In this insightful episode of theCUBE's Crypto Trailblazer series, host John Furrier converses with Demetrios Skalkotos, the chief decentralized finance and protocol officer at Blockdaemon, recorded at our New York Stock Exchange Studios. This conversation is part of our collaboration with the New York Stock Exchange Wired community, focusing on the convergence of decentralized finance and traditional finance, an event led by innovative leaders driving significant industry change.
Demetrios Skalkotos shares their journey and expertise as they discuss Blockdaemon's pivotal role in the crypto infrastructure landscape. Skalkotos elaborates on the company's comprehensive services, such as running nodes for major cryptocurrencies such as Ethereum and Bitcoin, and providing staking solutions and multiparty computation wallet technology. TheCUBE Research analysts and John explore Blockdaemon’s recent acquisition of a decentralized finance infrastructure startup and its impact on expanding ecosystem connectivity.
The conversation reveals key industry insights and trends as Skalkotos highlights the growing interest in staking, yield opportunities, and cross-chain trading, emphasizing their importance in the current market. They note that the integration of decentralized finance insights into existing financial systems bridges the gap between Web2 and Web3, fostering a dynamic collaborative environment. Skalkotos's perspective offers a glimpse into the rapidly evolving relationship between institutional finance and digital assets.
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Demetrios Skalkotos, Blockdaemon
Exploring the Future of Cryptocurrency with Offchain Labs
Join us as we delve into an insightful discussion with Steven Goldfeder of Offchain Labs, analyzed by theCUBE Research. This segment, part of the Crypto Trailblazers series in collaboration with NYSE Wired, explores the innovative efforts redefining the Ethereum ecosystem and the broader blockchain landscape.
Steven Goldfeder, co-founder and CEO of Offchain Labs, discusses significant advancements and strategic insights in blockchain technology. In this engaging episode, hosted at theCUBE Studios, Goldfeder shares their expertise on how Offchain Labs contributes to the evolution of Ethereum through groundbreaking projects such as Prysm and Arbitrum, while discussing impacts on scalability and decentralization.
In this discussion, Goldfeder elaborates on key technological initiatives driven by Offchain Labs, focusing particularly on Arbitrum, the pioneering layer two scaling solution for Ethereum. They illustrate how innovative platforms such as Arbitrum significantly enhance Ethereum's capacity, efficiency, and scalability without compromising security or decentralization, closely analyzed by theCUBE Research.
Highlights include Goldfeder's insights on the future trajectory of Ethereum and its ecosystem, emphasizing the sustainable development model and potential for global business transformations. Goldfeder states that engaging with regulators now can ensure crypto's lasting impact, aligning with a US administration open to embracing this technological shift. This discussion offers valuable perspectives for developers, businesses, and policymakers navigating the crypto landscape.
#OffchainLabs #Arbitrum #Ethereum #theCUBE #NYSEWired #Blockchain #CryptoTrailblazers #Scalability #Decentralization #Innovation #Crypto #SmartContracts #PaloAlto #CryptoRegulation
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
00:06 - Exploring Innovations in Blockchain: A Deep Dive into Offchain Labs and Arbitrum
05:23 - Ethereum's Scalability and the Layered Architecture
08:01 - Smart Contracts and Developer Innovations on Arbitrum
11:46 - The Impact of Arbitrum on Blockchain App Development
16:08 - Navigating the Future: Offchain Labs and Ethereum in a Regulatory Landscape
>> Welcome back everyone. I'm John Furrier, host of theCUBE here at our NYSE Studios. Day two of our Crypto Trailblazer series with the NYSE Wired community. This is an ongoing series. We feature the leaders. We're making things happen in the industry, building stuff, investing, and of course changing the financial plumbing, an upgrade to the system as two worlds collide, DeFi and TradFi. It's old school, new school coming together, rewriting the rules, interacting and the economics looking great, and the government's behind it. We got a great guest here, Demetrios Skalkotos, Chief DeFi and Protocol Officer at Blockdaemon. Welcome to theCUBE.
Demetrios Skalkotos
>> Thank you, good to be here.>> Getting ready for the big event tonight, the Crypto Trailblazers. 250 people are going to be here tonight in the industry, blazing the trails. What's going on?
Demetrios Skalkotos
>> Exciting. Exciting.>> Yeah.
Demetrios Skalkotos
>> Well, it's good to be here. Thank you for having me. Really appreciate it. Yeah. Where do you want me to start?>> Tell me about what you guys do. Let's set the table because-
Demetrios Skalkotos
>> Sure.>> You have a story, how you boomerang back into Blockdaemon, but let's set the table. What do you guys do? Obviously with the market now, people want to kind of put that in a box. What do you guys do?
Demetrios Skalkotos
>> Yeah. Blockdaemon is an eight-year-old infrastructure company. We got our start by just running nodes. Right. If people want access to Ethereum or Bitcoin or Solana, we run all that infrastructure for folks so they can get access to those ecosystems for data and trading. Then we kind of morphed into another business called Staking, so probably our largest business unit today on the staking side. And then we bought an MPC wallet company about three years ago called Sepior out of Denmark. So we provide a good deal of the MPC wallet tech for a lot of the big institutions and banks in the marketplace today. And we have a couple variations->> MPC.
Demetrios Skalkotos
>> Of that wallet. MPC. Yes.>> Not MCP.
Demetrios Skalkotos
>> Yeah, MPC. Yeah.>> Two worlds I live in.
Demetrios Skalkotos
>> Yeah.>> There's agent world. MPC.
Demetrios Skalkotos
>> Yeah. And then the last business unit was the business that Konstantin, our CEO just bought was our DeFi infrastructure business. It was a startup that was backed by Cumberland and DRW, and we just got acquired back and closed this past May, and we provide infrastructure into the entire DeFi world. So with one abstracted API, you can access about 20 different DEXs and DEX aggregators, lending protocols, yield aggregators, liquid staking venues, staking venues, and source a great deal of on-chain data. So we support the full trading ecosystem on the DeFi side. So four business units. And then the protocols that I run along with the DeFi go to market, really the protocols is the horizontal infrastructure middleware that connects all that tissue. So we work with all the protocol foundations in supporting them in their proliferation, and all those business units then are supportive of that.>> So you have the platform that from a connection standpoint, where you connect to everything.
Demetrios Skalkotos
>> Yes.>> And then you use the horizontal scalable layer for protocol management?
Demetrios Skalkotos
>> Yes.>> And what is that, the purpose? Interoperability, compatibility, what's the purpose of the protocol layer?
Demetrios Skalkotos
>> The protocol layer is really the connectivity of I want access to a node, I want to stake that particular protocol. I want that protocol supported in my wallet, and they also want to trade it on the DeFi side, so.>> Oh, it's two things.
Demetrios Skalkotos
>> We have to provide->> It's connection.
Demetrios Skalkotos
>> Yeah.>> It's connectivity.
Demetrios Skalkotos
>> And it's access.>> And access for programmability.
Demetrios Skalkotos
>> Exactly, yes. So we work with the foundations, but we support over 80 different chains and protocols that are in the ecosystem today.>> That's awesome. So you're basically enabling more transactional action happening-
Demetrios Skalkotos
>> Yes.>> At the front end.
Demetrios Skalkotos
>> Absolutely.>> I like to simplify, boil it down. Back end's DeFi, front end's TradFi, but that's the way as the techies, you think about the user experience, what's happening with some interaction, and then something has to happen under the covers.
Demetrios Skalkotos
>> Yeah.>> Take us through what's the hot air because staking is hot. I mean, right now staking seems to be the best, most popular thing because that the benefit of having the asset, it works for you.
Demetrios Skalkotos
>> Yeah. I would kind of classify it as variations of earn, right, or yield. Right. And staking being a big component of that, and it's a big growing component and a very strong component. But you're getting a lot of interest on the yield side as it pertains to USDC, Bitcoin, Ethereum, earning on Solana, all those types of categories. So the AVEs and Compounds and the Morphos of the world are in high demand through our ecosystem. And also being able to do cross-chain trading is cool. So getting from one chain to another is->> Frictionless. Without friction.
Demetrios Skalkotos
>> Yes. Without friction, yeah, with the and a lot of cross-chain bridging platforms. So I would say staking is very hot, yield is very hot, and the whole earn platform, the whole earn stack is I think is super important right now.>> What is the big misunderstanding or confusion around these stakings and these stablecoins and the utilities? I mean, I know it's can be a little bit messy, but you hear I got Solana, I got Ethereum, I got, so there's a lot of environments.
Demetrios Skalkotos
>> Yes.>> And that's not necessarily a bad thing or is it? Explain why, demystify was most misunderstood in the market or?
Demetrios Skalkotos
>> Well, each one is their own ecosystem, right, and it's their own community and you're trying to drive adoption and developers to build on top of that community to build a greater community. So you would say obviously Bitcoin is the big one, but then you have Ethereum and you have Solana and you have Avalanche, and you have the Aptos's and the Suis of the world and many, many others that are forthcoming too that are coming out now that I think have learned from the previous lessons and are building their L1s or L2s that take the best of a bunch of worlds.>> Yeah, out in the open. Not in shadows.
Demetrios Skalkotos
>> Yeah. So they're taking the best of a public network and maybe combining some aspects of a private network and putting those into proliferation too. So->> Interoperability is huge-
Demetrios Skalkotos
>> Very much so.>> In this because now you can have all the greatness of a community or economy, if you will, on the chains thriving and surviving, thriving and growing.
Demetrios Skalkotos
>> And you want to solve real problems, right? Not everybody wants their data on a public blockchain. Right. There's certain aspects of certain data sets that they want private, but there's certain things that you want for that. You want it on the public chain and you want that transparency. So how do you bridge the best of those worlds and what communities, what L1s and L2s are really going to proliferate and win?>> And what service are you guys providing? The private side for enterprises?
Demetrios Skalkotos
>> We do it all. Right. We do it all. We're obviously supportive of the vast majority of supporting all the public chains that are out there, but there's new chains that are coming out. Midnight is one. Canton is getting a lot of play out there as a private permission chain. And so we're supporting everything. So we're really listening to our->> Do they come to you or you go to them?
Demetrios Skalkotos
>> It's a combination of both.>> They want to have the interoperability. Why wouldn't they?
Demetrios Skalkotos
>> Of course. Well, it's really they want access to the institutional customer base. It's that bridging of the Web two world into the Web3 world. It's the bridging of TradFi into DeFi as you're mentioning. All those clients are wanting access to those things. So we listen to our customer base, which is very institutionally focused, and they're saying, hey, are you going to be supporting this protocol? Are you going to be supporting this particular chain? And we'll say->> You're the chief protocol officer.
Demetrios Skalkotos
>> Of course.>> Love that title.
Demetrios Skalkotos
>> We'll look into it and figure out how to support it from a node perspective, a staking perspective within the wallet. And if there's a DeFi component, we'll support it there as well.>> It's interesting, you're getting on some of this hot buttons that we cover in the AI side of our business on our coverage, which is data. Having access to data makes AI better. The institutions want access to the nodes because it makes the transaction and aperture increase-
Demetrios Skalkotos
>> Yes.>> Hence their customers can win. Also, the convergence of DeFi and TradFi is real. You agree that's happening super fast, right?
Demetrios Skalkotos
>> Yes.>> Okay. What is the driver of that right now? What are you seeing coming from? Because like the AI world, we're seeing a big surge of big gear. They're buying GPUs, all the big hardware because all the data of these banks are all in their premises. And we're seeing a similar reaction with chains where it's like, hey, I have a private need, but I don't want to foreclose my ability to connect to the global network. Is there similar, I mean, is that happening or are that down the road or that too far ahead?
Demetrios Skalkotos
>> It's been happening for quite a while and I always like to use the term that it's evolutionary, not revolutionary. Right. I think it's just going to continue to morph over time and merge. I think, look, you have payments, you've got stables. Those are key things. You've got a lot of great things about blockchain that fix a lot of the back office T+1, T+2, T+0 type of capabilities, and that drives efficiencies in the marketplace. So there's different variations where the TradFi market can adopt a lot of blockchain technology that fixes a lot of both middle, front, and back office capabilities.>> What are the most exciting things that are happening now and what are the key areas that are being worked on by the communities right now?
Demetrios Skalkotos
>> I think you're seeing a lot on the stablecoin side. I think you're seeing a lot on the ETF side and all the ETP side. I think that's where a lot of the TradFi's coming into the digital asset world, is they're supporting of their ETFs and they're looking to possibly stake those ETFs. And that's going to be huge business for my mom and dad and your parents and my brothers and sisters.>> Yeah. Because they get access to democratized capital.
Demetrios Skalkotos
>> They have access to democratized capital. Exactly.>> But the plumbing's got to get done first. You can't throw an app on a bad infrastructure.
Demetrios Skalkotos
>> Yeah. Exactly. Yeah. Besides->> An app it's not an app. It's a functionality.
Demetrios Skalkotos
>> Yeah. You don't have to have the conversation anymore.>> But the browser doesn't work on the internet.
Demetrios Skalkotos
>> Yeah. It streamlines the conversation like, oh, so that's kind of what you do. I never knew kind of what you did in crypto. So with those big firms, bringing those ETFs and ETPs to the marketplace, really will bring the masses to the marketplace.>> Demetrios, I have to ask you because once kids come up with Shawn Douglass from Amberdata because he has a tech background, IT operations. A lot of your customers have big IT shops. I mean, JPMorgan Chase got a $17 billion technology budget, annual budget. They do trillions of dollars of transactions. So they got a staff. So a lot of the institutions here in Wall Street, they have game when it comes to technology.
Demetrios Skalkotos
>> Of course.>> What are some of the conversations that you have with the big institutions? Because they're not a deer in the headlights. They may be leaning into it, they might not be really adopters, but I can imagine they're going to have robust conversations around resilience, security, recovery, all the things I'd like to check the boxes on.
Demetrios Skalkotos
>> Yeah, So for Blockdaemon, we are the largest institutional infrastructure provider out there. So we're ISO 27001, we're SOC two type two compliant. So we've been around for eight years. So we->> You speak their language.
Demetrios Skalkotos
>> We speak their language, and folks of the firms that you mentioned are either customers or on our cap table or both. Right. And so they'll come to us and they'll work with our team almost in as a consultancy basis, say, what do you think about this particular chain? I'm looking for this from a wallet application perspective. Can you help us fix that there? So it's very consultancy in that regard.>> It's collaborative.
Demetrios Skalkotos
>> It's very collaborative.>> They're in the community.
Demetrios Skalkotos
>> Yes, they're very much in the community. They're very much engaged.>> Yeah.
Demetrios Skalkotos
>> And at all levels of every business that we run, a lot of these big institutions and banks are tapping all those capabilities.>> What's the coolest thing you're working on right now?
Demetrios Skalkotos
>> Oh wow.>> Pick a favorite area, project or initiative?
Demetrios Skalkotos
>> A lot. I mean, there's a couple, like I mentioned, there's a private chain that's getting a lot of attention in the marketplace today, Canton being one. There's also kind of the combinations of public and private chains, kind of like what Avalanche is doing and what Arbitrum is doing and what OP is doing. I mean, there's a million of them out there as well as what Midnight is coming out with too. So I wouldn't say there's one. I would say there's a lot.>> Yeah.
Demetrios Skalkotos
>> There's a lot on the L1 side and there's a lot of what, the changes that are coming down the pike of what Ethereum is planning on doing too as well. So I just, excited about the movement in the space.>> It's good news.
Demetrios Skalkotos
>> Yeah.>> It's not bad.
Demetrios Skalkotos
>> It's good news. I don't have any favorites. I don't->> Yeah.
Demetrios Skalkotos
>> We need to work with all of them. We need to support all of them because our customers want the vast majority of them.>> You get the customers. They love those customers. I had to ask you a question. If you look at the market, this is much more of my observation. On this series over the past couple segments we've been doing episodes of the past couple months. The one thing that I noticed when I moved to New York from California was there's a entrepreneurship culture right now in finance that I've never really seen at this level. And I don't mean to compare it to tech entrepreneurs because tech entrepreneurs was, oh yeah, I got an invention. I get some funding, I take it to the market and I disrupt the incumbent. I take territory, go public and make money. Everyone's happy, everyone makes returns. Finance has all that institutional back office stuff. Was bottled up regulated so it was really hard to crack, to take territory down as that entrepreneur, to take down the big incumbent. Now you could make money, arbitrage some inefficiencies, get some prepaid calling cards and jump on someone's payment rails, get an API, like Stripe did and then go from there. But now I'm seeing really young guns and folks coming out of some of the bigger firms who are just jumping in and building a real company and it's like a financial entrepreneurial formula. And by the way, it's not being dismissed by the old guard because there's growth. What's your reaction to that? Is that happening or am I misreading that or just maybe looking for confirmation bias?
Demetrios Skalkotos
>> For sure it's happening and I think it's happening really fast. I think that there's a lot of changes. I think there's some components when you have the days of going, I think they're just trying to be difficult to be difficult versus trying to solve problems because the tech can get complicated really quickly.>> Noise ratios up high.
Demetrios Skalkotos
>> Yeah. The tech can get complicated really crazy when you're talking about MEV and a bunch of other different crazy things.>> Know your shit to get this done.
Demetrios Skalkotos
>> Yeah. But yeah, no, it's moving very fast and there's a lot of people interested, a lot of people that want to come in. A lot of people that said, hey, I've been in TradFi. I want to kind of make the move over to the digital asset side, crypto side. So you're seeing a lot of adoption.>> Yeah. I mean, to the work you guys are doing and you mentioned some of those other chains, Avalanche and what not, those other ones, they're bringing the tech up to the level where it's accessible for a domain expert.
Demetrios Skalkotos
>> Yeah.>> Someone that might know the knobs and buttons of these regulations or the nuance, a small little white space that could explode. And so that is huge because you don't have to be a super rocket science coder now. There's some real coding going on. L1 chains. I mean, some of the stuff coming out of New York and Stanford area and East Coast, West Coast, unbelievable. But also there's opportunities inside the top of the stack too. Middleware and-
Demetrios Skalkotos
>> Yes.>> Middle and top of the stack is emerging. That's where I think people can play nicely. That's where TradFi seems to be booming. Someone sees an opportunity, they can go after it.
Demetrios Skalkotos
>> Well, the traditional companies have definitely blockchain staffs and teams. They're looking at it in various different ways to solve certain problems that they're having, front, middle, and back office capabilities. And they're working with said chain or one of the said chains that we talked about, and then some that we haven't mentioned and trying to solve real problems. Whether it's a supply chain issue, whether it's a back office issue, whether it's trading efficiencies, they're all being addressed. So I think this is all good news for us and was trying to solve real problems that will advance the industry for us.>> Well, thanks for coming in. I really appreciate you coming in. I give you the final word. Put a plug in for what you're working on. You hiring, what are the key things you're looking to do, problems you're trying to solve? And you've got a great responsibility, Chief DeFi Protocol Officer. I mean, you're watching the key horizontally layer. That's a critical path layer. I mean that's super important. What are some of the things that are important to you? Put a plug in.
Demetrios Skalkotos
>> Look, I really think Blockdaemon is tried and true, eight years in the space. We're one of the mainstays in the industry. We're the trusted provider for the large traditional financial institutions coming into this space. And that's really our forte.>> Yeah, we appreciate you. Super humble. Appreciate that too.
Demetrios Skalkotos
>> Oh, thanks for having us.>> Yeah, great. All the hard work. You guys are pioneering. I mean, it's a convergence. The two worlds are connecting and interacting and we're seeing that. It's awesome. Thanks for coming on.
Demetrios Skalkotos
>> Well, thanks for having me.>> All right. I'm John Furrier with theCUBE. We're watching the Trailblazers, Crypto Trailblazers here. Big day of all the leaders coming into the NYSE for the NYSE Wired CUBE and FinTech event. We'll be right back.
>> Welcome back everyone. I'm John Furrier, host of theCUBE here at our NYSE Studios. Day two of our Crypto Trailblazer series with the NYSE Wired community. This is an ongoing series. We feature the leaders. We're making things happen in the industry, building stuff, investing, and of course changing the financial plumbing, an upgrade to the system as two worlds collide, DeFi and TradFi. It's old school, new school coming together, rewriting the rules, interacting and the economics looking great, and the government's behind it. We got a great guest here, Demetrios Skalkotos, Chief DeFi and Protocol Officer at Blockdaemon. Welcome to theCUBE.
Demetrios Skalkotos
>> Thank you, good to be here.>> Getting ready for the big event tonight, the Crypto Trailblazers. 250 people are going to be here tonight in the industry, blazing the trails. What's going on?
Demetrios Skalkotos
>> Exciting. Exciting.>> Yeah.
Demetrios Skalkotos
>> Well, it's good to be here. Thank you for having me. Really appreciate it. Yeah. Where do you want me to start?>> Tell me about what you guys do. Let's set the table because-
Demetrios Skalkotos
>> Sure.>> You have a story, how you boomerang back into Blockdaemon, but let's set the table. What do you guys do? Obviously with the market now, people want to kind of put that in a box. What do you guys do?
Demetrios Skalkotos
>> Yeah. Blockdaemon is an eight-year-old infrastructure company. We got our start by just running nodes. Right. If people want access to Ethereum or Bitcoin or Solana, we run all that infrastructure for folks so they can get access to those ecosystems for data and trading. Then we kind of morphed into another business called Staking, so probably our largest business unit today on the staking side. And then we bought an MPC wallet company about three years ago called Sepior out of Denmark. So we provide a good deal of the MPC wallet tech for a lot of the big institutions and banks in the marketplace today. And we have a couple variations->> MPC.
Demetrios Skalkotos
>> Of that wallet. MPC. Yes.>> Not MCP.
Demetrios Skalkotos
>> Yeah, MPC. Yeah.>> Two worlds I live in.
Demetrios Skalkotos
>> Yeah.>> There's agent world. MPC.
Demetrios Skalkotos
>> Yeah. And then the last business unit was the business that Konstantin, our CEO just bought was our DeFi infrastructure business. It was a startup that was backed by Cumberland and DRW, and we just got acquired back and closed this past May, and we provide infrastructure into the entire DeFi world. So with one abstracted API, you can access about 20 different DEXs and DEX aggregators, lending protocols, yield aggregators, liquid staking venues, staking venues, and source a great deal of on-chain data. So we support the full trading ecosystem on the DeFi side. So four business units. And then the protocols that I run along with the DeFi go to market, really the protocols is the horizontal infrastructure middleware that connects all that tissue. So we work with all the protocol foundations in supporting them in their proliferation, and all those business units then are supportive of that.>> So you have the platform that from a connection standpoint, where you connect to everything.
Demetrios Skalkotos
>> Yes.>> And then you use the horizontal scalable layer for protocol management?
Demetrios Skalkotos
>> Yes.>> And what is that, the purpose? Interoperability, compatibility, what's the purpose of the protocol layer?
Demetrios Skalkotos
>> The protocol layer is really the connectivity of I want access to a node, I want to stake that particular protocol. I want that protocol supported in my wallet, and they also want to trade it on the DeFi side, so.>> Oh, it's two things.
Demetrios Skalkotos
>> We have to provide->> It's connection.
Demetrios Skalkotos
>> Yeah.>> It's connectivity.
Demetrios Skalkotos
>> And it's access.>> And access for programmability.
Demetrios Skalkotos
>> Exactly, yes. So we work with the foundations, but we support over 80 different chains and protocols that are in the ecosystem today.>> That's awesome. So you're basically enabling more transactional action happening-
Demetrios Skalkotos
>> Yes.>> At the front end.
Demetrios Skalkotos
>> Absolutely.>> I like to simplify, boil it down. Back end's DeFi, front end's TradFi, but that's the way as the techies, you think about the user experience, what's happening with some interaction, and then something has to happen under the covers.
Demetrios Skalkotos
>> Yeah.>> Take us through what's the hot air because staking is hot. I mean, right now staking seems to be the best, most popular thing because that the benefit of having the asset, it works for you.
Demetrios Skalkotos
>> Yeah. I would kind of classify it as variations of earn, right, or yield. Right. And staking being a big component of that, and it's a big growing component and a very strong component. But you're getting a lot of interest on the yield side as it pertains to USDC, Bitcoin, Ethereum, earning on Solana, all those types of categories. So the AVEs and Compounds and the Morphos of the world are in high demand through our ecosystem. And also being able to do cross-chain trading is cool. So getting from one chain to another is->> Frictionless. Without friction.
Demetrios Skalkotos
>> Yes. Without friction, yeah, with the and a lot of cross-chain bridging platforms. So I would say staking is very hot, yield is very hot, and the whole earn platform, the whole earn stack is I think is super important right now.>> What is the big misunderstanding or confusion around these stakings and these stablecoins and the utilities? I mean, I know it's can be a little bit messy, but you hear I got Solana, I got Ethereum, I got, so there's a lot of environments.
Demetrios Skalkotos
>> Yes.>> And that's not necessarily a bad thing or is it? Explain why, demystify was most misunderstood in the market or?
Demetrios Skalkotos
>> Well, each one is their own ecosystem, right, and it's their own community and you're trying to drive adoption and developers to build on top of that community to build a greater community. So you would say obviously Bitcoin is the big one, but then you have Ethereum and you have Solana and you have Avalanche, and you have the Aptos's and the Suis of the world and many, many others that are forthcoming too that are coming out now that I think have learned from the previous lessons and are building their L1s or L2s that take the best of a bunch of worlds.>> Yeah, out in the open. Not in shadows.
Demetrios Skalkotos
>> Yeah. So they're taking the best of a public network and maybe combining some aspects of a private network and putting those into proliferation too. So->> Interoperability is huge-
Demetrios Skalkotos
>> Very much so.>> In this because now you can have all the greatness of a community or economy, if you will, on the chains thriving and surviving, thriving and growing.
Demetrios Skalkotos
>> And you want to solve real problems, right? Not everybody wants their data on a public blockchain. Right. There's certain aspects of certain data sets that they want private, but there's certain things that you want for that. You want it on the public chain and you want that transparency. So how do you bridge the best of those worlds and what communities, what L1s and L2s are really going to proliferate and win?>> And what service are you guys providing? The private side for enterprises?
Demetrios Skalkotos
>> We do it all. Right. We do it all. We're obviously supportive of the vast majority of supporting all the public chains that are out there, but there's new chains that are coming out. Midnight is one. Canton is getting a lot of play out there as a private permission chain. And so we're supporting everything. So we're really listening to our->> Do they come to you or you go to them?
Demetrios Skalkotos
>> It's a combination of both.>> They want to have the interoperability. Why wouldn't they?
Demetrios Skalkotos
>> Of course. Well, it's really they want access to the institutional customer base. It's that bridging of the Web two world into the Web3 world. It's the bridging of TradFi into DeFi as you're mentioning. All those clients are wanting access to those things. So we listen to our customer base, which is very institutionally focused, and they're saying, hey, are you going to be supporting this protocol? Are you going to be supporting this particular chain? And we'll say->> You're the chief protocol officer.
Demetrios Skalkotos
>> Of course.>> Love that title.
Demetrios Skalkotos
>> We'll look into it and figure out how to support it from a node perspective, a staking perspective within the wallet. And if there's a DeFi component, we'll support it there as well.>> It's interesting, you're getting on some of this hot buttons that we cover in the AI side of our business on our coverage, which is data. Having access to data makes AI better. The institutions want access to the nodes because it makes the transaction and aperture increase-
Demetrios Skalkotos
>> Yes.>> Hence their customers can win. Also, the convergence of DeFi and TradFi is real. You agree that's happening super fast, right?
Demetrios Skalkotos
>> Yes.>> Okay. What is the driver of that right now? What are you seeing coming from? Because like the AI world, we're seeing a big surge of big gear. They're buying GPUs, all the big hardware because all the data of these banks are all in their premises. And we're seeing a similar reaction with chains where it's like, hey, I have a private need, but I don't want to foreclose my ability to connect to the global network. Is there similar, I mean, is that happening or are that down the road or that too far ahead?
Demetrios Skalkotos
>> It's been happening for quite a while and I always like to use the term that it's evolutionary, not revolutionary. Right. I think it's just going to continue to morph over time and merge. I think, look, you have payments, you've got stables. Those are key things. You've got a lot of great things about blockchain that fix a lot of the back office T+1, T+2, T+0 type of capabilities, and that drives efficiencies in the marketplace. So there's different variations where the TradFi market can adopt a lot of blockchain technology that fixes a lot of both middle, front, and back office capabilities.>> What are the most exciting things that are happening now and what are the key areas that are being worked on by the communities right now?
Demetrios Skalkotos
>> I think you're seeing a lot on the stablecoin side. I think you're seeing a lot on the ETF side and all the ETP side. I think that's where a lot of the TradFi's coming into the digital asset world, is they're supporting of their ETFs and they're looking to possibly stake those ETFs. And that's going to be huge business for my mom and dad and your parents and my brothers and sisters.>> Yeah. Because they get access to democratized capital.
Demetrios Skalkotos
>> They have access to democratized capital. Exactly.>> But the plumbing's got to get done first. You can't throw an app on a bad infrastructure.
Demetrios Skalkotos
>> Yeah. Exactly. Yeah. Besides->> An app it's not an app. It's a functionality.
Demetrios Skalkotos
>> Yeah. You don't have to have the conversation anymore.>> But the browser doesn't work on the internet.
Demetrios Skalkotos
>> Yeah. It streamlines the conversation like, oh, so that's kind of what you do. I never knew kind of what you did in crypto. So with those big firms, bringing those ETFs and ETPs to the marketplace, really will bring the masses to the marketplace.>> Demetrios, I have to ask you because once kids come up with Shawn Douglass from Amberdata because he has a tech background, IT operations. A lot of your customers have big IT shops. I mean, JPMorgan Chase got a $17 billion technology budget, annual budget. They do trillions of dollars of transactions. So they got a staff. So a lot of the institutions here in Wall Street, they have game when it comes to technology.
Demetrios Skalkotos
>> Of course.>> What are some of the conversations that you have with the big institutions? Because they're not a deer in the headlights. They may be leaning into it, they might not be really adopters, but I can imagine they're going to have robust conversations around resilience, security, recovery, all the things I'd like to check the boxes on.
Demetrios Skalkotos
>> Yeah, So for Blockdaemon, we are the largest institutional infrastructure provider out there. So we're ISO 27001, we're SOC two type two compliant. So we've been around for eight years. So we->> You speak their language.
Demetrios Skalkotos
>> We speak their language, and folks of the firms that you mentioned are either customers or on our cap table or both. Right. And so they'll come to us and they'll work with our team almost in as a consultancy basis, say, what do you think about this particular chain? I'm looking for this from a wallet application perspective. Can you help us fix that there? So it's very consultancy in that regard.>> It's collaborative.
Demetrios Skalkotos
>> It's very collaborative.>> They're in the community.
Demetrios Skalkotos
>> Yes, they're very much in the community. They're very much engaged.>> Yeah.
Demetrios Skalkotos
>> And at all levels of every business that we run, a lot of these big institutions and banks are tapping all those capabilities.>> What's the coolest thing you're working on right now?
Demetrios Skalkotos
>> Oh wow.>> Pick a favorite area, project or initiative?
Demetrios Skalkotos
>> A lot. I mean, there's a couple, like I mentioned, there's a private chain that's getting a lot of attention in the marketplace today, Canton being one. There's also kind of the combinations of public and private chains, kind of like what Avalanche is doing and what Arbitrum is doing and what OP is doing. I mean, there's a million of them out there as well as what Midnight is coming out with too. So I wouldn't say there's one. I would say there's a lot.>> Yeah.
Demetrios Skalkotos
>> There's a lot on the L1 side and there's a lot of what, the changes that are coming down the pike of what Ethereum is planning on doing too as well. So I just, excited about the movement in the space.>> It's good news.
Demetrios Skalkotos
>> Yeah.>> It's not bad.
Demetrios Skalkotos
>> It's good news. I don't have any favorites. I don't->> Yeah.
Demetrios Skalkotos
>> We need to work with all of them. We need to support all of them because our customers want the vast majority of them.>> You get the customers. They love those customers. I had to ask you a question. If you look at the market, this is much more of my observation. On this series over the past couple segments we've been doing episodes of the past couple months. The one thing that I noticed when I moved to New York from California was there's a entrepreneurship culture right now in finance that I've never really seen at this level. And I don't mean to compare it to tech entrepreneurs because tech entrepreneurs was, oh yeah, I got an invention. I get some funding, I take it to the market and I disrupt the incumbent. I take territory, go public and make money. Everyone's happy, everyone makes returns. Finance has all that institutional back office stuff. Was bottled up regulated so it was really hard to crack, to take territory down as that entrepreneur, to take down the big incumbent. Now you could make money, arbitrage some inefficiencies, get some prepaid calling cards and jump on someone's payment rails, get an API, like Stripe did and then go from there. But now I'm seeing really young guns and folks coming out of some of the bigger firms who are just jumping in and building a real company and it's like a financial entrepreneurial formula. And by the way, it's not being dismissed by the old guard because there's growth. What's your reaction to that? Is that happening or am I misreading that or just maybe looking for confirmation bias?
Demetrios Skalkotos
>> For sure it's happening and I think it's happening really fast. I think that there's a lot of changes. I think there's some components when you have the days of going, I think they're just trying to be difficult to be difficult versus trying to solve problems because the tech can get complicated really quickly.>> Noise ratios up high.
Demetrios Skalkotos
>> Yeah. The tech can get complicated really crazy when you're talking about MEV and a bunch of other different crazy things.>> Know your shit to get this done.
Demetrios Skalkotos
>> Yeah. But yeah, no, it's moving very fast and there's a lot of people interested, a lot of people that want to come in. A lot of people that said, hey, I've been in TradFi. I want to kind of make the move over to the digital asset side, crypto side. So you're seeing a lot of adoption.>> Yeah. I mean, to the work you guys are doing and you mentioned some of those other chains, Avalanche and what not, those other ones, they're bringing the tech up to the level where it's accessible for a domain expert.
Demetrios Skalkotos
>> Yeah.>> Someone that might know the knobs and buttons of these regulations or the nuance, a small little white space that could explode. And so that is huge because you don't have to be a super rocket science coder now. There's some real coding going on. L1 chains. I mean, some of the stuff coming out of New York and Stanford area and East Coast, West Coast, unbelievable. But also there's opportunities inside the top of the stack too. Middleware and-
Demetrios Skalkotos
>> Yes.>> Middle and top of the stack is emerging. That's where I think people can play nicely. That's where TradFi seems to be booming. Someone sees an opportunity, they can go after it.
Demetrios Skalkotos
>> Well, the traditional companies have definitely blockchain staffs and teams. They're looking at it in various different ways to solve certain problems that they're having, front, middle, and back office capabilities. And they're working with said chain or one of the said chains that we talked about, and then some that we haven't mentioned and trying to solve real problems. Whether it's a supply chain issue, whether it's a back office issue, whether it's trading efficiencies, they're all being addressed. So I think this is all good news for us and was trying to solve real problems that will advance the industry for us.>> Well, thanks for coming in. I really appreciate you coming in. I give you the final word. Put a plug in for what you're working on. You hiring, what are the key things you're looking to do, problems you're trying to solve? And you've got a great responsibility, Chief DeFi Protocol Officer. I mean, you're watching the key horizontally layer. That's a critical path layer. I mean that's super important. What are some of the things that are important to you? Put a plug in.
Demetrios Skalkotos
>> Look, I really think Blockdaemon is tried and true, eight years in the space. We're one of the mainstays in the industry. We're the trusted provider for the large traditional financial institutions coming into this space. And that's really our forte.>> Yeah, we appreciate you. Super humble. Appreciate that too.
Demetrios Skalkotos
>> Oh, thanks for having us.>> Yeah, great. All the hard work. You guys are pioneering. I mean, it's a convergence. The two worlds are connecting and interacting and we're seeing that. It's awesome. Thanks for coming on.
Demetrios Skalkotos
>> Well, thanks for having me.>> All right. I'm John Furrier with theCUBE. We're watching the Trailblazers, Crypto Trailblazers here. Big day of all the leaders coming into the NYSE for the NYSE Wired CUBE and FinTech event. We'll be right back.
