In this segment from the theCUBE + NYSE Wired: Crypto TrailBlazers event, Daniel Liu, chief executive officer of Republic Technologies, joins theCUBE’s John Furrier to discuss the seismic shift occurring at the intersection of capital markets and blockchain infrastructure. Liu shares his vision for a future where the digital and physical worlds fully integrate, predicting the eventual tokenization of $900 trillion in global assets ranging from financial instruments to real estate and intellectual property. The discussion frames this transition not just as a financial upgrade, but as a total reimaging of the user experience where friction – such as complex wallet security phrases – is eliminated to pave the way for mass adoption.
The conversation dives into Republic Technologies' strategic approach to the market, where Liu describes the company as a "conductor" on the Ethereum rails, ensuring products and money move securely. He details their aggressive accumulation strategy – likening it to acquiring "digital oil" – and explains how they utilize synthetic mining and cash-secured put options to generate significant yield on idle cash. Furrier and Liu also explore current market dynamics, noting how shifting trading volumes from weekends to weekdays signal the mature entry of institutional players who think in decades rather than days. From the necessity of reworking blockchain infrastructure to the acceptance of volatility as a driver of innovation, Liu outlines what is required to move from speculative hype to a fully tokenized global economy.
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Daniel Liu, Republic Technologies
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
>> Welcome back, everyone. I'm John Furrier of theCUBE here at our NYSE Studio, of course, we have our Palo Alto studio connecting Silicon Valley, and Wall Street. Tech, and money are coming together. Technology in the capital markets are here. The market that we all talk about here at the NYSE is technology is the market. We're seeing that in our Crypto Trailblazer series of which we have another episode here. Daniel Liu's the CEO of Republic Technologies. Again, the pioneers are really connecting in technology into the financial stack, the infrastructure. Thanks for coming on theCUBE, and being part of our Crypto Trailblazer series. Thanks for coming in.
Daniel Liu
>> Thanks, John. Great to be here.
John Furrier
>> So, we were just talking before we came on camera about how just the imagination of what you can think about in terms of value. It's a fever pitch in terms of Bitcoin Ethereum, but the real world of physical digital coming together when you have physical AI, and physical financial instrumentation, the data, coming together, this is causing a lot of conversations in crypto around real world assets on chain. Hot conversation last year was probably one of the number one things we've talked about besides the price of Bitcoin, and Ethereum. And then the developer community is emerging around that. So, you have two forces that are coming together, the decentralized infrastructure that's programmable, and the money system, or financial stack on it. This is probably one of the most popular conversations, and it's just getting started. What's your reaction?
Daniel Liu
>> Yeah, John, this is extremely exciting. We look at this as really just the beginning. If you look back when Ethereum just started, there were a lot of predictions where everyone said the whole planet would be tokenized. And back then, it seemed a little bit like a fever dream, but now, especially with the regulation coming, and a lot more clarity, I do believe it's possible. And naturally they'll start with the financial assets, like all the ones you just mentioned. I think real estate very likely as well. Anything that is tied to a monetary value. But eventually when we really start to scale, I think all $900 trillion, or more of the total world's assets will go on chain. And so this will range anywhere from intellectual property down to maybe even your parking ticket. This could be something that is physical, like you mentioned. I think the whole world will be tokenized, and we really want to be there when that happens. I think it's coming very soon.
John Furrier
>> A lot of people get caught up into the hype around the price of this, the price of that, bubble this, bubble that. It's kind of bubble list in some areas, obviously AI. But when you think about the convergence of real world, and digital coming together, I mean, I've been covering tech for many, many decades. This is the first time where you see digital, and physical at a first party level fully integrating where it's completely seamless. Explain that concept, because I think a lot of people who are educated, who aren't inside the ropes, or in the industry are kind of like, what does it all mean? Explain the relevance, and scope of the digital physical integration.
Daniel Liu
>> Yeah. I mean, I think it's just a natural transition. As we move to from something like paper money to our digital currencies, when you look back, it looks like you would never have chosen to use paper money in the first place if we had that choice. And so I think this is really just a better user experience. It's obviously better for the institutions because more transparency, they're able to go get higher levels of security for their money that they're trying to keep safe. And this should transition our entire society to be fully digital.
John Furrier
>> We're already kind of digital already. I'm in New York, I'm moving around, I take the subway, people pull out their iPhone. We're just out the other day with a bunch of folks, and they wanted to tip the guy at the door. And it was like, "Who's got cash on them?" No one actually had cash. I mean, I had maybe $10 here, but it used to be carrying some good amount of paper money, but literally no one had any money. They had Venmo the guy didn't have Venmo. So, that already is a use case. Why not have a digital wallet in your phone? That's coming. It's already here. So, we're already there. I mean, I think we're kind of the frog in boiling water. So, I think that's kind of not a debate. I think people can generally get that concept. But I want to ask you where it goes from there because now you have... And that's just by the way, centralized databases is the tech behind that. But the user experience is seamless with digital. What does it look like when you look at crypto infrastructure? What has to happen next to make it fully user friendly?
Daniel Liu
>> Yeah. I mean, if we're talking about the broader user retail market, like your memos, for example, I think that the entire wallet infrastructure really needs to be reworked. Even something as simple as the 12 words, I personally love them. I have a notebook full of probably thousands of 12 words that have written down.
John Furrier
>> Tell us where you live, where that notebook is.
Daniel Liu
>> Yeah, it's locked away. But at the end of the day, your average mom, and pop, even your new kid who might be capable of doing this would not want to do it. And so that level of friction must be eliminated completely, and it just starts there. I think when you talk about security of the blockchain, that's something that's been working on scalability people have been working on for a long time. It's just the UI.
John Furrier
>> Talk about your venture Republic Technologies. What are you guys working on? What's the key things you're doing right now, and how does that scale out to real world assets?
Daniel Liu
>> Sure. So, Republican Technologies, we are the largest publicly listed Ethereum holder in Canada, and we offer a whole suite of validator services. So, as we're talking about financial versus tech, some of our more financial clients, they may purely care about the yield. They want to get involved in staking. We're able to help them do it in a reliable way. But then on the more technical developer side, you get clients that perhaps want to look into the blockchain, access some data, and that's when things like MEV protection become very crucial to them. And so we offer both, and the whole stack, something that any client can come to us for. Eventually we hope to expand, and be alongside those who are building for retail, and the more UI, UX...
John Furrier
>> So, you're like a full service shop, if you will, platform, not just a financial house, getting a bunch of Ethereum, and leveraging it.
Daniel Liu
>> We plan to really put the Ethereum to work, right? It's a productive asset, and I think it might have been 2017. Brian Armstrong gave a really good analogy for Ethereum. Don't quote me. I'm pretty sure it was him, but the analogy compared Ethereum to a train, and essentially the train tracks were the Ethereum blockchain itself. The fuel was the Ethereum token, and then each of the box cars carrying whatever it might be carrying, the supplies would be the applications. Us as our productologies, in this scenario, we are the conductor. We just want to make sure the train is going where it needs to be on time, and everyone's products, money are protected.
John Furrier
>> Bitcoin dropped a little bit. In the current market, it was over 100,000. Ethereums, I think 3,300 around that air, give, or take. Big delta in numbers, people always talk about Bitcoin as a store of value. But one thing that's been attracted about Ethereum, and I want to get your thoughts on this, is that it had all the same attributes as Bitcoin, but it was very developer friendly. And we think with exchanges, you're going to see more exchanges, you're going to see more apps on the network. It creates a lot of headroom for Ethereum. So, if someone's interested in say, buying Ethereum, or even using it, how would you explain the future value opportunity for Ethereum?
Daniel Liu
>> I think everyone will need it in order to interact with the world. It's just going to be something that's going to be built into our wallets. We'll have to have ways to automate the gas, make sure everything's seamless, but people will be using it without even knowing. And that's what I predict, and how that takes shape, it's hard to say. I give it five years, and it'll be clear.
John Furrier
>> I was talking to a friend, he's building an exchange, has all the things in place, and his target audience was communities that have applications, and the obvious ones are gaming. You see those out in the early adopters. What's your vision on those future systems? Because they're systems, basically. They have currency, they have exchanges, there's things needed. What's your vision on how that's going to develop? Because you can almost connect the dots, and say, "Hey, if developers start really kicking into high gear, you're going to start to see all these native blockchain enabled apps on Ethereum to take advantage of the programmability." What does that look like in your mind's eye?
Daniel Liu
>> I think we get something where once everything is on chain, because everything is always composable, very malleable, like you suggest, all of these applications can begin talking to each other in a trustless way without human input, through smart contracts, through whatever protocols that are being built. And once that can happen, and you have this kind of free flow of data, and potentially money, then everything becomes more efficient. My user experience, I no longer have to perhaps connect to a bank to do anything I want on Twitter. I no longer have to go, and get verified for every single institution I need to pass KYC at because it's already in my wallet. I think things like this are going to be incredible, and should be really the forces that drive-
John Furrier
>> I mean, that's the friction. You're removing the friction.
Daniel Liu
>> Yes.
John Furrier
>> All right. Talk about the liquidity trends you're seeing right now that seems to be shifting. What's your take on liquidity in the market right now?
Daniel Liu
>> Yeah. I mean, liquidity, everyone's talking about, right? We see the two big factors being the Fed, and kind of like the global macro. And so when we think about how this affects Bitcoin specifically, traditionally Bitcoin typically lags these major liquidity injections by about four to six weeks. So, starting from December when the Fed announced they'd be buying that $40 billion every single month, we now see in January some of that kind of flowing through to Bitcoin. Obviously, still very volatile as you suggest, but I think long term that uncertainty should trend up at least this year, and people will choose to go to Bitcoin.
John Furrier
>> Why is Bitcoin lagging? What's the force there? Just slower in terms of the velocity, what's the lag attributed to?
Daniel Liu
>> It's definitely a riskier asset, right? So, higher beta people want to take a little bit more time to digest what's happening, and the rails that people are used to purchasing, your big institutions, they're not going to think, "Oh, let me go get some Bitcoin first." They'll think about all the other assets.
John Furrier
>> So, the volatile has changed. Okay. Macro risks at play in the market. What are some of the macro risks?
Daniel Liu
>> I mean, obviously Japan, Greenland, Iran, we kind of see that actually in the 10 year curving up as well. So, that is something we're paying close attention to. But in terms of macro, we also want to look at how the Fed is behaving. That $40 billion that I mentioned, they're actually only purchasing very short dated bonds versus typically they do longer dated ones. I think that shows the uncertainty, and risk, and something we'll be watching.
John Furrier
>> On the momentum around Ethereum, talk about what's in the market now. How would you talk about the momentum? Obviously stablecoin's been great, real world assets, massive opportunity. I mean, trillions, and trillions of dollars coming online, the data's being instrumented.
Daniel Liu
>> Absolutely. So, we see an influx of assets being tokenized. And so the whole world is comprised of around $900 trillion of assets. Half of these are financial assets. So, that $450 trillion is already being moved on chain as we speak today. This is imminent, and something that we're preparing for. But then that other $450 trillion of non-financial assets, assets that people hold for utility, I think will also be tokenized. And that's really going to be a revolutionary.
John Furrier
>> Yeah, that's going to be a revolution for sure. I totally agree. Talk about your business model, what you guys are doing now. Who are your main clients? What's the value proposition? What's the engagements look like?
Daniel Liu
>> Yeah. I mean, right now we're just kind of in our accumulation phase. In order to go, and really probably service our customers, we want to go, and get digital oil as much of it. So, really stock dollars-
John Furrier
>> You want to mop up as much Ethereum as possible?
Daniel Liu
>> Yeah. And then just like Rockefeller, right? We're here in New York before we had cars, before we had machinery, he went, and got all the oil so well, he had to be broken up into, I believe, 30 companies, and we plan to do something similar.
John Furrier
>> Talk about some of the service that you're going to be enabling because I think this is a key value to what you guys are doing is once you have that oil, you got new revenue models potentially, you got staking, you got credit, all kinds of things emerge. What are some of the emergent enabled, accelerated, and enabled value?
Daniel Liu
>> Yeah. So, payment processing for sure, starting with stablecoins, everyone's talked about that, but we really want to be involved with tokenization. And I'll start with the financial assets moved on to physical assets, any type of asset. I think that the company, or the group that really makes the tokenization kind of standard is going to be a big winner.
John Furrier
>> People are watching this video. Who should call you, and why should they call you, or ping you, or whatever, DM you. What's the value? What's going on in their world would make them get involved, and lean into what you're doing?
Daniel Liu
>> I think if you want some exposure to Ethereum, to the ecosystem that's booming, then definitely call me up. It might not be to own some, but if you want to learn, I'm always happy to chat. I've been educating folks on Ethereum since 2017, so that's something I-
John Furrier
>> You wrote the pre ICO bubble, and then all the NFTs, and all that. Now it's real, real. I mean, the money's hitting the table.
Daniel Liu
>> Yeah. I mean, I think I had one of the first 100 accounts on OpenSea, so it's been a long journey.
John Furrier
>> You're definitely a trailblazer. Okay. What's the biggest learning? Okay. You certainly qualify as an OG trailblazer. Thanks for coming on. At that time, it was very much education. It was a very small group of people at that time, evangelizing, giving away, "Hey, what's your wallet? I'll send you some Ethereum." That's the way it used to be around 2017. It was a very communal opportunity.
Daniel Liu
>> Yes.
John Furrier
>> Now you've gotten through that regime change in the US, certainly outside the United States been booming. What's been the key learnings for you, and then how you shape that into your current execution?
Daniel Liu
>> Over the years, I would say that really the number one learning is how to accept volatility. I think coming from a finance background, getting into crypto, having something move 20, 30% a day is unheard of. It's something that would probably give most folks here a heart attack 20 years ago. And so having that change really taught me a lot of how to control myself, how to think about the world, how to think about new products. And when you kind of apply that in the context of technology, volatility actually is a good thing. It means that folks are experimenting. It means that there's innovation, and innovation doesn't always work, but it's pushing in the right direction. And so I would say we're extremely early. I would say that volatility is good, and hopefully it lasts for-
John Furrier
>> It's a market developing. Volatility is an indicator of market acceptance.
Daniel Liu
>> Exactly. I mean, if Bitcoin traded like S&P today, it would not be very exciting, but also by that standard would also probably be a million dollars a coin. And so, yeah.
John Furrier
>> I mean, it's a long game view for sure. What are some of your North Star first principles as you are here at the trailblazing side of it? It's going mainstream. We're starting to see that real world assets. In my opinion, no doubt will be on chain. Everything from forestry to agriculture to marine life, everything's going to be, anything that's an asset should be on chain. Now if there's data associated. So, what's your long game first principles?
Daniel Liu
>> Yeah. I think I really pay attention to the types of people that are purchasing these assets, and that's actually a big shift we've seen this cycle as well. With the institutions that you mentioned coming in, the trading volumes is something that actually tells a lot. And when you look at trading volumes historically, on the weekends, it's somewhere around 60 to 70% of weekday volume. But this cycle, it's dropped to anywhere between 10 to 30% of weekday volume. And to me, that's very obvious. The institutions that are buying this, they are not used to trading on the weekends. They don't prefer to. They have the way they handle their business. And so when you see volumes like this shift, it means really the money is coming in, and the people who are in here now are not going to be thinking one year, two years, they think in decades.
John Furrier
>> Yeah. It's a platform shift.
Daniel Liu
>> Yes.
John Furrier
>> What's the biggest advice you'd give others that are coming into the industry? You're starting to see a lot of inmigration, certainly a lot of mainstream institutions. It feels less us versus them, but more collaborative as the money system gets recasted. What's your biggest advice for people coming in?
Daniel Liu
>> I would say dive in. Don't be afraid. And I say that because a lot of times people think of crypto as a place where you might just randomly send your money away, and lose it all. But that happens everywhere. I'm pretty sure even today we still have those South African princes that are sending scam emails, and getting people off of Venmo. So, this happens around the world. It's not unique to crypto. It's a new technology. It's going to happen. Protect yourself, of course, but don't let that...
John Furrier
>> I think the world's pretty much locked in. You got Bitcoin, Ethereum, Solana, some real stable chains, and currencies that have different use cases. Talk about that use case diversity between the different approaches. And obviously you got the shit coins out there, you got other stuff out there that's going to... Okay, that's speculative. Yeah. Beam coins. Okay, whatever.
Daniel Liu
>> I'm not too sure diversity is a good thing right now, given that we're still kind of laying the frameworks for how all these feature applications will be built. But I think that each chain does have unique attributes. I know some chains might be perhaps a little bit faster. Whereas someone who is more of a financial institution, you prefer something that's a little bit slower, and secure versus fast like a social media platform might prefer. And something like that, I think will start to develop.
John Furrier
>> So, there's trade-offs based upon what the use cases are, and what the applications are.
Daniel Liu
>> Yes.
John Furrier
>> Well, what's your focus for this year? Give a plug for the company. What are you guys looking to do? What are you optimizing for? What's your focus?
Daniel Liu
>> We're just going to be working on building all our treasury. We're going to be consistently looking to generate a yield, staking as much as we can, bumping that up from the two, and a half percent base to upwards of maybe six to 8%. We have our synthetic mining going on, which is performing really, really well. And we really hope to just continue-
John Furrier
>> Explain that product.
Daniel Liu
>> So, synthetic mining is just a way for us to kind of take our idle cash, and quote unquote mine Ethereum. And essentially what we do is we sell cash secured put options, either at the market, or slightly below market, and we earn a premium for doing that. If it settles, then great. We bought it at a price that we were happy with. And if it doesn't, then it's fine. We take the premium as profit, and roll it into next week. So, that's something that's performed really well.
John Furrier
>> It's part of your oil acquisition, as you call it, basically getting more Ethereum.
Daniel Liu
>> Yes.
John Furrier
>> So, that's working well.
Daniel Liu
>> Extremely well. And now annualizing anywhere between 80 to 100%.
John Furrier
>> All right. I love the financial entrepreneurship. Again, new products come out of the woodwork once you have the base foundation, that's a theme we're seeing right now is that once the markets get settled, set in, there's kind of entrepreneurial activity going on. It's almost like having a product manager. That's like a tech thing. The financial market's turning into a entrepreneurial market. What's your reaction to that?
Daniel Liu
>> It's really amazing to sit at the intersection of tech, and finance because you really have kind of like two polar opposites, right? Extremely risk-taking versus extremely risk-averse. And that to me has been incredible to watch, incredible to try, and balance myself. And I'm really excited to see the two fully merge. I don't know if it will, but I think it should.
John Furrier
>> Well, Daniel, great to have you on. Certainly you're an OG pioneer, certainly a trailblazer. Huge entrepreneurial opportunity you're enabling. Congratulations. Thanks for coming on.
Daniel Liu
>> Thank you very much, John.
John Furrier
>> I'm John Furrier, you're hosting the queue the Crypto Trailblazer Series, really highlighting the leaders that are making the change happen, bringing in a new era, a modernization, and transformation of the financial infrastructure, and it's going to enable, and accelerate huge amount of opportunity recognition. There's going to be a fever of entrepreneurial activity. If you can see an opportunity, you can certainly capture it. The market's moving very, very fast, but we're doing our part to keep the coverage coming to you. Thanks for watching.
>> Welcome back, everyone. I'm John Furrier of theCUBE here at our NYSE Studio, of course, we have our Palo Alto studio connecting Silicon Valley, and Wall Street. Tech, and money are coming together. Technology in the capital markets are here. The market that we all talk about here at the NYSE is technology is the market. We're seeing that in our Crypto Trailblazer series of which we have another episode here. Daniel Liu's the CEO of Republic Technologies. Again, the pioneers are really connecting in technology into the financial stack, the infrastructure. Thanks for coming on theCUBE, and being part of our Crypto Trailblazer series. Thanks for coming in.
Daniel Liu
>> Thanks, John. Great to be here.
John Furrier
>> So, we were just talking before we came on camera about how just the imagination of what you can think about in terms of value. It's a fever pitch in terms of Bitcoin Ethereum, but the real world of physical digital coming together when you have physical AI, and physical financial instrumentation, the data, coming together, this is causing a lot of conversations in crypto around real world assets on chain. Hot conversation last year was probably one of the number one things we've talked about besides the price of Bitcoin, and Ethereum. And then the developer community is emerging around that. So, you have two forces that are coming together, the decentralized infrastructure that's programmable, and the money system, or financial stack on it. This is probably one of the most popular conversations, and it's just getting started. What's your reaction?
Daniel Liu
>> Yeah, John, this is extremely exciting. We look at this as really just the beginning. If you look back when Ethereum just started, there were a lot of predictions where everyone said the whole planet would be tokenized. And back then, it seemed a little bit like a fever dream, but now, especially with the regulation coming, and a lot more clarity, I do believe it's possible. And naturally they'll start with the financial assets, like all the ones you just mentioned. I think real estate very likely as well. Anything that is tied to a monetary value. But eventually when we really start to scale, I think all $900 trillion, or more of the total world's assets will go on chain. And so this will range anywhere from intellectual property down to maybe even your parking ticket. This could be something that is physical, like you mentioned. I think the whole world will be tokenized, and we really want to be there when that happens. I think it's coming very soon.
John Furrier
>> A lot of people get caught up into the hype around the price of this, the price of that, bubble this, bubble that. It's kind of bubble list in some areas, obviously AI. But when you think about the convergence of real world, and digital coming together, I mean, I've been covering tech for many, many decades. This is the first time where you see digital, and physical at a first party level fully integrating where it's completely seamless. Explain that concept, because I think a lot of people who are educated, who aren't inside the ropes, or in the industry are kind of like, what does it all mean? Explain the relevance, and scope of the digital physical integration.
Daniel Liu
>> Yeah. I mean, I think it's just a natural transition. As we move to from something like paper money to our digital currencies, when you look back, it looks like you would never have chosen to use paper money in the first place if we had that choice. And so I think this is really just a better user experience. It's obviously better for the institutions because more transparency, they're able to go get higher levels of security for their money that they're trying to keep safe. And this should transition our entire society to be fully digital.
John Furrier
>> We're already kind of digital already. I'm in New York, I'm moving around, I take the subway, people pull out their iPhone. We're just out the other day with a bunch of folks, and they wanted to tip the guy at the door. And it was like, "Who's got cash on them?" No one actually had cash. I mean, I had maybe $10 here, but it used to be carrying some good amount of paper money, but literally no one had any money. They had Venmo the guy didn't have Venmo. So, that already is a use case. Why not have a digital wallet in your phone? That's coming. It's already here. So, we're already there. I mean, I think we're kind of the frog in boiling water. So, I think that's kind of not a debate. I think people can generally get that concept. But I want to ask you where it goes from there because now you have... And that's just by the way, centralized databases is the tech behind that. But the user experience is seamless with digital. What does it look like when you look at crypto infrastructure? What has to happen next to make it fully user friendly?
Daniel Liu
>> Yeah. I mean, if we're talking about the broader user retail market, like your memos, for example, I think that the entire wallet infrastructure really needs to be reworked. Even something as simple as the 12 words, I personally love them. I have a notebook full of probably thousands of 12 words that have written down.
John Furrier
>> Tell us where you live, where that notebook is.
Daniel Liu
>> Yeah, it's locked away. But at the end of the day, your average mom, and pop, even your new kid who might be capable of doing this would not want to do it. And so that level of friction must be eliminated completely, and it just starts there. I think when you talk about security of the blockchain, that's something that's been working on scalability people have been working on for a long time. It's just the UI.
John Furrier
>> Talk about your venture Republic Technologies. What are you guys working on? What's the key things you're doing right now, and how does that scale out to real world assets?
Daniel Liu
>> Sure. So, Republican Technologies, we are the largest publicly listed Ethereum holder in Canada, and we offer a whole suite of validator services. So, as we're talking about financial versus tech, some of our more financial clients, they may purely care about the yield. They want to get involved in staking. We're able to help them do it in a reliable way. But then on the more technical developer side, you get clients that perhaps want to look into the blockchain, access some data, and that's when things like MEV protection become very crucial to them. And so we offer both, and the whole stack, something that any client can come to us for. Eventually we hope to expand, and be alongside those who are building for retail, and the more UI, UX...
John Furrier
>> So, you're like a full service shop, if you will, platform, not just a financial house, getting a bunch of Ethereum, and leveraging it.
Daniel Liu
>> We plan to really put the Ethereum to work, right? It's a productive asset, and I think it might have been 2017. Brian Armstrong gave a really good analogy for Ethereum. Don't quote me. I'm pretty sure it was him, but the analogy compared Ethereum to a train, and essentially the train tracks were the Ethereum blockchain itself. The fuel was the Ethereum token, and then each of the box cars carrying whatever it might be carrying, the supplies would be the applications. Us as our productologies, in this scenario, we are the conductor. We just want to make sure the train is going where it needs to be on time, and everyone's products, money are protected.
John Furrier
>> Bitcoin dropped a little bit. In the current market, it was over 100,000. Ethereums, I think 3,300 around that air, give, or take. Big delta in numbers, people always talk about Bitcoin as a store of value. But one thing that's been attracted about Ethereum, and I want to get your thoughts on this, is that it had all the same attributes as Bitcoin, but it was very developer friendly. And we think with exchanges, you're going to see more exchanges, you're going to see more apps on the network. It creates a lot of headroom for Ethereum. So, if someone's interested in say, buying Ethereum, or even using it, how would you explain the future value opportunity for Ethereum?
Daniel Liu
>> I think everyone will need it in order to interact with the world. It's just going to be something that's going to be built into our wallets. We'll have to have ways to automate the gas, make sure everything's seamless, but people will be using it without even knowing. And that's what I predict, and how that takes shape, it's hard to say. I give it five years, and it'll be clear.
John Furrier
>> I was talking to a friend, he's building an exchange, has all the things in place, and his target audience was communities that have applications, and the obvious ones are gaming. You see those out in the early adopters. What's your vision on those future systems? Because they're systems, basically. They have currency, they have exchanges, there's things needed. What's your vision on how that's going to develop? Because you can almost connect the dots, and say, "Hey, if developers start really kicking into high gear, you're going to start to see all these native blockchain enabled apps on Ethereum to take advantage of the programmability." What does that look like in your mind's eye?
Daniel Liu
>> I think we get something where once everything is on chain, because everything is always composable, very malleable, like you suggest, all of these applications can begin talking to each other in a trustless way without human input, through smart contracts, through whatever protocols that are being built. And once that can happen, and you have this kind of free flow of data, and potentially money, then everything becomes more efficient. My user experience, I no longer have to perhaps connect to a bank to do anything I want on Twitter. I no longer have to go, and get verified for every single institution I need to pass KYC at because it's already in my wallet. I think things like this are going to be incredible, and should be really the forces that drive-
John Furrier
>> I mean, that's the friction. You're removing the friction.
Daniel Liu
>> Yes.
John Furrier
>> All right. Talk about the liquidity trends you're seeing right now that seems to be shifting. What's your take on liquidity in the market right now?
Daniel Liu
>> Yeah. I mean, liquidity, everyone's talking about, right? We see the two big factors being the Fed, and kind of like the global macro. And so when we think about how this affects Bitcoin specifically, traditionally Bitcoin typically lags these major liquidity injections by about four to six weeks. So, starting from December when the Fed announced they'd be buying that $40 billion every single month, we now see in January some of that kind of flowing through to Bitcoin. Obviously, still very volatile as you suggest, but I think long term that uncertainty should trend up at least this year, and people will choose to go to Bitcoin.
John Furrier
>> Why is Bitcoin lagging? What's the force there? Just slower in terms of the velocity, what's the lag attributed to?
Daniel Liu
>> It's definitely a riskier asset, right? So, higher beta people want to take a little bit more time to digest what's happening, and the rails that people are used to purchasing, your big institutions, they're not going to think, "Oh, let me go get some Bitcoin first." They'll think about all the other assets.
John Furrier
>> So, the volatile has changed. Okay. Macro risks at play in the market. What are some of the macro risks?
Daniel Liu
>> I mean, obviously Japan, Greenland, Iran, we kind of see that actually in the 10 year curving up as well. So, that is something we're paying close attention to. But in terms of macro, we also want to look at how the Fed is behaving. That $40 billion that I mentioned, they're actually only purchasing very short dated bonds versus typically they do longer dated ones. I think that shows the uncertainty, and risk, and something we'll be watching.
John Furrier
>> On the momentum around Ethereum, talk about what's in the market now. How would you talk about the momentum? Obviously stablecoin's been great, real world assets, massive opportunity. I mean, trillions, and trillions of dollars coming online, the data's being instrumented.
Daniel Liu
>> Absolutely. So, we see an influx of assets being tokenized. And so the whole world is comprised of around $900 trillion of assets. Half of these are financial assets. So, that $450 trillion is already being moved on chain as we speak today. This is imminent, and something that we're preparing for. But then that other $450 trillion of non-financial assets, assets that people hold for utility, I think will also be tokenized. And that's really going to be a revolutionary.
John Furrier
>> Yeah, that's going to be a revolution for sure. I totally agree. Talk about your business model, what you guys are doing now. Who are your main clients? What's the value proposition? What's the engagements look like?
Daniel Liu
>> Yeah. I mean, right now we're just kind of in our accumulation phase. In order to go, and really probably service our customers, we want to go, and get digital oil as much of it. So, really stock dollars-
John Furrier
>> You want to mop up as much Ethereum as possible?
Daniel Liu
>> Yeah. And then just like Rockefeller, right? We're here in New York before we had cars, before we had machinery, he went, and got all the oil so well, he had to be broken up into, I believe, 30 companies, and we plan to do something similar.
John Furrier
>> Talk about some of the service that you're going to be enabling because I think this is a key value to what you guys are doing is once you have that oil, you got new revenue models potentially, you got staking, you got credit, all kinds of things emerge. What are some of the emergent enabled, accelerated, and enabled value?
Daniel Liu
>> Yeah. So, payment processing for sure, starting with stablecoins, everyone's talked about that, but we really want to be involved with tokenization. And I'll start with the financial assets moved on to physical assets, any type of asset. I think that the company, or the group that really makes the tokenization kind of standard is going to be a big winner.
John Furrier
>> People are watching this video. Who should call you, and why should they call you, or ping you, or whatever, DM you. What's the value? What's going on in their world would make them get involved, and lean into what you're doing?
Daniel Liu
>> I think if you want some exposure to Ethereum, to the ecosystem that's booming, then definitely call me up. It might not be to own some, but if you want to learn, I'm always happy to chat. I've been educating folks on Ethereum since 2017, so that's something I-
John Furrier
>> You wrote the pre ICO bubble, and then all the NFTs, and all that. Now it's real, real. I mean, the money's hitting the table.
Daniel Liu
>> Yeah. I mean, I think I had one of the first 100 accounts on OpenSea, so it's been a long journey.
John Furrier
>> You're definitely a trailblazer. Okay. What's the biggest learning? Okay. You certainly qualify as an OG trailblazer. Thanks for coming on. At that time, it was very much education. It was a very small group of people at that time, evangelizing, giving away, "Hey, what's your wallet? I'll send you some Ethereum." That's the way it used to be around 2017. It was a very communal opportunity.
Daniel Liu
>> Yes.
John Furrier
>> Now you've gotten through that regime change in the US, certainly outside the United States been booming. What's been the key learnings for you, and then how you shape that into your current execution?
Daniel Liu
>> Over the years, I would say that really the number one learning is how to accept volatility. I think coming from a finance background, getting into crypto, having something move 20, 30% a day is unheard of. It's something that would probably give most folks here a heart attack 20 years ago. And so having that change really taught me a lot of how to control myself, how to think about the world, how to think about new products. And when you kind of apply that in the context of technology, volatility actually is a good thing. It means that folks are experimenting. It means that there's innovation, and innovation doesn't always work, but it's pushing in the right direction. And so I would say we're extremely early. I would say that volatility is good, and hopefully it lasts for-
John Furrier
>> It's a market developing. Volatility is an indicator of market acceptance.
Daniel Liu
>> Exactly. I mean, if Bitcoin traded like S&P today, it would not be very exciting, but also by that standard would also probably be a million dollars a coin. And so, yeah.
John Furrier
>> I mean, it's a long game view for sure. What are some of your North Star first principles as you are here at the trailblazing side of it? It's going mainstream. We're starting to see that real world assets. In my opinion, no doubt will be on chain. Everything from forestry to agriculture to marine life, everything's going to be, anything that's an asset should be on chain. Now if there's data associated. So, what's your long game first principles?
Daniel Liu
>> Yeah. I think I really pay attention to the types of people that are purchasing these assets, and that's actually a big shift we've seen this cycle as well. With the institutions that you mentioned coming in, the trading volumes is something that actually tells a lot. And when you look at trading volumes historically, on the weekends, it's somewhere around 60 to 70% of weekday volume. But this cycle, it's dropped to anywhere between 10 to 30% of weekday volume. And to me, that's very obvious. The institutions that are buying this, they are not used to trading on the weekends. They don't prefer to. They have the way they handle their business. And so when you see volumes like this shift, it means really the money is coming in, and the people who are in here now are not going to be thinking one year, two years, they think in decades.
John Furrier
>> Yeah. It's a platform shift.
Daniel Liu
>> Yes.
John Furrier
>> What's the biggest advice you'd give others that are coming into the industry? You're starting to see a lot of inmigration, certainly a lot of mainstream institutions. It feels less us versus them, but more collaborative as the money system gets recasted. What's your biggest advice for people coming in?
Daniel Liu
>> I would say dive in. Don't be afraid. And I say that because a lot of times people think of crypto as a place where you might just randomly send your money away, and lose it all. But that happens everywhere. I'm pretty sure even today we still have those South African princes that are sending scam emails, and getting people off of Venmo. So, this happens around the world. It's not unique to crypto. It's a new technology. It's going to happen. Protect yourself, of course, but don't let that...
John Furrier
>> I think the world's pretty much locked in. You got Bitcoin, Ethereum, Solana, some real stable chains, and currencies that have different use cases. Talk about that use case diversity between the different approaches. And obviously you got the shit coins out there, you got other stuff out there that's going to... Okay, that's speculative. Yeah. Beam coins. Okay, whatever.
Daniel Liu
>> I'm not too sure diversity is a good thing right now, given that we're still kind of laying the frameworks for how all these feature applications will be built. But I think that each chain does have unique attributes. I know some chains might be perhaps a little bit faster. Whereas someone who is more of a financial institution, you prefer something that's a little bit slower, and secure versus fast like a social media platform might prefer. And something like that, I think will start to develop.
John Furrier
>> So, there's trade-offs based upon what the use cases are, and what the applications are.
Daniel Liu
>> Yes.
John Furrier
>> Well, what's your focus for this year? Give a plug for the company. What are you guys looking to do? What are you optimizing for? What's your focus?
Daniel Liu
>> We're just going to be working on building all our treasury. We're going to be consistently looking to generate a yield, staking as much as we can, bumping that up from the two, and a half percent base to upwards of maybe six to 8%. We have our synthetic mining going on, which is performing really, really well. And we really hope to just continue-
John Furrier
>> Explain that product.
Daniel Liu
>> So, synthetic mining is just a way for us to kind of take our idle cash, and quote unquote mine Ethereum. And essentially what we do is we sell cash secured put options, either at the market, or slightly below market, and we earn a premium for doing that. If it settles, then great. We bought it at a price that we were happy with. And if it doesn't, then it's fine. We take the premium as profit, and roll it into next week. So, that's something that's performed really well.
John Furrier
>> It's part of your oil acquisition, as you call it, basically getting more Ethereum.
Daniel Liu
>> Yes.
John Furrier
>> So, that's working well.
Daniel Liu
>> Extremely well. And now annualizing anywhere between 80 to 100%.
John Furrier
>> All right. I love the financial entrepreneurship. Again, new products come out of the woodwork once you have the base foundation, that's a theme we're seeing right now is that once the markets get settled, set in, there's kind of entrepreneurial activity going on. It's almost like having a product manager. That's like a tech thing. The financial market's turning into a entrepreneurial market. What's your reaction to that?
Daniel Liu
>> It's really amazing to sit at the intersection of tech, and finance because you really have kind of like two polar opposites, right? Extremely risk-taking versus extremely risk-averse. And that to me has been incredible to watch, incredible to try, and balance myself. And I'm really excited to see the two fully merge. I don't know if it will, but I think it should.
John Furrier
>> Well, Daniel, great to have you on. Certainly you're an OG pioneer, certainly a trailblazer. Huge entrepreneurial opportunity you're enabling. Congratulations. Thanks for coming on.
Daniel Liu
>> Thank you very much, John.
John Furrier
>> I'm John Furrier, you're hosting the queue the Crypto Trailblazer Series, really highlighting the leaders that are making the change happen, bringing in a new era, a modernization, and transformation of the financial infrastructure, and it's going to enable, and accelerate huge amount of opportunity recognition. There's going to be a fever of entrepreneurial activity. If you can see an opportunity, you can certainly capture it. The market's moving very, very fast, but we're doing our part to keep the coverage coming to you. Thanks for watching.
John Furrier