The North Star, people call it. But what's your day-to-day like? What are you optimizing for, what's the focus?
Raj Gokal
>> Yeah, I think the biggest constant truths for us are relentlessly improving performance of the network, and supporting the engineering teams that build the validator clients to fight the speed of light, and fight physics, to keep delivering performance in these financial systems. And then, supporting the builders with grants and tooling, to just create new business models, get businesses off the ground that benefit from using block space.
John Furrier
>> So let's talk about the internet capital markets concept. If you believe what we were just talking about, that there's going to be a rebuild. I think that's not a hard bridge to cross. I like the search engine analogy, that seemed impossible, and that opened up. What happens next? What is the future of internet capital markets? You got stablecoins, that was a real win. You got digital building apps, digital infrastructure. Physical world, we're starting to see humans and machines come together. Having a decentralized infrastructure at scale kind of makes you think, "Okay, what could be possible?" So I guess the question is, what does the internet capital markets look like from a vision standpoint?
Anatoly Yakovenko
>> I mean, I think stablecoins just kind of is the aha moment for a lot of people that deal with finance. As soon as they start using stablecoins, and they compare it to traditional rails, they just immediately realize the benefit. And then the next question they ask, "Why can't I do this with stocks? Why can't I do this with commodities, or ETFs, or Treasuries?" And you can, right?
John Furrier
>> Yeah.
Anatoly Yakovenko
>> There is no real difference for the underlying code or technology stack, whether you're moving digital dollars around the world, or Tesla shares. So as soon as that moment happens, you will start seeing adoption, and kind of this technology proliferate everywhere.
John Furrier
>> It's funny, I hate to come back to NVIDIA, but their schtick is, "Token everything." Now that's a data point of view, data-centric. Real world assets on chain, that's real. I mean, you're basically saying, if you tokenize everything and with crypto infrastructure-
Anatoly Yakovenko
>> It's funny that it's the same term. Yeah, we've been saying tokenize everything for the last six years, at least.
John Furrier
>> Okay, so what does the economics look like, from a tokenization? How should people think? Knowing what you know, and knowing what's going to kind of happen, as you guys think about the scenarios?
Anatoly Yakovenko
>> It reduces costs and creates transparency, and reduces risk. So ultimately, consumers benefit from lower risk and better pricing. And all the businesses benefit from lower fees and less risk. So you have things like lending protocols that are mathematically, formally verified, to always be in balance and never allow default. And that's a huge innovation for finance. You never have to trust a third party like Silicon Valley Bank. Do they have enough money? Do they have enough assets in here to cover all the depositors? You can do this in software, validated every 200 milliseconds. So not a daily settlement and verification, but literally, every 200 milliseconds, you know exactly how much money's at risk.
John Furrier
>> And so that kind of clocking out is a mechanism for just tracking distributed transactions, versus centralizing them. Right?
Anatoly Yakovenko
>> Exactly. So a lot of what folks deal in finance is just ledger reconciliation. You have Business A and Business B that have to figure out, "Are our ledgers synchronized? What if there's mistakes or bugs, and you have to go back?" And this is where these two day settlement things come in. But if you look-
John Furrier
>> And latency's critically important.
Anatoly Yakovenko
>> And anytime you have these delays, this is the sand in gears of finance, it creates costs and risks, and makes everything more expensive. So if you have a giant, shared, immutable ledger that's as cheap as physics allow, all that stuff goes away, and you have cheaper, faster finance.
John Furrier
>> As quantum, you made me think about a quantum question. Does quantum computing change the clock equation in your mind, or no?
Anatoly Yakovenko
>> Quantum is one of the most exciting technologies, I think, that's up and coming. I would be thrilled if it's possible within five years, for it to work.
John Furrier
>> Have an atomic clock that's quantum.
Anatoly Yakovenko
>> Yeah. It would be transformative for the entire world, for like-
John Furrier
>> I know why I went there-...
Anatoly Yakovenko
>> yeah....
John Furrier
>> but it was weird. But I mean, that's where the advancements are coming. That's why I like the, AI and crypto are bounded by power and energy. That's a similar trend, too. So the efficiency equation has to work. With that in mind, how do you see Solana and Wall Street converging? What do you see as some forecast of some impact here? Obviously, if there's going to be efficiencies and transparency, and distributed intelligence, it's going to make things more straightforward. Right? Where's the convergence? What do you see? What's the impact?
Anatoly Yakovenko
>> I mean, I think stablecoins are definitely going to be the lead there. Before the Genius Act passed, there's what, a quarter trillion dollars worth of stablecoins minted just from demand on the retail side in crypto, globally. Now, with the Genius Act, people are estimating a trillion to 10 trillion worth of stables, and that's an astounding number. So if there's 10 trillion worth of digital assets out there, finance is going to reshape itself around it.
John Furrier
>> Yeah. Raj, talk about the revenue generating opportunities that you're seeing for Solana, and others that are in the ecosystem.
Raj Gokal
>> So Solana's revenue is pretty consistently the highest of any Layer 1 or Layer 2 network. And the cool thing about Solana's fee mechanism is that you don't have to pay global fees for something like a stablecoin transfer, if there's a lot of competition for accessing state for something like trading. So at times this year, we've seen things like $40 billion of trading volume in one day, which is the highest number for any blockchain in history. But at the same time that there were spikes in priority fees, stablecoin transfers were still really cheap, like sub one cent. So what we tried to create is a system where different businesses can thrive in the same state machine, and generate lots of revenue, but when one gets really popular it doesn't affect the others.
John Furrier
>> As co-founders, you get the adoption, you make it easy to get on board, people can make money, you make money. Your monetization is derivative of the value you create, which is scalable.
Anatoly Yakovenko
>> Absolutely.
John Furrier
>> And that is a huge dynamic. So okay, given that you guys have a nice profit equation for you guys and others, I'll come back to my entrepreneurship question. I've been seeing this observation, I want to get your both reads, because you're both co-founders. I haven't founded too many companies myself, but you know how hard it is. There's an entrepreneurial zeal right now, and it's not hype. I mean, it's real. In the early days of crypto, too, it was like hardcore engineering, all the alphas were going in. Because it's a hard problem to solve, so hard problems attract smart people. Now that this economics, visibility into unit economics on opportunity recognition, you're starting to see product management thinking, system thinking and product management thinking, to finance. So again, I'm seeing people actually think like tech entrepreneurs, and they're just building a financial product. And now you've got vibe coding, and all this easy code assistance. So you're seeing more code acceleration, more entrepreneurs are coming into this space that aren't your prototypical, typical crypto entrepreneur. They're business people. They see an opportunity to be efficient. What's your take on this thinking? What does it take? Is it the same, am I getting this right? Am I on point here, or is it... Because I see entrepreneurship coming in, but it looks like someone building a tech startup. But they're not, they're just putting two financial products together and using some of the technology you guys are enabling. So given what you know at Solana, what are you seeing from a structural formation?
Anatoly Yakovenko
>> Yeah, I think this has been the biggest change over the last two years that I've observed, is we went from not having enough infrastructure, and fees being too expensive, and a lot of experiments being run. To having fees be viable to scale a business globally. And the kind of businesses that you can build on top of crypto are new fintechs. So instead of interfacing with banks, or these kind of old-school slow settlement systems, you can now build something that you have guaranteed sub one penny fees for financial transactions, and instant settlement everywhere in the world. So you can really rethink of your fintech startup as a totally different thing.
John Furrier
>> So you can basically take territory, and create a durable company.
Anatoly Yakovenko
>> Absolutely. Yeah. And I think with Congress passing the Genius Act, I think things are only going to accelerate.
John Furrier
>> What's the significance of that, for people that don't know what it is? Because the Clarity Act, and the Genius Act and Clarity Act have really opened up. Guys, share us your opinions, you guys are close to it. What's the value of that? Why is that so important?
Anatoly Yakovenko
>> I mean, for America, it's critical. Because we need people to buy Treasuries, and the way that the Genius Act is written is a stablecoin as backed by US Treasuries. And there's enormous demand for digital dollars, globally. So I think you're going to see global adoption for dollar rails to go from just kind of back end merchant to merchant, to retail. Like everywhere, everyone in the world is going to pay with dollars.
John Furrier
>> Talk about your success as it relates to the sovereignty of the US, and just global sovereignty, because your success was built mostly outside the United States. And in the States, so it wasn't just a US thing. And if the world is flat, and it is, by the book. You talk about a global economy. So if the US dollar, and this is just a weird idea, but if the stablecoins back to the US dollar, that means the US dollar could be everywhere. So there is no perimeter, if you think of it that way. What's your reaction to that? Because it's not just, the US has good policies, that's going to help the financial system. But this banking being done, and you guys have impacted that.
Anatoly Yakovenko
>> So both of us are in the US. This is my home. Solana Labs was created in the United States, and we've been building it for the last eight years. And US is the best financial system in the world. It was built before the internet, so it's a little crufty, and driven by lawyers and people, but it is the best one. And what crypto allows is interfacing between the US financial system with the internet, in a reliable, decentralized way. So what we're seeing, and the adoption we're seeing outside of the US, is really the adoption of US financial systems by everyone in the world, through this interface called crypto.
John Furrier
>> But prior, you guys had traction all over the world. Is there areas that you like, that you saw that led during that time?
Anatoly Yakovenko
>> I mean, it kind of goes all over. From Southeast Asia, to Hong Kong, to United States. So.
John Furrier
>> You guys have really have done a great thing, and so grateful for you guys coming on theCUBE. I guess my final question, what's it going to be like to ring that closing bell, after all the work you guys done, and just getting started?
Raj Gokal
>> I think the best part is that we've got a ton of ecosystem founders who've built massive businesses, some of them over a billion dollars in market cap, that are built on Solana. So this is really their victory, as well, and it's awesome that they get to share that experience.
John Furrier
>> Your thoughts?
Anatoly Yakovenko
>> Yeah, same. I mean, it is just a protocol. If you really look under the hood, it is a protocol like email, and it's mind-blowing that, on Wall Street there's an asset that represents running a validator that's staked, and earning rewards.
John Furrier
>> Well, we're here at the NYSE, and the NYSE Wired community. Guys, thanks so much for coming in. I know you got a busy day ahead of you. Congratulations on the listing. I'll be cheering and taking pictures from up on the balcony. Thanks for coming on.
Raj Gokal
>> Thanks for having us.
John Furrier
>> Appreciate it. I'm John Furrier, host of theCUBE, here for the Crypto Trailblazers, part of the NYSE Wired programming community. Thanks for watching.>> Clear.
>> Hello everyone. I'm John Furrier, host of theCUBE here for the Crypto Trailblazer series, part of theCUBE and the NYSE Wired program and community. Got two great guests here leading the way, and blazing the trail in crypto. The co-founder of Solana here, Toly's here. And Raj, Raj is the co-founder, president and COO. And Toly is the co-founder and CEO, inventor. Well, thanks for coming in. Appreciate it. Congratulations.
Raj Gokal
>> Thank you. Thank you for having us.
John Furrier
>> So ETF, first listing, you're in the building for the closing bell. Is that mind-blowing?
Anatoly Yakovenko
>> Yeah, it's very mind-blowing that there is, in United States, a staking protocol that I built is now listed on Wall Street. It's crazy.
John Furrier
>> And they're eating it up, and heard some of the stats. The numbers looking good, the retail market wants this. The financial markets we've been covering has kind of gone mainstream. If you go back a decade, it was the mercenaries and the missionaries, more mercenary kind of mindset. "Yeah. Beat the old guard." Now you got here, the old guard is leaning in, and with the climate, you're seeing massive mainstreaming of infrastructure kind of things. Qualcomm background, you know that movie. Raj, you see the business models. What's happening in your mind? Because your guys are succeeding.
Anatoly Yakovenko
>> I think crypto is creating a new infrastructure for finance. So blockchain and cryptography solve a lot of the same problems that you've solved in the United States with legislation and law and regulators, but now you can do it with software. And a lot of this, to me, kind of just hearkens back to Mark Andreessen saying, "Software is eating the world." So we're starting to see software start to eat a lot of the financial stack, as well.
John Furrier
>> Raj, I want to get your thoughts on the entrepreneurial opportunity. And one observation coming from the West Coast, and coming to East here is, the financial market has never really seen true entrepreneurship. We're talking, maybe there's been some hustle entrepreneurship, but now it's like structural take down opportunities for people who could move fast, create a great value proposition. And then, what you guys are enabling is a market on top of Solana, for literally two friends, college roommates or people working together that could be old like me saying, "Hey, let's go create X, a credit department, and take down Goldman Sachs." Or compete, structurally.
Raj Gokal
>> Yeah, there's a good argument that there hasn't really been a ground-up rebuild of finance at a software level, and it takes internet-native protocols around money and assets and things, and like stablecoins, to be able to actually do that ground-up rebuild. So the problem that we really focus on is performance. We wanted to build a network that supports consumer and enterprise-grade performance, that feels and looks like the usual internet, or the high performance and low latency systems that institutions are used to working with. And that's the problem that Solana's solved, so far.
John Furrier
>> I want to get into the founding story, but there's a lot of other videos people could watch that talk about all the history. But I want to context this with something I heard you talk about Toly, which is the world was, built the internet before crypto came. And I think you call it the fax machine, at one point.
Anatoly Yakovenko
>> Yeah.
John Furrier
>> Which means it's old, inadequate and antiquated. Yeah, the internet, technology. Also built on standards and openness. If it wasn't for funding, DARPA, all this wouldn't exist. So protocols matter. Talk about the funding story, founding story, and the origination and how you guys built it to the success level with that context in mind. Because I say disruptive enablement, companies like NVIDIA used the word accelerated, because they don't want to give that disruption, it sounds like winners and losers, but. It's enabling, but you're disrupting an existing thing, just like fax machines that... If people don't know what a fax machine is, that means they're probably 25, but it's just some old goes away, and some stays. Let's talk about that, how that vision connected into this rebuild moment.
Anatoly Yakovenko
>> I think a lot of this kind of parallels the internet. You had, in the '90s, this massive growth. And there was this idea of a global search engine, something that could index all of the internet. And at that time, people didn't think it was possible, because of how hard that problem was. Well, right now with blockchain and cryptography, there's an opportunity to build a single financial rail for the entire world. And it might not seem possible to a lot of people, unless you solve the engineering problems. And Solana has solved them. So we can deliver the throughput and the latency, to basically cover every market in the world at the same time. And this has never been done before, and I think it's a transformative change for the world. And what I think of when I think of, what does a science fiction version of finance look like 20, 30 years from now, it's a single, giant, global state machine that's synchronized at the speed of light, that runs every market everywhere at once.
John Furrier
>> And the transformation, just in the first five years, what's happened? What was the trajectory?
Anatoly Yakovenko
>> So, Solana launched in 2020, in the depth of the bear market. This was like the COVID crash. We literally had our launch announcement two days before everything crashed.
Raj Gokal
>> Before black Thursday.
Anatoly Yakovenko
>> Yeah.
Raj Gokal
>> Great time to launch.
John Furrier
>> And now, you've got an ETF, now. Look at that.
Raj Gokal
>> Yeah.
John Furrier
>> You know?
Anatoly Yakovenko
>> So we didn't even think about delaying, because we were so exhausted in the process to get there, that we had no other choice. But four years later, we've come to a point where Solana does more transactions than every major Layer 1 combined, and sometimes more revenue than all of them combined, which is I think a pretty astounding metric that we're both pretty proud of. And this is before crypto has been adopted by mainstream finance. So we always joke, there's only one more hard quarter left. So.
Raj Gokal
>> Yeah. We say that every quarter.
John Furrier
>> You guys dug in on the engineering side. And Raj, I want to get your perspective on those early days too, because you also had some early adopters jump in. Brian Baumann, with the NYSE and the NYSE Wired created that with theCUBE community. We've interviewed all the trailblazers, they all have the same kind of tune, which is adoption matters, right? Adoption creates that virtual cycle, and then gets better. Talk about the adoption days, the early adopters. Obviously they gravitated towards the speed, speed was key, but there was also other factors. Can you share some of the thinking around what made it work? Was it lucky by accident on purpose, or was it intentional? Take us through your thoughts, there.
Raj Gokal
>> Yeah, at the time there were a lot of networks and founders that were trying to solve the problem of speed and performance, but very few had actually taken the time to build something in production that was demo-able. So we had a demo in the early days that was really popular called Break, where we had a global permissionless network with nodes all over the world, and you could strike keys on your keyboard and watch the transactions propagating every time you hit a key. And that really turned people's brains on. So in 2020, after we launched, word started to get around that there was actually a performing network you could build on. And then I think the surprising thing was, we were some of the only folks that just took the time to get on the phone with everyone that wanted to build on the network. And they all came for the same reason.
John Furrier
>> What was the big aha moment for them? Was it the speed?
Anatoly Yakovenko
>> Speed and price. I mean, these are always kind of like that, Jeff Bezos says, "What's constant 10 years from now?" So people want things faster and cheaper.
John Furrier
>> Yeah, that's always a good phrase, he calls it the flywheel, too. I want to get your thoughts on the innovation now. Obviously, the success has gotten, grown. Can you just throw some stats out on what Solana is today? So the ETF's the big news here, you guys are going to close the market with the closing bell, which is a huge accomplishment, validation, it's a feel good but also a momentum moment of real value. But the innovation today, what are some of the stats, communities, for the folks watching that might not know what's going on? Give us some numbers, give us some insight to the numbers.
Anatoly Yakovenko
>> I mean the number that I always keep track of is transactions. So a hundred million transactions per day, which is more than I think the top-
Raj Gokal
>> Every other Layer 1 and Layer 2 combined, on most days.
Anatoly Yakovenko
>> Yeah.
John Furrier
>> So a lot of action.
Raj Gokal
>> So most of the transactions in all of crypto are happening on Solana.
John Furrier
>> You guys had certain use cases that adopted, like gaming, was one. Communities.
Anatoly Yakovenko
>> Yeah, there's NFTs, trading, so every kind of market that you can think of creating people can create. And permissionless-ly. We had 50,000 tokens created per day, at one point. So we always joke that OpenAI is our biggest competitor in tokens being created.
John Furrier
>> There's other tokens. You're beating me to my NVIDIA question. I was trying to think of a way to kind of scope the value of Solana. I was talking to a friend, I was just at the NVIDIA conference. NVIDIA is kind of like a darling right now, $5 trillion market cap, but they were misunderstood for 20 years. I mean, you go look at the early gaming stuff they did, now their Omniverse simulation technology really came out of that core competency that was an extension of, essentially video games. Guys from Hollywood came up and did some things, and they stood around, and it was not obvious to many. But obviously, they called it right. But what they're doing for AI at the infrastructure, and then enablement on top of it, is unbelievable. But it's a different playbook, to your point about how things are changing, the fax machine comment. So I think you guys are the NVIDIA of crypto infrastructure because you're engineering, same kind of discipline. And you're enabling, accelerating change. So what's your take on that? What's your reaction to that? I mean, it's not apples to apples, but from an impact standpoint.
Anatoly Yakovenko
>> I think what's interesting is thinking about how these two things are converging. So, AI is reducing the cost of intelligence, and for markets to function you need intelligent participants. So as the cost to process and create intelligence goes down, you can actually create many more markets for many more things than you could possibly before. And Solana is all about creating markets, and trading them globally everywhere at once.
John Furrier
>> What's your reaction to the NVIDIA ?
Raj Gokal
>> Yeah, I think the misunderstood label is definitely relatable. Solana has been branded as the NFT chain, and the meme coin chain, and the deep in chain. And the reality is, the use cases keep coming and forming organically, but they all benefit from a relentless focus on performance over years and years.
John Furrier
>> I mean, NVIDIA was pigeonholed as the gaming card, but what they were really doing was mathematics and computer science, matrix multiplication on steroids.
Raj Gokal
>> Right.
John Furrier
>> And they keep on adding more things, and as they get better technically, their virtuous cycle increases. I mean, long-term thinking is happening. Is there a power law that you guys see, or measure, relative to your thinking around that same kind of dynamic as you get better technically?
Anatoly Yakovenko
>> Yeah, we call it IBRL, Increase Bandwidth Reduce Latency. So we got to work on both. So both scaling up the technology to process more things in parallel, that's a similar problem to NVIDIA. And then, cutting latency. And there's folks that are literally laying fiber optic cable to optimize the distance between validators, and stuff like that.
John Furrier
>> So you're going to ride that wave, keep that tech.
Anatoly Yakovenko
>> Absolutely.
John Furrier
>> All right, so if I wanted to jump on and do some Solana app, theCUBE coin, or build some cool community thing. How is the ease of use going? Because you guys also get good marks on ease of use, in terms of deploying.
Anatoly Yakovenko
>> I think, in the industry, people consider Phantom as one of the best wallets for all of blockchains, and that's Solana native wallet. I think Jupiter is probably one of the best marketplaces in the world for crypto. So you will likely get better pricing in Jupiter than you get on centralized exchanges, but you have full decentralized markets powering that.
John Furrier
>> Raj, what's the innovation strategy on your end? You got to run the trains at the company, and as the co-founder, you got to keep the eye on the prize, and the vision. The North Star, people call it. But what's your day-to-day like? What are you optimizing for, what's the focus?
Raj Gokal
>> Yeah, I think the biggest constant truths for us are relentlessly improving performance of the network, and supporting the engineering teams that build the validator clients to fight the speed of light, and fight physics, to keep delivering performance in these financial systems. And then, supporting the builders with grants and tooling, to just create new business models, get businesses off the ground that benefit from using block space.
John Furrier
>> So let's talk about the internet capital markets concept. If you believe what we were just talking about, that there's going to be a rebuild. I think that's not a hard bridge to cross. I like the search engine analogy, that seemed impossible, and that opened up. What happens next? What is the future of internet capital markets? You got stablecoins, that was a real win. You got digital building apps, digital infrastructure. Physical world, we're starting to see humans and machines come together. Having a decentralized infrastructure at scale kind of makes you think, "Okay, what could be possible?" So I guess the question is, what does the internet capital markets look like from a vision standpoint?
Anatoly Yakovenko
>> I mean, I think stablecoins just kind of is the aha moment for a lot of people that deal with finance. As soon as they start using stablecoins, and they compare it to traditional rails, they just immediately realize the benefit. And then the next question they ask, "Why can't I do this with stocks? Why can't I do this with commodities, or ETFs, or Treasuries?" And you can, right?
John Furrier
>> Yeah.
Anatoly Yakovenko
>> There is no real difference for the underlying code or technology stack, whether you're moving digital dollars around the world, or Tesla shares. So as soon as that moment happens, you will start seeing adoption, and kind of this technology proliferate everywhere.
John Furrier
>> It's funny, I hate to come back to NVIDIA, but their schtick is, "Token everything." Now that's a data point of view, data-centric. Real world assets on chain, that's real. I mean, you're basically saying, if you tokenize everything and with crypto infrastructure-
Anatoly Yakovenko
>> It's funny that it's the same term. Yeah, we've been saying tokenize everything for the last six years, at least.
John Furrier
>> Okay, so what does the economics look like, from a tokenization? How should people think? Knowing what you know, and knowing what's going to kind of happen, as you guys think about the scenarios?
Anatoly Yakovenko
>> It reduces costs and creates transparency, and reduces risk. So ultimately, consumers benefit from lower risk and better pricing. And all the businesses benefit from lower fees and less risk. So you have things like lending protocols that are mathematically, formally verified, to always be in balance and never allow default. And that's a huge innovation for finance. You never have to trust a third party like Silicon Valley Bank. Do they have enough money? Do they have enough assets in here to cover all the depositors? You can do this in software, validated every 200 milliseconds. So not a daily settlement and verification, but literally, every 200 milliseconds, you know exactly how much money's at risk.
John Furrier
>> And so that kind of clocking out is a mechanism for just tracking distributed transactions, versus centralizing them. Right?
Anatoly Yakovenko
>> Exactly. So a lot of what folks deal in finance is just ledger reconciliation. You have Business A and Business B that have to figure out, "Are our ledgers synchronized? What if there's mistakes or bugs, and you have to go back?" And this is where these two day settlement things come in. But if you look-
John Furrier
>> And latency's critically important.
Anatoly Yakovenko
>> And anytime you have these delays, this is the sand in gears of finance, it creates costs and risks, and makes everything more expensive. So if you have a giant, shared, immutable ledger that's as cheap as physics allow, all that stuff goes away, and you have cheaper, faster finance.
John Furrier
>> As quantum, you made me think about a quantum question. Does quantum computing change the clock equation in your mind, or no?
Anatoly Yakovenko
>> Quantum is one of the most exciting technologies, I think, that's up and coming. I would be thrilled if it's possible within five years, for it to work.
John Furrier
>> Have an atomic clock that's quantum.
Anatoly Yakovenko
>> Yeah. It would be transformative for the entire world, for like-
John Furrier
>> I know why I went there-...
Anatoly Yakovenko
>> yeah....
John Furrier
>> but it was weird. But I mean, that's where the advancements are coming. That's why I like the, AI and crypto are bounded by power and energy. That's a similar trend, too. So the efficiency equation has to work. With that in mind, how do you see Solana and Wall Street converging? What do you see as some forecast of some impact here? Obviously, if there's going to be efficiencies and transparency, and distributed intelligence, it's going to make things more straightforward. Right? Where's the convergence? What do you see? What's the impact?
Anatoly Yakovenko
>> I mean, I think stablecoins are definitely going to be the lead there. Before the Genius Act passed, there's what, a quarter trillion dollars worth of stablecoins minted just from demand on the retail side in crypto, globally. Now, with the Genius Act, people are estimating a trillion to 10 trillion worth of stables, and that's an astounding number. So if there's 10 trillion worth of digital assets out there, finance is going to reshape itself around it.
John Furrier
>> Yeah. Raj, talk about the revenue generating opportunities that you're seeing for Solana, and others that are in the ecosystem.
Raj Gokal
>> So Solana's revenue is pretty consistently the highest of any Layer 1 or Layer 2 network. And the cool thing about Solana's fee mechanism is that you don't have to pay global fees for something like a stablecoin transfer, if there's a lot of competition for accessing state for something like trading. So at times this year, we've seen things like $40 billion of trading volume in one day, which is the highest number for any blockchain in history. But at the same time that there were spikes in priority fees, stablecoin transfers were still really cheap, like sub one cent. So what we tried to create is a system where different businesses can thrive in the same state machine, and generate lots of revenue, but when one gets really popular it doesn't affect the others.
John Furrier
>> As co-founders, you get the adoption, you make it easy to get on board, people can make money, you make money. Your monetization is derivative of the value you create, which is scalable.
Anatoly Yakovenko
>> Absolutely.
John Furrier
>> And that is a huge dynamic. So okay, given that you guys have a nice profit equation for you guys and others, I'll come back to my entrepreneurship question. I've been seeing this observation, I want to get your both reads, because you're both co-founders. I haven't founded too many companies myself, but you know how hard it is. There's an entrepreneurial zeal right now, and it's not hype. I mean, it's real. In the early days of crypto, too, it was like hardcore engineering, all the alphas were going in. Because it's a hard problem to solve, so hard problems attract smart people. Now that this economics, visibility into unit economics on opportunity recognition, you're starting to see product management thinking, system thinking and product management thinking, to finance. So again, I'm seeing people actually think like tech entrepreneurs, and they're just building a financial product. And now you've got vibe coding, and all this easy code assistance. So you're seeing more code acceleration, more entrepreneurs are coming into this space that aren't your prototypical, typical crypto entrepreneur. They're business people. They see an opportunity to be efficient. What's your take on this thinking? What does it take? Is it the same, am I getting this right? Am I on point here, or is it... Because I see entrepreneurship coming in, but it looks like someone building a tech startup. But they're not, they're just putting two financial products together and using some of the technology you guys are enabling. So given what you know at Solana, what are you seeing from a structural formation?
Anatoly Yakovenko
>> Yeah, I think this has been the biggest change over the last two years that I've observed, is we went from not having enough infrastructure, and fees being too expensive, and a lot of experiments being run. To having fees be viable to scale a business globally. And the kind of businesses that you can build on top of crypto are new fintechs. So instead of interfacing with banks, or these kind of old-school slow settlement systems, you can now build something that you have guaranteed sub one penny fees for financial transactions, and instant settlement everywhere in the world. So you can really rethink of your fintech startup as a totally different thing.
John Furrier
>> So you can basically take territory, and create a durable company.
Anatoly Yakovenko
>> Absolutely. Yeah. And I think with Congress passing the Genius Act, I think things are only going to accelerate.
John Furrier
>> What's the significance of that, for people that don't know what it is? Because the Clarity Act, and the Genius Act and Clarity Act have really opened up. Guys, share us your opinions, you guys are close to it. What's the value of that? Why is that so important?
Anatoly Yakovenko
>> I mean, for America, it's critical. Because we need people to buy Treasuries, and the way that the Genius Act is written is a stablecoin as backed by US Treasuries. And there's enormous demand for digital dollars, globally. So I think you're going to see global adoption for dollar rails to go from just kind of back end merchant to merchant, to retail. Like everywhere, everyone in the world is going to pay with dollars.
John Furrier
>> Talk about your success as it relates to the sovereignty of the US, and just global sovereignty, because your success was built mostly outside the United States. And in the States, so it wasn't just a US thing. And if the world is flat, and it is, by the book. You talk about a global economy. So if the US dollar, and this is just a weird idea, but if the stablecoins back to the US dollar, that means the US dollar could be everywhere. So there is no perimeter, if you think of it that way. What's your reaction to that? Because it's not just, the US has good policies, that's going to help the financial system. But this banking being done, and you guys have impacted that.
Anatoly Yakovenko
>> So both of us are in the US. This is my home. Solana Labs was created in the United States, and we've been building it for the last eight years. And US is the best financial system in the world. It was built before the internet, so it's a little crufty, and driven by lawyers and people, but it is the best one. And what crypto allows is interfacing between the US financial system with the internet, in a reliable, decentralized way. So what we're seeing, and the adoption we're seeing outside of the US, is really the adoption of US financial systems by everyone in the world, through this interface called crypto.
John Furrier
>> But prior, you guys had traction all over the world. Is there areas that you like, that you saw that led during that time?
Anatoly Yakovenko
>> I mean, it kind of goes all over. From Southeast Asia, to Hong Kong, to United States. So.
John Furrier
>> You guys have really have done a great thing, and so grateful for you guys coming on theCUBE. I guess my final question, what's it going to be like to ring that closing bell, after all the work you guys done, and just getting started?
Raj Gokal
>> I think the best part is that we've got a ton of ecosystem founders who've built massive businesses, some of them over a billion dollars in market cap, that are built on Solana. So this is really their victory, as well, and it's awesome that they get to share that experience.
John Furrier
>> Your thoughts?
Anatoly Yakovenko
>> Yeah, same. I mean, it is just a protocol. If you really look under the hood, it is a protocol like email, and it's mind-blowing that, on Wall Street there's an asset that represents running a validator that's staked, and earning rewards.
John Furrier
>> Well, we're here at the NYSE, and the NYSE Wired community. Guys, thanks so much for coming in. I know you got a busy day ahead of you. Congratulations on the listing. I'll be cheering and taking pictures from up on the balcony. Thanks for coming on.
Raj Gokal
>> Thanks for having us.
John Furrier
>> Appreciate it. I'm John Furrier, host of theCUBE, here for the Crypto Trailblazers, part of the NYSE Wired programming community. Thanks for watching.>> Clear.
John Furrier