In this Crypto TrailBlazers segment, theCUBE’s John Furrier sits down with Luigi Demeo, chief strategist at Ava Labs, to unpack how Avalanche is powering the next wave of blockchain adoption. Demeo explains how Ava Labs’ architecture combines a public permissionless network with customizable L1 blockchains, enabling enterprises and developers to spin up purpose-built chains in minutes through AvaCloud. From FIFA’s gaming ecosystem to Bergen County’s deed tokenization project, he highlights how this flexibility is attracting sectors ranging from financial services to gaming and loyalty programs.
The conversation dives into why enterprises are moving beyond generic public chains to deploy tailored environments that meet their security, compliance and performance requirements. Demeo details real-world examples of tokenizing real-world assets (RWAs), integrating smart contracts for automated transactions and building infrastructure that can handle institutional-grade risk and regulatory demands. He also explores the convergence of AI and blockchain, where autonomous agents can transact, settle and manage assets without intermediaries — opening new opportunities for programmable economies.
Additional topics include competitive dynamics among L1 and L2 chains, the role of stablecoins as a “killer app” for payments and how data programmability on blockchain creates new value streams for both Web3 natives and traditional enterprises.
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Luigi Demeo, Ava Labs
In this Crypto TrailBlazers segment, theCUBE’s John Furrier sits down with Luigi Demeo, chief strategist at Ava Labs, to unpack how Avalanche is powering the next wave of blockchain adoption. Demeo explains how Ava Labs’ architecture combines a public permissionless network with customizable L1 blockchains, enabling enterprises and developers to spin up purpose-built chains in minutes through AvaCloud. From FIFA’s gaming ecosystem to Bergen County’s deed tokenization project, he highlights how this flexibility is attracting sectors ranging from financial services to gaming and loyalty programs.
The conversation dives into why enterprises are moving beyond generic public chains to deploy tailored environments that meet their security, compliance and performance requirements. Demeo details real-world examples of tokenizing real-world assets (RWAs), integrating smart contracts for automated transactions and building infrastructure that can handle institutional-grade risk and regulatory demands. He also explores the convergence of AI and blockchain, where autonomous agents can transact, settle and manage assets without intermediaries — opening new opportunities for programmable economies.
Additional topics include competitive dynamics among L1 and L2 chains, the role of stablecoins as a “killer app” for payments and how data programmability on blockchain creates new value streams for both Web3 natives and traditional enterprises.
>> Welcome back, everyone. This is theCUBE here, the NYSC, NYSC Wired community. Of course, theCUBE and NYSC partnering together for the Wired program. This is Crypto Trailblazers, our ongoing series. We're here for two days. We had a crypto IPO go out today, Bullish. Another crypto company going public, going mainstream. And as blockchain and crypto start to change how the institutions and the financial money systems work, the mainstreaming of crypto is continuing to happen, the window is open. Luigi DeMeo is here. he's the Chief Strategist of Ava Labs. Luigi, thanks for coming on theCUBE, and Crypto pioneer yourself and trailblazer. Thanks for coming on.
Luigi DeMeo
>> Yeah, of course. Thanks for having me. It's a lot of excitement here at the New York Stock Exchange, so happy to be here.>> We were just talking before we came on camera about our coin endeavors and some of the things we're working on. You guys have a pedigree, you go back the Cornell days, the early work done. Now as it's going mainstream, you saw the IPO, you saw circle, you see what's in the pipeline. The mainstreaming of crypto's here, but yet it's not even any anyone yet. I mean, it's early, a lot more innovation. What's your reaction to the current market?
Luigi DeMeo
>> Yeah, I mean, in a lot of ways it's a blessing. The last three years prior to the last six months were very challenging. Post-FTX, we were in a situation where a lot of people thought there would be the demise of the industry, where they thought that maybe this wouldn't prevail, and it's nice to see that all of those things we were doing actually are coming to fruition. Tokenization of assets, BlackRock, as you said, Stripe, all of these institutions realizing the value of this technology and bringing it to mainstream. So I couldn't be more excited. I tell people FTX basically delayed the inevitable for a year and this was always going to happen.>> I mean, the previous regime on the government side, COVID, FTX, just really bad timing all around, just kind of like, okay, flush it through the system. Now game's on. What do you guys do? Explain your business because you have a fascinating opportunity. Explain what you guys do, how you guys are set up, Ava Labs, what does that entail? Just, we'll set the table.
Luigi DeMeo
>> Sure. I work at Ava Labs, we're basically a software provider. We are the creator of the Avalanche blockchain, which is one of the largest blockchains by TVL and many other metrics out there. The Avalanche blockchain really brought to market a new consensus mechanism, which allowed for much faster finality of transactions, which, anybody who's in TradFi knows how important that is. That was the first advent where we came to market in 2020. The Avalanche network effectively spans two different things. It's a public permissionless network similar to an Ethereum, a Solana in terms of a singular chain. However, one of the big differences is it also enables the ability for you to launch your own blockchain, your own L1 blockchain. That's embedded directly into the network itself, so have the public permissionless chain and a bunch of other L1s. For example, FIFA launched an L1 on Avalanche. MapleStory, one of the largest IPs in Korea in terms of gaming, launched their own L1 on Avalanche. So there are many different chains that actually can communicate and inter-operate just like the internet, and that's how the architecture is constructed. It's dissimilar in a lot of ways to the layer two and Ethereum architecture, and it's also different than the Solana singular architecture.>> And your customers come to you because they don't want to build one or use the public. What's the rationale? Give us the use case.
Luigi DeMeo
>> For sure. Public chains are good for a lot of things. You have utmost security, you can get started permissionlessly. The infrastructure initial costs are lower and that's where DeFi and standard liquidity is prevalent. We always saw the need and we started with the initial hub chain, let's call it, that is going to be the public permissionless chain. But clients, depending on their use case, may want their own environments. They might want to customize the entire stack, and that's where the L1 offering that we have has really been something that they enjoy. At Ava Labs, we actually have a provider called AvaCloud, which spins up these L1 blockchains within minutes. It's a GUI, you go there, you click a few buttons and you can get your own chain started. Obviously, that's the simple form, but these can get pretty complex. But what we're seeing is institutions and enterprises want to customize their own environment.>> Kind of like they want an IT shop for their own on-premise, right?
Luigi DeMeo
>> Exactly, on-prem versus cloud is a good example. So I do think you're going to see the smaller, less sophisticated start with a provider like an AvaCloud, and then companies that have unlimited resources, they may be more willing to invest in full teams to build out->> Its a profile of some of these innovators that are trailblazing with you on this. Obviously they know DeFi, they know decentralized market. But as people started to realize like us, "Hey, maybe we want to reboot our cube coin, cube chain," what do we do? We would probably want to have a proprietary, not proprietary, but our own offering to customize some of the mechanics. Is that the use case? And then are they newbies or are they just technical dudes or are gals that know what to do? What's the makeup of some of the people, early adopters and then the fast followers?
Luigi DeMeo
>> Yeah, it's a great question. It really spans the gamut. We have early startups and developers that launch chains, like for example, Dexalot is a central limit order book that's its own chain that you can trade on. There's DeFi Kingdoms, it's like a pixelized game, for example, that they built their own chain for their community. And then you have the FIFAs, the MapleStorys, Gunzillas with off the grid, it's a very big PlayStation/Xbox game that there's the blockchain powering all the movement of assets. So I don't know if you have kids, but my kids play a lot of Roblox and Fortnite and they move these assets all the time. Well, this is all blockchain enabled, meaning they actually own and retain->> They got that knife that's worth 40 grand now. Okay, so this is an asset play and I want to ask this question because I know this comes up, I get this question a lot so I'll ask you. What about database? I can just do a database. I'm like, "Why do I need my own blockchain?"
Luigi DeMeo
>> It's a great question.>> Answer that question because that's the most frequently asked question.
Luigi DeMeo
>> Yeah, so there's a lot of value depending on what your use case is and actually it being a blockchain. For example, one, you may want to do something with integration partners whereby the actual integration on an EVM smart contract level is much easier than an API call across different disparate databases. The fact that everybody's speaking the same language and they have different value, they can actually do a smart contract and interact. For example, let's say I'm an olive oil producer and I have my own blockchain and everything's on the supply chain and whatnot, and then one of my producers or somebody in the supply chain wants to actually send me value or an asset. We can use the chain, we can have an automatic trigger in a smart contract when a transaction's done. Can't do that in a database, you can't move value seamlessly without an intermediary.>> And I can maybe sell my stock option on the chain.
Luigi DeMeo
>> Exactly. And then if we get more financial, you think about a credit default swap or something like that, you can create an asset like that. When the constituents change in the actual index for CDS, you can have something where there is an automatic trigger for that or variation margin that's automatically paid out. So blockchains really allow for the movement of value in a way that the internet before blockchain never was->> Who are your top customers right now? Are you targeting, is it horizontal market for you? Is it more financial institutions? What are your top focus areas in terms of what you're optimizing for?
Luigi DeMeo
>> Yeah, it's a great question. I'd say we're obviously deeply focused on the financial institutions and all financial use cases in terms of RWAs and whatnot.>> They got the assets.
Luigi DeMeo
>> They have the assets. It's also the team's background. I worked at Citi for a number of years. John Wu, our President, has been tradified for a long time. Actually, our motto at Alva Labs is to digitize the world's assets, and that was back in 2020. This has always been the focus. That's actually why we started in New York. But most recently we tokenized a bunch of CLOs with Janice Henderson on Avalanche. We did a deal with Bergen County over in New Jersey to tokenize all the deeds of all homes in the entire county. That's a long five-year project.>> That's awesome.
Luigi DeMeo
>> So we're kind of seeing assets that are going to get put on the blockchain, but we are also deeply involved in things like gaming. We think gaming's a very critical sector for blockchain and also loyalty points. We work with a partner called Uptop, and we were able to do loyalty points for the Detroit Pistons and the Cleveland Cavaliers. That's all in production, many more teams to come, so I think fan loyalty->> So basically, I mean, you take the Bergen County deed thing, that's physical world assets.
Luigi DeMeo
>> Yes.>> Say financial assets are money and other things. The digital straight-up game is just economy so that an economy can run, basically.
Luigi DeMeo
>> Exactly.>> Kind of the old ICO days. So you're really looking at more of the dynamics of what the situation is, assets.
Luigi DeMeo
>> That's exactly right, assets. assets on the blockchain because they could become program->> RWA's hot right now. I think everything's going to be on the chain.
Luigi DeMeo
>> Table coins.>> Everything will be tokenized, I think the forest will be tokenized. Ultimately, everything physical will be digitized from a value standpoint. It's inevitable in my mind. Okay, so talk about the competition. It seems frothy out there that everyone and their mother seems to have an L1, L2 alternative, especially with the NFT craze and Solana's success, just the rise of multiple chains. You had put a LinkedIn post, I just read, that even some of the big companies might vertically integrate their own chains and offer it as a service. What's the landscape like? And as you guys vector it out, so you've got your core competency, what's the landscape look like from a competitive standpoint and then what are you guys doing to differentiate?
Luigi DeMeo
>> Yeah, great question. I think the end state is going to look something like three to five public chains that anybody can run a node for, interact with. That's where all the liquidity will reside, et cetera. However, there's going to be a ton of purpose-built enterprise-type chains as well because it's just a better infrastructure to work on and it's easier to inter-operate with the public chains out there if you have your own chain for your corporation as well. We recently saw the announcement by Circle to launch their own L1 chain, we recently saw the announcement by Stripe to launch their own L1 chain. Every company will have their own chain.>> Why are they doing that?
Luigi DeMeo
>> There's a number of use cases, Circle. It's for a payment network that they're trying to build. For Stripe in particular, they haven't given a ton of details because that kind of leaked, but my assumption is they're trying to take all their integration partners and be able to put them on one chain and then make them a little bit more of a developer community and be able to provide tools for them. But also, they want a lot of that payment->> Because value's going to be created there.
Luigi DeMeo
>> 100%, 100%. I mean, Hyperliquid is an L1 blockchain where everybody trades perps these days. That's a $40 billion asset. There's a lot of value in launching an L1 chain that owns a market. So I think if you're a Stripe, if you're a company like that, the way for you to move the needle, there's only so many things you can do to move that kind of value.>> One theme that's come up a lot in the crypto trailblazer, I want to ask, get your opinion on this or thoughts, is data moats. You hear that a lot in Gen AI area. We have a data mote, everything's going to go GPU, everything's going to go, who's got the most horsepower, process clearing stuff, whatever. There's a lot of data that you can put on these chains. That's a data moat opportunity so obviously, I can see why they would do that, those chains. Makes sense if you've got data and got community. It may not be the biggest, but it's them kind of creating a data moat. If I'm looking to do that, how do I do that? Or, well, what's your view of the data moat and the DeFi side of it and decentralized side, and how do I take my physical assets and put it into a data moat so I don't have to build a super neo-cloud to compete?
Luigi DeMeo
>> Yeah, it's interesting. I mean, I think one of the benefits of blockchains is that the data is readily accessible but also programmable. So if you think about the way DTCC works for example, or something like that, people have to download data, reformat it, do whatever they want to do to construct their own analysis. If there's a blockchain that does that, people can actually program smart contracts onto that data and have everything automatically flow. I think that as AI really pushes forward, crypto and AI are a perfect marriage because you have AI agents that are able to have you automatically transact. You can't do that with fiat. You can do that with crypto in terms of stable coins and things like that.>> It's interesting, I was going to ask that question, I'm glad you brought it up. If you look at the AI market today, it's essentially all a bunch of ex-miners who had data center and energy moved over to Gen AI and making some bank on that capability. But if you look at the psychology and the personas of the early blockchain alpha engineering community, they were hardcore techies if you look at that, and then you went through that period of time where you just mentioned. But now fast-forward today, the makeup, it's almost an intersection of that full circle. It's almost a blending of two same worlds. They know how GPUs work, they know the value of horsepower, they know infrastructure. AI infrastructure is the hottest category right now on the market. I mean, look at CoreWeave on the board here today, stumbling a little bit. But I had predicted, and I think it's going to get more tighter, crypto and AI. One, the psychology of the people running those markets or building in those markets are symbionic.
Luigi DeMeo
>> That's right.>> What's your take on that? What would you envision the outcome would be? You mentioned agents, I'm sure you agree, but what's your thoughts on that?
Luigi DeMeo
>> Yeah, I mean, I think having agents that are able to autonomously do simple tasks is going to be one of the biggest trends in the next five, 10 years, maybe two to five years, actually. And crypto is the only tool that they can use to actually move value because an AI agent is going to be difficult for them to set up a bank account and all that kind of stuff, but they can move stable coins frictionlessly. They can collect data frictionlessly and they can actually work on that data. I've seen a lot of different AI platforms trying to actually learn on blockchain data for different trading models, and that's really interesting because blockchain data is publicly accessible, so they can actually build really interesting models around that.>> Today you look at people's appetite, I think we're going to see more people coming in and saying, "You know what? I want to really get that data moat. I have Gen AI, I have the energy on both sides." Maybe that might be relevant for some of the bigger players. But let's just take a use case, I think there's going to be a large market for you because I would envision someone saying, "I can have a data moat." So what would be your advice to help someone squint through the BS? Because if there's a lot of chains out there, I don't know which one to buy, there's no buyer's guide. So take me through what should I look at, what's the key criteria? What would be things to watch out for? Your LinkedIn post had a great point, which I highlighted on our CubePod this morning, which is upgradability, stability, version changes. We've seen that be almost devastating on Ethereum, certainly, in other chains that have screwed up the upgrades.
Luigi DeMeo
>> Yeah, I mean->> What is the key things I got to watch? And from a risk management, I'm building infrastructure. What do I need to look for?
Luigi DeMeo
>> Yeah, so look, we speak to a lot of the top enterprises, Fortune 100 companies out there. And look, if you're at a certain size, the risk is so high for you messing up an upgrade or building on alternative infrastructure that you need a company that's going to be willing to actually stand out there. Our AvaCould offering is SOC 2 compliant. It's going through all of these different things to make sure that it can actually service the real corporations that are on demand. But if you think about it, a lot of financial institutions are still on-prem. They never migrated to the cloud.>> The Gen AI, they're keeping it on-prem.
Luigi DeMeo
>> Exactly.>> That's their IP.
Luigi DeMeo
>> Exactly. And so I do think there was this notion that everybody in the world's going to build Nel 2 and this is going to be great. Well, I think there's a lot of issues with that. I think you have to have purpose-built infrastructure, and it has to be really robust in order to support institutions. And frankly, some of them just might build their own thing if they have the resources, they might just go about it their own way. But I do think seeing a Stripe, seeing a Circle, seeing a FIFA build their own chain shows that there's a market for this. People see value in building their own chains and we're going to continue to see a lot of->> What's the number one thing people ask you guys when they say, "Show me the proof that you're up and running, you're good, reliable?" Obviously, it's almost like an IT purchase at some level, right?
Luigi DeMeo
>> Yeah, yeah. I mean, it's about uptime, it's about finality. It's about actually monitoring the statistics. The beauty is we don't have to show we to provide data for them, it's all available.>> They spin up their own chain.
Luigi DeMeo
>> They could spin up their own chain in two minutes and they could run load tests and everything like that.>> All kinds of recovery options, cyber resilience all built in.
Luigi DeMeo
>> All that kind of stuff is stuff they can do by themselves. And more interestingly, it's customizable. So if they want to start as a permission chain and keep things guarded, they can. And if they want to, for example, allow the validators to be all KYC'd or be in a certain jurisdiction, that's something that they can program and make sure that they have themselves. So there's a lot of flexibility in the architecture and I do think you're going to see, and we're seeing in our pipeline, a large demand from enterprises to build their own chains.>> And do they need to have a dev team in place? What's the requirements that they have to have on their side?
Luigi DeMeo
>> We have clients that have no dev team, just one liaison on the technical side and we do all the work for them. And then we have clients that are deeply involved and want to own the whole stack, and we're just assisting.>> That's the on-prem mentality because that's their crown jewels.
Luigi DeMeo
>> Yeah, exactly. At the end of the day, there are certain institutions where it's like, "I'd rather point to somebody and blame them if somebody goes wrong," and there are other ones that are like, "No, we need to own the risk here.">> We talk to JP Morgan Chase all the time because they love theCUBE and we talk to all the nerds there, they have a high bar on what gets into production. Obviously they do $10 billion IT budget, they do trillions a day in transactions. That level, they're a unicorn in my mind, but other financial institutions have a similar scope.
Luigi DeMeo
>> Well, I mean, we did a pretty interesting pilot with JP Morgan and Apollo where we tokenized assets for their Crescendo offering, and then we put those all on chain, so that was a really rigorous process. We did the same thing with Citi. We built out an RFQ FX trading engine with them. So these are things that we had to go through deep vetting processes in order to ensure that the technology would stand up.>> What's it like as someone who's been in the industry and be in the entrepreneurial side? You're also now on an awesome product. What's it like in the market right now? Because it's the enablement, it's disruptive but it's enabling.
Luigi DeMeo
>> Yeah, it's noisy, it's a noisy market. I don't know if you'd call it a bull market, but it's a noisy market because you have a lot of distractions. You got DAT vehicles out there that are doing all a bunch of things with tokens and people are very focused on that. You have enterprises building their own chains, you have institutions like BlackRock tokenizing assets on chain. For example, the BlackRock Biddle token, Avalanche is the second largest chain in terms of value that that holds. You're seeing a lot of noise out there. But I do think if you take a step back, zoom out, it's always obvious that we're making a lot of progress. If I had told you three years ago or two years ago that Stripe would have their own chain, that BlackRock would tokenize assets on chain, Janice Henderson, Franklin Templeton, et cetera, and frankly that the US government's looking at blockchain as something that they can integrate into their services, you'd probably tell me I was crazy, so we're making a lot of progress.>> Yeah, I think one of the things I like about what's happening is that to your point, it's like people can go down two rabbit holes, one of science project. It's just ongoing, that's off the rails, to more pragmatic value creation, extraction thinking. What are we doing? What's the purpose? I got to create value that's a data moat or sort of unique application, and then how does that get extracted?
Luigi DeMeo
>> Yeah, I mean, I've always said that stable coins are the killer app for crypto. I don't think there's a conference call for a payments company where stable coins aren't mentioned in an earnings transcript. And for example, you saw Western Union mention that they might consider their own stablecoin, that they might consider stable coins for remittances. I think you're going to see the entire financial world, for example, move stable coins as a movement of value. This is great for the United States, right? Because they can get dollar to dominate the world in terms of a value, and then you have companies like PayPal, for example, creating their own stable coins. There's a real competition to figure out who's going to be the winner there.>> Is there too many stable coins? Is it irrelevant as long as it's pegged to the dollar?
Luigi DeMeo
>> It's irrelevant. Every company, for the most part, will have their own stable coin. And I think it's going to be interesting to see how that impacts banks over time but I do think that it->> It creates gravity around the key things that need to get done on transactions.
Luigi DeMeo
>> Exactly, and it's an additional revenue source for them. They retain all that yield, that net interest margin becomes->> I wish I was 25 again, I'd be making more money, but I'd definitely be on stable coins. Okay, final question for you. You mentioned agents and we cover cloud like a blanket, like on a coverage area. Observability is a hot area, data. So I'm envisioning that there's going to be a bunch of agents doing stuff in the chain, clearing. You mentioned stable coins can move around, that's easy. Setting accounts, a little bit different. But smart contracts, I could see agents under the coverage just doing all the smart contract minutia. What's your vision on that?
Luigi DeMeo
>> Yeah, I mean, I wouldn't be surprised to see an agent go book a flight for you, take care of the payment all autonomously. An agent work on settling Nigerian bonds between banks and having all that value be settled autonomously. That's going to be the former back-and-middle offices of all these financial institutions, I think will look more like a combination of crypto and agents. And once the assets are tokenized, we'll be in a position where all that value can move frictionlessly and we'll update all of our financial market infrastructure.>> I think the agents, what we're seeing with Gen AI now is you're seeing coding and sales and marketing benefits, obviously. I think the next level is the middleware area kind of model where it's going in.
Luigi DeMeo
>> That's right.>> Great conversation. Thanks for coming in and being part of our crypto trailblazer of the NYSE Wire program with theCUBE.
Luigi DeMeo
>> Yeah, loved it.>> Thanks for coming on.
Luigi DeMeo
>> Thanks for having me.>> I'm Dave Vellante, two days of coverage, Crypto Trailblazer, all the leaders who are enabling the value extraction, value creation. And of course, the financial markets are responding, the plumbing is being reset, the money system and it's programmable. Crypto's at the center of all of it. Stablecoins been a big, big... And of course, the Genius Act has enabled tons of clarity, pun intended. Thanks for watching.
>> Welcome back, everyone. This is theCUBE here, the NYSC, NYSC Wired community. Of course, theCUBE and NYSC partnering together for the Wired program. This is Crypto Trailblazers, our ongoing series. We're here for two days. We had a crypto IPO go out today, Bullish. Another crypto company going public, going mainstream. And as blockchain and crypto start to change how the institutions and the financial money systems work, the mainstreaming of crypto is continuing to happen, the window is open. Luigi DeMeo is here. he's the Chief Strategist of Ava Labs. Luigi, thanks for coming on theCUBE, and Crypto pioneer yourself and trailblazer. Thanks for coming on.
Luigi DeMeo
>> Yeah, of course. Thanks for having me. It's a lot of excitement here at the New York Stock Exchange, so happy to be here.>> We were just talking before we came on camera about our coin endeavors and some of the things we're working on. You guys have a pedigree, you go back the Cornell days, the early work done. Now as it's going mainstream, you saw the IPO, you saw circle, you see what's in the pipeline. The mainstreaming of crypto's here, but yet it's not even any anyone yet. I mean, it's early, a lot more innovation. What's your reaction to the current market?
Luigi DeMeo
>> Yeah, I mean, in a lot of ways it's a blessing. The last three years prior to the last six months were very challenging. Post-FTX, we were in a situation where a lot of people thought there would be the demise of the industry, where they thought that maybe this wouldn't prevail, and it's nice to see that all of those things we were doing actually are coming to fruition. Tokenization of assets, BlackRock, as you said, Stripe, all of these institutions realizing the value of this technology and bringing it to mainstream. So I couldn't be more excited. I tell people FTX basically delayed the inevitable for a year and this was always going to happen.>> I mean, the previous regime on the government side, COVID, FTX, just really bad timing all around, just kind of like, okay, flush it through the system. Now game's on. What do you guys do? Explain your business because you have a fascinating opportunity. Explain what you guys do, how you guys are set up, Ava Labs, what does that entail? Just, we'll set the table.
Luigi DeMeo
>> Sure. I work at Ava Labs, we're basically a software provider. We are the creator of the Avalanche blockchain, which is one of the largest blockchains by TVL and many other metrics out there. The Avalanche blockchain really brought to market a new consensus mechanism, which allowed for much faster finality of transactions, which, anybody who's in TradFi knows how important that is. That was the first advent where we came to market in 2020. The Avalanche network effectively spans two different things. It's a public permissionless network similar to an Ethereum, a Solana in terms of a singular chain. However, one of the big differences is it also enables the ability for you to launch your own blockchain, your own L1 blockchain. That's embedded directly into the network itself, so have the public permissionless chain and a bunch of other L1s. For example, FIFA launched an L1 on Avalanche. MapleStory, one of the largest IPs in Korea in terms of gaming, launched their own L1 on Avalanche. So there are many different chains that actually can communicate and inter-operate just like the internet, and that's how the architecture is constructed. It's dissimilar in a lot of ways to the layer two and Ethereum architecture, and it's also different than the Solana singular architecture.>> And your customers come to you because they don't want to build one or use the public. What's the rationale? Give us the use case.
Luigi DeMeo
>> For sure. Public chains are good for a lot of things. You have utmost security, you can get started permissionlessly. The infrastructure initial costs are lower and that's where DeFi and standard liquidity is prevalent. We always saw the need and we started with the initial hub chain, let's call it, that is going to be the public permissionless chain. But clients, depending on their use case, may want their own environments. They might want to customize the entire stack, and that's where the L1 offering that we have has really been something that they enjoy. At Ava Labs, we actually have a provider called AvaCloud, which spins up these L1 blockchains within minutes. It's a GUI, you go there, you click a few buttons and you can get your own chain started. Obviously, that's the simple form, but these can get pretty complex. But what we're seeing is institutions and enterprises want to customize their own environment.>> Kind of like they want an IT shop for their own on-premise, right?
Luigi DeMeo
>> Exactly, on-prem versus cloud is a good example. So I do think you're going to see the smaller, less sophisticated start with a provider like an AvaCloud, and then companies that have unlimited resources, they may be more willing to invest in full teams to build out->> Its a profile of some of these innovators that are trailblazing with you on this. Obviously they know DeFi, they know decentralized market. But as people started to realize like us, "Hey, maybe we want to reboot our cube coin, cube chain," what do we do? We would probably want to have a proprietary, not proprietary, but our own offering to customize some of the mechanics. Is that the use case? And then are they newbies or are they just technical dudes or are gals that know what to do? What's the makeup of some of the people, early adopters and then the fast followers?
Luigi DeMeo
>> Yeah, it's a great question. It really spans the gamut. We have early startups and developers that launch chains, like for example, Dexalot is a central limit order book that's its own chain that you can trade on. There's DeFi Kingdoms, it's like a pixelized game, for example, that they built their own chain for their community. And then you have the FIFAs, the MapleStorys, Gunzillas with off the grid, it's a very big PlayStation/Xbox game that there's the blockchain powering all the movement of assets. So I don't know if you have kids, but my kids play a lot of Roblox and Fortnite and they move these assets all the time. Well, this is all blockchain enabled, meaning they actually own and retain->> They got that knife that's worth 40 grand now. Okay, so this is an asset play and I want to ask this question because I know this comes up, I get this question a lot so I'll ask you. What about database? I can just do a database. I'm like, "Why do I need my own blockchain?"
Luigi DeMeo
>> It's a great question.>> Answer that question because that's the most frequently asked question.
Luigi DeMeo
>> Yeah, so there's a lot of value depending on what your use case is and actually it being a blockchain. For example, one, you may want to do something with integration partners whereby the actual integration on an EVM smart contract level is much easier than an API call across different disparate databases. The fact that everybody's speaking the same language and they have different value, they can actually do a smart contract and interact. For example, let's say I'm an olive oil producer and I have my own blockchain and everything's on the supply chain and whatnot, and then one of my producers or somebody in the supply chain wants to actually send me value or an asset. We can use the chain, we can have an automatic trigger in a smart contract when a transaction's done. Can't do that in a database, you can't move value seamlessly without an intermediary.>> And I can maybe sell my stock option on the chain.
Luigi DeMeo
>> Exactly. And then if we get more financial, you think about a credit default swap or something like that, you can create an asset like that. When the constituents change in the actual index for CDS, you can have something where there is an automatic trigger for that or variation margin that's automatically paid out. So blockchains really allow for the movement of value in a way that the internet before blockchain never was->> Who are your top customers right now? Are you targeting, is it horizontal market for you? Is it more financial institutions? What are your top focus areas in terms of what you're optimizing for?
Luigi DeMeo
>> Yeah, it's a great question. I'd say we're obviously deeply focused on the financial institutions and all financial use cases in terms of RWAs and whatnot.>> They got the assets.
Luigi DeMeo
>> They have the assets. It's also the team's background. I worked at Citi for a number of years. John Wu, our President, has been tradified for a long time. Actually, our motto at Alva Labs is to digitize the world's assets, and that was back in 2020. This has always been the focus. That's actually why we started in New York. But most recently we tokenized a bunch of CLOs with Janice Henderson on Avalanche. We did a deal with Bergen County over in New Jersey to tokenize all the deeds of all homes in the entire county. That's a long five-year project.>> That's awesome.
Luigi DeMeo
>> So we're kind of seeing assets that are going to get put on the blockchain, but we are also deeply involved in things like gaming. We think gaming's a very critical sector for blockchain and also loyalty points. We work with a partner called Uptop, and we were able to do loyalty points for the Detroit Pistons and the Cleveland Cavaliers. That's all in production, many more teams to come, so I think fan loyalty->> So basically, I mean, you take the Bergen County deed thing, that's physical world assets.
Luigi DeMeo
>> Yes.>> Say financial assets are money and other things. The digital straight-up game is just economy so that an economy can run, basically.
Luigi DeMeo
>> Exactly.>> Kind of the old ICO days. So you're really looking at more of the dynamics of what the situation is, assets.
Luigi DeMeo
>> That's exactly right, assets. assets on the blockchain because they could become program->> RWA's hot right now. I think everything's going to be on the chain.
Luigi DeMeo
>> Table coins.>> Everything will be tokenized, I think the forest will be tokenized. Ultimately, everything physical will be digitized from a value standpoint. It's inevitable in my mind. Okay, so talk about the competition. It seems frothy out there that everyone and their mother seems to have an L1, L2 alternative, especially with the NFT craze and Solana's success, just the rise of multiple chains. You had put a LinkedIn post, I just read, that even some of the big companies might vertically integrate their own chains and offer it as a service. What's the landscape like? And as you guys vector it out, so you've got your core competency, what's the landscape look like from a competitive standpoint and then what are you guys doing to differentiate?
Luigi DeMeo
>> Yeah, great question. I think the end state is going to look something like three to five public chains that anybody can run a node for, interact with. That's where all the liquidity will reside, et cetera. However, there's going to be a ton of purpose-built enterprise-type chains as well because it's just a better infrastructure to work on and it's easier to inter-operate with the public chains out there if you have your own chain for your corporation as well. We recently saw the announcement by Circle to launch their own L1 chain, we recently saw the announcement by Stripe to launch their own L1 chain. Every company will have their own chain.>> Why are they doing that?
Luigi DeMeo
>> There's a number of use cases, Circle. It's for a payment network that they're trying to build. For Stripe in particular, they haven't given a ton of details because that kind of leaked, but my assumption is they're trying to take all their integration partners and be able to put them on one chain and then make them a little bit more of a developer community and be able to provide tools for them. But also, they want a lot of that payment->> Because value's going to be created there.
Luigi DeMeo
>> 100%, 100%. I mean, Hyperliquid is an L1 blockchain where everybody trades perps these days. That's a $40 billion asset. There's a lot of value in launching an L1 chain that owns a market. So I think if you're a Stripe, if you're a company like that, the way for you to move the needle, there's only so many things you can do to move that kind of value.>> One theme that's come up a lot in the crypto trailblazer, I want to ask, get your opinion on this or thoughts, is data moats. You hear that a lot in Gen AI area. We have a data mote, everything's going to go GPU, everything's going to go, who's got the most horsepower, process clearing stuff, whatever. There's a lot of data that you can put on these chains. That's a data moat opportunity so obviously, I can see why they would do that, those chains. Makes sense if you've got data and got community. It may not be the biggest, but it's them kind of creating a data moat. If I'm looking to do that, how do I do that? Or, well, what's your view of the data moat and the DeFi side of it and decentralized side, and how do I take my physical assets and put it into a data moat so I don't have to build a super neo-cloud to compete?
Luigi DeMeo
>> Yeah, it's interesting. I mean, I think one of the benefits of blockchains is that the data is readily accessible but also programmable. So if you think about the way DTCC works for example, or something like that, people have to download data, reformat it, do whatever they want to do to construct their own analysis. If there's a blockchain that does that, people can actually program smart contracts onto that data and have everything automatically flow. I think that as AI really pushes forward, crypto and AI are a perfect marriage because you have AI agents that are able to have you automatically transact. You can't do that with fiat. You can do that with crypto in terms of stable coins and things like that.>> It's interesting, I was going to ask that question, I'm glad you brought it up. If you look at the AI market today, it's essentially all a bunch of ex-miners who had data center and energy moved over to Gen AI and making some bank on that capability. But if you look at the psychology and the personas of the early blockchain alpha engineering community, they were hardcore techies if you look at that, and then you went through that period of time where you just mentioned. But now fast-forward today, the makeup, it's almost an intersection of that full circle. It's almost a blending of two same worlds. They know how GPUs work, they know the value of horsepower, they know infrastructure. AI infrastructure is the hottest category right now on the market. I mean, look at CoreWeave on the board here today, stumbling a little bit. But I had predicted, and I think it's going to get more tighter, crypto and AI. One, the psychology of the people running those markets or building in those markets are symbionic.
Luigi DeMeo
>> That's right.>> What's your take on that? What would you envision the outcome would be? You mentioned agents, I'm sure you agree, but what's your thoughts on that?
Luigi DeMeo
>> Yeah, I mean, I think having agents that are able to autonomously do simple tasks is going to be one of the biggest trends in the next five, 10 years, maybe two to five years, actually. And crypto is the only tool that they can use to actually move value because an AI agent is going to be difficult for them to set up a bank account and all that kind of stuff, but they can move stable coins frictionlessly. They can collect data frictionlessly and they can actually work on that data. I've seen a lot of different AI platforms trying to actually learn on blockchain data for different trading models, and that's really interesting because blockchain data is publicly accessible, so they can actually build really interesting models around that.>> Today you look at people's appetite, I think we're going to see more people coming in and saying, "You know what? I want to really get that data moat. I have Gen AI, I have the energy on both sides." Maybe that might be relevant for some of the bigger players. But let's just take a use case, I think there's going to be a large market for you because I would envision someone saying, "I can have a data moat." So what would be your advice to help someone squint through the BS? Because if there's a lot of chains out there, I don't know which one to buy, there's no buyer's guide. So take me through what should I look at, what's the key criteria? What would be things to watch out for? Your LinkedIn post had a great point, which I highlighted on our CubePod this morning, which is upgradability, stability, version changes. We've seen that be almost devastating on Ethereum, certainly, in other chains that have screwed up the upgrades.
Luigi DeMeo
>> Yeah, I mean->> What is the key things I got to watch? And from a risk management, I'm building infrastructure. What do I need to look for?
Luigi DeMeo
>> Yeah, so look, we speak to a lot of the top enterprises, Fortune 100 companies out there. And look, if you're at a certain size, the risk is so high for you messing up an upgrade or building on alternative infrastructure that you need a company that's going to be willing to actually stand out there. Our AvaCould offering is SOC 2 compliant. It's going through all of these different things to make sure that it can actually service the real corporations that are on demand. But if you think about it, a lot of financial institutions are still on-prem. They never migrated to the cloud.>> The Gen AI, they're keeping it on-prem.
Luigi DeMeo
>> Exactly.>> That's their IP.
Luigi DeMeo
>> Exactly. And so I do think there was this notion that everybody in the world's going to build Nel 2 and this is going to be great. Well, I think there's a lot of issues with that. I think you have to have purpose-built infrastructure, and it has to be really robust in order to support institutions. And frankly, some of them just might build their own thing if they have the resources, they might just go about it their own way. But I do think seeing a Stripe, seeing a Circle, seeing a FIFA build their own chain shows that there's a market for this. People see value in building their own chains and we're going to continue to see a lot of->> What's the number one thing people ask you guys when they say, "Show me the proof that you're up and running, you're good, reliable?" Obviously, it's almost like an IT purchase at some level, right?
Luigi DeMeo
>> Yeah, yeah. I mean, it's about uptime, it's about finality. It's about actually monitoring the statistics. The beauty is we don't have to show we to provide data for them, it's all available.>> They spin up their own chain.
Luigi DeMeo
>> They could spin up their own chain in two minutes and they could run load tests and everything like that.>> All kinds of recovery options, cyber resilience all built in.
Luigi DeMeo
>> All that kind of stuff is stuff they can do by themselves. And more interestingly, it's customizable. So if they want to start as a permission chain and keep things guarded, they can. And if they want to, for example, allow the validators to be all KYC'd or be in a certain jurisdiction, that's something that they can program and make sure that they have themselves. So there's a lot of flexibility in the architecture and I do think you're going to see, and we're seeing in our pipeline, a large demand from enterprises to build their own chains.>> And do they need to have a dev team in place? What's the requirements that they have to have on their side?
Luigi DeMeo
>> We have clients that have no dev team, just one liaison on the technical side and we do all the work for them. And then we have clients that are deeply involved and want to own the whole stack, and we're just assisting.>> That's the on-prem mentality because that's their crown jewels.
Luigi DeMeo
>> Yeah, exactly. At the end of the day, there are certain institutions where it's like, "I'd rather point to somebody and blame them if somebody goes wrong," and there are other ones that are like, "No, we need to own the risk here.">> We talk to JP Morgan Chase all the time because they love theCUBE and we talk to all the nerds there, they have a high bar on what gets into production. Obviously they do $10 billion IT budget, they do trillions a day in transactions. That level, they're a unicorn in my mind, but other financial institutions have a similar scope.
Luigi DeMeo
>> Well, I mean, we did a pretty interesting pilot with JP Morgan and Apollo where we tokenized assets for their Crescendo offering, and then we put those all on chain, so that was a really rigorous process. We did the same thing with Citi. We built out an RFQ FX trading engine with them. So these are things that we had to go through deep vetting processes in order to ensure that the technology would stand up.>> What's it like as someone who's been in the industry and be in the entrepreneurial side? You're also now on an awesome product. What's it like in the market right now? Because it's the enablement, it's disruptive but it's enabling.
Luigi DeMeo
>> Yeah, it's noisy, it's a noisy market. I don't know if you'd call it a bull market, but it's a noisy market because you have a lot of distractions. You got DAT vehicles out there that are doing all a bunch of things with tokens and people are very focused on that. You have enterprises building their own chains, you have institutions like BlackRock tokenizing assets on chain. For example, the BlackRock Biddle token, Avalanche is the second largest chain in terms of value that that holds. You're seeing a lot of noise out there. But I do think if you take a step back, zoom out, it's always obvious that we're making a lot of progress. If I had told you three years ago or two years ago that Stripe would have their own chain, that BlackRock would tokenize assets on chain, Janice Henderson, Franklin Templeton, et cetera, and frankly that the US government's looking at blockchain as something that they can integrate into their services, you'd probably tell me I was crazy, so we're making a lot of progress.>> Yeah, I think one of the things I like about what's happening is that to your point, it's like people can go down two rabbit holes, one of science project. It's just ongoing, that's off the rails, to more pragmatic value creation, extraction thinking. What are we doing? What's the purpose? I got to create value that's a data moat or sort of unique application, and then how does that get extracted?
Luigi DeMeo
>> Yeah, I mean, I've always said that stable coins are the killer app for crypto. I don't think there's a conference call for a payments company where stable coins aren't mentioned in an earnings transcript. And for example, you saw Western Union mention that they might consider their own stablecoin, that they might consider stable coins for remittances. I think you're going to see the entire financial world, for example, move stable coins as a movement of value. This is great for the United States, right? Because they can get dollar to dominate the world in terms of a value, and then you have companies like PayPal, for example, creating their own stable coins. There's a real competition to figure out who's going to be the winner there.>> Is there too many stable coins? Is it irrelevant as long as it's pegged to the dollar?
Luigi DeMeo
>> It's irrelevant. Every company, for the most part, will have their own stable coin. And I think it's going to be interesting to see how that impacts banks over time but I do think that it->> It creates gravity around the key things that need to get done on transactions.
Luigi DeMeo
>> Exactly, and it's an additional revenue source for them. They retain all that yield, that net interest margin becomes->> I wish I was 25 again, I'd be making more money, but I'd definitely be on stable coins. Okay, final question for you. You mentioned agents and we cover cloud like a blanket, like on a coverage area. Observability is a hot area, data. So I'm envisioning that there's going to be a bunch of agents doing stuff in the chain, clearing. You mentioned stable coins can move around, that's easy. Setting accounts, a little bit different. But smart contracts, I could see agents under the coverage just doing all the smart contract minutia. What's your vision on that?
Luigi DeMeo
>> Yeah, I mean, I wouldn't be surprised to see an agent go book a flight for you, take care of the payment all autonomously. An agent work on settling Nigerian bonds between banks and having all that value be settled autonomously. That's going to be the former back-and-middle offices of all these financial institutions, I think will look more like a combination of crypto and agents. And once the assets are tokenized, we'll be in a position where all that value can move frictionlessly and we'll update all of our financial market infrastructure.>> I think the agents, what we're seeing with Gen AI now is you're seeing coding and sales and marketing benefits, obviously. I think the next level is the middleware area kind of model where it's going in.
Luigi DeMeo
>> That's right.>> Great conversation. Thanks for coming in and being part of our crypto trailblazer of the NYSE Wire program with theCUBE.
Luigi DeMeo
>> Yeah, loved it.>> Thanks for coming on.
Luigi DeMeo
>> Thanks for having me.>> I'm Dave Vellante, two days of coverage, Crypto Trailblazer, all the leaders who are enabling the value extraction, value creation. And of course, the financial markets are responding, the plumbing is being reset, the money system and it's programmable. Crypto's at the center of all of it. Stablecoins been a big, big... And of course, the Genius Act has enabled tons of clarity, pun intended. Thanks for watching.
