Speaker unverified: evaluation

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…and you can have the computer do anything. And so they are actually turning complete blockchains. And Ethereum is the world computer in that regard. And I think the phase we're in now is scalability. Yeah, I think it's interesting where you see these, this isn't a blockchain specific thing, but you see these pockets where there are moments in time where a bunch of people build the same thing to solve the same problem because the problem becomes so acute that the world is like, “Oh, this is obviously a thing that someone needs to build a solution around to do it.” And if you zoom into the blockchain where we've seen this now twice, where a couple years ago everyone was building scalable blockchains. Sui and Aptos and Solana, and all of these kind of came out right around the same time period to solve the scalability problems of Ethereum and Bitcoin. And then now we're going through the same moment where everyone's realizing that those blockchains that were previously greater were really good, but not great for payments use cases. And we have Tempo and others coming out to solve the payments use cases and all of them seemingly coming out and going to market at the same time, which is a good thing for the blockchain ecosystem because one or many of these will solve these problems. And this was a part of the conversations that we had at Privy when talking to Stripe about M&A, which was like, what are conditions under which we think we can be successful here? And I think one of them was the need to be able to work with competitive endeavors, endeavors competitive to Stripe itself and no offense to Bridge as well. And I think the point was to say it's way too early in market development to try and verticalize the stack. Part of the core value prop of the stack is that actually it's layered and you can assemble it in the way that best fits your use case. I think it's like, if you're serious about all these layers of the stack, you can't bind them all together because, just like there's no way you're going to get that much. If Microsoft is serious about the office suite, they're going to have it run on Mac and Windows because you're just not going to get a meaningful market share of an office suite otherwise. And beyond that, Microsoft at this point has its own laptops, but they're not building their own chips or maybe they are, but the point is you can't verticalize the entire— They're also mostly not building their own laptops that are running Windows software. Ultimately we want these blockchains to solve payments use cases. Folks are only going to build payments use cases around infrastructure that they feel like is open and neutral. There's not a world where there's a JP Morgan chain and a Stripe chain and a Bank of America chain and there's a thousand unique company blockchains. That's not going to happen. e is open and neutral. There's not a world where there's a JP Morgan chain and a Stripe chain and a Bank of America chain and there's a thousand unique company blockchains. That's not going to happen. The one thing I think I'll note is a lot of the things that are being solved by Tempo or theoretically possible on any other chain, but I think this is one thing that we often get wrong in this space, which is the gap between the theoretically possible and the actually true. And so of the Tempo features that I know our customers are excited about the ability to sponsor GAS with any asset, the ability to have batch transactions built into the chain. Really reliable like throughput where transactions aren't getting dropped or priority lanes for payments where you're not paying more because something happened on the chain. All this stuff is theoretically possible elsewhere, but I think making it a primary purpose of the chain and making it something that comes out of the box with it ends up leading to a very different developer experience if you're building with it. And so— You didn't touch on the most controversial of all of those, which is decentralization. No, but yeah, and I think the two sides are like if you work… I think the set of launch partners that Tempo has is exceedingly exciting because if you build for these customers, this has been super true of how Privy has sought to build, which is we will build for customers. They will dictate our product roadmap in a very real way and that is how we stay away from shiny object syndrome or building stuff that no one actually cares to use. And I think if Tempo can do that and deliver for the partnerships that they have, they'll build an exceedingly useful payment chain. I think it comes at the risk of actually over-centralizing. And I think the real question is over a two year, three year journey, can they make good on actually decentralizing the validator set and the people who are running transaction validation on Tempo altogether? Doesn't this get to the related question, which is like nobody really knows how a token should be valued? And in particular it's not clear, it's at least never been clear to me that you could have 10 times the transaction volume on Ethereum or a hundred times the transaction volume on Ethereum. And no one can really tell you mathematically what that should correspond to in terms of the Ethereum token price. And I think if you try to reason about it bottoms up on this is how much value we'll accrue to the underlying token holder. This is what’s so interesting about the dynamics. Ethereum I think has vastly underperformed its utility as a network. Yeah, it's like a value capture, value creation and Ethereum wild value creation, of all the blockchains, minimal value capture. Whereas, or a bunch of others,where Solana is probably perfect value creation, value capture, and then there are some others where there's very little value creation, lots of value capture. You should name them. That's where I think Bitcoin at least is very simple. We know what we're valuing and it's valued by the market in that way. e's very little value creation, lots of value capture. You should name them. That's where I think Bitcoin at least is very simple. We know what we're valuing and it's valued by the market in that way. And Solana. Yeah, it all depends on what your reference point is. Is your reference point other crypto assets or is your reference point companies? Why is crypto so tribal? Is it just because as if everyone was a shareholder in their soccer team and people are constantly starting new soccer teams? Is that basically what's going on? I think there's two reasons. I think one, people's relationship to money is very complicated. And I think as a French person in the US, it's stark to see the difference between how people interact with money as a thing. Everyone runs through the share of suffering together. And I mean, I think crypto being so zero sum is such a great shame because there's such an opportunity to make this— Zero sum mindset to you mean. Not actually zero sum. No, it's not and it shouldn't be. It's very positive sum. But I think we all act as though someone else succeeding means we are doing less well. Yes. What does change in your guys' world post GENIUS act? On our side, it has been this incredible tailwind to our business. The benefits of stablecoins have not changed. You can— Yeah, they were legal before, so it's funny. It's not a technical change to your business. The building of global products and the economic benefits of using stablecoins, the cross border opportunities of stablecoins, all of these benefits were there, but the perceived risk of engaging with stablecoins or issuing stablecoins was really high. So it made everyone uncomfortable with doing stuff with stablecoins. Yes. Yes. It purely like in people's ROI brain, it lowered the risk upfront and increased the It was like an official statement from the US government that— You can try things now. Yes. And so that's the first thing that happened. The second thing that happened is we launched this open issuance platform because now all these folks are interested in launching stablecoins and now people realize there's a license for them to participate in the market, and this market is likely going to be very big and a permanent part of the US financial ecosystem. Describe the open issuance strategy and early customers and just what's going on there. Bridge was sort of predicated on the belief that one, stablecoins would be important and then two, that there would be many of them. And our belief that there would be many of them was just purely based on companies acting in a self-interested manner and that they're going to want to control the infrastructure on top of which they're built and they're going to want the underlying economics of the stablecoin. And importantly, this has not been the case up to now where it's mostly been USDC and Tether is like where most stablecoincoin balance is.…

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