Hey guys, thanks everybody for joining here. We're going to give it a couple more minutes and let the rest of our speakers get up and ready to go and we'll get kicked off.
Super excited for this one!
Hey everyone, can you hear me?
Hey hey Nathan, yes loud and clear. All good, can you hear me well?
Awesome stuff. I think we're just waiting for Franklin here and then we can kick off and get started. Excited for this one.
Great! Yeah likewise, thanks for having me.
Hey Franklin, how are you? Good, how are you Cooper? Can you hear me okay?
Yep, doing well. Well awesome stuff. I think we have everybody on our side. Super excited to be kicking off this kind of AMA, kind of discussing RWA's and institutional adoption on Injective.
We have quite a bunch of content to get through here, but to just kick off, we'd love to give it to each of our different speakers on our side of things and get high-level intros into you, your project, what you guys do,
and that'll give all of our listeners some context and understanding for how institutional adoption on Injective is really leading forward the future of finance.
So with that, Eric, can I kick it over to you?
Hey guys, how's it going? Really glad to be here. This is Eric Chan, founder and CEO of Injective Labs.
So we're a software development firm focusing on contributing to open source software and contributing to the Injective network.
A couple of the examples are Helix and we built out a lot of core modules that eventually became part of the Injective chain.
And of course, super excited about the whole upgrade and what it can bring to the ecosystem.
Awesome. Awesome. And we'd love to kick it over to Franklin from there.
Thanks, Cooper. Yeah, a little bit about me. I'm a partner at Pentair Capital. We are a blockchain and crypto-focused investment firm.
We manage up to around $5 billion in assets across our early-stage venture and liquid tokens and early-stage tokens.
We've been doing it since 2023, so we finally made it past the 10-year mark and are still surviving and thriving through all the cycles.
For me personally, I've been at Pentair for almost five years. Before that, I was at JP Morgan in the investment bank.
Started the blockchain team there, which is now known as Onix, with a couple of other folks back in 2015.
Helped build out things like JPM Coin, Enterprise Ethereum, some of our use cases across the bank and payments and settlement and tokenization.
Glad to be here and also glad to be very proud, very early investors in both Injective and Onda.
Awesome stuff. Well, incredible introduction and we're super lucky to have you here. With that, we'd love to kick it over to Nathan and then get into the exciting stuff here.
Thanks, Cooper. I'm Nate. I'm the founder and CEO of Onda Finance. My background is in TradFi, originally in private credit and private equity.
I really got into crypto in earnest in early 2017, so I was very excited by the white paper mania of ICOs in early DeFi.
Eventually, I went full time into the space late 2017 and then a bit later moved over to Goldman Sachs on the digital assets team.
It had originally been set up actually by Onda's current COO, Justin Schmidt, to create a Bitcoin trading desk.
But as the bear market deepened, there didn't end up being a whole lot of institutional interest there.
When I joined, we shifted into Fermoid Strategy and took on a broader mandate, looking at how the firm could use blockchain strategically.
That primarily took the form of securities tokenization.
We explored a whole bunch of different things.
The one public deal that we worked on was helping the European Investment Bank issue a bond on Ethereum, paid for with the central bank digital currency.
That was also on Chain and we used smart contracts to enforce atomic delivery versus payment settlement.
It was a pretty cool one-off pilot, but eventually it became pretty clear that the path to scalable commercial use of particularly public blockchains was still quite a ways out.
I left about three years ago to found Onda Finance.
There's really two main sides of our business today.
At a high level, we're focused on bringing institutional grade financial products and services on Chain and making them accessible to everyone.
That materializes through a securities tokenization arm where we're particularly focused on cash and cash equivalents.
OUSG, the first tokenized treasuries that we released a little over a year ago, and then more recently, USDY, our substitute for a yield-bearing stablecoin.
Then we also developed certain protocols that derive utility from tokenized securities like Flux Finance, which is effectively an on-chain version of a Treasuries repo marketplace.
Awesome stuff. With that, I'm excited to hop into all the incredible traction that USDY has also gained within the Injective Ecosystem and the different offerings on Helix, etc.
With that, we have clearly two of the largest domain experts of real-world assets within the DeFi and crypto space.
We'd love to kick off more high-level questions to be asked surrounding real-world assets and those things on Chain.
Eric, can you kick the conversation off and briefly explain new and key features of Injective's recent
The way this is achieved is extremely interesting because historically, one of the biggest issues
with any type of whitelisted permission asset or permission token is that you're effectively creating a separate token contract.
There's a lot of edge cases that different types of DeFi protocols and different types of existing primitives run into that might break the primitive itself completely or it might be incompatible.
This is what creates the lack of traction in part to the adoption of RWA or permission assets.
Within DeFi, within the broader on-chain ecosystem, in order to support one, you first of all have to agree to a standard that everyone are okay with for all the projects out there and all the issuers.
And then second of all, you have to make sure that everyone adopts that standard, create custom contract or fork diversion, go through routing cycle, and it obviously depends on the complexity of the project themselves.
And for Injective's case, we have a chance to utilize module-level tools to solve this problem or to not have to be confined by issues within a generalized environment.
The biggest part of the permission module is to make sure that permission tokens itself works out of the box with all the existing modules, with all the existing projects on top of Injective,
and having almost a very simple and elegant catch-all solution to conflicts or issues when attempting to transfer to non-permissioned counterparties.
This is basically like standing in a voucher system, which means that if the transfer to another party fails,
let's say going from a module address or from a certain contract address to another user that's certainly not on the whitelist,
the failure is actually not reverted on the contract itself, in a sense, or the module itself, in a sense.
It actually simply goes into the voucher system where either the module can find a way to handle it and recover it optionally,
or perhaps it can just stay there. We're waiting for someone to regain their permission to claim it.
So yeah, this is one of the most monumental steps for the overall ecosystem,
and it basically allows for permission asset to be integrated and incorporated seamlessly with an exchange module that's just been ripping in terms of traction today,
and really bring on the institutional crowd. And of course, this is just one cool feature that I'm just nerding out on within this module.
There's actually a lot of other features that basically allows for and solves a lot of the existing institutional onboarding
and different types of compliance requirements all at once.
I think it's going to be a super, super exciting tool that people are going to slowly see adoption
and people coming out in public announcing their integration deployments and support.
Yeah, no, awesome stuff. And really, the RWA module, being live on Injective now really empowering all these different projects
is really the next step in pushing forward all these different types of activities on Injective as a chain.
I would love with that to kick over to Franklin and understand from an investment angle and where you sit,
what role do you see and envision real world assets on chain playing into shaping more institutional strategies towards blockchain investments?
And to provide more context there, there's so much that goes on within the traditional financial world today,
and much of this can be brought on chain. How do we see this with these real world assets actually creating a more capital efficient environment?
Yeah, definitely. Having come from that TradFi background and having spent so many years just thinking about
where does blockchain really fit into the tech stack for capital markets and just financial use cases,
RWA's coming on chain is basically the moment I've been waiting for personally.
And I think it's something that is really going to change how people on Wall Street think about blockchain technology,
about DeFi, about everything they're hearing in the headlines today around Bitcoin and Ethereum.
The reality is, RWA's in many ways is sort of the moment of crossing the chasm for DeFi,
because when you get outside of this crypto bubble that we all live inside every day,
the perception is still that DeFi is just this toy that only crypto native people use or need to use.
It's kind of insular. It's crypto serving crypto. It's buying tokens, borrowing tokens so you can bet on tokens and make money on tokens.
And so there's not really a differentiation, I think, in people's minds, both mainstream and in TradFi,
of what DeFi really represents and everything they hear around just general headlines in crypto.
And how it relates to what they do every day.
But when we start to actually see real world assets get tokenized, I think that perception starts to completely change.
I mean, you can see that from folks like Larry Fink, BlackRock.
You can see that it's resonating, because like any early state technology, there's an adoption curve.
And especially for technology that's related to financialization, to FinTech, the markets,
the adoption curve is not the same for everyone. It's not evenly distributed.
And it actually tends to start from the fringe until it reaches the center.
So when assets start to come on chain and we see use cases like Ondo and USDY that really start to tap into global capital markets
and going cross-border to where demand for the US dollar-based assets is not being served
and where there's latent demand and markets that should exist but don't,
and suddenly because of DeFi and because of Ondo and Injective, they actually start to materialize.
That's really going to turn heads, I think, for people on Wall Street and for institutional players,
because that's what they understand.
It's rare, but it is potentially career-making to be at the center of a new market appearing and materializing.
And so people are always watching out for that.
I think the second thing is that it's making people realize that there's actually a real amount of liquidity that's available on a chain.
If you're going to turn on new capital markets, that's one thing that has to be there or there has to be a path to that somehow.
And it's a simple rule, follow the money.
And if there's not really money there, why would asset issuers be there?
Why would market participants be there?
And so I think what people are starting to realize now is there is real money there.
There is real connectivity to global capital markets, to real market players.
I mean, one thing I like to follow very closely is DeX market share.
How much market share do decentralized exchanges have today versus centralized exchanges within crypto?
And today, that's maybe 10 to 20 percent.
I think that's on the low end of where we actually end up.
And I think that ratio is actually going to be very true of TradFi,
that there's going to be major volumes through traditional assets that are going through decentralized exchanges
and being traded in a fully DeFi native way.
And so I think as RWAs get more adoption, as people start to see these markets play out,
they actually realize that, hey, maybe I should be bringing some of my assets on chain
because there's better price discovery, there's better access to global markets.
And it's the right time now.
And so I think that's a massive inflection point that we're just starting to see now.
And with that, I think that Franklin just touched on a ton of incredible points
and notes of how real TradFi investors and Wall Street more generally
will be able to view and really access this new technology.
Eric, with that, to talk more about the RWA module,
you really kind of explained on a technical level how it works.
But what types of entities and what types of use cases can you imagine
now coming on board to Injective because this is now all possible?
Yeah, for starters, obviously the integration and incorporation of RWA assets
or any type of permission assets in any shape or form or fashion,
could be a typical token that's backed and an existing issuer,
an existing reputable institution.
But also it could very much be general assets or contracts
or representation of fungible or non-fungible items
that are being migrated on chain by this issuer,
or this trust or this custodian structure.
That's just the basics of it.
I would say what's truly interesting is that the volume upgrade,
adding the permission module, really collapses kind of like the overhead
of maintaining and supporting from an infrastructure level.
But more importantly, it makes it super easy for an institution to get started
becoming the issuer, supporting and engaging with their own user base
and getting traction and just completely forget about
having to worry about the on-chain component that can be easier
and easier and easier as more and more institutions on board
with more and more tools at their disposal because these can all be shared.
So a decent example is that, for example, for a whitelist, for a particular asset,
that whitelist might all end up sharing with the same type of KYC provider
that shares the same type of standard.
And over time, as more and more KYC provider kind of synergizes
and onboard more users and KYC more users to basically expand the list,
the same list can be shared and inherited in a sense by any other assets.
For example, if I'm trying to issue something that's quite regulated,
it has very, very strict KYC requirements.
It also perhaps requires you to be a credited investor.
Now it's not about me having to talk to a KYC provider,
having to go to them and say, hey, I need to engage with my potential clients or users.
Now start something completely fresh, zero to one for me.
Now it's more about, okay, here's an existing provider with a list
that I know and it passes my existing compliance framework.
Now I can just use that list for my asset issuance
so that over time, even from a user's perspective,
if you're onboard to one, you can get access to all of these assets all at once.
And lastly, I mean, if you could speak on it at all, Franklin,
kind of going off back to kind of your introduction
and your work at J.P. Morgan on ONIX, really cool.
I think what they've been doing, you know,
I would love to hear from your perspective
if you can see more of these types of, you know,
more kind of public blockchains to some extent, you know,
bringing over market share from different types of, you know,
stratify entities and those things, given that prior experience.
I would love to hear if you don't have any thoughts there.
You know, I think a couple of different things.
One, I think permission chains are just a weird Frankenstein
transitory technology that won't be useful in the future.
And so, you know, I think from call it pretty early on
in at least my work at J.P. Morgan,
I always felt pretty highly convicted that we would all end up
on public blockchains for a couple of reasons.
One is, you know, I think for when you're picking
a tech stack for testing and experimentation,
it's really a low stakes decision.
You're not taking it that seriously,
because what you're really optimizing for is convenience,
the ability to sort of make changes quickly.
And so permission chains end up being an okay answer for that.
But when you start to talk about having real clients,
real volumes, real markets on chain with billions
and trillions of value traveling through those pipes,
you know, there's no reason why you should pick
a permission chain for that.
Because we have public blockchains that have been
battle-hardened and tested by real world use cases,
by basically the most adversarial environment
of hackers and malevolent entities
for the past 10 plus years.
So when you actually have to make a real decision
about picking a tech stack,
I don't think any proper enterprise CTO
would choose the tech stack that's only been tested
by five or six entities in an environment
that is completely isolated from the real world.
The second thing is I think permission chains
actually destroy the business case
for bringing financial assets on chain.
You know, like Eric was saying,
the tokenization of real world assets
really reduces the cost of securitization by a ton, right?
I mean, there's so many intermediaries that you have to pay
along the way in today's financial world
to have an asset distributed around the world.
If you end up using a closed source permission chain
where just to get people onto that network,
you have to go knock on the doors
of a thousand different institutions and say,
hey, are you willing to use my software?
Hey, are you willing to sign this contract with me
to use my version of Ethereum or Solana?
That destroys the business case
because suddenly you're right back where you started.
You have an army of a thousand sales people,
a thousand support people to manage that network
that you own or co-own potentially.
And the overhead is right back to where it was before.
So a lot of that, I would say, costs advantage
comes from the fact that public chains are open source.
They can be used by anyone around the world like an API
without someone knocking on their door and inviting them to do it.
And that's what's so powerful about it
is that it's this self-sustaining network
that can grow without overhead growing.
And so I don't know how long it'll take
for everyone else in the world to realize this,
but it's one of those things
that I kind of hold to be an absolute truth.
It's just that it takes time for people
to come to this realization,
and it takes a few mistakes, a few failed experiments,
and I think that's okay for people to go through it.
Totally, totally. Well, thanks for that.
Awesome for a lot of our listeners
to hear and understand on our side of things.
And I think this AMA set up in a great sense
where we really got the high level in terms of where RWAs are,
the future of Injective and those RWAs,
and now we can kind of switch gears
and pop over to the incredible partnership and collaboration
between Ando and Injective
and really the first use cases of real-world assets
on the chain as it currently already stands.
So with that, I want to kick off
and shoot over to Nathan here.
Could you just give us a high level really
I think you did a great job.
What are the primary benefits
of all the different token offerings
that Ando currently offers,
and how would you break those down on a high level?
So our focus is really on the tokenization
So I think we can really start with
what are the benefits of stablecoins.
You know, we think of most of our products
as yield-bearing versions of stablecoins.
So, you know, stablecoins are digital bear assets
that allow for, you know,
24-7 global peer-to-peer real-time settlement.
And, you know, also programmability
with decentralized finance protocols.
So obviously we've seen quite a lot of demand for that,
as, you know, Franklin mentioned earlier,
particularly in, you know, developing economies.
And, you know, I think that it's certainly a testament
to the value of those features that, you know,
we have so much demand for stablecoins
despite the fact that, you know,
they pay holders nothing, you know,
while their issuers are earning, you know,
5% or more on the reserves.
And so, you know, our main goal, at least for now,
is really just to pass, you know,
the vast majority of that yield on to end holders.
You know, with other sorts of securities,
I think the focus is less so on, you know,
24-7 real-time settlement.
I don't think there's really demand to settle 24-7
in most financial instruments,
but enabling them to be used as collateral at,
you know, derivatives protocols, lending protocols, et cetera.
I do think it's really valuable.
And I think this private versus public chain discussion
is a really interesting one as well.
I just wanted to add a couple of follow-up thoughts
I mean, when I was at Goldman, we, you know,
we pushed the use of public blockchain quite hard,
but, you know, there was a lot of, I think,
And, you know, particularly in the context of a regulated bank,
I think that it is still going to be a pretty long path there.
I mean, issues like, you know,
paying transaction fees to unknown validators,
you know, allowing clients to effectively be front-run
via malicious MEV, you know, these things have, you know,
pretty real regulatory consequences,
especially when you're talking about securities.
That said, you know, I think that, you know,
public blockchains and their open accessibility
and, you know, interoperability is obviously hugely valuable.
And I think that, you know,
we need to see a little more exploration in the space of,
you know, incorporating hybrid elements that,
you know, address these sort of concerns
around front-running and the like,
but allow for open development.
So excited to see some of that.
And with that, we'd love to kind of kick this both over
to Nathan and Eric at kind of the same time
and discuss the specific integration
and partnership and collaboration between Ondo
and Injective as it currently stands.
Kind of, you know, what exists today
and what can we hope for, you know, here in the future as well.
Yeah. So for starters, you know, like,
we start off with a USDI and USDY
and that's been, you know, super, super exciting.
You know, it brought out so many new use cases
and slowly, you know, more and more products
are also, you know, adopting it.
So that makes it look super interesting.
You know, it's been like super active on humans as well.
And I think, you know, basically,
with the introduction of a Roland upgrade,
what I'm looking forward is, you know,
like creating this essentially like a permission asset
ecosystem and also like couple that with like RWA
to basically create this, you know, like,
kind of like almost like an RWA sub-ecosystem
that's, you know, once you opt in,
once you go through like the, you know,
permissioning process, you get to participate in it
while, you know, like also get to, you know,
use the exact same staff and, you know,
make the overall like migration process for users
Because for sure, like one of the currently issues
with, you know, a lot of the kind of like permission platforms
is that because, you know, like the list is typically,
you know, maintained by, you know,
the KYC provider, you know, and, you know,
approved by like the platform themselves,
it becomes quite difficult and quite lengthy,
lengthy process for like a user to onboard,
you know, all these platforms.
So it basically becomes like a one by one process.
So typically, you know, what ends up happening is that,
you know, these sort of assets generally just stays
within a platform with not a lot of, you know,
on-chain participation, let alone like, you know,
composability and interoperability.
And the goal for like Volon is to really break that.
It's to really, you know, create an ecosystem around it
where, you know, users onboard one platform
to gain access to one asset and also, you know,
thereby in the future be whitelisted
and, you know, join into this entire ecosystem
And I would love to kick it over to you, Nathan,
as well, specific to Injective,
kind of why are you really excited about the partnership
and all the existing kind of offerings
and the, you know, potential for kind of,
you know, more kind of in-depth offerings
as well as partnerships here in the future as well?
Sure. I mean, my understanding is that Injective
is fairly focused on, you know,
supporting some RWAs like, you know,
USUI that's bridged over to Injective
which I think is one of the, you know,
more interesting use cases, you know,
to allow traders to, you know,
get yield while they've, you know,
parked assets in our trading derivatives.
So I'm certainly excited to see that.
And just from our side, ecosystem development,
you know, a totally kind of third-party team,
Neptune Finance, who I see is also on the call here today,
recently launched, and I know has plans of also working
to integrate these different types of real-world assets
So shout-out to an awesome ecosystem project
that has been quickly growing as well
and will continue to expand
the different forms of use cases
for all of kind of, you know,
Ando's different types of offerings as well.
So, you know, on to the next question,
kind of, Eric, in terms of market dynamics,
how will this integration, you know,
with Ando kind of affect liquidity
and market depth relative to the
Injective kind of exchange and that
derivative landscape that Nathan is mentioning?
Obviously, you know, there's tremendous,
you know, added value to using these
different types of real-world assets
in the context of derivatives
and trading those different types of things
But I would love to hear kind of your thoughts
on, you know, utilizing these types
of real-world assets into, you know,
perps and derivatives, et cetera.
Yeah, it's going to be slowly and very quickly.
Basically, it requires like a critical mass
in terms of participation to like
join in on board to the assets, you know,
kind of like attain like the critical level
for it to really go on like a full-on
Basically, like currently, you know,
like for a lot of RWA and also a lot of
in terms of, you know, like permission assets,
it's always going to be a slower start
compared to, you know, permissionless assets
mainly because, you know,
for like the initial like Genesis set
of participants to onboard,
there's, you know, like the overall KYC friction,
the onboarding friction and, you know,
sometimes there's like time restrictions
or basically like a lockup of restriction
in terms of kind of tokenizing there,
kind of like a subscription.
And over time, like this is, you know,
definitely going to solve first of all
in the form of, you know,
having enough participants onboarded
and synergizing it with others.
And then another really interesting case
is that basically, you know,
for a lot of these permission platforms
and, you know, Nathan probably can confirm
whether like this is similar to Ando's case as well.
Because of the lockup period,
sometimes it could be six months
and that could be one year.
There's kind of like a delayed effect
the translation of kind of like onboarded,
kind of like a notional value
or onboarded users into like the on-chain activity
and, you know, like looking back
like six months or a year,
like very soon we basically get to have a countdown
of like this influx of users
and these influx of institutions,
literally like just hopping on
and, you know, joining the on-chain world
and, you know, developing use case for it
or, you know, bringing in enough user traction
to kind of like make projects
and to prioritize like the integration
So I think overall it's going to be super, super exciting.
Nice, nice. Yeah, totally love that.
And now kind of would love to kick it over to you,
How do you see this integration
and really the just broader partnership coming together?
I know you noted previously that Pantera is both an investor
and both Anno and Injective.
So cool to see two of your different portfolio companies
But also with that, like from your perspective,
how do you see that this type of partnership
and collaboration empowering kind of, you know,
this new kind of financial paradigm?
I mean, number one, totally agree with you.
So excited to see different teams in our portfolio
bring out ways to work together.
You know, it's kind of one of those things
where everyone sees a different part of the elephant
and sees something different about how they can add value
and really get us to that sort of final vision
of this new financial system.
And so to me, what's most exciting about Injective
and Anno working together is, you know, you've got Injective,
which in my opinion is one of the best places
to build a DeFi application today.
And you've got assets coming on chain from the real world
to flow through those applications.
So why is that interesting and cool?
Well, DeFi up until very recently has been
this kind of isolated financial system, right?
It sort of travels its own path completely divorced
from what's happening in the real world.
And, you know, that was nice for a while
when not too much was really going on,
but there's been a lot of change in the real world
You know, yields are a lot higher.
We're in a totally different macro environment.
And so a lot of the kind of changes you've seen
in the DeFi ecosystem has been because people can operate
And so if DeFi were to continue in isolation,
it just wouldn't be competitive.
You know, people have a choice of investing
into other assets off-chain or investing into assets
But when you start to merge them together,
you actually start to solve that gap, right?
You know, it's sort of the difference
between investing into really low-risk assets
versus investing into high-growth companies.
The return that you're going to get on a high-growth company
is really based on how much excess risk you're taking on
and hopefully excess upside
versus just low-risk, risk-free asset,
But if that U.S. Treasury isn't accessible in DeFi,
there's no way to build that sort of logic
And that's why you've seen DeFi yields
actually start to go really low,
even though as a risk profile, as a risk asset,
they should really be priced much, much higher
than just a 4% to 5% interest rate.
So when we see real-world assets come on-chain,
to me, that is the opportunity to merge DeFi
into the real world that we can bring
that kind of financial logic back into DeFi
so that people can actually see the kind of risk-reward
of being a market participant in DeFi today.
And so with a partnership like Injective and Ondo,
that's exactly what's happening, right?
You've got decentralized exchanges like Helix
built on Injective that turn on totally DeFi-native use cases
like Perp's that are just uniquely possible in crypto.
But those products are now able to access
the kinds of yields that are,
or at least before, were only found in the real world,
but now can be found in DeFi because of Ondo's partnership.
So to me, it makes complete sense.
And I think when we look ahead four, five, six months from now,
I think people that are building in the Injective ecosystem
are going to see this as a really critical moment
where the things that they're building
are going to be capable of so much more
because of the real-world assets
that are now available in Injective.
And I think we've covered quite a few great points
with regards to what the broader implications
of real-world assets are across crypto
and more specifically the partnership between Ondo and Injective
as that currently stands.
We'd love to hear your three thoughts here surrounding,
okay, now we have the awesome ability
to bring these different types of financial assets
that exist in traditional finance on-chain,
but now there's always added potential
for the composability and interoperability
of those assets into things like perpetual exchanges,
which we've kind of briefly covered,
We'd love to hear kind of, you know,
what these different types of composable
and interoperable functions and applications
you guys see taking off in 2024 here.
Can kind of start with Eric
and kind of, you know, then go to Nathan and Franklin.
Yeah, I feel like, you know, like if I keep going,
it's going to be, you know, me repeating myself
about like how bullish I am about like, you know,
like RWA and like, you know, the adoption.
I think an interesting angle and like a new point
I can think of is with the introduction of like Bitcoin ETF,
it's kind of like the very first time
where there is basically a super, super compliant,
super, super, you know, safe channel or venue
for a lot of the existing institutions
that's been on a sideline, that's been, you know,
waiting for, you know, like a completely regulated
and compliant product to, you know, come on board
and for them to kind of join in and, you know,
freed it as, you know, like a potential,
like an investment product within their portfolio.
That's going to have a quite,
it's going to have a pretty strong latent effect.
It's probably going to take a few months to really kick in,
but it's when you see, you know,
more and more institutions after they dipped their toe
and ETF or, you know, the derivatives around it
and decided, you know, like this is certainly like a class
of product or, you know, this is like, you know,
like an infrastructure and space for them to,
you know, experiment more on or, you know,
with the introduction of the ETF products,
they get more confidence to, you know, join in on it,
you know, with assumptions on, you know,
like the regulation being clearer these days
and also, you know, with the overall like compliance
framework being more mature now.
You know, when I think about sort of the new possibilities
getting unlocked, I'll go back to Perpetuals.
You know, we talked about it a little bit and,
you know, for the audience that might not be
super familiar with Perpetuals.
The super short, super oversimplified version
is they're just like futures,
but they don't have an expiration date.
So, you know, you can bet on the future price of something
without actually having to accept the asset
or buy the asset, which makes it a really liquid
and capital efficient kind of instrument.
And without an expiration date, it's even more flexible, right?
Because that doesn't sound that exciting at all.
I think it's cool because what it actually opens up
is really flexibility in time for financial markets
and time in the sense of, you know,
take a product like insurance
and take something like skydiving.
You know, you jump out of a plane, things might go wrong.
You'd love to be insured.
How do you solve for that today?
Well, you have to go out and buy life insurance,
you know, a policy that lasts for a year
because, well, that's what insurance companies will sell you.
But when you think about it, that's not the right product
or what you actually need when you're skydiving.
What you actually need is an insurance policy
that lasts for two minutes, right?
Because you're only falling through the sky for two minutes.
And so what you actually really want is an insurance policy
that lasts for two minutes that you can buy,
literally the minute before you're about to jump out the plane.
And so, you know, that's a really hard product to build today.
But it's something that eventually I think we can build in DeFi.
If you have the right kind of data, you know,
the right kind of Oracle,
the right kind of risk metrics and models,
you can actually build a product like that
where Perpetuals might be one of the unlocking products for it.
And so, you know, that's the kind of product and market
that should exist today but doesn't, right?
Because of the constraints of today's financial markets,
because the issuance of those kinds of products
are only controlled by a very few number of institutions.
But through DeFi and through, you know,
these kinds of partnerships that Injective and Onda are going through,
you can open up these kinds of markets
that allow you to build that kind of product, right?
And so, you know, somewhere in the world,
there's someone who wants to take the other side of that bet, right?
And make the other side of the market
so that you can actually buy that kind of protection
for that very specific kind of risk, right?
Someone who's just looking to diversify their portfolio,
someone who just thinks it's really interesting,
and without the kinds of DeFi products
that are uniquely possible in DeFi
and without the kind of global capital markets
that you open up because of DeFi,
you can't make products like that.
Yeah, very well put there, Franklin. Very well put.
And also, you know, Nathan,
keen to hear your thoughts here
and also really keen to hear kind of your thoughts
in the future of Flux and kind of the inspiration there
and, you know, how that all ties into this as well.
Sure, yeah, I mean, it can answer both questions
I mean, one of the use cases that we're most excited about
is the cross-collateralization
of both securities and crypto.
So, you know, lending and borrowing,
cross-margin, cross-collateralized
by, you know, both classes of assets
is really not something that, you know,
investors can do on any major centralized
or decentralized platform today.
And you effectively have to get the two on the same settlement rails
to enable that, you know, in any sort of reasonable way.
So, you know, getting, you know,
Bitcoin and ETF form actually does start to open the door to that,
you know, for certain types of institutions.
And that was actually a really major issue
when we were selling Bitcoin non-deliverable forwards
and the Bitcoin TV futures at Goldman
and the fact that it couldn't be crossed with, you know,
funds, securities portfolios.
But, you know, more broadly,
I think that, you know, having that be retail accessible
and, you know, applicable for a much wider basket
of securities and crypto is extremely exciting.
I also think that, you know, related to that,
simply the availability of, you know,
effectively prime brokerage for retail investors globally
is going to be a really big unlock.
You know, today you might hold some securities
in your Fidelity brokerage account, some in Robinhood.
You know, you have some crypto on Coinbase.
You know, you have some other assets in your bank account.
And, you know, they're all on disjointed settlement rails.
And there really isn't a way to take out a loan
that's cross-collateralized by all of those different assets.
You know, institutions have prime brokers
that are able to effectively centralize custody
or access to custody to all of those different types of assets
such that they can do this.
But it's, you know, relatively expensive and inaccessible.
And I think that, you know, flux and other lending protocols
can make that much more easily accessible in the future.
Yeah, no, that's awesome. That's awesome.
And really appreciate that perspective as well.
With that, kind of, you know, we're hearing the end
We'd love to kind of just hand it off to each of our speakers
for any closing remarks or anything to really, you know,
stay in touch with relative to your potential projects as well.
So with that, handing it off to Eric, you know, here.
Yeah, I think generally, you know,
definitely check out Injective.com.
I think that's the best place to start,
or follow the Twitter at Injective Underscored.
Basically, you know, VOTEful and being included in the chain upgrade
is just, you know, very much step one.
There's so many very exciting products
that are being rolled out in correspondence to it.
For example, like Helix Institutional, et cetera.
And that's really, you know, exciting as well.
And of course, you know, MITO's on the horizon as well.
So that's quite fun as well.
Awesome. And we'd love to kick it over to Franklin.
Great. Yeah, final thoughts.
You know, we are super excited about everything that Injective
and OnDoor are doing, and we love being supporters
and see a bright, bright future ahead.
We are still actively investing in DeFi
and just crypto and Web3 broadly.
So, you know, if you're building something really cool
or know somebody who is, we'd love to chat
and see if we can work together.
Final thought just on the topic we talked about today.
Look, I think I get asked a lot, sort of,
you know, when does institutional adoption happen?
You know, what needs to happen to really hit
And what I'll say is that what really doesn't matter
actually is, you know, what Jamie Diming thinks
or what Larry Fink thinks or what Warren Buffett thinks.
What matters is what their customers think.
That's really what makes the world go round
in institutional finance.
And so, there's two takeaways from that.
One is, I think the tipping point
for institutional adoption is when you can say
that your assets are worth more on-chain than off-chain.
I think that's the simple milestone we're shooting for.
And it's not going to be true for all assets, right?
But when enough assets can be more efficiently traded
and transacted on-chain and are actually worth more
because there's greater demand.
There's greater access to more people around the world
who might want that asset.
Theoretically, that price should be higher on-chain.
And so, to me, the moment is when you,
as an owner of assets, as an investor,
look at your portfolio and say,
wait a minute, why is my Apple stock worth less
sitting on Vanguard or Fidelity or E-Trade worth less there
than it is in a decentralized exchange on Injective, right?
And that's what's going to make the world tip over.
And so, I think that's really it.
So, the second takeaway is,
I think what everyone on this space is doing
is exactly the right thing,
which is getting educated about what's possible
so that you can go and educate your financial advisor
or your banker or whoever it might be and say,
Why are we not doing this yet?
And if enough people say that,
I think that's actually what leads to institutional adoption.
So, I'll just leave off there.
Yeah, thanks for having me.
You can check us out at Ando.finance.
You can onboard to our products there.
They're mostly cash equivalents today,
but we'll certainly be expanding in the not-too-distant future.
You know, echo a lot of the excitement around RWAs.
You know, I'd emphasize, I think, as we all know,
that it's still in the very early innings of this space.
I mean, certainly made a lot of progress.
You know, it was a big push of enterprise blockchain,
research and tokenization in 2016,
and then, you know, again in 2018
with a bit more of a focus on public blockchains.
And I think, you know, it's been a long road
to get institutions educated on all of this,
but, you know, they're finally making, you know,
very, very substantial investments.
You know, incredible to see things like, you know,
Franklin Templeton going out on Twitter
and, you know, being so crypto-native
and some of that stuff just really blows my mind
as to, you know, how far institutional acceptance
of, you know, crypto-digital assets
and, you know, public blockchains has become.
So, yeah, really excited for what's to come
Well, you know, to wrap up on our end,
I want to thank Eric, Franklin, and Nathan here
for coming on and having this awesome space,
you know, discussing real-world assets
and institutional adoption on Injective.
This was a recorded space,
so many of our listeners will be able to come back
and hear all these wise words of wisdom.
Always keep up to date with what's going on
on the Injective side of things by following our Twitter,
taking a look at our website, and et cetera.
But thanks for everybody for tuning in today
and looking forward to all of us to come in 2024.