theCUBE + NYSE Wired: Crypto Trailblazers | Dave Ripley, Kraken

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Dave Ripley

Co-CEO

Kraken

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Dave Ripley, Kraken

Dave Ripley

Co-CEO Kraken

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>> Hello, welcome back to theCUBE here in Palo Alto and our studio is theCUBE. I'm John Furrier, your host of theCUBE. This is the Crypto Trailblazer series digital event. We're bringing all the experts, talking about the future of blockchain, crypto money, business technology. And we've got a great guest here Dave Ripley, CEO of Kraken, part of the NYSE Wired CUBE's open network rebuilding. Dave, thanks for coming in. Appreciate you taking the time.

Dave Ripley

>> Yeah, great to be here.

>> So news is out there. You guys are doing great. Looking at the public offering, you're starting to see the mainstream of money on the chain, crypto trading. You guys have been super successful. We've had many conversations around how this market's maturing, this liquidity, all kinds of new activities. Give us an update on what's going on with Kraken right now, and what's new with you guys? How's business?

Dave Ripley

>> Yeah. Well, it's fantastic and particularly if you contrast it to where we were a year and a half ago or a year ago, or even less than that, six months ago, let's face it, back in November, we had change of administration. The U.S. policy environment was frankly couldn't get any worse in the previous year and now there's just massive tailwinds on the U.S. policy front, and that's frankly had a lot of positive impacts on the broader market, Kraken as well. So yeah, we went from talking about litigations with the government to talking about strategic Bitcoin reserves.

>> Someone said, "Hey, there's a headwind on this." More like a hurricane. Let's talk about the transition from, I won't say insiders, but people who were obviously pro crypto trading. Obviously the system's developing, evolving very fast, but now you have massive interest. There's enthusiasm across the entire market, not just tech insiders. You starting to see awareness around self-custody, centralized hosting, ETFs. You're seeing the money side of it where trading, store of value is now kind of crossing over. Talk about that transition right now. And obviously you guys have been very successful eyeing the markets as well. So what's that transition look like? Where are we? Scope that transition.

Dave Ripley

>> Yeah. Well, you hit on a few good points as far as new technologies, products and services that have come to market. You mentioned the ETF, you mentioned about non-custodial. We can tackle those two. They in some ways go in different directions, but I think they're both meaningful for the ecosystem. So on the ETFs, for example, a regulated product, a product that's accessible, familiar for many that are in TradFi, if you will, whether it's individuals or even hedge funds. The advent of the ETF actually drove a significant new adoption of institutions actually. Previously we had HFTs and VCs and hedge funds somewhat in the space just trading on native crypto markets with the ETF that brought in the RIAs. And of course they were able to offer crypto for the first time really to their clients. And so I think that's a fantastic part of the ecosystem to bring more people into crypto. But then if you flip to the other side with non-custodial and decentralized exchanges, that's really exciting, frankly more exciting. And we've seen over time that the share of total trading volume in the crypto industry has moved from at one point 0% on decentralized exchanges to now we're in the 15-ish, 15% of total, pushing 20% of total, which is a fantastic development honestly.

>> What's the readiness on the market right now for you guys? As you look at this wave? Obviously there's a surge coming in, you mentioned some of those points around the dynamics there, as you look at going global, because what's happening, and at least we see it, how are you guys getting ready? Obviously not IPO readiness, but obviously businesses booming, you guys are doing great. I mean, I'm sure the valuations will be significant given some of the numbers you have, and it'll be, I think, a surprise to the market. How are you guys getting ready at Kraken as a company? What's the thought process? What's the vision?

Dave Ripley

>> Yeah. Well, here again, there's been a shift in our business that has somewhat tied to the market but also tied internally. So over the past year and a half, we've actually spent a lot of time fortifying our existing geographies. U.S., Canada, U.K. Europe and Australia, those are our core geographic markets, bringing more product to those geographies, which required a lot of work on the licensure side and a number of different things. And we've also localizing the product, ramping marketing. And we've achieved a lot of those goals. So now we get to turn our attention more towards expansion. So new geographies. There's a lot of exciting markets out there where crypto's really interesting LATAM, places in Middle East, Asia Pacific, and we're looking into all of those now.

>> Yeah, there's so many great examples of how it's enabling change, whether it's social freedom to money-making and everything in between. As you guys get ready and look at that business and expansion, certainly the go-to-market looks great, what are some of the business model adjustments? Are you going to double down on the existing stuff? What's the business model strategy? Any different thinking around that? Or as you look at the shift, do you see something you're going to jump into that might be a bigger way? What's the thinking around the business model?

Dave Ripley

>> Well, again, I'll probably point out two things that almost might feel like they're in somewhat different directions, but we both think they're meaningful. So one is potentially more of a convergence of crypto and traditional financial services. And so we see a lot of the companies in the traditional financial services space coming into crypto. And we think that the two are going to merge. So you see on the institutional side, of course, BlackRock came in earlier in the year with the ETF, CME and ICE have been in for a while and you name it. Of course the FinTechs as well, Robinhood, Revolut and so forth. So you see all this. But then when we look towards our customers there is this dynamic where, hey, they're interested in trading and investing and that might apply to both crypto assets and beyond. And so I think there's this convergence and Kraken's going to be a part of that, whether it's tokenized equities or something in that direction, tokenized other assets, were starting to move in that direction. And then on the flip side, again, it's this brave new on-chain world where we talk about DeFi, decentralized exchanges, and we're really leaning hard into .

>> What I love about the culture is if you look at where it's at, the digital culture, most tech have been online. I was joking with an entrepreneur this week here in the program, it's like, "Hey, two guys in the garage." And I'm like, "Well, it's more like two guys on Telegram." So you have that kind of entrepreneurial action going on that's enabled from this new growth. But also you've got a massive trading market whether it's old-school day traders to young guns on Discord, slinging all kinds of trades is real appetite for interactions and engagement with the platform. Is there a mindset or opportunity that you see for folks out there watching white spaces for entrepreneurs to come in and innovate or trading opportunities? There's tons of people that the GameStop generation, I call them, they want to come in. They're trying trade anyway.

Dave Ripley

>> Yeah, it's a great point. I think it's both. I'll hit the entrepreneurial one first because this is really the first time that we've seen in decades, hundreds of years, where there's been this level of entrepreneurial ability in the financial services space. And so we see particularly in the on-chain crypto world, a number of different companies that are a couple people on Telegram or Signal or whatever it is, and they're launching apps that get adoption into the hundreds of thousands of users and even revenue. We encountered one new app wallet that was ramped up to eight figures in revenue. And that's just with a couple people. And I think that trend is more true now in financial services effort. It's actually a trend that is kind of across technology with AI and all these types of things as well.

>> Democracy is the issue, but yeah, it means opportunities. So your key opportunities big time.

Dave Ripley

>> Yeah, absolutely.

>> On the trading side, any trends there that you're watching closely or you love that you want to highlight?

Dave Ripley

>> Yeah, that's a good question on the trading side. Look, I mean, I think in crypto, one of the things we've seen is just a proliferation of the number of assets and cryptocurrencies out there. And that has been true historically, and there's been ebbs and flows. And we've kind of seen that ramp up over the past, I don't know, six months plus meme coins and all of those opportunities out there. So I think the general trend is going to be more, not less.

>> Yeah, it's interesting, I love, and the conversations are so multi-threaded here as many things to talk about. I mean, transparency alone on what returns look like with on-chain is phenomenal. There's not a lot of tough stuff masking ups and downs and kind of growth rates. And that brings up the product technology conversation. You guys have a platform, you have a wallet, you guys launch, there's more self custody, and you got the ETF system, the market's on fire, you got the business models cranking. What's going on on some of the product technology? What are some of the things that you guys are doing that you see that is going to be that lever, that driver to meet that growth?

Dave Ripley

>> Yeah, well thanks for using the term platform to refer to Kraken because that's how we think about it. We have a platform that serves a set of products to a number of different customer segments. We put it in three buckets. Individual consumers, individual advanced traders, individual professional traders, and then institutions. There's of course a spectrum of those groups. But yeah, we really see how do we take a set of products, whether it's trading, investing products, hedging, derivatives, staking some of this new on-chain stuff and find a way to meet each of those customer segments where they are and make it accessible, make it how they want to interact with these various different products, and that's the power of our platform is the ability to do that.

>> I mean, I love platforms. I'm a platform guy myself, but I think when you look at what the market you guys are doing, there's not a consumer only, everything's on large scale. And so you have both platform, portfolio platform and tools and delivers the service that users use. So the idea of organic and inorganic growth come to the table. And the old school was, "Hey, I just want to acquire users." That's I would say in myopic view, if you say, "Hey, of course you might move on strategy." But some consumer visits don't think about the platform growth. What do you need to do? Acquire technology, do you build it? How do you rationalize that? Because I think you're starting to see the confluence of two, they're not mutually exclusive, you can do both. How do you think about that as seed of Kraken as the platform will be the disruptive enabler? It'll be a growth engine. You still got to have growth there, organic and inorganic, whether it's M&A or internal. And then the user side. Why wouldn't you want to buy users and grow users? There's an interplay flywheel there. What's your perspective? What's your reaction to that?

Dave Ripley

>> Well, it's a great point. I mean, this is not to say that look, everything starts and ends with the customer. I mean, that's the whole objective of this whole thing. And it's really, hey, I mean, we talk about platform, it's a means to an end and the end is, hey, how do we serve more customers better more quickly, offer them more products of what they want and better user experience, easier, safer, all of those types of things? So that's really the objective of thinking about it that way.

>> And obviously we were talking before we came on camera about the wallet, and you guys have a wallet that's certainly going to be iterating on. Those are product discussions. I mean, you want to have a strong technology. Talk about how that's translating into the customer benefit and how your customers are dealing with it. What's the customer scenario? What's the experience? How do you envision that steady state as Kraken goes to that next level? What's that look like from today and where does it go to tomorrow?

Dave Ripley

>> Yeah, so I think a couple of different things. So one is look, the foundation of Kraken, how the company was founded, was on this foundation of security, market-leading service. Also, in order to operate in the markets that we operate and provide a great experience we need to support the domestic fiat currency, which also means regulatory compliance. And so that's the foundation in order to offer that best-in-class experience for our customers. And so we lead with that. And then the other thing that I'll mention is that where we Kraken initially came out into the crypto space was focusing on individual advanced traders. And so we were one of the first to go multi-token, one of the first to offer margin, one of the first to move into derivatives. And so we've been really strong with that group. And so I think as we move into, for example, the new on-chain world will be looking to make sure that we serve that population as well.

>> Yeah, got it. Great business model. Love the success, love the environment for you guys too, obviously. Let's hope it goes there.

Dave Ripley

>> .

>> You start to see obviously the political moves where they recognize in the store of value in crypto and obviously the engineers are working on the technology. Share some stats on Kraken. Can you share some stats that are relevant for the audience to think about why you're winning some of the metrics that you're looking at? Give us some inside the numbers here.

Dave Ripley

>> Yeah, I'll maybe just call out a couple. So one, we actually just released our headline financials for the full year 2024, and we did that frankly on a path to being more transparent about financials and being in the public markets-

>> some good money....

Dave Ripley

>> and so forth. And so we're committing to do that on a go-forward basis, which is something we were one of the first to offer proof of reserves and so look, we're going to be moving even more so in this direction. The couple of numbers to highlight, one would be 1.5 billion in revenue. So that just gives a little bit of a frame of the size and scale of Kraken. We're off across a number of major markets offering a lot of product that all stack up to that 1.5 billion in total revenue. The other thing to note is ARPU, so average revenue per user, around $2,000 per year annually. And that is one of the highest level ARPUs versus all of our peers. Much of that is tied to we're really strong with those individuals that have a deeper relationship with Kraken, more the individual advanced traders that are more active. And so that's one of the things that differentiates Kraken, is that we have high quality customers, if you will, that seek to come back high retention. And that's just a testament to where we've invested.

>> And that also speaks to the market opportunity with just the evolution, more serious, I won't say more serious, bigger things are going on in the mechanisms of finance and democratizing there. You want to put a plug in for the company last minute we have here? What you looking to do? Obviously you go to market expanding. Put a plug in.

Dave Ripley

>> Yeah, sure. Look, I mean, I think as I mentioned before, Kraken is one of the top places to go for crypto in the space. I mean, we've built the company on a foundation of security compliance, top level service, incredible user experience. And now looking ahead, we're going to be offering some of the most innovative and new products in the marketplace.

>> Yeah, security is huge. Just quick follow up on that, what's the security posture? What's your North Star? What should people know about security? Everyone's got fear, "I lost my..." I mean, that's out there, but it's also legit.

Dave Ripley

>> It's incredibly legit. I mean, our founders, Jesse and Thanh referred to Kraken often as a security company with an exchange built on top. It's everything. I mean, it's absolutely critical. It has been critical in the crypto space and it'll continue to be. We invest massively in this area. We have hundreds of people focused on just in the security function, but then when you look more broadly, there's a security mindset that's deep in our values across all parts of the company, the engineering team, also the client support team. And so I think it's across the board and we really emphasize it.

>> That brings up when we were talking about platforms earlier, and it's like most people, I won't say dogmatic about level layer two, and when you see in the tech waves always been full stack and then multi-stack people integrate together. There's a lot of integration going on between the old school tech companies. Now you have, it's not this or that. Just riff on that real quick. I mean, layer two obviously benefits, but layer three you can do combinations of things. People have done. So it's not about they have this. And people can slice the salami any way they want, but at the end of the day there's a platform here.

Dave Ripley

>> Yeah. Look, I mean, I would say one thing about Kraken, we're certainly not maximalists on this dimension. I mean, part of the fantastic part about cryptocurrency and blockchain innovation is that you do have this open permissionless platform where anyone can build, anyone can use it, but also anyone can build on it. And I think that's one of the powers of it. And so I mean, we do embrace all of these different aspects. The multiple layer ones out there, we want to be a part of those, give people access to them. We do have a layer two now, Ink, which is off to fantastic start. So look, I think all of those are fantastic. And that's really the essence.

>> It's an engineer's system, at the end of the day it's a platform.

Dave Ripley

>> Yep.

>> Well, final question before we break is obviously the trailblazers is the topic and trailblazers are plowing the fields. Whenever you're the first the things are blowing in your face, you're spitting out glass, eating nails. What have you learned and what do you see? Because it was a market, it wasn't for the faint of heart, now it's gotten mainstream, lots on the tables, lot of risk management. I mean, you're talking about big money here. We're talking about real dollars, real commerce, real finance, real everything going on. What have you learned as you had the experience with the success? And then as you look forward, is there going to be a calm state or is it going to continue to be just running hard and-

Dave Ripley

>> Yeah. Well look, I mean as far as the trailblazers and the history of crypto and the dirt blowing in our face, for sure. Look, I've been through now three bear markets in crypto and after the first two, I came into the third and I was like, "You know what? We got this now. This is going to be simple. No big deal." And then we went through what we did over the past two and three years and I was like, "Okay, this was effing challenging." And each market dynamic, each part of the cycle brings its own set of challenges. And so I think frankly, we learn a lot and we learn something new each time. Going forward, look, I mean, I think we're really in optimistic place, certainly for the industry and even more so for Kraken.

>> Awesome. Well, I mean, are we at the beach yet? And certainly the sun's coming out. Thanks for coming on theCUBE. Really appreciate you taking the time to come on theCUBE here in Palo Alto.

Dave Ripley

>> Absolutely.

>> Appreciate it. Okay. We got theCUBE Trailblazers Crypto series with the NYSE Wired. I'm John Furrier, host of theCUBE. Thanks for watching.

Dave Ripley, Kraken

search

>> Hello, welcome back to theCUBE here in Palo Alto and our studio is theCUBE. I'm John Furrier, your host of theCUBE. This is the Crypto Trailblazer series digital event. We're bringing all the experts, talking about the future of blockchain, crypto money, business technology. And we've got a great guest here Dave Ripley, CEO of Kraken, part of the NYSE Wired CUBE's open network rebuilding. Dave, thanks for coming in. Appreciate you taking the time.

Dave Ripley

>> Yeah, great to be here.

>> So news is out there. You guys are doing great. Looking at the public offering, you're starting to see the mainstream of money on the chain, crypto trading. You guys have been super successful. We've had many conversations around how this market's maturing, this liquidity, all kinds of new activities. Give us an update on what's going on with Kraken right now, and what's new with you guys? How's business?

Dave Ripley

>> Yeah. Well, it's fantastic and particularly if you contrast it to where we were a year and a half ago or a year ago, or even less than that, six months ago, let's face it, back in November, we had change of administration. The U.S. policy environment was frankly couldn't get any worse in the previous year and now there's just massive tailwinds on the U.S. policy front, and that's frankly had a lot of positive impacts on the broader market, Kraken as well. So yeah, we went from talking about litigations with the government to talking about strategic Bitcoin reserves.

>> Someone said, "Hey, there's a headwind on this." More like a hurricane. Let's talk about the transition from, I won't say insiders, but people who were obviously pro crypto trading. Obviously the system's developing, evolving very fast, but now you have massive interest. There's enthusiasm across the entire market, not just tech insiders. You starting to see awareness around self-custody, centralized hosting, ETFs. You're seeing the money side of it where trading, store of value is now kind of crossing over. Talk about that transition right now. And obviously you guys have been very successful eyeing the markets as well. So what's that transition look like? Where are we? Scope that transition.

Dave Ripley

>> Yeah. Well, you hit on a few good points as far as new technologies, products and services that have come to market. You mentioned the ETF, you mentioned about non-custodial. We can tackle those two. They in some ways go in different directions, but I think they're both meaningful for the ecosystem. So on the ETFs, for example, a regulated product, a product that's accessible, familiar for many that are in TradFi, if you will, whether it's individuals or even hedge funds. The advent of the ETF actually drove a significant new adoption of institutions actually. Previously we had HFTs and VCs and hedge funds somewhat in the space just trading on native crypto markets with the ETF that brought in the RIAs. And of course they were able to offer crypto for the first time really to their clients. And so I think that's a fantastic part of the ecosystem to bring more people into crypto. But then if you flip to the other side with non-custodial and decentralized exchanges, that's really exciting, frankly more exciting. And we've seen over time that the share of total trading volume in the crypto industry has moved from at one point 0% on decentralized exchanges to now we're in the 15-ish, 15% of total, pushing 20% of total, which is a fantastic development honestly.

>> What's the readiness on the market right now for you guys? As you look at this wave? Obviously there's a surge coming in, you mentioned some of those points around the dynamics there, as you look at going global, because what's happening, and at least we see it, how are you guys getting ready? Obviously not IPO readiness, but obviously businesses booming, you guys are doing great. I mean, I'm sure the valuations will be significant given some of the numbers you have, and it'll be, I think, a surprise to the market. How are you guys getting ready at Kraken as a company? What's the thought process? What's the vision?

Dave Ripley

>> Yeah. Well, here again, there's been a shift in our business that has somewhat tied to the market but also tied internally. So over the past year and a half, we've actually spent a lot of time fortifying our existing geographies. U.S., Canada, U.K. Europe and Australia, those are our core geographic markets, bringing more product to those geographies, which required a lot of work on the licensure side and a number of different things. And we've also localizing the product, ramping marketing. And we've achieved a lot of those goals. So now we get to turn our attention more towards expansion. So new geographies. There's a lot of exciting markets out there where crypto's really interesting LATAM, places in Middle East, Asia Pacific, and we're looking into all of those now.

>> Yeah, there's so many great examples of how it's enabling change, whether it's social freedom to money-making and everything in between. As you guys get ready and look at that business and expansion, certainly the go-to-market looks great, what are some of the business model adjustments? Are you going to double down on the existing stuff? What's the business model strategy? Any different thinking around that? Or as you look at the shift, do you see something you're going to jump into that might be a bigger way? What's the thinking around the business model?

Dave Ripley

>> Well, again, I'll probably point out two things that almost might feel like they're in somewhat different directions, but we both think they're meaningful. So one is potentially more of a convergence of crypto and traditional financial services. And so we see a lot of the companies in the traditional financial services space coming into crypto. And we think that the two are going to merge. So you see on the institutional side, of course, BlackRock came in earlier in the year with the ETF, CME and ICE have been in for a while and you name it. Of course the FinTechs as well, Robinhood, Revolut and so forth. So you see all this. But then when we look towards our customers there is this dynamic where, hey, they're interested in trading and investing and that might apply to both crypto assets and beyond. And so I think there's this convergence and Kraken's going to be a part of that, whether it's tokenized equities or something in that direction, tokenized other assets, were starting to move in that direction. And then on the flip side, again, it's this brave new on-chain world where we talk about DeFi, decentralized exchanges, and we're really leaning hard into .

>> What I love about the culture is if you look at where it's at, the digital culture, most tech have been online. I was joking with an entrepreneur this week here in the program, it's like, "Hey, two guys in the garage." And I'm like, "Well, it's more like two guys on Telegram." So you have that kind of entrepreneurial action going on that's enabled from this new growth. But also you've got a massive trading market whether it's old-school day traders to young guns on Discord, slinging all kinds of trades is real appetite for interactions and engagement with the platform. Is there a mindset or opportunity that you see for folks out there watching white spaces for entrepreneurs to come in and innovate or trading opportunities? There's tons of people that the GameStop generation, I call them, they want to come in. They're trying trade anyway.

Dave Ripley

>> Yeah, it's a great point. I think it's both. I'll hit the entrepreneurial one first because this is really the first time that we've seen in decades, hundreds of years, where there's been this level of entrepreneurial ability in the financial services space. And so we see particularly in the on-chain crypto world, a number of different companies that are a couple people on Telegram or Signal or whatever it is, and they're launching apps that get adoption into the hundreds of thousands of users and even revenue. We encountered one new app wallet that was ramped up to eight figures in revenue. And that's just with a couple people. And I think that trend is more true now in financial services effort. It's actually a trend that is kind of across technology with AI and all these types of things as well.

>> Democracy is the issue, but yeah, it means opportunities. So your key opportunities big time.

Dave Ripley

>> Yeah, absolutely.

>> On the trading side, any trends there that you're watching closely or you love that you want to highlight?

Dave Ripley

>> Yeah, that's a good question on the trading side. Look, I mean, I think in crypto, one of the things we've seen is just a proliferation of the number of assets and cryptocurrencies out there. And that has been true historically, and there's been ebbs and flows. And we've kind of seen that ramp up over the past, I don't know, six months plus meme coins and all of those opportunities out there. So I think the general trend is going to be more, not less.

>> Yeah, it's interesting, I love, and the conversations are so multi-threaded here as many things to talk about. I mean, transparency alone on what returns look like with on-chain is phenomenal. There's not a lot of tough stuff masking ups and downs and kind of growth rates. And that brings up the product technology conversation. You guys have a platform, you have a wallet, you guys launch, there's more self custody, and you got the ETF system, the market's on fire, you got the business models cranking. What's going on on some of the product technology? What are some of the things that you guys are doing that you see that is going to be that lever, that driver to meet that growth?

Dave Ripley

>> Yeah, well thanks for using the term platform to refer to Kraken because that's how we think about it. We have a platform that serves a set of products to a number of different customer segments. We put it in three buckets. Individual consumers, individual advanced traders, individual professional traders, and then institutions. There's of course a spectrum of those groups. But yeah, we really see how do we take a set of products, whether it's trading, investing products, hedging, derivatives, staking some of this new on-chain stuff and find a way to meet each of those customer segments where they are and make it accessible, make it how they want to interact with these various different products, and that's the power of our platform is the ability to do that.

>> I mean, I love platforms. I'm a platform guy myself, but I think when you look at what the market you guys are doing, there's not a consumer only, everything's on large scale. And so you have both platform, portfolio platform and tools and delivers the service that users use. So the idea of organic and inorganic growth come to the table. And the old school was, "Hey, I just want to acquire users." That's I would say in myopic view, if you say, "Hey, of course you might move on strategy." But some consumer visits don't think about the platform growth. What do you need to do? Acquire technology, do you build it? How do you rationalize that? Because I think you're starting to see the confluence of two, they're not mutually exclusive, you can do both. How do you think about that as seed of Kraken as the platform will be the disruptive enabler? It'll be a growth engine. You still got to have growth there, organic and inorganic, whether it's M&A or internal. And then the user side. Why wouldn't you want to buy users and grow users? There's an interplay flywheel there. What's your perspective? What's your reaction to that?

Dave Ripley

>> Well, it's a great point. I mean, this is not to say that look, everything starts and ends with the customer. I mean, that's the whole objective of this whole thing. And it's really, hey, I mean, we talk about platform, it's a means to an end and the end is, hey, how do we serve more customers better more quickly, offer them more products of what they want and better user experience, easier, safer, all of those types of things? So that's really the objective of thinking about it that way.

>> And obviously we were talking before we came on camera about the wallet, and you guys have a wallet that's certainly going to be iterating on. Those are product discussions. I mean, you want to have a strong technology. Talk about how that's translating into the customer benefit and how your customers are dealing with it. What's the customer scenario? What's the experience? How do you envision that steady state as Kraken goes to that next level? What's that look like from today and where does it go to tomorrow?

Dave Ripley

>> Yeah, so I think a couple of different things. So one is look, the foundation of Kraken, how the company was founded, was on this foundation of security, market-leading service. Also, in order to operate in the markets that we operate and provide a great experience we need to support the domestic fiat currency, which also means regulatory compliance. And so that's the foundation in order to offer that best-in-class experience for our customers. And so we lead with that. And then the other thing that I'll mention is that where we Kraken initially came out into the crypto space was focusing on individual advanced traders. And so we were one of the first to go multi-token, one of the first to offer margin, one of the first to move into derivatives. And so we've been really strong with that group. And so I think as we move into, for example, the new on-chain world will be looking to make sure that we serve that population as well.

>> Yeah, got it. Great business model. Love the success, love the environment for you guys too, obviously. Let's hope it goes there.

Dave Ripley

>> .

>> You start to see obviously the political moves where they recognize in the store of value in crypto and obviously the engineers are working on the technology. Share some stats on Kraken. Can you share some stats that are relevant for the audience to think about why you're winning some of the metrics that you're looking at? Give us some inside the numbers here.

Dave Ripley

>> Yeah, I'll maybe just call out a couple. So one, we actually just released our headline financials for the full year 2024, and we did that frankly on a path to being more transparent about financials and being in the public markets-

>> some good money....

Dave Ripley

>> and so forth. And so we're committing to do that on a go-forward basis, which is something we were one of the first to offer proof of reserves and so look, we're going to be moving even more so in this direction. The couple of numbers to highlight, one would be 1.5 billion in revenue. So that just gives a little bit of a frame of the size and scale of Kraken. We're off across a number of major markets offering a lot of product that all stack up to that 1.5 billion in total revenue. The other thing to note is ARPU, so average revenue per user, around $2,000 per year annually. And that is one of the highest level ARPUs versus all of our peers. Much of that is tied to we're really strong with those individuals that have a deeper relationship with Kraken, more the individual advanced traders that are more active. And so that's one of the things that differentiates Kraken, is that we have high quality customers, if you will, that seek to come back high retention. And that's just a testament to where we've invested.

>> And that also speaks to the market opportunity with just the evolution, more serious, I won't say more serious, bigger things are going on in the mechanisms of finance and democratizing there. You want to put a plug in for the company last minute we have here? What you looking to do? Obviously you go to market expanding. Put a plug in.

Dave Ripley

>> Yeah, sure. Look, I mean, I think as I mentioned before, Kraken is one of the top places to go for crypto in the space. I mean, we've built the company on a foundation of security compliance, top level service, incredible user experience. And now looking ahead, we're going to be offering some of the most innovative and new products in the marketplace.

>> Yeah, security is huge. Just quick follow up on that, what's the security posture? What's your North Star? What should people know about security? Everyone's got fear, "I lost my..." I mean, that's out there, but it's also legit.

Dave Ripley

>> It's incredibly legit. I mean, our founders, Jesse and Thanh referred to Kraken often as a security company with an exchange built on top. It's everything. I mean, it's absolutely critical. It has been critical in the crypto space and it'll continue to be. We invest massively in this area. We have hundreds of people focused on just in the security function, but then when you look more broadly, there's a security mindset that's deep in our values across all parts of the company, the engineering team, also the client support team. And so I think it's across the board and we really emphasize it.

>> That brings up when we were talking about platforms earlier, and it's like most people, I won't say dogmatic about level layer two, and when you see in the tech waves always been full stack and then multi-stack people integrate together. There's a lot of integration going on between the old school tech companies. Now you have, it's not this or that. Just riff on that real quick. I mean, layer two obviously benefits, but layer three you can do combinations of things. People have done. So it's not about they have this. And people can slice the salami any way they want, but at the end of the day there's a platform here.

Dave Ripley

>> Yeah. Look, I mean, I would say one thing about Kraken, we're certainly not maximalists on this dimension. I mean, part of the fantastic part about cryptocurrency and blockchain innovation is that you do have this open permissionless platform where anyone can build, anyone can use it, but also anyone can build on it. And I think that's one of the powers of it. And so I mean, we do embrace all of these different aspects. The multiple layer ones out there, we want to be a part of those, give people access to them. We do have a layer two now, Ink, which is off to fantastic start. So look, I think all of those are fantastic. And that's really the essence.

>> It's an engineer's system, at the end of the day it's a platform.

Dave Ripley

>> Yep.

>> Well, final question before we break is obviously the trailblazers is the topic and trailblazers are plowing the fields. Whenever you're the first the things are blowing in your face, you're spitting out glass, eating nails. What have you learned and what do you see? Because it was a market, it wasn't for the faint of heart, now it's gotten mainstream, lots on the tables, lot of risk management. I mean, you're talking about big money here. We're talking about real dollars, real commerce, real finance, real everything going on. What have you learned as you had the experience with the success? And then as you look forward, is there going to be a calm state or is it going to continue to be just running hard and-

Dave Ripley

>> Yeah. Well look, I mean as far as the trailblazers and the history of crypto and the dirt blowing in our face, for sure. Look, I've been through now three bear markets in crypto and after the first two, I came into the third and I was like, "You know what? We got this now. This is going to be simple. No big deal." And then we went through what we did over the past two and three years and I was like, "Okay, this was effing challenging." And each market dynamic, each part of the cycle brings its own set of challenges. And so I think frankly, we learn a lot and we learn something new each time. Going forward, look, I mean, I think we're really in optimistic place, certainly for the industry and even more so for Kraken.

>> Awesome. Well, I mean, are we at the beach yet? And certainly the sun's coming out. Thanks for coming on theCUBE. Really appreciate you taking the time to come on theCUBE here in Palo Alto.

Dave Ripley

>> Absolutely.

>> Appreciate it. Okay. We got theCUBE Trailblazers Crypto series with the NYSE Wired. I'm John Furrier, host of theCUBE. Thanks for watching.