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The Money Layer: Stablecoins, Payments, & Aggregation
Recorded: July 21, 2025 Duration: 0:48:42Space Recording
Short Summary
In a recent discussion, leaders from Polygon, Agora, and Conduit explored the future of stablecoins and payments, highlighting significant partnerships and innovative projects aimed at enhancing blockchain infrastructure. With Polygon emerging as a leading platform for stablecoin transactions, the conversation underscored the importance of interoperability and the growing trend of businesses seeking to develop their own stablecoin solutions.
Full Transcription
Thank you. Thank you. GMGM everyone Happy Monday Happy Monday
We will get going in just a few minutes
As we get all of the speakers here
And ready to go
So until then sit back relax
And enjoy the music I work all night, I work all day, and pay the bills I have to pay.
Ain't it sad?
Still there never seems to be a single penny left for me.
That's too bad
In my dreams, I'll have a plan
If I got these, you're a wealthy man
I wouldn't have to work at all
I'd fool around and have a ball
Money, money, money, must be funny in a rich man's world.
Money, money, money, always sunny in a rich man's world Ohhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh't it sad? And if he happens to be, I bet he wouldn't fancy me. That's too bad. So I must be a happy girl To Los Angeles, Monaco
And when I'm fortunate in a game
My life will never be the same
Money, money, money
Must be funny
In a rich man's world
Money, money, money, money, always sunny.
In a rich man's world, all the things I can do.
If I had a little money, it's a rich man's world.
All right. Welcome, everyone, to Happy Monday. I am super excited. This is actually a space
that I am very, very excited to talk about because I think it's actually one of the,
uh, the best use cases for aggregation. So, uh, thank you everyone. If you guys can give
me a thumbs up or wave or heart or whatever just to make sure that my voice is coming through and everyone can hear me.
All right. Fantastic. Thank you, Nick.
So I know Nick can hear me. Anyone else, I would appreciate just a thumbs up a couple more.
Oh, there we go. Thank you. Thank you, Andy.
All right. Fantastic. So we are going to talk stable coins, payments, and aggregation today. It is going to be a great space. If everyone in the audience can do us a favor and hit the little quotation bubble in the bottom right corner, retweet, like the space, and then if you have any questions, feel free to drop a reply or comment, and I'll be sure to ask the speaker so they can answer any questions you might have. But with that being said we will get underway
and we will start by introducing the speakers. I'll just go as I see them on my screen so
why don't we start with you Aishwari.
Don't worry.
Hello everyone, I'm Ashwari Deshaid, working with Polygon, leading the entire payments
and the RWA initiative for Polygon.
Thanks for having me here.
Awesome, yes, it'll be great.
And then your partner in crime, let's say, Jamal, why don't you go ahead and introduce yourself?
Tell us what you do.
Hi, everyone.
Thanks for having me.
I am Jamal.
I lead our payment strategy on the U.S. side.
Somewhat new to Polygon, a little bit less than six months, but a longtime user, longtime fan.
And I've been in the space for about nine years.
So across various roles,
I worked at companies like BitPay, Square, Bridge, Wire,
and another company called Unlimit.
A lot of experience with stablecoins,
a lot of experience with compliance
and just anything fintech related to crypto.
Super excited to chat stablecoins and payments.
Awesome. Thank you. And Nick, why don't we hand the mic on over to you?
Yeah, Nick, I'm the CEO and one of the co-founders of Agora. I've been in digital assets personally
about nine years, but made the jump full time a few years ago, right after DeFi Summer,
first leading the crypto practice at General Catalyst,
which is a large multi-stage venture firm,
and then leading to start Agora.
Fantastic.
Yeah, I definitely am interested in what you have to say
and kind of what Agora is doing differently,
but we'll get to that.
After we introduce Forrest,
Forrest, why don't you go ahead
and tell us a little bit about yourself?
Yeah, thanks so much for having me. Excited to join the stage with you all. introduce Forrest. Forrest, why don't you go ahead and tell us a little bit about yourself?
Yeah, thanks so much for having me. Excited to join the stage with you all. My name is Forrest.
I lead business development at Conduit. We're a chain infrastructure platform that helps teams of all shapes and sizes, including Katana, most relevant to this conversation, and on the new
Aglera CDK, launch chains and scaled their on-chain apps
and ecosystems.
Before I joined Conduit, I was in the DeFi world
working on a decentralized exchange.
So I've been in the space since 2019 or so,
playing around with on-chain finance
and along the way, fell in love with rollups.
Awesome, yes, it is always fun talking to you. I'm glad we
get the chance again. So to open up the space, and if you guys have something to add to say,
just give me a wave or put your hand up and I'll do my best to call on you. But kind of an open
question. And I think stablecoins have gotten a whole bunch of attention, call it the last six
months, 12 months, they've been talked about a lot, obviously. In the US, there's legislation
being talked about over stable coins. But one thing that kind of interests me when we go from
talking to something a lot, and it seems like a very, very great use case for crypto. Why weren't stablecoins a big part of
the narrative for most of the history? And I don't know if anyone has any thoughts kind of like
where we were and why it's becoming important, but also why it wasn't important.
I can start. I think it wasn't important from the get-go because a lot of this industry was
birthed in speculation, right? And when you have an asset that's tied to a fixed price
that you're unable to speculate on, that just doesn't attract attention.
And I'm really harking back to the early pre-second halving ETH ICO boom days. I would also say that the infrastructure wasn't as developed
from a security perspective, user interface perspective,
and then also like a cost perspective
to make stable coins actually valuable, right?
Tether really was first brought
to bring price stability for folks
that were trading against Bitcoin on exchanges.
I don't know how long some folks in the call
have been in the space,
but I remember the days when everything traded against BTC.
And Tether's first use case wasn't really in payments at all.
It was as, you know, just a dollarization mechanism on these sort of speculative crypto exchanges.
And over time, the infrastructure has gotten better.
Traditional businesses that are involved in payments have gotten comfortable with security
and wallets.
And also, you've gotten to a place where networks like Polygon
are so widely accepted and distributed
that you can pay folks
with these assets on these networks.
So I think it's a combination of things,
but those are, I think, the main reasons.
And then when it comes to blockchains,
one of the main value props
is just the ability to transfer value
instantly for low costs and have composable liquidity.
And a lot of these speculative tokens, which initially brought interest to the space, I
think folks are coming to the realization that many of them aren't going to have the venture style or internet, you know,
style earnings potential that some thought they might have. And so, you know, folks are really coming back to some of the key use cases, which is money movement. And so that's why I think it,
that's why I think it wasn't initially talked about,
you know, wasn't initially talked about, but it started to get a lot more attention,
but it started to get a lot more attention
over the last two to three years.
Yeah, I can add something as well.
I think that was really well said.
So totally agree with everything Nick said.
I also just think that financial services is really slow.
It's like a long game.
It's like more methodical than let's say some other use cases that you see popular with crypto.
If there is good returns or speculation to be had,
I think a lot more people are motivated to go out of their comfort zone
and their risk profile to be able to look at assets.
And that just didn't happen with stablecoins for quite some time, which is good.
I think that's like a healthy piece of how financial services grows and how it comes to adoption.
I think like over the last, let's say, 12 months, like a nice perfect storm has kind of happened
with the interest rate environment, the regime change.
Like Trump is obviously very pro-crypto, very pro-stablecoin.
I think that the world has gone quite a bit more digital and like fintechs are just starting to go more global.
And obviously, people like,
like circle or companies like circle and tether have kind of provided a,
a general proof of concept on like how the plumbing would work and how the,
like the general space has evolved and what the adoption looks like.
And I think it's like now a perfect time for, for people like, you know,
like obviously Nick and Agora to kind of come in and build what will be the future of these spaces.
So I think, yeah, it's just a lot of things coming to fruition right now.
But financial services is really slow.
Like the analogy I use all the time is like the first debit card was kind of built around the 1960s.
But people wrote checks all the way up until like till now, probably still.
wrote checks all the way up until like till now probably still uh so it just takes a while for
people to to start doing things with their primary like spend which affects like their house and their
you know their mortgage and their bills and whatever and i think you're just starting to
see that kind of trend come around now so uh yeah but it's been great
that's actually a really interesting analogy when you think about debit cards from the 1960s
till people like really not using it 40 years i would say like early 2000s probably when they
started getting used a lot so when you think about crypto it's actually like very fast uh for
innovation um and i think too one of the, and I literally experienced this earlier today, but why is there, and maybe it's an infrastructure problem, but why is there so much fragmentation with stablecoins?
And I'll actually ask Forrest that because I know conduits, one of the things they're trying to do is resolve that.
But why is there so much fragmentation still?
Yeah, excellent question.
And certainly want to hear thoughts from the other speakers as well.
But I think at a high level on Nick's insight that these started as units of account,
these stable coins, they started as collateral assets in units of account.
And it really took the space over five years to get users and
consumers comfortable with holding these assets across a spectrum of accounts, right? So I think
a lot of it was an infrastructure issue. We have better wallet technologies and kind of smart,
invisible on-chain account technologies and platforms than we've ever had before.
on-chain account technologies and platforms than we've ever had before.
Bridging, right?
I think when I compare the cross-chain bridging experience from when I got in the space to now,
I just feel incredibly safer.
Or maybe even in hindsight, just realize how dangerous a lot of the original bridging protocols were.
So I think it just took a long time for users to be really convinced of these
outside of these are just some sort of like kind of gray area, digital dollar that can sit on a
centralized exchange and I can trade financial products with. And now I feel comfortable
transacting online with them across the spectrum. And to the point of fragmentation, I certainly,
like my view on this continues to evolve where I was taking inventory the other day on my non-crypto apps on my phone.
And I think I have a USD balance across non-crypto apps across like 12 or 13 different apps when you count brokerages, Venmo, etc. And so I think users are actually already very comfortable with holding dollars on an app
specific account on one application or website. And the 10x that stable coins bring is they're
willing to be that compatible and visible infrastructure that can unify that. And I
don't have to jump through hoops to transfer to between all of these different layers and applications.
So I'd say in some ways, yes, stable coins are fragmented today.
There's a power law among some of the bigger players that all of us probably hold in our
wallets.
But in a lot of ways, they're actually less fragmented than the existing digital dollar
technologies that are out there on traditional apps.
I love that answer. No, that was actually really, really,
I never even thought about like, you know what? Like, yeah,
even payments in general, there's like,
everyone has Venmo and cash app and Zelle and all of these other ones.
It's something I didn't think about it um
and now i kind of want to oh nick i saw you unmuted if you want to go ahead i was just
going to say to forrest's point i opened up like venmo two weeks ago and realized i had a lot more
money there than i probably should have and so i brought that all back to my bank account i think
like you have the same you know and i do wonder, maybe it's an issue that will always persist to some degree,
but I do think we're getting to a point, hopefully,
where we can unify a lot of these disparate fintech or wallets or apps.
There's probably, I don't know, depending on how long in the space
folks have been who are on the spaces,
people probably have dozens of wallets at this point.
No, that's a really good point.
I want to hear Ashwari's perspective
because you've worked with so many different payment providers.
What's Stablecoin and has your experience been
that there is fragmentation with Stablecoins
or where is it going?
I mean, look, we are still not fragmented enough
uh is my thought process we'll still see like around 200 new startups because uh the the i
think the valley story right now is uh that circle is uh getting like a very high valuation and every
vc who has not put a check in there wants to cash out something
from that narrative. So I personally feel we'll see like around 100 new stable coins in USD itself
before like we kind of go out and see that merge that is there. I think this is something which
will majorly be dependent or will be driven by user till the time they're fatigued. And I think the
way we are looking at it from the perspective of Polygon, and this is something like we're still
kind of contemplating on how to solve for it, but I think we already are working on a solution
which would exactly solve for this. It does not matter how many USD stable coins are there.
It does not matter which one you hold. Ultimately,
as a user, what you will know is you're holding a stable coin. And technically, at the back end,
we will be managing it at a chain level to enable a user to not worry about which type of a stable
coin. So I think, long story short, from my perspective, there will be still a massive amount of fragmentation
because a lot of people do not want to touch the name of someone else.
They want their own stablecoin.
This is something coming out in gaming a lot.
A lot of these gaming companies actually are saying that we want to have our own branded
stablecoin.
I think in the last week we've talked to two of them, but they're saying we want, and there are a couple of them which are already live on Polygon.
So there are two of them which are already live on Polygon. One which is using, I think,
Agora's infrastructure as well, which is like FSLP. So there's another one, there are a couple
of other ones that are coming in and they all want their own branding. They all want
their own infrastructure. We're talking to a lot of enterprises and all these enterprises are also in the same horizon
where they're like, oh, why should we kind of,
like if you look at Pfizer launching FIUSD,
FIUSD is actually nothing.
It's just a wrapper on top of USDG.
So it's still the same tech.
Everything is same.
Nothing changes there.
But ultimately what is happening is they,
everyone wants their own branding,
their own color and their own way,
how they want to distribute rewards,
how they want to be perceived from a user perspective.
And that is why this fragmentation is bound to happen.
So as a chain, we cannot stop that.
But as a chain, what we can do is we can work at the backend to solve this as
an infrastructure and hence enable people to kind of seamlessly still
assume like US dollar is US dollar.
That's actually a really interesting point.
It's actually opened up a segue into the next question that I have.
As you were talking about, everyone kind of will want their own stable coins.
But one reason why I wanted to talk to you, Nick, and like, I just love what
Agor is doing. But you guys, I would say one of the few, like you brought a lot of innovation to
the stable coin space, which was really cool. So can you just kind of share what Agor is doing
differently than other stable coins? And not only that, but why you're making those decisions that you are.
Yeah. So, uh, yeah, I was actually at a firm that owned, uh, you know, very large chunk of circle. And so I got to see a lot of things, you know, up close and firsthand, but from my
perspective, we're at the beginning of a 20, 30 year revolution in financial services and payments.
And stable coins are going to quickly become like a 10 to $20 trillion asset class as they just eat the entire euro dollar market.
So for folks that are unaware, the euro dollar market is about a $15 trillion market, which
is US dollar deposits in non-US banks, right?
banks, right? So in Europe, Asia, Africa, Latam. And I think stable coins eat that entire pie and
So in Europe, Asia, Africa, Latam.
then grow it because they're actually improving the access for individuals and businesses in
emerging markets to hold dollars, which are oftentimes better than their own currency,
but also blockchain enables them to hold it themselves versus keeping it in a bank, which
but also blockchain enables them to hold it themselves versus keeping it in a bank,
may be attractive, particularly in jurisdictions where the rule of law and property rights
are not as strong as they are in the United States.
And if you believe all that to be true, it's probably a bad setup that you have a duopoly
cartel where one issuer doesn't really interact with anyone and the other
one has a single partner in Coinbase which competes with pretty much everyone else,
because Coinbase has the exchange, they have the chain, wallets, etc.
And you're just a sort of like a lover of crypto and this industry.
I was looking at the market and you had $10 billion getting sucked
out of crypto each year by these companies when it was all the businesses and the apps
that were driving utility and liquidity to these assets.
And so what I wanted us to do at Agora is really just completely flip the script where
you had rent seekers on top of the space to a company that
was actually driving the majority of the economics back to all of these builders. And so we've
started to do that first through AUSD, which is our own stablecoin. And it was also important for
us to make an institutional grade, right? Because the path that we saw forward, and if you're really
going to 100x the activity on chain, is you needed traditional businesses to start building on these networks.
And they want to have best-in-class custodians.
And so we used State Street, which custodies tens of trillions of dollars of assets, to custody the Agora Reserve Fund.
So that was, you know, AUSD was product number one.
Product number two is actually derivative of this. So for years, Paxos has been, you know, white labeling their
stable coins, so to speak. And what this means is each time they set up an entirely new token,
which has zero integration, zero liquidity profile. And you're basically starting a stablecoin network from scratch every single time,
which we thought was a bad outcome, right?
And frankly, just something that's like not scalable.
And so what we wanted to do is actually build our white label on top of AUSD
so that every single white labeled stablecoin effectively gets to tap into the AUSD network
and liquidity and integrations with
just one additional hop.
And that all these companies that would then build on top of us would actually reinforce
the liquidity flywheel and the integration flywheel for everyone else that's a participant
in that network.
And so you get like this really beautiful acceleration in terms of liquidity and utility
at scale.
And so that's some of what we decided to do and how we're going about things to really
try to shake things up and deliver a lot more economic value back to builders, not just
that are crypto native, but also that are coming to the space for the first time.
That's a great answer. I love it. Yeah, and this question's for Forrest, and I know that
Agora and Conduit, you guys partner together to support native stablecoins on Conduit-powered
chains. So as someone who isn't, if someone wasn't very technical, like why are native stable coins important for a chain versus simply creating it on Ethereum mainnet and bridging to your chain?
Yeah, really good question.
I think something that we think a lot about at Conduit is what can we do, what can we build, what can we we buy or what can we partner with to help the teams building on our platform
make more money?
And so I think very clearly the first item of that with roll ups was own your economics
and owning your block space.
So last year we had hundreds of conversations about owning your sequencer revenue,
owning your transaction supply chain, owning your transaction supply
chain, not paying rent, right? Be a landlord, not a tenant. And I still think that's certainly one
of the primary selling cases of why teams are internalizing their own blockchains and really
verticalizing here. And per the trend that Nick's noting on, verticalizing your own stablecoin has been a very, very clear path that we're starting to see the biggest ecosystems in crypto do.
So I think when we're in this stage where it's so many teams in crypto or larger companies that are looking to get into crypto are essentially trying to build on-chain super apps. They want to own
the means of exchange. They want to own the means of value, a stablecoin. They want to own the means
of account. So they want to have some sort of wallet product. And you see in different flavors
of this from whether it's a team like Coinbase that I think we all know they're different
products in these spaces. I think even teams like Tether are starting to move in this direction, fully funding their own
chains. Robinhood, obviously the more recent one, they have an exchange, they've announced a
blockchain, they're part of a stablecoin consortium. I think that these teams will want to fully
verticalize their entire on-chain footprint.
And that means that stablecoins and means of value are an important part of the equation.
So one example I like to tell here is that roughly a third of Conduit's business today
is some form of derivatives exchange or just some sort of crypto exchange.
That spans perps exchanges, futures exchanges, options,
really every single product under the sun. And a lot of them are sitting on somewhere between 20
and 50 million TVL and earning nothing on that. They're using a larger stable coin where they
have no revenue share. They get no network effect. In fact, they probably don't even have the native version of that stablecoin if they're
working with a USDC or a Tether.
And so I think what we really liked when we first discovered Agora late last year is,
number one, Nick's built an awesome team, but his product suite as well makes it really
easy and just, I think, really configurable for teams to get what they want.
You can lean into AUSD, you can brand it under your own brand, and you can get to market quickly rather than having
a more burdensome process where you're going to lose user attention. And simply put, you can just
make more money and you can redirect that yield. If I'm one of our exchange users, I can redirect
that yield that I'm earning off of stable exchange users, I can redirect that yield that I'm earning
off of stablecoin deposits. I can redirect it to market makers and run bigger market maker
incentive programs and compete with the larger centralized exchanges that are doing big monthly
payouts. Or I can just give it back to users as yield bearing collateral, or I can just keep it
to fund operations and fund my development company.
So I think there's just a lot of different ways that people can be creative
with stablecoin yield once they have access to it.
And that's what Agora is building.
And that's why we're so excited to partner with them first on Katana
and then hopefully a bunch of more chains building on Conduit in the future.
and then hopefully a bunch of more chains building on conduit in the future.
Yeah, that's a really, I mean, I love that conduit's connecting to AgLayer,
and I think it's just like this perfect mix, but it is funny.
I think like make people more money is like make your users,
and for conduit your users would be other businesses,
like make your users rich is a pretty good business model if you want to keep having business.
So that is very, very wise, I would say.
And now for Eshwari and Jamal, this is both of you can kind of take this question and support each other.
But so Polygon obviously is very focused on stable coins and payments.
I mean, you guys have done tremendous work over the last six months.
The numbers are just insane when you talk about velocity of dollars on Polygon and especially with micropayments.
But what is Polygon doing to approach the infrastructure at scale?
And then how does AgLayer support it?
Is question number two.
And then how do AgLayer connected chains benefit
from Polygon kind of being the hub of the payments in Web3?
Yeah, I think you attached a lot of questions on that.
Let me unpack as well.
From an infrastructure perspective,
like I think earlier also that I shared, like we
are already working on how we will resolve this massive, like you can say, fragmentation on
various types of stable coins and like various same currency stable coins. That is something
that we're already doing. And I think one of the articles that I was writing today,
majorly was focusing on how basically like the Genius Act
recently said that you cannot go out and
distribute the yields as a stable coin issuer.
So I think one of the good things is we already have
a solution for that which is already live,
also known as Vault Bridge,
where you can actually go out and use
Vault Bridge to go out and use Vault Bridge
to kind of go out and import and export yields
from Ethereum to any chain
that essentially are going out and doing things
and, like, actually still kind of continue going out
and giving yields.
Because if you look at Ethereum,
Ethereum is still, like, the biggest or the best
and the baddest chain,
which there is when it comes to, like, DeFi yields,
which are organically coming in,
rather than like incentivized yields that essentially like a lot of chains are like
right now going out and building. So that's why I think like building on top of Ethereum and like
the wall bridge essentially solves a lot of those problems where you're kind of going out and using
the stablecoin infrastructure on Ethereum or like you're launching on Ethereum and Polygon and essentially all the Aglier chains where what we're doing is instead of going out and taking the asset out, your asset still stays on Ethereum, but the yields are getting imported from Ethereum, which are coming from DeFi.
big kind of boost or advancement on top of that,
on how we're kind of looking into things.
Plus, I think a couple of other products also
that we are in the process of launching.
I think you'll see it in the next four to five months
that we will be announcing.
And you can think about or you can get a hint of it
by just looking at the job board.
We've just rolled out four rows yesterday,
or day before yesterday which
essentially are getting a deep dive into how those things would work but yeah I think overall
like if I unpack the first thing is from a perspective of like infrastructure
half the things that we're talking about are actually live like the wall bridge it has like
a good amount of TVL already there some of the
things that we're building on that are going to be coming in in the next four
to five months so we've already assessed that from a chain level connecting to
the Agla basically enhances this distribution mechanism and then like I
think with Agora being like a ag native USE stablecoin like that essentially
helps us kind of go out and distribute and move
even faster among aglier chains so that is how like i think broadly we are looking at it
jamal you want to add something on top of it
uh i mean i'll just say that like everything ashwari just said and you can kind of see from
our focus over the last couple months we, we are dedicated to making sure that
Polygon is the best place to build payments related stuff across the board. We think that
that's kind of already shown in some of the metrics and the data. We are the number one
most active chain for USDC. We're the third most active chain for USDT. A ton of our traction comes
from organic P2P payments.
A ton of our traction is global.
And all of that just kind of shows you that we are kind of one of the best places, if not the best place, to be able to build payments-related use cases and do payments-related
transactions and build that payments-related infrastructure.
We're obviously going to focus on doing a lot more.
So we think that there's a lot more infrastructure we can do on the chain level that's going to make it even easier for our developers. Obviously, Agora and
Conduit are great examples of that, right? Conduit enables really like quick and easy deployment of
chains and rollups. And that enables our larger enterprise and ecosystem partners to be able to
jump into more complex bespoke solutions quickly. Agora provides like the picks and shovels,
I think, to be able to do
just payments-related activity.
The key building block
to any payments-related activity on-chain
is the stablecoin
and the network you use behind that.
And Agora gives a very builder-focused
set of tools
that enable our developers,
our ecosystem partners,
to be able to do
compliant, seamless transactions at enterprise level scale.
So you will see us doubling down on that thesis probably in the next like 12 months.
We think that there's a lot more stuff that we can do at the chain level
to support other financial services and other use cases.
And AgLayer is kind of the engine that powers all that
because we do think that there's going to be a healthy amount of fragmentation across all different chains in the world.
And some will be vertical specific, some will be use case specific, some will be app specific, whatever it is.
And we just want to build key infrastructure that makes payments really seamless and very easy and very cost effective for the user.
Whatever they're trying to do, whether they're trying to send money across borders,
whether they're trying to do local payments,
whether they're trying to build cool stuff on DeFi,
whether they're trying to trade,
there's key plumbing that needs to be there,
both on the chain level, the network level,
and the asset level that needs to deliver value to the users.
And I think we're going to be doubling down over that
probably over the next 12 months.
I love asking you and asking questions
because I'm like, oh my God,
you guys just gave so much alpha and what's coming.
I'm like, I know that I'm on the Polygon team
and you guys excite me.
So no, I think that's like very, very exciting.
Like, and I do think the acceleration is just like,
we're going to have more and more payments needed.
So that's, I think you both gave really great answers.
One question I have for Nick, because you're probably living this, is what are the challenges in building a stablecoin that you would say is capital efficient and yield generating?
And then, like, what are you doing about that?
And does it change through any sort of ag
layer solution um and that might i might be totally wrong with that question but like not
on the right track but what challenges are faced with that like how do you how do you make it yield
generating while also capital efficient yeah yeah there's a lot of there's a lot of challenges i
think that also people you know people think about stable coins and they don't, like the devil is always in the details.
So I'll give a few good answers or some answers actually maybe that you weren't even looking for.
But let's talk about cash management, right?
So we effectively have to operate a 24-7 business on rails that are not 24-7, right?
And so we are keeping, to maximize yield, we're always going to keep it in the reserve fund,
which is sitting in treasuries and repo.
And we're earning like, call it four to five gross fees on that today.
or two five gross of fees on that today.
But in order to maintain like really good timely redemptions,
which is like core to any true stable coins,
like USP,
you need to be keeping cash
in a variety of different transaction banks, right?
And there the yield is lower.
I think it's some of ours,
you know, we're earning like 3.2
or like 3.5% from the underlying
banks.
And so we have to be managing that 24 seven across a variety of different banks, you know,
and operate a stable coin that is running 24 seven when a lot of the underlying infrastructure
doesn't run 24 seven.
You know, something else that we do is keep other stablecoins on hand off our balance sheet as inventory.
So the FSL team, which Ashuari mentioned, uses us for white-label stablecoin, is a great example of a solution that we debuted on Polygon a few weeks ago, which is this instant liquidity function.
And so right now we have about a 5 million USDC pool set up against AUSD on Polygon a few weeks ago, which is this instant liquidity function. And so right now we have about a 5 million USDC pool set up against a USD on Polygon,
where onboarded businesses can mint and redeem a USD directly against USDC 24-7, assuming
that there's still the USDC in the pool, which we monitor on a daily basis.
And so that's another feature that we've added
to help drive further adoption,
but also just meet the customers where they are.
Something that we think about a lot is building
for the world that you're in and where people are.
Some of the other things that people don't think about
is we've deployed natively to a number
of high throughput chains. Some are EVM based, others are Move VM or other VMs. And this is maybe a fun one
and a little bit off topic, but when we deployed to Sui, that network had been live on mainnet for
a year and there were still no production grade RPC nodes. And so we actually ended up having to build one entirely ourselves.
And so we have our own team that's running nodes,
indexing a lot of these high-throughput chains.
And so there's a lot of technical things
that I think folks don't always think about.
And there's a number of others, but I'll pause there.
Because I know your question was just about cash management.
Yeah, that was definitely a lot. I don't know if anyone else has anything to add to that and kind of what they've been seeing, especially like in that, what, what problem the risk you could run into.
I think that's like the big one. And I think you covered that.
Well, I think the biggest risk too,
is just like using bad underlying counterparties. Right. So, you know,
the most obvious example is circle kept three and a half billion dollars of
uninsured cash at SVB, which went under, right?
And that left them with a hole until the Fed came in.
I think there were a variety of different solutions that they could have used to solve it,
whether it was debt or selling additional equity.
But that's what we think about most when it comes to risk.
And so that's why we use the second largest custodian bank in the world to custody the assets um because for better or for worse if something wrong is going on
at state street we may have bigger problems than what's going on in stable going land
yeah i mean that i would say that's probably one of the things i know i said earlier like
the first question um is why weren't we talking about stables?
But I also think like throughout cryptos history, there was a lot of risk associated with stables that when they blew up.
I mean, I think Paraluna is like the most relevant example where it's like, OK, this is actually hurting the trust of mass retail coming on chain, I think, as a, like, managing
risk is probably one of the biggest challenges to stablecoins.
Like, not only from a, like, business, we're running this, we need to manage risk, but
also just an industry-wide risk of, like, how we're perceived by traditional finance
and how the greater world sees payments on chain.
So the next question I have, and this is open season for anyone, is how do you see something
like AgLayer supporting payments and stable coins in three to five years? Where does it go from here? And then we talk a lot about mass stablecoin usage.
And I mean, you said it, Nick, earlier,
eating that entire whatever $50 trillion market.
Where will that happen
if there isn't an interop solution, I guess?
Can we achieve that with fragmentation
if we don't progress
and things just kind of stay where they're at today?
No, I think you absolutely need to have
unification through something like the AgLayer.
And I think the Polygon and AgLayer teams
have done a really thoughtful job
of working with all the key counterparties
that you would need to make this a reality.
You know, one, you know, obviously from the AgLayer side, they're providing a lot of the
solution, but also working with the stablecoin issuer and, you know, the folks at Conduit
who have really built, you know, the best platform in their market to help serve all
these enterprises as they want to customize their own environment, right?
Whether it's someone like a Robinhood or someone like a Visa, I think there's, you know, a
future where every single business is running their own role opportunity
and they need really good, fast, and cheap interop.
Yeah, I agree.
I think, yeah, I think the ag layer completely abstracts
and removes, like, the liquidity and interop issues that you need.
I think fragmentation, as we've talked about,
fragmentation is kind of healthy and it's been fine over the last,
you know, whatever, however long.
Fragmentation is going to continue to exist.
And I think that's fine.
I think that's important because I think we'll specialize in different use cases
or verticals or whatever it is.
And as long as we have a robust interop solution
that enables like
seamless liquidity and settlement across these different layers, I think that that's going to
be important because that is what gives the users the user experience they need to be able to tackle
all these different areas and get the user experience that they want. I think that's like
a critical piece or else it's impossible to compete with traditional fintech. Like blockchain solutions at their core are tough and difficult to deal with,
but they have like revolutionary technology that's going to change the financial system.
And without these kind of layers of interoperability,
that technology can't be competitive with traditional fintechs like it should be.
So I'm very bullish on blockchain tech,
but I think it needs some of these like picks and troubles
in order to be able to come to fruition.
I'll add to the excellent points from Jamal and Nick are that
in the past, I think stable coins have had to
either build their own interop solution in-house.
So they're kind of picking up a trusted dependency on themselves
to be able to maintain ledgers on and off chain, or they're having to pick up a dependency of
another cross chain messaging protocol to bring their stables to all of these different ledgers
that are already out there. And so I think a future in multiple years where all of these
chains are just proving each other and we don't have as many trusted parties
in the flow of what is hopefully trillions
of digital dollars flowing across
all sorts of different ledgers.
I think that's a much better reality
than maybe the one that all of us know today
that while better in a lot of ways
than the existing systems in terms of unifying dollars
like we were talking about earlier are still, you know, have dependencies or maybe clunkier and more expensive than we want
them to be. Fantastic. Oh, looks like Eshwere actually dropped down to listener. I don't know
if he disconnected. But yes, thank you all for your time.
That was great.
That is all the questions I had.
I think you guys did a very, very good job answering all the questions.
I'm super excited to see.
I mean, obviously working for Polygon, I like I'm very bullish on what Polygon is doing.
But I really, really enjoy what both Conduit and Agor is doing.
So you guys are building some really, really awesome features, and I think it's critical to the rest of Web3 as a whole.
So thank you all.
I will let you all say your final piece, and then we will sign off and get everyone enjoying the rest of their Monday,
because I'm sure we're very busy.
So we'll start with you, Nick, if you want to say your final goodbyes.
Nothing else other than I appreciate everyone taking the time to listen.
And if you have any questions about stablecoins, white-labeled stables,
or you just want to talk markets, I'm around, so DM me.
Yeah, the same for me. I'm excited to kind of see what the space has over the next 12 months.
We're excited to build with different builders across all use cases. So get in touch and DM me
or Ashwari if you guys want to chat. So just wanted to say thank you, Timmy, for hosting and great questions today.
And if you guys are interested in learning more about rollups, chains, potentially connecting to the ag layer, my DMs are open or check us out at conduit.xyz.
Yes, thank you all.
I very much enjoyed.
I hope we're able to all talk again at some point in
both the near future and long future i hope i can talk to you guys for the rest of my life i suppose
um you're all dear dear friends now but thank you all thank you everyone and enjoy the rest of your
monday take care thanks guys thanks everyone Thanks, everyone.
