theCUBE + NYSE Wired: Crypto Trailblazers | Frank Chaparro, GSR

Frank Chaparro, GSR

Dan Tapiero, co-founder and CEO of RoundTable Partners and 10T Holdings, joins theCUBE at the NYSE to discuss his extensive background in finance and his transition into the digital asset ecosystem. With over 20 years in the macro hedge fund industry, Tapiero brings valuable insights as he highlights the role of cryptocurrencies and blockchain in transforming business finance and infrastructure. theCUBE Research team, led by John Furrier, engages Tapiero in an in-depth discussion on the evolution of digital assets and the future of growth in this sector. Tapiero emphasizes the potential of digital assets, predicting a substantial market value increase from $300 billion to a projected $10 trillion within the next decade. According to Tapiero, the current environment favors companies building this new ecosystem, as businesses generate significant revenue and prepare to enter public markets. The interview explores the role of US regulatory shifts in fostering a supportive atmosphere for cryptocurrencies, along with the importance of positioning the US as a global hub for blockchain technology and digital assets. #DanTapiero #DigitalAssets #theCUBE #NYSE #Crypto #Blockchain #Web3 Explore more about this topic and related insights on SiliconANGLE: siliconangle.com. Subscribe to our blockchain playlist for further discussions: [Blockchain Playlist](#). 00:00 - Intro 00:06 - Cryptocurrency and Blockchain: An Introductory Overview 02:31 - The Journey of Dan Tapiero and the Rise of 10T Holdings 09:09 - Crypto Industry Developments and Challenges 16:31 - Crypto Companies and Public Offerings 20:44 - The Future of Digital Assets 23:10 - The Digital Cultural Revolution: Final Reflections

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More from theCUBE + NYSE Wired: Crypto Trailblazers

Frank Chaparro

Head of Content & Special Projects

GSR

play_circle_outline Introduction of Solana's ETF listing as a significant milestone for crypto crossover.

play_circle_outline From NYSE to Solana: Charting the Mainstream Rise of Cryptocurrencies and Tech Innovations Like Nvidia

play_circle_outline Exploring Crypto Commercialization: GSR's Impact on Capital Markets and the Rise of Stablecoins in Traditional Finance

play_circle_outline The importance of liquidity providers in 24/7 trading for crypto assets and exchanges.

play_circle_outline Current market dynamics driven by macroeconomic factors influencing crypto asset flows.

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Frank Chaparro, GSR

Frank Chaparro

Head of Content & Special Projects GSR

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John Furrier

>> Hello, I'm John Furrier, host of theCUBE here for the Crypto Trailblazer's ongoing series featuring the leaders in crypto infrastructure, crypto economics, the financial disruption, the acceleration of new business models and all the people making it happen. And as the mainstreaming of the financial systems blends in with crypto, a whole other generation of activities, productization and capabilities, and of course, wealth creation is happening. Frank Chaparro is here, head of content and special projects at GSR. Frank, thanks for coming on theCUBE. Appreciate it.

Frank Chaparro

>> Good to be here. This is a special day I'd say.

John Furrier

>> This is a special day. We have Solana's listing of their ETF, and really moment to celebrate the crypto crossover, because ringing the closing bell at the NYSE is you see, okay, wow. It's happening, it's continuing to happen.

Frank Chaparro

>> The juxtaposition is poignant. When I harken back to those hassle-on days of when Solana was really establishing itself in 2020, I remember speaking with Anatoly and him describing the project as, and this is really the branding that they had at the time was a NASDAQ, sorry, NYSE 2.0 or a Wall Street 2.0. And to see them ring the New York Stock Exchange bell today for this flagship canonical, really, ETF product speaks to how far we've come since those early days. It's really incredible.

John Furrier

>> And the NYSE, I've got to say is becoming a symbol for crypto because it's iconic, it has imagery, it's got great optics. And in a global landscape it represents capitalism and trading except they have bells and they have... and there's opening and closing. We don't need that anymore in the futures of all these different markets. But also because they got the ETF done, the execution, I'm impressed by the fact that Solana got this out during the government shutdown, huge deal. And plus the validation the mainstream is now... retail can buy in. Solana's got that Nvidia effect going on. When I say Nvidia effect, Nvidia was a game card company then became obviously now AI worth $5 trillion. And Solana has a similar kind of DNA to that where it's like a technology, it's peaked, it's focused, it doesn't have everything Ethereum has, but they're highly technical, computer science, engineering, low latency. They're really grinding away. Now if they can continue that and do like what Nvidia's formula was, just keep making it better, then we don't know what's going to happen. So I want to ask you that question of at your firm, you guys are doing a ton of work. You got your fingers in a lot of action. And the productization, the commercialization and the money making in crypto, you go back just five years or eight years, getting fiat money out of crypto is really... and they had all the regime dark times here in the U.S., this is prime time. Okay. Give me your thoughts on this commercialization wave.

Frank Chaparro

>> No, it's a really good point. And you're 100% right, this is prime time because of the inflows that are pouring into the space across a number of different vehicles. Obviously, ETFs have been red-hot. This debut was a massive debut. The first Bitcoin ETFs that launched were among the largest ETF debuts in the history of Wall Street. And at the same time, at a firm like GSR, we sit at the center of crypto's capital markets as a provider of liquidity, as an investor on the venture side and on the asset management side, and as an OTC provider, a systematic OTC provider. We as a firm are noticing the fact that this is prime time and that firms across Wall Street are positioning themselves like NYSE and many others to gate crash and dominate crypto. Over the past week, and we actually put out some research on this on our socials, the number of firms that are exploring stablecoins continues to mount, from Apollo to Citigroup announcing that they're entering this market to Zelle as well, which is obviously one of the largest connectors of people financially. Everyone wants to get on the stablecoin RWA bandwagon. And these are not cryptocurrencies in the sense of Solana and Bitcoin and Ethereum, but these are digital assets. And so the future that we see at GSR is eventually all these assets will trade onchain, and market participants and counterparties will need liquidity providers that are suited and for over a decade have engaged in these onchain 24/7 capital markets. Now, at the same time, like I said, if you juxtapose it with the Street, I think NYSE is a good example moving towards 24/5 or potentially maybe even 24/7 trading, I think they did a poll of a lot of their clients on whether that would be the right move. Wall Street recognizes that this is the direction that we're going in and firms like GSR need to be prepared for when they do to either partner or compete.

John Furrier

>> I get asked a lot because I'm from California about the NYSE versus NASDAQ, and since you mentioned it, I'll bring this up. And I don't really have a dog in that hunt except we have a studio here, not there, a great studio, by the way. But NYSE is not my dad's NYSE.

Frank Chaparro

>> It's absolutely not.

John Furrier

>> It's ICE. ICE is the parent company. They're innovative. So you brought up the 24/7 concept. That's already happening. It just happens to be with the bells and it's just more... maybe it's historical. But when you start thinking about 24/7 assets onchain, ICE is in the data business. They're in the exchange business. They do energy. It's a zillion diverse things that they do. And so you got to look at their investment in poly market. See, that's a signal.

Frank Chaparro

>> It's a huge signal. And Jeff Sprecher, he knows where the puck is skating. And obviously he's been a visionary since he established ICE, since he bought New York Stock Exchange. And now with something like the poly market investment, it illustrates how this segment, this industry is going to be core to our capital markets moving forward.

John Furrier

>> Yeah. That's what I want to get into. As you look at your business now, you mentioned some of those things, explain the importance of this ETF here, the crypto ETF, and how does this compare to other ETFs and the significance of it?

Frank Chaparro

>> It's a really important question. When I think about what drives crypto market, specifically over the past year, it is flows. Flows and macro have been in the driver's seat. You rewind the clock maybe 10 years ago, 10 years ago, it was super specific crypto tailwinds that drove big pops or exchange listings as well. We still see some of that, but right now, since for so long, crypto was just the same capital recycling for the most part. The introduction of new flows and vis-a-vis ETFs, which bring in a whole unlock of capital through IRAs and retirement accounts is a game changer for crypto.

John Furrier

>> So let me ask you a question. I want to just probe a little bit 'cause I'm not an expert on some of the inner workings of the financial systems that you play in. But I know on the crypto side, since I've been in since 2012, knowing all the people, there's a lot of whales and billions and billions of dollars they're holding, and it was hard to get that liquid. Even though they're anonymous, they're still tracked. So it was this clogged up system of wealth that if released-

Frank Chaparro

>> Well, it's being released....

John Furrier

>> would change the flow diversity. Am I getting that right or is that the wrong scoped problem?

Frank Chaparro

>> I can give you a very interesting granular example that points to this convergence about what you're speaking. With the rise of a lot of these digital asset treasury companies, what you're seeing, and this is a super unique specific example of this intertwining of the two systems, you're having a lot of these raises where there's a component that's contributed in kind. So if I'm investor in Project X and I want to then participate in a pipe or SPAC deal for a debt, I can contribute even in some instances the lock tokens that I've invested in any ecosystem project to that SPAC or that pipe. And so that then for the long-term holders of startup X in crypto or startup Y gives them a unique liquidity opportunity that they otherwise wouldn't have had if they had then held on or sat through that traditional vesting cycle. And it's also introducing a new ability for crypto folks to access something that's extremely important and that they haven't had access to, which is credit. For the majority of crypto's history, we've either had no credit market or an extremely fragile and volatile credit market. And so now because the collateral requirements are it's a Bitcoin or bust for the most part, and we saw that bust in 2021-

John Furrier

>> And I saw people taking debt out and-...

Frank Chaparro

>> and now they have equity....

John Furrier

>> the debt interest payment was so much smaller than their gains on crypto. So the credit market naturally came out of that. Great point. That's a great point. And that puts capital to work.

Frank Chaparro

>> Exactly.

John Furrier

>> And so there is that set cycle. So on a philosophical question on that point, 'cause this brings up something I've been seeing want to get your reaction to. This product market fit kind of angle here, there's almost a money engineering talent because you're getting into hedge fund thinking. You're getting into math. There's an engineering layer of how to engineer money, 'cause if you've got programmable money, it's still money, but it's programmable. Now you have the ability to do things like create some staking, get some credit. Those derivatives are hot. You mentioned DATs, the treasuries. And with stablecoin and the Genius Act, it's opening up massive product opportunities. "Products," meaning in quotes, not like a SaaS app or an app, like financial product.

Frank Chaparro

>> I know exactly what you're talking about.

John Furrier

>> Financial product.

Frank Chaparro

>> And you hit on a really important part, which is what the future of crypto, if it's manifested will be, which is the financialization of every element of our lives. When you think about NFTs, that's the financialization of different elements of culture. There's obviously projects that try to financialize our social capital and social equity that we have on different platforms. I know you guys have 15 million followers. Wouldn't it be nice if you could leverage that in the form of an NFT to then borrow to expand your studio and set up a nice studio in, I don't know, wherever you guys might be keen to be, on an island somewhere one day?

John Furrier

>> London, Dubai, Singapore, D.C. would be our studio expansion.

Frank Chaparro

>> These are the opportunities, but this is what crypto enables. It allows for-

John Furrier

>> So what would we do with that?...

Frank Chaparro

>> hyper-financialization.

John Furrier

>> How would we do that? Play that out. So we tokenize the community, create a network, they're measured.

Frank Chaparro

>> Well, that's another opportunity in terms of creating these social networks. The way crypto through things like meme coins are hyperefficient at capital raising is one element. The other interesting element is the fact that you have not just this hyper-financialization, but also the ability to do instant payments to reconcile things more quickly than you have on Wall Street. But at the same time, a lot of this just mirrors what's happening in finance. You mentioned the hyper-productization of things that we see in crypto. At the end of the day, all of these markets are converging, not just crypto and Wall Street, but retail and institutional. And so the gamification of markets is already happening on Wall Street and crypto is just mirroring that with things like DATs. On Wall Street, you have PE firms creating ETFs. That's something that you never would've imagined firms doing 10 years ago, and we're really just running towards the same finish line in a sense.

John Furrier

>> On your current activities, what's the most popular thing that you guys are doing? Where's the activity? How would you heat map the services that the market needs that you guys are delivering? Can you rank them? What's their priority? Where's the action, I guess?

Frank Chaparro

>> A lot of the action is in derivatives, and that's our bread and butter as a firm. When we gatecrashed the zeitgeist of attention in crypto, we've been around since 2013, but I feel like we crypto growing, we became more prominent in 2018. Bespoke esoteric derivatives was the bread and butter. And that's still obviously a huge area of growth, especially with most of liquidity being centered around offshore perpetuals. But just the opening gates of flows from ETFs, that's a huge opportunity to market make in. And then to your point, whales, servicing them with high touch, almost like private banking like services that they might not be able to get at a Citi or a Goldman because they're not engaging with those types of assets yet, that's a huge opportunity for us to provide a lot of these whales. They want to do the same thing that the rich people that we know in normal markets want to do it

John Furrier

>> And that's new capital flowing in too.

Frank Chaparro

>> Yeah.

John Furrier

>> Again, that's a benefit. I had so many people say, "Yeah, I like that," 'cause they want to . Why spend it?

Frank Chaparro

>> But at the same time, our markets are really fragile, and I think even still with all the benefits of blockchain technology, the actual exchanges still have to grapple with the fact that they're built on traditional market infrastructure. And so you see these cascading liquidation events and these blow-ups happen, and I would say that's one of the tailwinds as well.

John Furrier

>> Frank, talk about the vibe of the market because you've been... and you've seen both sides of-

Frank Chaparro

>> It's not vibing. Despite all these tailwinds, there's still...

John Furrier

>> Maybe vibe coating is paint that word vibe. What's the sentiment of the market? As you look back at where you've come from early days, there was a really real commitment. Everyone knew each other. We were just talking, one of the Solano guys. He's been on the circuits. You see everyone, they have different events. Now you have this mainstream adoption. Is there a change in culture mindset? It seems like old and new are coming together and people; not just the young guns taking over, it's the folks who have been around experience leaning in. So it's not the new beats the old, the old-

Frank Chaparro

>> I guess I'm not a young gun anymore.

John Furrier

>> You're a mid gun. I'm an old gun.

Frank Chaparro

>> I guess the dye and the Botox has been working for me.

John Furrier

>> You're considered an OG since you've been in crypto since 2013-

Frank Chaparro

>> Well, you hit on-...

John Furrier

>> technically an OG.

Frank Chaparro

>> You hit on a really interesting point, which I alluded to before, which is the fact that what drives this market now is the same tailwinds and headwinds that drive global equities at the end of the day. And if anything right now in this moment, we're almost in a very weird position where almost bad news is really bad news for crypto and good news is math news for crypto. Despite all of the activations that we're seeing and the flows pouring into the space, I think in this present moment people are nervous, especially because of these cascading liquidations and the drawdowns that have precipitated

John Furrier

>> What are the hotspots that you see that people should pay attention to? Crypto now, just, my opinion, you could debate it or agree, but when you have dogma or vision and grind and grit, like most entrepreneurs have, and we saw Solana, they almost had two or three near-death experiences-

Frank Chaparro

>> Well, that's exactly right. What I was going to say is that nothing feels existential anymore. There's no existential threat to crypto as an asset class. Specific tokens on the long tail, for sure there are. For DATS, definitely. But crypto has now found product market fit vis-a-vis stablecoins and real-world assets, and that's not going to change. And that's really what's bringing a lot of the attention from a different genre of characters into the space.

John Furrier

>> And that's why I was trying to make that metaphor leap of Nvidia to AI. What they've done starting out as a graphics card for video games to now Omniverse simulation technology, AI factories, and their entire disruption or acceleration in their words is a completely different operational model. That's the AI side. And AI is bounded by power. Well, guess what? So is crypto. So if you take that theory on this side of the ledger, pun intended, what crypto will do is follow an Nvidia-like track because the operating model will change, the efficiencies and gains through technology or the network effect or the network and the derivative works on top, that will happen. I do agree with you. I think the genie's out of the bottle, it's a product market fit, but it's almost like, to use the Nvidia example, the graphics card today. There's so much more headroom. What's your reaction to that in terms of opportunity? Do you agree? Weird metaphor.

Frank Chaparro

>> I 100% agree. On one side of the equation, we have the inflows pouring into these products, but on the other side of the equation, there is still a wall between stablecoin assets touching the big banks. And once that wall breaks, you will have that Nvidia moment because all of our markets will make that transition, will make that jump. And a lot of these new products are exploding without that new capital. Like something like Biddle, for instance, the lion's share of those inflows are from crypto-native people. And so there's still so much room to grow from this current moment. And once you see the big banks start accepting crypto and stablecoin as collateral, it's just going to explode.

John Furrier

>> And that's where I think the software will be really also because then you'll have abstractions, you'll abstract the way the plumbing and multichain or multiprotocol things going on and it'll just be a wallet like Apple Pay. It's just like today, like Venmo, these are like click, click, click.

Frank Chaparro

>> Not having to write down 12 words on a piece of paper and sticking it a lock box somewhere.

John Furrier

>> We could spend an hour on custody. That always creeps fear. All right, so final question. What are you excited about right now in the market? Just taking your Frank hat off at GSR too, like industry participant, as someone who's seen what's happened, where we are now and we talked about the future, what are you most excited about that's going to play out in the next few years?

Frank Chaparro

>> I think that one thing that'll be exciting is to see that intersection of AI and crypto converge. When we think about, and I'm sure everybody's been seeing it, the-

John Furrier

>> Agents, baby.

Frank Chaparro

>> The agents, right?

John Furrier

>> The agents are coming.

Frank Chaparro

>> How are they going to participate properly in this economy without crypto wallets? You can't have Frank's AI agent go open up a private wealth account at Citi or J.P. Morgan, but they can have wallets. And so I think the AI stuff needs to come to fruition first and then undergirding that will be crypto rails for their full participation, and that's going to be really cool.

John Furrier

>> That's the old joke, have my agent call your agent, we'll do a deal. That's coming.

Frank Chaparro

>> Exactly.

John Furrier

>> That's happening.

Frank Chaparro

>> And the contract will be executed onchain.

John Furrier

>> Frank, great to have you on.

Frank Chaparro

>> Thanks so much.

John Furrier

>> Great conversation.

Frank Chaparro

>> Thanks so much.

John Furrier

>> Again, the Crypto Trailblazer is an ongoing series here at theCUBE, at the NYSE studio part of theCUBE and the NYSE Wired programming community. It's an open access of entrepreneurs, again, bringing all the big players in; Solana, ringing the bell, the listing. Again, the change is coming. Product market fit for crypto infrastructure, crypto solutions and protocols will open up and once the banks start adopting stablecoin, it will be just a matter of time, the floodgates will open and innovation will happen. Today you can get Solana on ETF, so it's happening and keeps happening. Of course, we're doing our job to keep happening and bringing the content to you. I'm John Furrier, thanks for watching.

Frank Chaparro, GSR

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John Furrier

>> Hello, I'm John Furrier, host of theCUBE here for the Crypto Trailblazer's ongoing series featuring the leaders in crypto infrastructure, crypto economics, the financial disruption, the acceleration of new business models and all the people making it happen. And as the mainstreaming of the financial systems blends in with crypto, a whole other generation of activities, productization and capabilities, and of course, wealth creation is happening. Frank Chaparro is here, head of content and special projects at GSR. Frank, thanks for coming on theCUBE. Appreciate it.

Frank Chaparro

>> Good to be here. This is a special day I'd say.

John Furrier

>> This is a special day. We have Solana's listing of their ETF, and really moment to celebrate the crypto crossover, because ringing the closing bell at the NYSE is you see, okay, wow. It's happening, it's continuing to happen.

Frank Chaparro

>> The juxtaposition is poignant. When I harken back to those hassle-on days of when Solana was really establishing itself in 2020, I remember speaking with Anatoly and him describing the project as, and this is really the branding that they had at the time was a NASDAQ, sorry, NYSE 2.0 or a Wall Street 2.0. And to see them ring the New York Stock Exchange bell today for this flagship canonical, really, ETF product speaks to how far we've come since those early days. It's really incredible.

John Furrier

>> And the NYSE, I've got to say is becoming a symbol for crypto because it's iconic, it has imagery, it's got great optics. And in a global landscape it represents capitalism and trading except they have bells and they have... and there's opening and closing. We don't need that anymore in the futures of all these different markets. But also because they got the ETF done, the execution, I'm impressed by the fact that Solana got this out during the government shutdown, huge deal. And plus the validation the mainstream is now... retail can buy in. Solana's got that Nvidia effect going on. When I say Nvidia effect, Nvidia was a game card company then became obviously now AI worth $5 trillion. And Solana has a similar kind of DNA to that where it's like a technology, it's peaked, it's focused, it doesn't have everything Ethereum has, but they're highly technical, computer science, engineering, low latency. They're really grinding away. Now if they can continue that and do like what Nvidia's formula was, just keep making it better, then we don't know what's going to happen. So I want to ask you that question of at your firm, you guys are doing a ton of work. You got your fingers in a lot of action. And the productization, the commercialization and the money making in crypto, you go back just five years or eight years, getting fiat money out of crypto is really... and they had all the regime dark times here in the U.S., this is prime time. Okay. Give me your thoughts on this commercialization wave.

Frank Chaparro

>> No, it's a really good point. And you're 100% right, this is prime time because of the inflows that are pouring into the space across a number of different vehicles. Obviously, ETFs have been red-hot. This debut was a massive debut. The first Bitcoin ETFs that launched were among the largest ETF debuts in the history of Wall Street. And at the same time, at a firm like GSR, we sit at the center of crypto's capital markets as a provider of liquidity, as an investor on the venture side and on the asset management side, and as an OTC provider, a systematic OTC provider. We as a firm are noticing the fact that this is prime time and that firms across Wall Street are positioning themselves like NYSE and many others to gate crash and dominate crypto. Over the past week, and we actually put out some research on this on our socials, the number of firms that are exploring stablecoins continues to mount, from Apollo to Citigroup announcing that they're entering this market to Zelle as well, which is obviously one of the largest connectors of people financially. Everyone wants to get on the stablecoin RWA bandwagon. And these are not cryptocurrencies in the sense of Solana and Bitcoin and Ethereum, but these are digital assets. And so the future that we see at GSR is eventually all these assets will trade onchain, and market participants and counterparties will need liquidity providers that are suited and for over a decade have engaged in these onchain 24/7 capital markets. Now, at the same time, like I said, if you juxtapose it with the Street, I think NYSE is a good example moving towards 24/5 or potentially maybe even 24/7 trading, I think they did a poll of a lot of their clients on whether that would be the right move. Wall Street recognizes that this is the direction that we're going in and firms like GSR need to be prepared for when they do to either partner or compete.

John Furrier

>> I get asked a lot because I'm from California about the NYSE versus NASDAQ, and since you mentioned it, I'll bring this up. And I don't really have a dog in that hunt except we have a studio here, not there, a great studio, by the way. But NYSE is not my dad's NYSE.

Frank Chaparro

>> It's absolutely not.

John Furrier

>> It's ICE. ICE is the parent company. They're innovative. So you brought up the 24/7 concept. That's already happening. It just happens to be with the bells and it's just more... maybe it's historical. But when you start thinking about 24/7 assets onchain, ICE is in the data business. They're in the exchange business. They do energy. It's a zillion diverse things that they do. And so you got to look at their investment in poly market. See, that's a signal.

Frank Chaparro

>> It's a huge signal. And Jeff Sprecher, he knows where the puck is skating. And obviously he's been a visionary since he established ICE, since he bought New York Stock Exchange. And now with something like the poly market investment, it illustrates how this segment, this industry is going to be core to our capital markets moving forward.

John Furrier

>> Yeah. That's what I want to get into. As you look at your business now, you mentioned some of those things, explain the importance of this ETF here, the crypto ETF, and how does this compare to other ETFs and the significance of it?

Frank Chaparro

>> It's a really important question. When I think about what drives crypto market, specifically over the past year, it is flows. Flows and macro have been in the driver's seat. You rewind the clock maybe 10 years ago, 10 years ago, it was super specific crypto tailwinds that drove big pops or exchange listings as well. We still see some of that, but right now, since for so long, crypto was just the same capital recycling for the most part. The introduction of new flows and vis-a-vis ETFs, which bring in a whole unlock of capital through IRAs and retirement accounts is a game changer for crypto.

John Furrier

>> So let me ask you a question. I want to just probe a little bit 'cause I'm not an expert on some of the inner workings of the financial systems that you play in. But I know on the crypto side, since I've been in since 2012, knowing all the people, there's a lot of whales and billions and billions of dollars they're holding, and it was hard to get that liquid. Even though they're anonymous, they're still tracked. So it was this clogged up system of wealth that if released-

Frank Chaparro

>> Well, it's being released....

John Furrier

>> would change the flow diversity. Am I getting that right or is that the wrong scoped problem?

Frank Chaparro

>> I can give you a very interesting granular example that points to this convergence about what you're speaking. With the rise of a lot of these digital asset treasury companies, what you're seeing, and this is a super unique specific example of this intertwining of the two systems, you're having a lot of these raises where there's a component that's contributed in kind. So if I'm investor in Project X and I want to then participate in a pipe or SPAC deal for a debt, I can contribute even in some instances the lock tokens that I've invested in any ecosystem project to that SPAC or that pipe. And so that then for the long-term holders of startup X in crypto or startup Y gives them a unique liquidity opportunity that they otherwise wouldn't have had if they had then held on or sat through that traditional vesting cycle. And it's also introducing a new ability for crypto folks to access something that's extremely important and that they haven't had access to, which is credit. For the majority of crypto's history, we've either had no credit market or an extremely fragile and volatile credit market. And so now because the collateral requirements are it's a Bitcoin or bust for the most part, and we saw that bust in 2021-

John Furrier

>> And I saw people taking debt out and-...

Frank Chaparro

>> and now they have equity....

John Furrier

>> the debt interest payment was so much smaller than their gains on crypto. So the credit market naturally came out of that. Great point. That's a great point. And that puts capital to work.

Frank Chaparro

>> Exactly.

John Furrier

>> And so there is that set cycle. So on a philosophical question on that point, 'cause this brings up something I've been seeing want to get your reaction to. This product market fit kind of angle here, there's almost a money engineering talent because you're getting into hedge fund thinking. You're getting into math. There's an engineering layer of how to engineer money, 'cause if you've got programmable money, it's still money, but it's programmable. Now you have the ability to do things like create some staking, get some credit. Those derivatives are hot. You mentioned DATs, the treasuries. And with stablecoin and the Genius Act, it's opening up massive product opportunities. "Products," meaning in quotes, not like a SaaS app or an app, like financial product.

Frank Chaparro

>> I know exactly what you're talking about.

John Furrier

>> Financial product.

Frank Chaparro

>> And you hit on a really important part, which is what the future of crypto, if it's manifested will be, which is the financialization of every element of our lives. When you think about NFTs, that's the financialization of different elements of culture. There's obviously projects that try to financialize our social capital and social equity that we have on different platforms. I know you guys have 15 million followers. Wouldn't it be nice if you could leverage that in the form of an NFT to then borrow to expand your studio and set up a nice studio in, I don't know, wherever you guys might be keen to be, on an island somewhere one day?

John Furrier

>> London, Dubai, Singapore, D.C. would be our studio expansion.

Frank Chaparro

>> These are the opportunities, but this is what crypto enables. It allows for-

John Furrier

>> So what would we do with that?...

Frank Chaparro

>> hyper-financialization.

John Furrier

>> How would we do that? Play that out. So we tokenize the community, create a network, they're measured.

Frank Chaparro

>> Well, that's another opportunity in terms of creating these social networks. The way crypto through things like meme coins are hyperefficient at capital raising is one element. The other interesting element is the fact that you have not just this hyper-financialization, but also the ability to do instant payments to reconcile things more quickly than you have on Wall Street. But at the same time, a lot of this just mirrors what's happening in finance. You mentioned the hyper-productization of things that we see in crypto. At the end of the day, all of these markets are converging, not just crypto and Wall Street, but retail and institutional. And so the gamification of markets is already happening on Wall Street and crypto is just mirroring that with things like DATs. On Wall Street, you have PE firms creating ETFs. That's something that you never would've imagined firms doing 10 years ago, and we're really just running towards the same finish line in a sense.

John Furrier

>> On your current activities, what's the most popular thing that you guys are doing? Where's the activity? How would you heat map the services that the market needs that you guys are delivering? Can you rank them? What's their priority? Where's the action, I guess?

Frank Chaparro

>> A lot of the action is in derivatives, and that's our bread and butter as a firm. When we gatecrashed the zeitgeist of attention in crypto, we've been around since 2013, but I feel like we crypto growing, we became more prominent in 2018. Bespoke esoteric derivatives was the bread and butter. And that's still obviously a huge area of growth, especially with most of liquidity being centered around offshore perpetuals. But just the opening gates of flows from ETFs, that's a huge opportunity to market make in. And then to your point, whales, servicing them with high touch, almost like private banking like services that they might not be able to get at a Citi or a Goldman because they're not engaging with those types of assets yet, that's a huge opportunity for us to provide a lot of these whales. They want to do the same thing that the rich people that we know in normal markets want to do it

John Furrier

>> And that's new capital flowing in too.

Frank Chaparro

>> Yeah.

John Furrier

>> Again, that's a benefit. I had so many people say, "Yeah, I like that," 'cause they want to . Why spend it?

Frank Chaparro

>> But at the same time, our markets are really fragile, and I think even still with all the benefits of blockchain technology, the actual exchanges still have to grapple with the fact that they're built on traditional market infrastructure. And so you see these cascading liquidation events and these blow-ups happen, and I would say that's one of the tailwinds as well.

John Furrier

>> Frank, talk about the vibe of the market because you've been... and you've seen both sides of-

Frank Chaparro

>> It's not vibing. Despite all these tailwinds, there's still...

John Furrier

>> Maybe vibe coating is paint that word vibe. What's the sentiment of the market? As you look back at where you've come from early days, there was a really real commitment. Everyone knew each other. We were just talking, one of the Solano guys. He's been on the circuits. You see everyone, they have different events. Now you have this mainstream adoption. Is there a change in culture mindset? It seems like old and new are coming together and people; not just the young guns taking over, it's the folks who have been around experience leaning in. So it's not the new beats the old, the old-

Frank Chaparro

>> I guess I'm not a young gun anymore.

John Furrier

>> You're a mid gun. I'm an old gun.

Frank Chaparro

>> I guess the dye and the Botox has been working for me.

John Furrier

>> You're considered an OG since you've been in crypto since 2013-

Frank Chaparro

>> Well, you hit on-...

John Furrier

>> technically an OG.

Frank Chaparro

>> You hit on a really interesting point, which I alluded to before, which is the fact that what drives this market now is the same tailwinds and headwinds that drive global equities at the end of the day. And if anything right now in this moment, we're almost in a very weird position where almost bad news is really bad news for crypto and good news is math news for crypto. Despite all of the activations that we're seeing and the flows pouring into the space, I think in this present moment people are nervous, especially because of these cascading liquidations and the drawdowns that have precipitated

John Furrier

>> What are the hotspots that you see that people should pay attention to? Crypto now, just, my opinion, you could debate it or agree, but when you have dogma or vision and grind and grit, like most entrepreneurs have, and we saw Solana, they almost had two or three near-death experiences-

Frank Chaparro

>> Well, that's exactly right. What I was going to say is that nothing feels existential anymore. There's no existential threat to crypto as an asset class. Specific tokens on the long tail, for sure there are. For DATS, definitely. But crypto has now found product market fit vis-a-vis stablecoins and real-world assets, and that's not going to change. And that's really what's bringing a lot of the attention from a different genre of characters into the space.

John Furrier

>> And that's why I was trying to make that metaphor leap of Nvidia to AI. What they've done starting out as a graphics card for video games to now Omniverse simulation technology, AI factories, and their entire disruption or acceleration in their words is a completely different operational model. That's the AI side. And AI is bounded by power. Well, guess what? So is crypto. So if you take that theory on this side of the ledger, pun intended, what crypto will do is follow an Nvidia-like track because the operating model will change, the efficiencies and gains through technology or the network effect or the network and the derivative works on top, that will happen. I do agree with you. I think the genie's out of the bottle, it's a product market fit, but it's almost like, to use the Nvidia example, the graphics card today. There's so much more headroom. What's your reaction to that in terms of opportunity? Do you agree? Weird metaphor.

Frank Chaparro

>> I 100% agree. On one side of the equation, we have the inflows pouring into these products, but on the other side of the equation, there is still a wall between stablecoin assets touching the big banks. And once that wall breaks, you will have that Nvidia moment because all of our markets will make that transition, will make that jump. And a lot of these new products are exploding without that new capital. Like something like Biddle, for instance, the lion's share of those inflows are from crypto-native people. And so there's still so much room to grow from this current moment. And once you see the big banks start accepting crypto and stablecoin as collateral, it's just going to explode.

John Furrier

>> And that's where I think the software will be really also because then you'll have abstractions, you'll abstract the way the plumbing and multichain or multiprotocol things going on and it'll just be a wallet like Apple Pay. It's just like today, like Venmo, these are like click, click, click.

Frank Chaparro

>> Not having to write down 12 words on a piece of paper and sticking it a lock box somewhere.

John Furrier

>> We could spend an hour on custody. That always creeps fear. All right, so final question. What are you excited about right now in the market? Just taking your Frank hat off at GSR too, like industry participant, as someone who's seen what's happened, where we are now and we talked about the future, what are you most excited about that's going to play out in the next few years?

Frank Chaparro

>> I think that one thing that'll be exciting is to see that intersection of AI and crypto converge. When we think about, and I'm sure everybody's been seeing it, the-

John Furrier

>> Agents, baby.

Frank Chaparro

>> The agents, right?

John Furrier

>> The agents are coming.

Frank Chaparro

>> How are they going to participate properly in this economy without crypto wallets? You can't have Frank's AI agent go open up a private wealth account at Citi or J.P. Morgan, but they can have wallets. And so I think the AI stuff needs to come to fruition first and then undergirding that will be crypto rails for their full participation, and that's going to be really cool.

John Furrier

>> That's the old joke, have my agent call your agent, we'll do a deal. That's coming.

Frank Chaparro

>> Exactly.

John Furrier

>> That's happening.

Frank Chaparro

>> And the contract will be executed onchain.

John Furrier

>> Frank, great to have you on.

Frank Chaparro

>> Thanks so much.

John Furrier

>> Great conversation.

Frank Chaparro

>> Thanks so much.

John Furrier

>> Again, the Crypto Trailblazer is an ongoing series here at theCUBE, at the NYSE studio part of theCUBE and the NYSE Wired programming community. It's an open access of entrepreneurs, again, bringing all the big players in; Solana, ringing the bell, the listing. Again, the change is coming. Product market fit for crypto infrastructure, crypto solutions and protocols will open up and once the banks start adopting stablecoin, it will be just a matter of time, the floodgates will open and innovation will happen. Today you can get Solana on ETF, so it's happening and keeps happening. Of course, we're doing our job to keep happening and bringing the content to you. I'm John Furrier, thanks for watching.