In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
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Itai Turbahn, Dynamic
In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
play_circle_outlineFrom Niche to Network: The Evolution of FinTech in a Democratized Ecosystem of Payments and Integration
replyShare Clip
play_circle_outlineRevolutionizing Crypto Payments: Dynamic's CEO Itai on Simplifying Transactions for Developers and Businesses
replyShare Clip
play_circle_outlineDynamic's target audience includes developers and businesses looking to implement crypto solutions.
replyShare Clip
play_circle_outlineRevolutionizing Global Payments: The Future of Financial Innovation Through Crypto, Microtransactions, and Dynamic Peer-to-Peer Solutions
>> Welcome back, everyone, to theCUBE here on New York City NYSE CUBE Studio. I'm John Furrier, host of theCUBE, of course. We got our Palo Alto studio connecting Wall Street and Silicon Valley creating a network effect, bringing innovators together. This is our Crypto Trailblazer series. And in from Palo Alto is Itai, who is the CEO and co-founder of Dynamic, venture-backed, hot start-up blazing the trail. Itai, great to see you from Palo Alto here. Just found that out. Of course, I live in Palo Alto and looking at New York. Good to have you on.
Itai Turbahn
>> Thanks for having me on the other side of the country from you.>> I love the work right now in the market. We couldn't covering AI like it's nobody's business and supercomputing, NVIDIA, infrastructure enterprise, and now in Wall Street seeing that financial impact. A lot of the startups and the young guns here in New York and even in Silicon Valley ... They're targeting the enterprise. I think there'll be a big AI wave on the consumer side will pop out soon. I think that's just baking in the oven. But right now, all the action seems to be enterprise because cloud's enterprise ready from day one. It's not just EC2 and S3. You got higher-level services. There's a lot of companies here in New York that are customers. FinTech's hot. And of course, in Silicon Valley, you got people coming out of Facebook, Palantir, that have real, large-scale experience. And then you got the crypto wave reborn out of the ashes of the downside and the regulatory regime that was prior to Trump. You have this resurgence of decentralized infrastructure dynamics combined with traditional enterprise merging in with a software layer coming in.
Itai Turbahn
>> That's right.>> That's Circle meets Palantir vibe, right? You got the Marc Andreessen 20 years ago wrote, "Software is eating the world," but it's also now eating money and banks.
Itai Turbahn
>> That's exactly right. That's exactly right.>> I see that banking and money kind of connecting. I think there's going to be a surge of innovation in AI software on top of decentralized infrastructure. And what that looks like, I don't know. Nobody knows. If I did, I'd be investing in it. But you're in the middle of it. What's your reaction to that software blockchain intersection? Do you agree with it? And what would be your commentary?
Itai Turbahn
>> 100%. We're seeing this on a day-to-day basis. At the very basic level, finance was very hard. The moats to actually get in to ... The moats to innovate were extremely complex. And what we are seeing recently is essentially you're lowering the barrier to actually create a FinTech app. What used to take years for a Venmo to spin up a Venmo just in the US, you can now, with services like Dynamic or others, do within days on a weekend. It'll build your own global version of a Venmo or a Zelle very, very quickly. You're starting to see this massive acceleration of, to your point, software is eating the world. Crypto is eating FinTech in a lot of ways.>> It's interesting. I want to get some of the tech and talk about Dynamic, but I want to just keep on this thread because FinTech used to be this narrow category. Banks or whatever. Payment rails have done this. You've got APIs. Cloud. Great. Now, you're starting to see with AI, and we're seeing this with theCUBE, retail.
Itai Turbahn
>> That's right.>> Classic retail industry. FinTech is not just a category. It's payments and settlements.
Itai Turbahn
>> Yes. That's right.>> That's up for grabs. Everything's connected.
Itai Turbahn
>> That's right.>> AI affects all the industries. This idea that FinTech is just one thing is over.
Itai Turbahn
>> That's right.>> Now, money is integrated into app. Democratization wave is here.
Itai Turbahn
>> That's exactly right.>> I want to have my own Venmo. Why not have my own Venmo?
Itai Turbahn
>> That's exactly right. Look, what we learned very quickly is that every company grows up wants to be a FinTech company, and every company that grows up wants to be an identity company. And so what you're going to see is not just FinTech companies or banks, et cetera, but you're going to see FinTech be implemented across anything. There's no reason why a global payroll company doesn't want to start being your neobank when you receive money from them. There's no reason why, if you do a house purchase, why you don't keep stuff there. Everything going to have this FinTech component implemented and, to your point, an AI component implemented, just going to work across->> The neobank thing is phenomenal. We've been covering the neo clouds, which is a little bit more interesting than the CapEx side, but Dave Vellante and I were talking, I think, five years ago when we were at an Amazon re:Invent that Capital One's got a cloud. JP Morgan Chase has got a $17 billion IT budget. Why don't they become their own clouds and serve the other banks that don't have ... They could become the AWS of the sector. Why wouldn't they? They're already investing in all the CapEx.
Itai Turbahn
>> That's exactly right.>> Why wouldn't they do that?
Itai Turbahn
>> That's exactly right. And I would argue that's why you see companies like Airbnb and Uber think about this stuff is because they're saying, "Look, I run all the money. I move money internationally at massive scale, whether I'm Airbnb, Uber, or any one of those. Why am I not also the bank at the end of that for the drivers? For the consumers? Why am I not keeping the financial relationship there?" And that's where you're starting to see crypto rails come in and abstract that complexity.>> I love this contrast. I want to get into what you're working on. Again, one finer point before we jump in is that, if you take that one step further, why don't I be the bank? Why don't I just build a platform? Why don't I connect everything? I got the data. I got the cost barrier. I invested in it. Why don't I harvest that? And that essentially will enable people to build agents. That also impacts the infrastructure. Now, what SaaS was is evolved into full-blown platforms. It's not just build an app like Airbnb, throw it on Apple's app store, and then people download it. And you had a backend. You built out. You're actually a service provider.
Itai Turbahn
>> Yes.>> Why wouldn't I do that?
Itai Turbahn
>> 100%.>> Then you say, "I'm going to enable this ... Democratize this with blockchain, and the developers are moving there because of store value." If I'm going to store my value, me, why should I give it to a bank?
Itai Turbahn
>> That's right.>> I'll just hold it and leverage it. Do something with it.
Itai Turbahn
>> That's right. That's right. Issue a debit card against it.>> That's just happening in your mind.
Itai Turbahn
>> That is happening. That is happening today and very, very quickly. It's exactly that logic of, look, if I'm a FinTech company, I'm looking at the rails. Why am I paying five of these providers when I'm transferring money internationally? Why am I not owning the full stack? Why am I giving some of that value away? And if you switch that out with kind of crypto layers with, hey, I will own my own chain on top of Aetherium, I will move my own money. I will even issue my own stablecoin, and I will have wallets on both ends. Then I, as a FinTech company, I would own the full stack, and I can get a lot more of the value of keeping the user.>> I had this conversation recently a lot in the past year with old-school dudes like me and gals that have been in the software business for a while. Because the old wars of heterogeneous versus homogeneous systems, monolithic mainframes and then open systems ... You kind of have this notion of, hey, I might want to vertically integrate.
Itai Turbahn
>> That's right.>> But you also have the integration of open standards at the same time, so it's not so much proprietary versus open standards. It's I'm going to vertically integrate a platform with open standards to create ... I won't say Moca because moat sounds too defensive, but competitive advantage.
Itai Turbahn
>> That's right.>> What is the competitive advantage strategy, in your opinion, with these trends? Because I think I've come to the conclusion that, yes, open ... It's not proprietary.
Itai Turbahn
>> That's right.>> Open source standards are out there. Open standards. But I need to integrate vertically. If I'm going to have a car, I better ... A self-driving car. I don't want to rely on some third party. I want to own everything, maybe.
Itai Turbahn
>> That's right. I think, to your point, the competitive advantage very much lies in the user relationship. The end-user, end-consumer relationship. That's why you're seeing the Robinhoods of the world and Revoluts of the world do phenomenally well because they're not competing on ... Historically, they might've competed on better tech. But really, now that you're democratizing the tech, you're really competing on, can I deliver this magical experience for consumers today and, to your point, in the future, to AI agents on consumers' behalf and do that at massive scale? And no one's competing around ACH. ACH is not a competitive advantage. It's just a shared rail that people use. But because you have that as a shared rail, you can start building these innovative solutions on top of it.>> I think where the money is is in settlement. Zero-latency settlement-
Itai Turbahn
>> That's right.... >> has to be in our future.
Itai Turbahn
>> That is correct. Zero latency and global. The key thing is we are very fortunate in the US to have access to these incredible financial systems, but as soon as you venture outside, that diminishes very quickly. Just the ability for someone ... Even very basic things. Just the ability of someone in South America or Nigeria to access a US-denominated account is massive on its own.>> Awesome. Well, great commentary. Really appreciate you contributing on that. Let's talk about Dynamic, what you guys do. Give a quick overview of what you guys do, how long you've been in business, who funded you, and what is the value proposition.
Itai Turbahn
>> Absolutely. Dynamic, at the very basic level, is a wallet infrastructure company. We're backed by Andreessen Horowitz and Founders Fund. We raised about $23 million. Late Series A company. And really, what we do in a nutshell is everything wallets. What that means is the following. If you think about crypto as the electric grid, think about crypto as power moving into the electric grid. We sell outlets. The way to think about wallets is how you plug into the electric grid. And every time you want to interact with it, you have to have an outlet that lets you plug things in. That is a wallet in the crypto analogy. And that's what we do. If you're a payroll company, for instance, and you want to send money via stablecoin rails via a kind of crypto to end users, it starts with a wallet, and it ends with a wallet. And it starts with programmatic wallets here, which we do through APIs which agents can use or developers can use. And it ends with consumer-branded wallets on the other side of that, where an end user of a company can open their phone. A Kraken, for instance, can open their phone and just receive funds, and everything just works. That's Dynamic in the background.>> You're an endpoint for the one wallet and the origination of the other?
Itai Turbahn
>> That's right.>> Send-receive model.
Itai Turbahn
>> We very much abstract away crypto complexity. The way to think about us is sort of a plaid, for instance, or a stripe where you don't have to know about the full money movement infrastructure to accept payments. You just need to know that it works. In a very similar way, what Dynamic does is we abstract the crypto complexity for you. You implement Dynamic's SDK. We're a developer tool, and we take care of the abstraction of->> And who's the buyers of the service?
Itai Turbahn
>> Our buyers->> The consumers?
Itai Turbahn
>> The buyers for us are developers. The customers we serve are customers like Stripe today and Kraken and Zero Hash and Magic Eden and Ondo Finance. Developers and businesses->> You're targeting anyone who's doing payment rails.
Itai Turbahn
>> That is exactly right. Any Web3, as the cool kids like to call it, or any crypto ->> 3.5. Whatever. When's that going to be Web4?
Itai Turbahn
>> That's right. Exactly. Any crypto company that's trying to build a neobank or any FinTech company that's building a payroll platform, remittance platform, neobank and is thinking about crypto would need a service like Dynamic, ideally Dynamic, to power their wallet and money movement into->> You're trying to create an ease-of-use mechanism for the developer.
Itai Turbahn
>> That's right. We're very much->> the first time I set into an Uber, I saw the Stripe swipe when they had that little iPhone attachment. That's really easy.
Itai Turbahn
>> That's right?>> Very similar what you're thinking. I could build something that simple for a small business or anyone, whatever might ... Could be an enterprise. Sales reps getting commissions on deals.
Itai Turbahn
>> Yes. That is exactly right. And we take all the complexity of doing that. Wallets are security features. These are very complex security and money movement type things. We take all of the complexity and abstract it behind the scenes so that you can wake up in the morning say, "Look, I want to compete against Venmo on a global level." You can spin that up in the weekend and focus on building your brand rather than re-architecting an entire->> It's a very interesting business model. Now, you can take the security issue and push it to the developer.
Itai Turbahn
>> That's right.>> You don't actually have to worry about too much. I mean, obviously you have to have security built in that's solid as a rock. But I'm the developer. I'm building an app for someone. Or my app.
Itai Turbahn
>> To an extent. Essentially, we would ... I actually abstract away the security, at least the key management security, for you as a developer. At the very basic level, what is a wallet? It's a private key that lets you kind of open the door to access your funds. My entire business is essentially a security business. I help you secure that private key. I use really fancy tech, a multi-party computation, to do that. There's really no private key->> There's cryptography involved. You're basically innovating on the math.
Itai Turbahn
>> That's right.>> You're ensuring that you're basically the keys to the kingdom here, the money-
Itai Turbahn
>> That's exactly right.... >> don't get stolen.
Itai Turbahn
>> That's exactly right. So that, whether you're a two-person startup building the next neobank, or you're a Fortune 500 company saying, "Let me introduce stablecoins for all my customers," you can implement it and not worry about the security aspects of it.>> All right. I'll put my skeptic hat on. I'm scared. It's a black box to me. My money's being moved around. What if I lose my cash in crypto? How do you calm me down, give me confidence?
Itai Turbahn
>> That's a completely fair thing. That's what we wake up every morning thinking about it and what we go to sleep every night thinking about. The way we handle that is by essentially ... There's this concept called non-custody, right? Which essentially means you hold the keys. You are the custodial of the keys, and you actually are the person, the only person, that can actually do things with your wallet. We've seen historically ledgers or physical ways to do this. For those that remember, you can put crypto on your actual physical device, but there are other more creative and innovative ways to do non-custody. Meaning, how do I ensure it's super easy on the UI side? You just log in like you would to your bank account or to your WhatsApp or whatever, but you get the same security. What we do is we actually ... In the background, in your device, we store a part of the secret. And on the Dynamic side, we store a second part of the secret. And only when those two are combined or kind of interact can something sign. If Dynamic gets hacked, your information and your money's still safe. And if you get hacked, your money's still safe because they just stole a part of a secret.>> The only way to get hacked is to have both secrets hacked at the same time.
Itai Turbahn
>> That's right. But at that point, you can start expanding it in more sophisticated use cases to let's do three secrets. Let's do four secrets. And so you->> And that's developer controlled?
Itai Turbahn
>> That's developer controlled. That's right.>> I can put the provisions into the algorithm?
Itai Turbahn
>> That's exactly right.>> Protective provisions based upon what I deem necessary?
Itai Turbahn
>> Yes, that's exactly right. And not all users are created equal. If you have $1 in your wallet, the security approach for you should be very different than someone that has $1 million in their wallet. If you're playing a game, and you are gaining some funds in a wallet throughout the game, that's a very different use case if you're storing $10 million in your neobank.>> It reminds me of the days ... I was talking to someone at the Databricks conference because OLTP PostgreSQL was a big part of the program. And I'm like, "OLTP used to be a big financial services kind of thing. Big transactional databases." And reminds me of the micropayment days. Remember those days? Little payments going back and forth?
Itai Turbahn
>> That's exactly right.>> Agents will be doing those. Wallets will be doing those.
Itai Turbahn
>> That's exactly right.>> You're going to have a lot of online transactions.
Itai Turbahn
>> Yes. We actually have an entire tool suite exactly for that. To your point, you can spin up a wallet, and you would log in, and you would access it, but agents don't have that need. They have this no need for an interface. They just completely programmatically do this. Everything we described you could do with what we call server wallets. The ability for an agent ... Literally an agent. We have an entire agent kit. You can, as an AI agent, show up and say, "Let me create a wallet for myself, and let me trade with that wallet."
As a developer, for instance->> It's wallet services.
Itai Turbahn
>> It's wallet services. That's right. As a developer, I can spin up a million wallets and have a million agents trade on my behalf. Or you can do really sophisticated things like saying, "Look, I am a trader. I would log in, and I will delegate access to 10 agents to trade complex strategies on my behalf." You can do all of that with Dynamic.>> This is going to change so much. I just love the agent wave. And I still think in the main enterprise they're not ready. But on the innovation side, it's definitely opportunity with entrepreneurs. The question I have to ask you is that I would envision Dynamic enabling a scenario where people will start doing what we hope smart contracts would enable. Peer-to-peer direct communications and commerce create value together without an intermediary.
Itai Turbahn
>> That is exactly right.>> Take me through that use case. Are you built for that?
Itai Turbahn
>> Yes.>> And how does that manifest itself?
Itai Turbahn
>> At the very basic level, we're ... Because we're an infrastructure company, our goal is to really enable the next set of financial innovation to happen on top of crypto rails, right? We're successful if you're starting to see companies that could not exist until today start to exist. And the way you do that is you democratize, to your point, a lot of these financial rails. What you're going to see is you're going to see apps ... And we see this today. You're going to see apps where I can do very efficient micropayment at a tenth of a cent or a hundredth of a cent where two folks interact, and they can move money very quickly without having to send it to a bank, et cetera. And they can move money in the same efficient way, whether they're right next to each other or on the other side of the world. If my sister's in Israel, my ability to send her money and have her receive it within the next one minute should be as immediate as me sending you money. And that's what you're going to see.>> Talk about the scenario where just to say theCUBE wanted to have its own crypto wallet. Say if I wanted to hire off some new producers, all these influences out there, and then, hey, we're going to put you out there, get tip jar, or whatever you want to do. Create a business model. Would I do that, the developer, on behalf ... Of course, I want to get some fees off that.
Itai Turbahn
>> That's right.>> Small taste. Lick off the cone, as they say. I would want to enable that because I think I would see people wanting to have a crypto donation or contribution even a producer or value.
Itai Turbahn
>> We actually see this really interesting use case of Donate.gg, which is a company that uses Dynamic, where you can literally go in, pay with bitcoin, and donate to St. Jude's Hospital. You can do that. You can literally spin up these wallets. Taking transaction fees depends on licensees, right? You just want to make sure that you're ... Being encrypted does not imply that ... You got to still ensure you're compliant, complying with the relevant regulations. But, to your point, that is absolutely possible. And before, two years ago, three years ago, et cetera, you would have to spend->> I could do that today with Dynamic?
Itai Turbahn
>> You can do that today in a week with Dynamic->> What do I need to do? Hire a developer to do that?
Itai Turbahn
>> Today, maybe hire a developer. Fast-forward with AI six months, you're not going to need to hire a developer. You're going to be able to go to Lovable or Cursor or->> you guys can build or build a Replit kind of scenario?
Itai Turbahn
>> That's right. You can actually go to Replit today, add Dynamic, and be on your merry way. We've seen people do that and spin up Dynamic with Replit->> Well, this is the kind of business models that are going to be enabled from this new environment.
Itai Turbahn
>> That's exactly right. To your point, if you have a good idea with AI and crypto ... Before, if you had a good idea with AI in the last six months, you are able to spin up a great app. In the next six to 12 months, if you have a good idea with AI and crypto, you can spin up a global payment app, global neobank, within a month.>> And you mentioned gg as an example. I think about gaming, for instance. The gaming culture. What's going on in social media. What we're seeing with micro communities. You're starting to see the formation of these micro communities that are tightly connected that also have connections to bigger numbers. But you have ... They're domain experts or domain tribal. And they're all connected to graphs. It's the internet. These micro communities are self-governing,
Itai Turbahn
>> That's right.>> And it's not in a Patreon way. It's more of they just do stuff like what we're doing with the NYSE is theCUBE and the NYSE merging our communities together in an abstract way, forming a micro community that we have, and no one owns it, but people might want to invest in your next round. Why not say, "Hey, come through theCUBE. I got a referral. I know the founder,"?
Itai Turbahn
>> That's right.>> I'm hypothetical. But these are the kinds of transactions that would fit the use case of a micropayment or direct, no intermediary required, trusted-
Itai Turbahn
>> That's exactly right. I think giant businesses to be built in exactly ... And just going to Facebook groups that are their own micro-communities and creating businesses that are vertically integrated with payments and money movement along those with crypto. And those are enabled by Dynamic, essentially.>> Itai, great conversation. Certainly, we'll have you on in Palo Alto now that I know you live in Palo Alto. We'll get you into our studio there on our next series of focus ... Again, we do topics. We can do a deep dive. We didn't get into the math. I was looking forward to that, but we're living in a math world.
Itai Turbahn
>> Fair enough.>> Put a plug in for the company, to close out. What you're looking to do. What's your focus? What are you optimizing for? Are you hiring, obviously? You're looking for a next round of funding. Andreessen always steps up. Come on.
Itai Turbahn
>> We're very well funded. To your point, the biggest thing, I think, is our launch of what we call stablecoin accounts which we rolled out on Monday at this point. Two days ago. And what that does is take what we've described, which is anyone can build a crypto-based app, and lower the complexity for that by twofold. What we do is we let you plug in an SDK that also brings money from fiat to crypto, from crypto to fiat, and store it in a wallet, move it globally very, very quickly all as a single SDK. We just launched that. It's something we're super excited about. And you can check it out at dynamic.xyz.>> Well, welcome to theCUBE community. You're now CUBE alumni. And thanks for coming on. And then love your venture. Appreciate it.
Itai Turbahn
>> Thank you so much. I very much appreciate the time.>> The crypto trailblazers are here in New York City. They're in Silicon Valley. They're all around the world. Software chips. Geography. No matter what's happening, the growth of the AI decentralized wave is converging. All the benefits that have been talked about will be realized. And again, opportunity for entrepreneurs, opportunities for big companies, to transform. If you don't, it's an extinction event. That's what we're hearing. I'm John Furrier, your host of theCUBE. Thanks for watching.
>> Welcome back, everyone, to theCUBE here on New York City NYSE CUBE Studio. I'm John Furrier, host of theCUBE, of course. We got our Palo Alto studio connecting Wall Street and Silicon Valley creating a network effect, bringing innovators together. This is our Crypto Trailblazer series. And in from Palo Alto is Itai, who is the CEO and co-founder of Dynamic, venture-backed, hot start-up blazing the trail. Itai, great to see you from Palo Alto here. Just found that out. Of course, I live in Palo Alto and looking at New York. Good to have you on.
Itai Turbahn
>> Thanks for having me on the other side of the country from you.>> I love the work right now in the market. We couldn't covering AI like it's nobody's business and supercomputing, NVIDIA, infrastructure enterprise, and now in Wall Street seeing that financial impact. A lot of the startups and the young guns here in New York and even in Silicon Valley ... They're targeting the enterprise. I think there'll be a big AI wave on the consumer side will pop out soon. I think that's just baking in the oven. But right now, all the action seems to be enterprise because cloud's enterprise ready from day one. It's not just EC2 and S3. You got higher-level services. There's a lot of companies here in New York that are customers. FinTech's hot. And of course, in Silicon Valley, you got people coming out of Facebook, Palantir, that have real, large-scale experience. And then you got the crypto wave reborn out of the ashes of the downside and the regulatory regime that was prior to Trump. You have this resurgence of decentralized infrastructure dynamics combined with traditional enterprise merging in with a software layer coming in.
Itai Turbahn
>> That's right.>> That's Circle meets Palantir vibe, right? You got the Marc Andreessen 20 years ago wrote, "Software is eating the world," but it's also now eating money and banks.
Itai Turbahn
>> That's exactly right. That's exactly right.>> I see that banking and money kind of connecting. I think there's going to be a surge of innovation in AI software on top of decentralized infrastructure. And what that looks like, I don't know. Nobody knows. If I did, I'd be investing in it. But you're in the middle of it. What's your reaction to that software blockchain intersection? Do you agree with it? And what would be your commentary?
Itai Turbahn
>> 100%. We're seeing this on a day-to-day basis. At the very basic level, finance was very hard. The moats to actually get in to ... The moats to innovate were extremely complex. And what we are seeing recently is essentially you're lowering the barrier to actually create a FinTech app. What used to take years for a Venmo to spin up a Venmo just in the US, you can now, with services like Dynamic or others, do within days on a weekend. It'll build your own global version of a Venmo or a Zelle very, very quickly. You're starting to see this massive acceleration of, to your point, software is eating the world. Crypto is eating FinTech in a lot of ways.>> It's interesting. I want to get some of the tech and talk about Dynamic, but I want to just keep on this thread because FinTech used to be this narrow category. Banks or whatever. Payment rails have done this. You've got APIs. Cloud. Great. Now, you're starting to see with AI, and we're seeing this with theCUBE, retail.
Itai Turbahn
>> That's right.>> Classic retail industry. FinTech is not just a category. It's payments and settlements.
Itai Turbahn
>> Yes. That's right.>> That's up for grabs. Everything's connected.
Itai Turbahn
>> That's right.>> AI affects all the industries. This idea that FinTech is just one thing is over.
Itai Turbahn
>> That's right.>> Now, money is integrated into app. Democratization wave is here.
Itai Turbahn
>> That's exactly right.>> I want to have my own Venmo. Why not have my own Venmo?
Itai Turbahn
>> That's exactly right. Look, what we learned very quickly is that every company grows up wants to be a FinTech company, and every company that grows up wants to be an identity company. And so what you're going to see is not just FinTech companies or banks, et cetera, but you're going to see FinTech be implemented across anything. There's no reason why a global payroll company doesn't want to start being your neobank when you receive money from them. There's no reason why, if you do a house purchase, why you don't keep stuff there. Everything going to have this FinTech component implemented and, to your point, an AI component implemented, just going to work across->> The neobank thing is phenomenal. We've been covering the neo clouds, which is a little bit more interesting than the CapEx side, but Dave Vellante and I were talking, I think, five years ago when we were at an Amazon re:Invent that Capital One's got a cloud. JP Morgan Chase has got a $17 billion IT budget. Why don't they become their own clouds and serve the other banks that don't have ... They could become the AWS of the sector. Why wouldn't they? They're already investing in all the CapEx.
Itai Turbahn
>> That's exactly right.>> Why wouldn't they do that?
Itai Turbahn
>> That's exactly right. And I would argue that's why you see companies like Airbnb and Uber think about this stuff is because they're saying, "Look, I run all the money. I move money internationally at massive scale, whether I'm Airbnb, Uber, or any one of those. Why am I not also the bank at the end of that for the drivers? For the consumers? Why am I not keeping the financial relationship there?" And that's where you're starting to see crypto rails come in and abstract that complexity.>> I love this contrast. I want to get into what you're working on. Again, one finer point before we jump in is that, if you take that one step further, why don't I be the bank? Why don't I just build a platform? Why don't I connect everything? I got the data. I got the cost barrier. I invested in it. Why don't I harvest that? And that essentially will enable people to build agents. That also impacts the infrastructure. Now, what SaaS was is evolved into full-blown platforms. It's not just build an app like Airbnb, throw it on Apple's app store, and then people download it. And you had a backend. You built out. You're actually a service provider.
Itai Turbahn
>> Yes.>> Why wouldn't I do that?
Itai Turbahn
>> 100%.>> Then you say, "I'm going to enable this ... Democratize this with blockchain, and the developers are moving there because of store value." If I'm going to store my value, me, why should I give it to a bank?
Itai Turbahn
>> That's right.>> I'll just hold it and leverage it. Do something with it.
Itai Turbahn
>> That's right. That's right. Issue a debit card against it.>> That's just happening in your mind.
Itai Turbahn
>> That is happening. That is happening today and very, very quickly. It's exactly that logic of, look, if I'm a FinTech company, I'm looking at the rails. Why am I paying five of these providers when I'm transferring money internationally? Why am I not owning the full stack? Why am I giving some of that value away? And if you switch that out with kind of crypto layers with, hey, I will own my own chain on top of Aetherium, I will move my own money. I will even issue my own stablecoin, and I will have wallets on both ends. Then I, as a FinTech company, I would own the full stack, and I can get a lot more of the value of keeping the user.>> I had this conversation recently a lot in the past year with old-school dudes like me and gals that have been in the software business for a while. Because the old wars of heterogeneous versus homogeneous systems, monolithic mainframes and then open systems ... You kind of have this notion of, hey, I might want to vertically integrate.
Itai Turbahn
>> That's right.>> But you also have the integration of open standards at the same time, so it's not so much proprietary versus open standards. It's I'm going to vertically integrate a platform with open standards to create ... I won't say Moca because moat sounds too defensive, but competitive advantage.
Itai Turbahn
>> That's right.>> What is the competitive advantage strategy, in your opinion, with these trends? Because I think I've come to the conclusion that, yes, open ... It's not proprietary.
Itai Turbahn
>> That's right.>> Open source standards are out there. Open standards. But I need to integrate vertically. If I'm going to have a car, I better ... A self-driving car. I don't want to rely on some third party. I want to own everything, maybe.
Itai Turbahn
>> That's right. I think, to your point, the competitive advantage very much lies in the user relationship. The end-user, end-consumer relationship. That's why you're seeing the Robinhoods of the world and Revoluts of the world do phenomenally well because they're not competing on ... Historically, they might've competed on better tech. But really, now that you're democratizing the tech, you're really competing on, can I deliver this magical experience for consumers today and, to your point, in the future, to AI agents on consumers' behalf and do that at massive scale? And no one's competing around ACH. ACH is not a competitive advantage. It's just a shared rail that people use. But because you have that as a shared rail, you can start building these innovative solutions on top of it.>> I think where the money is is in settlement. Zero-latency settlement-
Itai Turbahn
>> That's right.... >> has to be in our future.
Itai Turbahn
>> That is correct. Zero latency and global. The key thing is we are very fortunate in the US to have access to these incredible financial systems, but as soon as you venture outside, that diminishes very quickly. Just the ability for someone ... Even very basic things. Just the ability of someone in South America or Nigeria to access a US-denominated account is massive on its own.>> Awesome. Well, great commentary. Really appreciate you contributing on that. Let's talk about Dynamic, what you guys do. Give a quick overview of what you guys do, how long you've been in business, who funded you, and what is the value proposition.
Itai Turbahn
>> Absolutely. Dynamic, at the very basic level, is a wallet infrastructure company. We're backed by Andreessen Horowitz and Founders Fund. We raised about $23 million. Late Series A company. And really, what we do in a nutshell is everything wallets. What that means is the following. If you think about crypto as the electric grid, think about crypto as power moving into the electric grid. We sell outlets. The way to think about wallets is how you plug into the electric grid. And every time you want to interact with it, you have to have an outlet that lets you plug things in. That is a wallet in the crypto analogy. And that's what we do. If you're a payroll company, for instance, and you want to send money via stablecoin rails via a kind of crypto to end users, it starts with a wallet, and it ends with a wallet. And it starts with programmatic wallets here, which we do through APIs which agents can use or developers can use. And it ends with consumer-branded wallets on the other side of that, where an end user of a company can open their phone. A Kraken, for instance, can open their phone and just receive funds, and everything just works. That's Dynamic in the background.>> You're an endpoint for the one wallet and the origination of the other?
Itai Turbahn
>> That's right.>> Send-receive model.
Itai Turbahn
>> We very much abstract away crypto complexity. The way to think about us is sort of a plaid, for instance, or a stripe where you don't have to know about the full money movement infrastructure to accept payments. You just need to know that it works. In a very similar way, what Dynamic does is we abstract the crypto complexity for you. You implement Dynamic's SDK. We're a developer tool, and we take care of the abstraction of->> And who's the buyers of the service?
Itai Turbahn
>> Our buyers->> The consumers?
Itai Turbahn
>> The buyers for us are developers. The customers we serve are customers like Stripe today and Kraken and Zero Hash and Magic Eden and Ondo Finance. Developers and businesses->> You're targeting anyone who's doing payment rails.
Itai Turbahn
>> That is exactly right. Any Web3, as the cool kids like to call it, or any crypto ->> 3.5. Whatever. When's that going to be Web4?
Itai Turbahn
>> That's right. Exactly. Any crypto company that's trying to build a neobank or any FinTech company that's building a payroll platform, remittance platform, neobank and is thinking about crypto would need a service like Dynamic, ideally Dynamic, to power their wallet and money movement into->> You're trying to create an ease-of-use mechanism for the developer.
Itai Turbahn
>> That's right. We're very much->> the first time I set into an Uber, I saw the Stripe swipe when they had that little iPhone attachment. That's really easy.
Itai Turbahn
>> That's right?>> Very similar what you're thinking. I could build something that simple for a small business or anyone, whatever might ... Could be an enterprise. Sales reps getting commissions on deals.
Itai Turbahn
>> Yes. That is exactly right. And we take all the complexity of doing that. Wallets are security features. These are very complex security and money movement type things. We take all of the complexity and abstract it behind the scenes so that you can wake up in the morning say, "Look, I want to compete against Venmo on a global level." You can spin that up in the weekend and focus on building your brand rather than re-architecting an entire->> It's a very interesting business model. Now, you can take the security issue and push it to the developer.
Itai Turbahn
>> That's right.>> You don't actually have to worry about too much. I mean, obviously you have to have security built in that's solid as a rock. But I'm the developer. I'm building an app for someone. Or my app.
Itai Turbahn
>> To an extent. Essentially, we would ... I actually abstract away the security, at least the key management security, for you as a developer. At the very basic level, what is a wallet? It's a private key that lets you kind of open the door to access your funds. My entire business is essentially a security business. I help you secure that private key. I use really fancy tech, a multi-party computation, to do that. There's really no private key->> There's cryptography involved. You're basically innovating on the math.
Itai Turbahn
>> That's right.>> You're ensuring that you're basically the keys to the kingdom here, the money-
Itai Turbahn
>> That's exactly right.... >> don't get stolen.
Itai Turbahn
>> That's exactly right. So that, whether you're a two-person startup building the next neobank, or you're a Fortune 500 company saying, "Let me introduce stablecoins for all my customers," you can implement it and not worry about the security aspects of it.>> All right. I'll put my skeptic hat on. I'm scared. It's a black box to me. My money's being moved around. What if I lose my cash in crypto? How do you calm me down, give me confidence?
Itai Turbahn
>> That's a completely fair thing. That's what we wake up every morning thinking about it and what we go to sleep every night thinking about. The way we handle that is by essentially ... There's this concept called non-custody, right? Which essentially means you hold the keys. You are the custodial of the keys, and you actually are the person, the only person, that can actually do things with your wallet. We've seen historically ledgers or physical ways to do this. For those that remember, you can put crypto on your actual physical device, but there are other more creative and innovative ways to do non-custody. Meaning, how do I ensure it's super easy on the UI side? You just log in like you would to your bank account or to your WhatsApp or whatever, but you get the same security. What we do is we actually ... In the background, in your device, we store a part of the secret. And on the Dynamic side, we store a second part of the secret. And only when those two are combined or kind of interact can something sign. If Dynamic gets hacked, your information and your money's still safe. And if you get hacked, your money's still safe because they just stole a part of a secret.>> The only way to get hacked is to have both secrets hacked at the same time.
Itai Turbahn
>> That's right. But at that point, you can start expanding it in more sophisticated use cases to let's do three secrets. Let's do four secrets. And so you->> And that's developer controlled?
Itai Turbahn
>> That's developer controlled. That's right.>> I can put the provisions into the algorithm?
Itai Turbahn
>> That's exactly right.>> Protective provisions based upon what I deem necessary?
Itai Turbahn
>> Yes, that's exactly right. And not all users are created equal. If you have $1 in your wallet, the security approach for you should be very different than someone that has $1 million in their wallet. If you're playing a game, and you are gaining some funds in a wallet throughout the game, that's a very different use case if you're storing $10 million in your neobank.>> It reminds me of the days ... I was talking to someone at the Databricks conference because OLTP PostgreSQL was a big part of the program. And I'm like, "OLTP used to be a big financial services kind of thing. Big transactional databases." And reminds me of the micropayment days. Remember those days? Little payments going back and forth?
Itai Turbahn
>> That's exactly right.>> Agents will be doing those. Wallets will be doing those.
Itai Turbahn
>> That's exactly right.>> You're going to have a lot of online transactions.
Itai Turbahn
>> Yes. We actually have an entire tool suite exactly for that. To your point, you can spin up a wallet, and you would log in, and you would access it, but agents don't have that need. They have this no need for an interface. They just completely programmatically do this. Everything we described you could do with what we call server wallets. The ability for an agent ... Literally an agent. We have an entire agent kit. You can, as an AI agent, show up and say, "Let me create a wallet for myself, and let me trade with that wallet."
As a developer, for instance->> It's wallet services.
Itai Turbahn
>> It's wallet services. That's right. As a developer, I can spin up a million wallets and have a million agents trade on my behalf. Or you can do really sophisticated things like saying, "Look, I am a trader. I would log in, and I will delegate access to 10 agents to trade complex strategies on my behalf." You can do all of that with Dynamic.>> This is going to change so much. I just love the agent wave. And I still think in the main enterprise they're not ready. But on the innovation side, it's definitely opportunity with entrepreneurs. The question I have to ask you is that I would envision Dynamic enabling a scenario where people will start doing what we hope smart contracts would enable. Peer-to-peer direct communications and commerce create value together without an intermediary.
Itai Turbahn
>> That is exactly right.>> Take me through that use case. Are you built for that?
Itai Turbahn
>> Yes.>> And how does that manifest itself?
Itai Turbahn
>> At the very basic level, we're ... Because we're an infrastructure company, our goal is to really enable the next set of financial innovation to happen on top of crypto rails, right? We're successful if you're starting to see companies that could not exist until today start to exist. And the way you do that is you democratize, to your point, a lot of these financial rails. What you're going to see is you're going to see apps ... And we see this today. You're going to see apps where I can do very efficient micropayment at a tenth of a cent or a hundredth of a cent where two folks interact, and they can move money very quickly without having to send it to a bank, et cetera. And they can move money in the same efficient way, whether they're right next to each other or on the other side of the world. If my sister's in Israel, my ability to send her money and have her receive it within the next one minute should be as immediate as me sending you money. And that's what you're going to see.>> Talk about the scenario where just to say theCUBE wanted to have its own crypto wallet. Say if I wanted to hire off some new producers, all these influences out there, and then, hey, we're going to put you out there, get tip jar, or whatever you want to do. Create a business model. Would I do that, the developer, on behalf ... Of course, I want to get some fees off that.
Itai Turbahn
>> That's right.>> Small taste. Lick off the cone, as they say. I would want to enable that because I think I would see people wanting to have a crypto donation or contribution even a producer or value.
Itai Turbahn
>> We actually see this really interesting use case of Donate.gg, which is a company that uses Dynamic, where you can literally go in, pay with bitcoin, and donate to St. Jude's Hospital. You can do that. You can literally spin up these wallets. Taking transaction fees depends on licensees, right? You just want to make sure that you're ... Being encrypted does not imply that ... You got to still ensure you're compliant, complying with the relevant regulations. But, to your point, that is absolutely possible. And before, two years ago, three years ago, et cetera, you would have to spend->> I could do that today with Dynamic?
Itai Turbahn
>> You can do that today in a week with Dynamic->> What do I need to do? Hire a developer to do that?
Itai Turbahn
>> Today, maybe hire a developer. Fast-forward with AI six months, you're not going to need to hire a developer. You're going to be able to go to Lovable or Cursor or->> you guys can build or build a Replit kind of scenario?
Itai Turbahn
>> That's right. You can actually go to Replit today, add Dynamic, and be on your merry way. We've seen people do that and spin up Dynamic with Replit->> Well, this is the kind of business models that are going to be enabled from this new environment.
Itai Turbahn
>> That's exactly right. To your point, if you have a good idea with AI and crypto ... Before, if you had a good idea with AI in the last six months, you are able to spin up a great app. In the next six to 12 months, if you have a good idea with AI and crypto, you can spin up a global payment app, global neobank, within a month.>> And you mentioned gg as an example. I think about gaming, for instance. The gaming culture. What's going on in social media. What we're seeing with micro communities. You're starting to see the formation of these micro communities that are tightly connected that also have connections to bigger numbers. But you have ... They're domain experts or domain tribal. And they're all connected to graphs. It's the internet. These micro communities are self-governing,
Itai Turbahn
>> That's right.>> And it's not in a Patreon way. It's more of they just do stuff like what we're doing with the NYSE is theCUBE and the NYSE merging our communities together in an abstract way, forming a micro community that we have, and no one owns it, but people might want to invest in your next round. Why not say, "Hey, come through theCUBE. I got a referral. I know the founder,"?
Itai Turbahn
>> That's right.>> I'm hypothetical. But these are the kinds of transactions that would fit the use case of a micropayment or direct, no intermediary required, trusted-
Itai Turbahn
>> That's exactly right. I think giant businesses to be built in exactly ... And just going to Facebook groups that are their own micro-communities and creating businesses that are vertically integrated with payments and money movement along those with crypto. And those are enabled by Dynamic, essentially.>> Itai, great conversation. Certainly, we'll have you on in Palo Alto now that I know you live in Palo Alto. We'll get you into our studio there on our next series of focus ... Again, we do topics. We can do a deep dive. We didn't get into the math. I was looking forward to that, but we're living in a math world.
Itai Turbahn
>> Fair enough.>> Put a plug in for the company, to close out. What you're looking to do. What's your focus? What are you optimizing for? Are you hiring, obviously? You're looking for a next round of funding. Andreessen always steps up. Come on.
Itai Turbahn
>> We're very well funded. To your point, the biggest thing, I think, is our launch of what we call stablecoin accounts which we rolled out on Monday at this point. Two days ago. And what that does is take what we've described, which is anyone can build a crypto-based app, and lower the complexity for that by twofold. What we do is we let you plug in an SDK that also brings money from fiat to crypto, from crypto to fiat, and store it in a wallet, move it globally very, very quickly all as a single SDK. We just launched that. It's something we're super excited about. And you can check it out at dynamic.xyz.>> Well, welcome to theCUBE community. You're now CUBE alumni. And thanks for coming on. And then love your venture. Appreciate it.
Itai Turbahn
>> Thank you so much. I very much appreciate the time.>> The crypto trailblazers are here in New York City. They're in Silicon Valley. They're all around the world. Software chips. Geography. No matter what's happening, the growth of the AI decentralized wave is converging. All the benefits that have been talked about will be realized. And again, opportunity for entrepreneurs, opportunities for big companies, to transform. If you don't, it's an extinction event. That's what we're hearing. I'm John Furrier, your host of theCUBE. Thanks for watching.
