Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
$KDA | Kadena News #2 🎙️
Recorded: July 14, 2025 Duration: 0:53:27Space Recording
Short Summary
Kadena is making significant strides in the blockchain space with the upcoming launch of its Kinesis Bridge, the unveiling of its EVM testnet, and a focus on institutional adoption of real-world asset tokenization. The company is also enhancing its ecosystem through strategic partnerships and innovative solutions, positioning itself as a leader in the evolving landscape of decentralized finance.
Full Transcription
Thank you. All right, hello, hello.
Hope everybody's doing great.
It's great to be back and do our second Cadena News X-Pace.
I'm Stuart Popejoy.
I'm co-founder and CEO of Cadena.
And this is a format where we talk about new things happening in Kadena, but then bring
on very excited to have Nitin Gar as our guest.
Let's see if Nitin's there.
Nitin, have able to join our space.
So yeah, thanks for joining. Just a reminder for those who are new to Cadena. Cadena, we're a layer one horizontally scalable proof of work blockchain and we're built for business.
I'm the host of these episodes where we go over the latest news and talk about important things also just happening in the general blockchain space.
blockchain space. So, so just some news coming from our ecosystem and various headlines.
From the ecosystem, we have some, we have some good things happening with the Lynx wallet.
Their latest release integrates an on-ramp solution to their app that allows users to
directly buy KDA. So it's always good when there's more ways to get KDA. So that's exciting.
So it's always good when there's more ways to get KDA.
So that's exciting.
And then Unit is an interesting socialify app
rewarding users for consuming content.
They launched their mobile app on major,
you know, on Apple and Google mobile platforms.
And this has also been a chance for us
to lean in on co-marketing.
We've added a Kadena user profile
for others to follow content and to help in on co-marketing. We've added a Kadena user profile for others
to follow content and to help influence New Year's has joined. So come check it out. It's
an exciting new app on the Kadena blockchain. So some headlines. We have the, so we, you
might recall that our Kinesis Bridge, we've been doing a bounty program to get hackers to come in and try to hack the bridge.
Initially, we dangled 20,000 KDA, and that was claimed by a researcher who came through and found, and we were able to fix a very important bug in the Kinesis Bridge.
We were launched with 40,000 KDA and it was not claimed.
So that's good news.
We're all clear for formal launch of the Kinesis Bridge
later this month, which to remind people
that it'll be the first time that there'll be
a fully supported bridge to Ethereum
and other ecosystems will be coming through Kinesis soon after
that. But initially it's for EVM and for moving KDA into DEXs and just making it once again easier for everyone to get KDA and be part of this
action.
Some events.
There was the GBBC in Washington, D.C.
This was, we had our BD team attending.
Our CBO, Annelies Osborne, was there to speak with policymakers and legislators about blockchain.
We went to Istanbul Blockchain Week in IBW 2025.
I presented there about our upcoming, at that time upcoming, Chainweb EVM testnet.
And we got to connect with the Turkish community, which was really great because Turkey,
Turkey crypto folks have been a big part of the Cadena story ever since we
launched.
So that was really great to go there and actually, you know,
meet in the person, including we had a rooftop rooftop,
rooftop bar meetup for local community members and in general is really great.
And then we went to can for etc and uh that
was where we unveiled the chain web evm testnet this was a huge hit um we got so much interest
at the booth uh i spoke and the crowd response was great um real uh we have you know 200 plus
developers 50 more than 50 committed projects.
We launched five new EVM testnet chains.
And the enthusiasm at the conference and the interest,
I mean, it's just so clear that we're providing something that people haven't seen before in the Ethereum EVM world.
Both the fact that we've got such a compelling solution
surrounding parallel chains and dealing with gas problems and congestion and just making that go away forever.
But also, there was a lot of interest in the fact that it could end as a proof of work chain.
I think the dominance of proof of stake, the kind of overwhelming amount of proof of stake projects has really made people get much more sophisticated about proof of stake.
proof of stake projects has really made people get much more sophisticated about proof of
stake.
And as a result, they see some of the issues that come along with everything from centralization
to just the kind of risks that happen when you have something like, you know, a restaking
protocol that can take over the majority of the staking liquidity and things like that.
The simplicity and proven security of proof of work was very much of interest to people at the conference and so that
was super exciting. So along those lines we released a dev portal page for the
EVM effort. You can find it at evm.kadena.io and it's where it has
developer resources and what projects are deploying on test that
and so much more. And then on that, there's just been a lot of,
there's been a lot of appearances and marketing communication efforts with our executive team and BD team members, interviews and podcasts,
recent articles in block works and Forbes. I was on Turkish,
I was on Turkish live TV which is kind of fun. That just came out
but it's completely in Turkish so I have no idea what we're talking about anymore
but that was nonetheless really fun. So all right so that's the news. I think we
have Nitin is that correct? Nitin right there? I'm here, Stuart.
Really good to be here.
Great.
I'm excited talking about Kadena and what you're doing.
So thanks for having me.
Yeah, well, I'm super excited.
Nitin is an advisor who just has so much depth in,
today we're gonna be talking about institutional adoption
in RWAs and what some of the recent changes to the Cadena offering means for that.
But Nint is just one of the deepest thinkers I know surrounding this entire space.
He's just a super impressive thinker and he's involved with lots of really exciting projects.
So we're really glad to have him as an advisor at cadena and i'm personally really excited to be talking about some of this stuff because i always learn
so much when um i have a conversation with nitten you guys are really gonna this is you're gonna
there's gonna be lots of really interesting things to talk about today
so let's get going uh so i think you know, the question that's on everybody's mind is, you know, is, you know, it's really exciting how tokenization of RWAs.
And, you know, the first question is really, and specifically RWAs on public chain.
I mean, there's lots of interesting things going on with people using permission chains and things like that. But we've clearly seen this huge explosion of activity, interest, adoption, innovation, using public chain for RWA. So
then the big question is, is the infrastructure ready for institutions to truly use public
blockchain?
No, so first of all, Stu, thanks for including me in this call and thanks for the kind words.
It's an interesting conversation to have this week because this week you have something
called a crypto sort of week in D.C.
A few regulatory sort of things and I think Annalisa is on her way to be in the middle
of that conversation.
But I would say that the market today is going through this structural shift driven
by institutional interest.
Largely, you know, the maturing infrastructure, as we have seen this evolve and spend some time talking about that and the regulatory signals that are increasing favorable, you know, situation, especially in the U.S. at the moment.
So that three sort of to me, to answer your question, broad areas that are characterized by one productization of
blockchain based financial instruments so these are things like etfs money market funds even though
many of them are rappers so to speak which means that they are taking this digital asset and
crypto assets and wrapping them into traditional sort of market infrastructure and the instruments
that the financial industry is used to it still gives an edge up to the industry in general.
And second thing I think that's a primary driver
is an increased tokenization of traditionally illiquid assets.
Some amazing numbers that we can go by is like, you know,
what we have seen is, you know,
almost about 4 billion today is locked in DeFi protocols.
And it's a small number compared to traditional assets,
but it's still significant triple digit growth,
not double, but triple digit growth in the last one year.
And the last thing I would say,
which is realignment of financial infrastructure,
including things like trading, custody,
fund administration, all the things
that sort of govern the assets.
So RWA is mainstream at the moment.
A lot of narratives that are emerging,
not to mention the fact that with the rise of Bitcoin now,
it's the fifth largest asset class after gold and Nvidia
and Apple and so on and so forth from that perspective.
So super exciting times, I'd say.
Oh yeah, for sure.
And yeah, I mean, that's quite a stat about Bitcoin.
What do you think of Robinhood's new venture?
So what's interesting about the Robinhoods and many of the existing broker dealers who
are involved in the space is piggybacking on that narrative.
So first thing was, of course, BlackRock and Franklin Templeton,
Wisdom Tree, Fidelity.
They all had some offering of an ETF or ETF-like product.
BlackRock went as far as integrating this into its Aladdin,
which is its risk platform that's available to all investment
and large asset managers in the world,
simply providing access to these things.
What Robinhood did is saying, can we not take existing,
so right now you have these wrappers or ETFs,
or in some cases, stable coins
or tokenized money market funds, hyper liquid assets,
providing the narrative of programmability,
providing accessibility and sort of mobility of these assets in a much more efficient manner, things like collateral management and all these different
things, which are sort of table stakes in the larger high finance, which is the Wall Streets
and the large financial market infrastructure. And so where the likes of Robinhood came about,
came about, and this has been spewing actually from quite some time.
and this has been spewing actually from quite some time, if you remember,
If you remember, Stuart, a protocol called Mirror Protocol.
This is prior to the Terra Luna fiasco that we had.
The thinking was, can we not tokenize securities?
These are stocks of Apple and Tesla and so on and so forth.
So there's one public issuance of these equities.
When you tokenize them, then you then piggyback on all the efficiencies that we've
been talking about, both in terms of speed, resiliency, liquidity, and everything else.
And then there's another narrative where you have all these companies like OpenAI, for example,
or SpaceX. They are large companies, but they're not exactly public yet. Access to these is still
confined to a limited few. You have to be a credit investor
or you have to be a qualified investor
or you have to go through a separate entity
that has to vet you.
So it's still a very wall garden sub scenario.
And where Robinhood came and said,
while we still have to get all kinds of regulatory clearance
for let's say tokenizing an Apple stock or IBM stock,
which are publicly sort of listed securities,
can we not go after this space, which is the likes of SpaceX and OpenAI, which are very large companies, very large market cap, but not exactly public markets yet.
And of course, Vlad Tenev announced that, and quickly he circled back and said, these are the non-equities because they represent a tokenized sort of stock.
So they become like derivatives. And they had to quickly walk back that whole element. I think it's an important consideration because, believe it or not, the market cap of these private securities that are not listed on exchanges and not easily available is 4x.
It's 4x. The private market is 4x of four times than the listed public securities, which is a trend that we've been seeing for quite some time.
So it's a significant sort of movement. And I'll say one more thing and then I'll pause, is that when the securities are offered outside of the United States,
then they go to something called a GDR which is something called as a global deposit receipt which
says that hey you have access to IBM stock but you have to go to a wrapper of sorts to make it
available for investment managers and investors outside the U.S. and because that's already a
wrapper many of these are already offered in tokenized form outside of the United States so
it's an easier offering outside the United States which which is where the likes of, you know, Charles Schwab,
the likes of, you know, Robinhood
have sort of begun to make that offering.
And to me, it's a significant directional trend
of the industry that we should pay attention to.
And we should stay relevant
to addressing that directional trend,
if that makes sense.
Yeah, I mean, at Cannes,
it was the kind of thing
we were first getting there.
I was getting ready for my talk and helping set up the booth
and generally just focused on Cadena.
And I kind of regretted it.
There was some airdrops of those tokens.
Because Robinhood was, that's where they made it.
And I was like, wait, I want some SpaceX and some opening
But then it was too late by then.
It was already like a couple days
in just because it's interesting i mean you know i wouldn't do anything with it it'd just be kind
of cool um but you know another thing the reason why one of the reasons i brought up robin hood is
to is to bring up something that you and i have talked about uh which is that you know they launched
a chain on uh i believe it's on arbit on Arbitrum's ecosystem where they're launching their own L2 so this gets into the you know some of the things that I
know you've been talking about in terms of you know the rise of what you call
de novo entries entities yeah and that you know and the re-platforming of
finance just you know in the sense you have Franklin Templeton launching on
Stellar so that but the the for for me, the interesting thing about this is that, you know, some of this really is, since they're launching on L2, we're really looking at a reworking of the app chain narrative.
And that's something where I think Cadena is really positioned to offer something different, as you know, in the sense that we can offer a lot of the benefits that come from an app chain without the fragmentation
that accompanies like launching your own L2
and things like that.
So I just wanted to kind of just give the floor to you
to talk about the whole app,
how the app chain thesis is working
with traditional finance these days
and why something like Cadena
could address some of the shortcomings of that approach.
Yeah, absolutely. And I think this is a brilliant question and please bear with me for the audiences
just to hang in there because I've spent so much time in trying to understand the movement of
liquidity and we'll spend some time on that as well. That's why I brought you here, you're the guy.
spend some time on that as well. That's why I brought you here. You're the guy.
Thank you, Stu. And so when I say the rise of de novo entities and re-platforming of finance,
you begin to see a lot of new players who have come into market, which were not traditional
financial institutions. So of course, BlackRock, Franklin Templeton, Wisdom3, Fidelity,
ARK Investment, these were all traditional financial investment, have very progressive
thinking and say, we need to, one, understand, appreciate, legitimize these asset classes and
move forward with it. And they've done a fantastic job for us and the industry in creating the demand
and providing some wrapper around the fact that if regulators are concerned around it.
And then you have the likes of Maple Finance, the centrifuge, the clear pool, the super state of the world, who are the novo entity, including Ondo Finance, for example, who have said, why can't we build
a model, which is what we have been envisioning for almost 14 years now to do. And you were
there early on when you actually launched Kadena is the convergence, convergence of
the fact that you have crypto and digital asset as a new asset class, but then you also have,
when I use the word replatforming, is modernization of financial infrastructure,
is can we address the elements of trade trust ownership and bring them into this modernized
financial infrastructure and removing some of the challenges of the old infrastructure from
that perspective. And so all these de novo entities, and if you look at Coinbase, they launched a layer
two on optimism, which is base. You have Robinhood that took Arbitrum and launched their own sort of
chain. So a few things, right? One is there are still regulations in this space that requires you
to adhere to things like resiliency and security of the infrastructure, which means you have to
guarantee the government that things are going to be available all the time. And it's very hard to
guarantee with this under the moniker of decentralized finance or decentralized infrastructure.
So having a layer two that you control, that you manage, that you sort of build that whole
structure. So that's one sort of attribute that to appease the global body of regulators to say,
Attribute that to appease the global body of regulators to say, just like if you look at any of the JPM's infrastructure,
their infrastructure or what DTCC would do in their infrastructure, there are requirement of the infrastructure itself.
Things like good control location, ensuring that you have the right cybersecurity measures and all these checkboxes that you're maintaining.
location, ensuring that you have the right cybersecurity measures and all these checkboxes
that you're maintaining. And many of these de novo entities who are coming to say, can we do this,
are saying we're going to have our own sort of fenced chain, fence infrastructure, and be able
to launch all these new products, new financial structures, new financial products on these
chains, giving these layer twos some sense of not just volume, but also leveraging
some of the technical capabilities of these volumes. So now what's that done is that's led
to the fact that if I'm launching these asset classes, broadly speaking, the industry has
cash, cash equivalent assets, which is quite rampant in the industry and we'll spend some
time on that. You have stock and equities, you have bonds and debt instruments,
and then you have something called private markets,
which encompasses everything that's not these three different asset classes.
They all have their own requirements of freezing and forfeiture
and things like how do the assets behave.
And that has led to leading the growth of app chains.
App chains are saying, okay, we're going to have application-specific chains.
So this chain has enough
of applications,
have enough attributes,
they have enough characteristics
that can handle
a specific asset class.
And that way,
people can launch their products
and asset classes
that adhere to that specific requirement
of that asset.
And app chain was being discussed
for almost a decade now.
It's come to fruition
for many purposes.
And this is one of the reasons why that's the case.
Now, having said all this,
what I want the audience to understand is
there is something called liquidity,
which is such an important construct
in not just traditional finance,
but crypto finance as well.
Liquidity essentially means that you have enough
of something that you can use
a fungible instrument to trade.
It doesn't change the value of a specific asset. And US can use a fungible instrument to trade. It doesn't change the value of a specific asset.
And U.S. dollar is a fungible instrument in traditional finance.
And, for example, Apple and IBM stocks are quite liquid assets where you can buy and sell these assets.
But they don't inherently change the price of those assets with these large volumes of trade that happen.
And what the industry has done in the last, I would say,
three years, and again, the triple digit growth I was talking about was they have taken the
traditional liquid assets in the industry, things like stablecoin, which represent digital cash
equivalents, tokenized T-bills, which is for instant settlements and short duration assets,
tokenized money market funds, tokenized treasuries, and tokenized credit. And that collectively today
is about $340 billion and growing exponentially. And what this does, these tokenized assets,
is provide the shock absorbing capabilities to not just crypto asset markets. Again,
Bitcoin is now the fifth largest asset class in the world, but it also provides a convergence
avenue between those two.
Now, why am I saying all this and why is Kadena important?
So if you look at what you guys have done and what, you know, I've been following this for quite some time, the chain web,
the beta architecture allowing for the best of both worlds,
that what layer two did for Ethereum was it created all kinds of problems,
that it created fragmentation of liquidity,
that every layer two had some money somewhere.
And it was a pain to move liquidity from one layer to another layer two.
There was a 1.17 layer twos.
And it also fragmented the infrastructure where what you have done with this Bredard architecture is having a single point for security, which is your consensus mechanism, and giving the ability to create this namespace
or having this sort of fenced architecture
or having multiple chains.
And conceivably, these chains could be allocated
for these app chain infrastructures,
but you still rely on a single security architecture,
which at the end of the day,
I think that this longstanding issue
of the scalability trilemma,
which is providing scalability and security and decentralization without the need of any rollups or sharding or complex bridges and everything else.
I think chain web or this build architecture that we've been talking about, Stu, really solves the problem that we could envision a chain for securities.
could envision a chain for securities, we can envision a sort of a chain for equities and a
chain for liquidity. And you don't have to go through this complex and more risky avenues to
connect them all together, because inherently the chain web and the Canadian architecture provides
that connectivity. The question now is, can we recruit, and I'm going to ask you this question,
Stuart, can we recruit enough ecosystem players to have ecosystem
depth to bring all that innovation to our chain, to have adequate liquidity from this perspective,
and what is our institutional playbook that allows us to be able to begin to recruit
the Black Rocks and the Frankel temples and the wisdom trees of the world to come to the party
and say we see this as a viable infrastructure because it allows us to adhere to all the regulatory challenges, which is what Robinhood is doing.
And there's enough liquidity that suddenly now by offering these, you know,
new financial products, I'm able to attract talent, capital, and so on and so forth.
So I'll pause here, Stu.
I know it's a long, long-winded response, but I just want you to, there's a lot of
depth in that question that you asked.
Yeah.
I wanted to drill in on one thing there just quickly, and then we'll you to, there's a lot of depth in that question that you asked. Yeah, I wanted to drill in on one thing there just quickly,
and then we'll get to, yeah, how Kaden is tackling this,
because there's a lot of interesting stuff, you know, both with Pact and with EVM.
But you said one of the things is kind of like availability,
resilience, and uptime being part of the app chain story.
and uptime being part of the app chain story.
I hadn't heard that.
I hadn't heard that.
So that's something, I guess what I'm,
which if I was to interpret that without, you know,
guess at what that's responding to is the fact that,
you know, Ethereum is a very stable environment.
Bitcoin is a very stable environment.
I mean, the uptime there is, you know,
over the years is really tremendous.
I think when they talk about like availability, my guess is that they're talking about controlling congestion.
Is that the case? Because, you know, like making sure a public layer one has uptime is the same no matter where you go.
Right. They can't innovate on that.
It's not like it's not like the robin hood arbitrum l2 is going
to be more stable than other than arbitrums l2 right yeah so it's a valid question so so to finish
your thought still sorry no no i wanted to ask you just i just wanted to drill in specifically on that
like what is the differentiation is it really just congestion or is it some kind of like ISO certification of uptime?
Yeah, there is a certification process where, like, for example, if you look at something called
good control location. So I'll give you an example. When I build a private equity marketplace for
Northern Trust in the soil public information, and after we released that, you know, the news,
I got a 300 questionnaire from FFIEC. So one imperative
from the regulators, and there's a college of regulators, which is like an alphabet soup of
all kind of regulators, but US Treasury has a requirement in that any financial infrastructure,
if the economy begins to depend upon it, so like payment infrastructure, for example,
or our stock markets and equity sort of stuff, then it going down can have economic impact.
So, for example, there was a scenario in the UK when their main payment system was down
for a day.
Imagine a scenario where the world, which is increasingly digitized, and we with our
blockchain and digital assets are taking this to a whole new level.
If the payment system is down for a day, imagine you unable to swipe your card or pay for things
and you have to go back to cash.
And many countries now have sort of moved away from cash.
Many stores don't accept cash,
your airlines don't accept cash and so on and so forth.
And so one requirement is to ensure the continuity,
the business continuity of these financial systems
because it has a long lasting impact on not just the economy
but our daily lives because we had to buy medicines and bread and food and a drink every
now and then.
And so one requirement from the regulators to make sure that if you're a market participant,
if you are an entity that's involving and engaging in maintaining the financial infrastructure,
you're providing those guarantees, making investments.
And there's something called five nines requirement availability of this infrastructure. And five
nines is essentially a five minutes worth of downtime, unscheduled downtime on a yearly basis.
So in a year, you can only have five minutes of downtime. And for that, a lot of these companies
go through having, you know, three-paddle infrastructures and now in cloud environment,
but back in the day, they would have this infrastructure in their own data centers and
make this massive investments, get certification, do annual testing to make sure that these
systems are never down.
I think that's the requirement of the uptime is in a decentralized world, where does this
And so, again, in the context of my past work, I was asked when I was at IBM, and as you're building this infrastructure, that even the tech companies are regulated in some cases to make sure that they're testing these things in a prescribed fashion from the regulators.
dissipate in this decentralized infrastructure is,
do we have enough nodes that provides a verification,
validation, consensus mechanism,
that even if the remaining nodes are not available,
there's adequate quorum of nodes that are available
to provide consensus and provide resiliency.
And that's where I think some of the conversation with base,
which is Coinbase's architecture or infrastructure
or Arbitrum's sort of layer two of Robinhood is to say,
we will assure the regulators that even if some nodes go down,
we have adequate nodes to continue transactions and we are going to adhere to
those regulatory requirements. So I'll pause here again, Stu.
And that's what I think they mean by uptime.
Yeah. And that's actually, I think a real strength, obviously,
in public blockchain is at least, you know,
ones that are architected correctly using real consensus
models um is is the fact that you know they can handle you know like so if if robin hood wants to
you know run 30 additional uh arbitrum nodes that's fine that's just not a problem and then
obviously with a proof of work that's that's you know that's even more straightforward um so okay
so that that's i think that's i think that's a strength then of public blockchain is the fact
that you can uh you know one of the things we worked on we were doing private blockchain was
trying to have a technology that could support at the time we were shooting we we had tests showing
we could do 2 000 transactions per second on 500 nodes.
And that was completely unmatched at the time in private blockchain.
But we felt that node count was one of the most important things, and it was for that
resilience.
So it really meant that each individual participant in a consortium, we'd always think of them
running three nodes.
And then if you had like 30 know 30 businesses participating and they're all
running three nodes well now we're up to 90 nodes and you look at some of the old uh private
infrastructures they really couldn't handle more than like a handful of nodes and they'd start
slowing down so that's a that's a huge strength of public blockchain so i'm glad that i've ended
and hear about that um but getting back to uh you, you're asking how Cadena is going after this.
And you're right that institutional, like that going after the institutional market is not just as simple as offering the right technology.
And, you know, we have a lot of depth in Cadena from the point of view of our backgrounds.
You know, I'm from JP Morgan.
Morgan, Annaleigh Osborne has worked on a million different things, Arca, you know,
Annalise Osborne has, you know, has worked on a million different things.
we have Cesar coming from, you know, just lots of background there and advisors like you.
And then, you know, all the technical affordances that we've touched on already, but that's not
enough. You have to have a thriving ecosystem. You have to have developers. You have to have TVL.
This is an interesting discussion for us right now
because we have really exciting stuff launching on PAC.
You know, we have everything from decks to lending to stables.
But we also at ECC launched our testnet with over 50 partners coming on board in every part of that or filling out every part of this strategy.
there's a lot of stuff that is going to be directly attractive to institutional use cases
and players in the sense that PACT offers all these advanced things in terms everything from
custody to formal verification. EVM is obviously as our testnet effort shows from an ecosystem
point of view is kind of a no-brainer in terms of like how to how to supercharge the amount of activity on the
on the kineta blockchain so the interesting piece that that is starting to come together now
is institutional adoption on the kineta evm blockchain and the reason why i bring that up
is because all of these are going very well from you know business development and you know business
origination point of view.
But some of the things that we take for granted in PACT, like gas stations and things like
that, are only now starting to actually make sense in EVM with Pectra coming along.
So this is something where we're identifying key partners to work with, to bring, you know,
to bring some of these affordances to UVM, but there's, you know,
there's still just some stuff that's missing.
And that is going to be hard to replicate from the PAC point of view.
I mean, just the fact that PAC has a secure multi-sig.
I don't know if you were, if you were aware of the Bybit, the bait,
the issue of the safe wallet. I mean,
that shows you what
happens when you have multi-sig being handled by something other than the chain itself you know it
opens you up to attack vectors that are simply impossible in something like that so so it's an
interesting tension because we're bringing uh you know one of the reasons why we're able to do this
is because of our
experience launching and running PACT and understanding how our multi-chain protocol
works under load and all the kinds of, you know, the things that make it kind of confusing
or things that make it great. These are the kinds of things that we're going to be addressing
head on as we bring EVM projects on. But, you know, just wanted to get your thoughts on how these, how all of these play into the
L1 narrative.
And, you know, and also just to touch a little more on the layer one narrative too, because
like there's app chains and there's layer ones, you know, how does, how, how is this
offering going to, going to play with the institutional when they come and see the depth
of our offering and how it works in a kind of traditional layer one story
as opposed to an app chain.
Yeah, no, I think that's brilliant, Stu.
So a few things, right?
One is I remember three or four years back,
I myself wrote a long paper on layer one, layer two,
layer three, layer four,
and we had this long narrative of all these layers
that make this sort of a new OSI
model, which is the open system architecture of TCP IP to say, hey, the existing internet is
built on TCP IP. We need to have a equivalent layered model for the value web, which is what
web three is all about, right? And I think I would say that in the last few years, that has,
the focus now has been, can we compress these into a layer one to simplify the architecture and design, which is what Kadena has done.
And I'll dive deeper into it.
Second thing is that we've seen largely a business problem, liquidity fragmentation, security challenges with having all these multiple layer twos and keeping up. At one point, you had to have a PhD in Ethereum
to understand the Ethereum ecosystem.
And that further complicated what was meant to simplify
our financial infrastructure.
And that was a problem.
And then came about the likes of Mantra and the likes of Plume,
who says, you know what?
We are the chain for RWA, which is real-world assets.
And we'll only focus on that,
which means that we will take
all the characteristics that we define,
which is scale, privacy, privacy preservation,
and ensuring that you have fractional visibility
of information data only to the participants who need it,
because that's how the real world works today
from taking the existing asset classes.
And then came about the likes of Ondo
announcing their own chain, Uniswap
announcing their own chain, partly because they realized there's, of course, a lot of
value in having the layer one.
The technology cost has become a lot lower than what it used to be, Stu, when you started
this whole journey.
But the thinking around the core elements of linear scalability, around maintaining a
shared security model.
Because at the end of the day, if you're proposing a layer one design, which is the primary transactional infrastructure,
you have to make sure that you can't screw that one up in the sense that if the layer one itself either falls on its face because it's not scalable
or is inherently insecure in its transaction processing, you're sort of breaking
the entire scaffolding of all these applications, whether it's a decentralized exchange or whether
it's a lending pool or it's any of the Aave and Uniswaps of the world who are building these
financial structures. You're risking the entire sort of edifice of this new
re-platforming of finance, as I've labeled it.
So from that perspective, the motivations behind a lot of layer one is, fine, we have
our own token, we manage our own treasury, it gives us tremendous flexibility, but does
it really solve the problem of having yet another layer one with some specialization?
And I think what you've done, to me, I look at four things that Kadina,
to me from an RWA perspective, is this chain web architecture,
the braided parallel chains, solves the issue of scalability,
allows me to be able to spin up multiple chains
while still maintaining that shared security model,
which means I'm still tethered to this robust
proof of work, which is still, I mean, the reason why Bitcoin is what Bitcoin is, is because of
proof of work. And many of us still believe that that's, you are inherently relying upon
computational security, as opposed to economic security, which is what proof of stake provides,
right? And so to me, the chain web architecture is a brilliant model, because I can then create
this parallel processing, and still tie to a shared security model backed by proof of work, which is still
one of the most resilient security structure that's in the place.
Second thing is the PACT smart contract, the formal verification, the ability for me to
upgrade the smart contract, which is such a vital thing because business is never static.
They change, they have to be upgraded, and ability for us to be able to ensure.
And if you look at digital asset,
they launched their own Canton network.
They have relied upon the something
called zero knowledge smart contract,
which again, tries to provide security layer
on smart contracts.
I think all that is inherently built
into the back spot contracts.
EVM compatibility, which was, I think,
another brilliant move from the technical teams at Kadena,
attracts the portability of code,
of an evolved ecosystem from the Ethereum world
from that perspective.
And having no gas for the end users,
which is having gas stations,
allows business to not deal with the nuances
of the value fluctuations
and dealing with keeping disaster assets on the balance sheet,
they can still focus on businesses and not deal with. And the last thing I would say,
the fact that you have this very braided structure is I have the ability to have a hybrid private
public model, exactly what we're discussing in context of Robinhood, is to spin up a chain,
do all the work I need to do, and have privacy layers on top,
whether I'm using advanced encryption or relying on some capability of Xenolage proof to preserve
privacy. And perhaps the question for you in this case, as I end this long narrative, Stu, is it a
probability in the future that we have, as we are spinning up this new parallel infrastructure for chains, can we have a privacy chain? Can we have a chain that has built-in
encryption or built-in zero-knowledge, you know, way of transacting with the participants
involved in that chain? And that could actually bridge that gap, form a regulation perspective.
So I'll take a pause here and back to you, Stu. Yeah, no, that's a great, that's definitely the hot topic in institutional adoption for sure.
And Canton, you know, recently doing, I think it was like $150 million raise.
You know, there's lots of stuff going on.
going on can basically offers, you know, something similar to what we were offering before in
the sense of, you know, in theory, a permission chain makes a lot of sense for, you know,
all the reasons why privacy is so important.
Also, Vitalik has talked a lot about how privacy is the, you know, is the final frontier in
the sense that we won't really be able to realize the
promise of blockchain because it's not just for institutional, right? There's reasons why,
you know, everyday crypto users should be entitled to privacy as well.
So, but, you know, it's a hard topic because we're talking about new technology. We're talking about,
you know, in some cases you know things
like form uh uh fully homomorphic encryption which uh you know as i understand is usable
for certain use cases but like using it for like a stable coin is still a ways off just in terms of
like getting that to the point you know the amount of compute required for some of these things, including, you know, things like,
you know, ZK technologies coming online, Aztec and things like that. I mean, they're still
in beta. They're still in testnet. So I think that what Cadena offers is, well, for starters,
the chain, you know, the idea of a privacy chain has two main components.
One is that you can, in a public chain environment on Kadena, you can basically, you know, Kadena has features such that you can make it that you can restrict what other applications you work with.
I mean, one of the problems that came up with, you know, with something like BlackRock is that with Biddle is that you have these accounts that, you know, with something like BlackRock is that with Biddle is that you have these accounts that,
you know, a problem in public chain is that anybody can order up to you. Once you have
an Ethereum key, someone can just start dropping funds and associating it with your key.
And this can create like big problems from a regulatory, you know, from a custody point of
view. And there's really no way to stop it.
So that's something, that's an example of something
that like a segregated chain could just completely eliminate
is it could say that, you know, we're going to make it that.
So this isn't, you know, and, you know,
just for the listeners to be aware of,
this is something that we're discussing at Cadena.
This is not something where, you know,
we are open to working with partners
and seeing if
something like this solves problems and makes business sense so so some of this is just kind
of our initial outlook on that however i think the more uh immediate focus for us is on privacy
technology in terms of uh you know we we we have a partnership we started a partnership with a company called Lurk, then called Argument, and they built an implementation of Sysync Labs SP1 that works on Kdena.
And that's something that we're, you know, that we're readying for production.
You know, initially the idea was to use it for a bridge, but now we're realizing that some of that stuff has capability in a privacy use case.
But I think the idea is that there are other technologies, too, out there,
like trusted execution environments that allow for, that give a comfort level
for a kind of circle-style direct mint-on-chain use case.
case you can you can put that inside of a te very easily so you know so in a way i think it's kind
You can put that inside of a TEE very easily.
of the march to production of these privacy technologies being kind of a core piece of how
institutional will be able to bring uh you know all the business that they really want to bring
on chain but i do still see it as tomorrow tech in the sense that there are there's just fundamental there's a tension between having a public chain which you know part of part of the trust of a public chain
is also being able to trust the transactions that happen on the chain some of these approaches to
privacy reduce the chain basically to a time stamper and i think that's even what canton does
in day of their public synchronizer so that's you know, that's like that's offering such a small amount of trust from the public chain.
I don't think it really gets there ultimately, although, you know, bridge technologies, things that will get us started and get people minting on chain.
You know, we're we're happy to partner with people.
partner with people. But I think the more interesting thing is when we start seeing,
you know, kind of the promise of something like you can do with Sysync Labs, where you have a whole
ZKVM running, and you actually have, you know, you have full transactions happening
in this cloaked environment that is, you know, where all of the details that you need to emerge from
the transaction and get so it's beyond just time stamping because time stamping you know typically
is just like a bitcoin you know what they used to call colored coins in the sense that you're just
throwing a hash up there and saying well you know it's you know, this hash relates to the stuff we did on this offline system,
and it means nothing to the people that are on the chain. And to my mind, that's just insufficient.
Whereas with something like having a full VM and the proper proving environment, it means that you
can unmask inputs and outputs as needed to provide kind of a greater level of assurance in the sense that you might not want to have things like balances and transaction amounts.
But you can have things like total supply.
You can have things like, you know, you can be talking about the different currencies that are in play.
about the different currencies that are in play and maybe even you know i would imagine that in
certain use cases you know making it possible for regulators to crack that kind of thing open
to me that's i mean i don't know if you agree with that but that's where i think things have to go
for you know for this kind of public chain privacy uh story to one give institutions the comfort level they need, but two, preserve the trust that is beyond just the fact
that you can trust in the consensus,
but that you can actually trust in the transaction
and the business because enough things are verifiable
and change.
Do you agree with that?
Yeah, I do.
And I would say one more thing, right, Stu,
I think the technical description of what you mentioned
is spot on, right?
We need to do these things.
But I, you know, like three weeks back, I began to spend some time as, you know, like we have all these protocols and all these different chains, like 800 plus different chains that are vying for the attention of the industry in general.
role, I began to look into say, where is the real liquidity here? So besides the Bitcoin and Ether,
I began to look and to say, where is the real liquidity here?
where is the liquidity that is induced by us, by not crypto economic systems, but by stable coins
and tokenized debils and everything else. So in that context, I looked into, besides having these
raw technical areas, whether you're looking at the smorgasbord of the privacy technology available
to us, tokens, there were some token standards like ERC, ERC-3643, and a bunch of these things, which
allow for the users to go and build these applications that then leverage the underlying
security technologies to say, I want to enable permissioning.
I want to enable KYC rules.
I want to enable off-chain data integration.
Because, you know, one, it's practically impossible, nor it's feasible, nor advisable.
To put all your data in one chain, it creates a scalability challenge.
And so you do need to get off things like market data, things like KYC data.
I can't pack everything to one chain.
Even if Sucinct Lab does a few things, it's still tied to the limited amount of information that you're trying to send across that whole thing.
So this whole composability element,
which means that we have to either join that band somehow
and absorb that standard that has been
sort of universally accepted by at least
the de novo entities that we talked about
and bring them in-house to say,
hey, we will adhere to these standards,
which means those standards are then packed ready
that we can do these things.
Second thing I would say, which is what PACT already does, is composability.
So I looked into, broadly speaking, there are three chains today, essentially Optimism, Arbitrum, which is Ethereum, sort of offshoot, and Solana.
And surprisingly, I saw ZK think.
And there are practically two protocols
where all the liquidity moves through it.
So amongst all these different chains,
you have just those three chains
and that's just the value,
the attribute of these sort of standards
that somebody has proposed.
And largely speaking,
all these DeFi protocols,
all the liquidity passes through Uniswap and Aave, which happen to be in all these different chains.
So Uniswap, again, is so I think our focus from Kadena's growth perspective, as I said, technology is great, but I need to focus on liquidity because that's where all the businesses come.
all these new structures like decentralized exchange or lending protocols and borrowing
protocols or collateral protocols will begin to form because these businesses will go the
gravity of that will only move towards where the liquidity is and so that's where my thinking is
that besides the core technical element that you described eloquently Stu is embarking on some of
the say hey how can I bring in these institutions?
Because they are used to a specification
because that's how they operate.
And me not fighting and saying, let me get that on.
Let me slap that on my smart contracts
and be ready to accept that business, so to speak.
Yeah, and just one last thought about that,
which is that, you know, there's,
it's so obvious from an ecosystem point of view, the advantages of integrating EVM into Chainweb, but the one that's a little
subtler is that, you know, one of the real reasons we did this is as we started approaching
institutions, the one of the one of the big reasons why they would ask about EVM was,
you know, one for developers, but also because of participating in
these standards. You know, like, because of course we can, you know, we have our, we have a really
great RWA standard impact and we're, you know, in CurveBlock and other, you know, great partners
are getting our, you know, are getting their hands dirty, firing that up. And that's great. But,
you know, there's too many the you don't want to reinvent
everything right i mean you can you know there are good models for that of course i mean we've
talked you and i've talked about like solana and how they you know brought out a lot you know a
very strong portfolio of but you know but at the end of the day you want it's like you say you you
don't want to fight these standards you want to to embrace them. And that's actually one of the big reasons why we did EVM is so that we can be part of these standards.
And so we can help strengthen them and even weigh in on, you know, start being a stakeholder in how these standards move forward.
You know, especially in light of having something different than other EVM, you know, like in terms
of like what we can offer in terms of having a multi-chain protocol and what that means for
scalability and resilience and all those kinds of things. So, I mean, it's a really good point.
And it's a subtler point of why we went to EVM. And the other side being, of course, that, you know,
it just increases the amount of partners we're bringing in from the TVL side.
And that being really central for Kanena as well.
So, well, it's been really great having you on here, Nitin, as I knew it would be.
It's just so much fun talking to you. It's always like I hope people have enjoyed it because really, you know, this is the kind of perspective that I, you know, that I'm really glad to, you know, give our community some access to.
Thank you, everyone.
Thank you, everyone, for joining us.
You know, we hope these spaces are useful in providing a recap of our progress and getting deep into some of these topics.
And so check out our 2025
roadmap page that's at cadena.io roadmap of course follow us on twitter right here to stay up to date
engage with our community in telegram and join our discord for technical support and lastly if
you're interested in our new chain web evm test net check out the EVM developer portal at evm.kadena.io
and get more info about our $15 million grant program
at kadena.io slash grants.
So once again, thanks so much Nitin.
Well, thank you so much, Stu.
I'm super excited about the future.
I've seen this grow since I joined the team.
And I think the advances you've, the team have made
us super exciting. So again, rooting for it as I should and more
importantly I think I'm excited about the technical features that is going to
enable the new generation of finance going forward so thank you for having me
I love this chat as well fantastic all right thanks everybody we'll be signing See you at the next Cadena News.
