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What's The Future Of FX?
Recorded: March 3, 2026 Duration: 0:47:26Space Recording
Full Transcription
Thank you. I'm going to go ahead and put it in the middle of the room. Thank you. Thank you. and we are back with another block made stream this time we have the hibachi co-founders chip
and varoon thanks for hopping on guys how you doing great thanks for having us
on guys how you doing great thanks for having us excellent excellent awesome and chip it's a pretty
recent news right that you're joining the team do you want to ruin you want to introduce him i was
going to say yeah i think most people have seen me in the past in the podcast but chip is the new face
so uh maybe i'll let him uh you know obviously chip has an extensive background
in trad fi world including in the fx markets and then also just all in all like you know i think
i'll let him speak i think it's more impressive when he says it than i do no i think he did
i just want a trad fi guy but i think he knows
I'm a TradFi guy, but I think he knows.
Doesn't seem to ring very true.
So I'm Chip Dempsey.
I'm a market structure guy.
I grew up in a soybean trading family, and I was a trader.
I was an options market maker, and I traded in the Interbank FX market.
Left trading to run sales and strategy for GMI, which was the listed derivatives back
office in the US that does 85% of customer seg funds in the US and probably 60% globally. Then
I was the chief commercial officer of the border trade clearing corporation. After that, I was an
independent consultant setting up futures exchanges and clearing houses across Africa, Asia, and Australia.
I joined Morgan Stanley's principal strategic investments team doing market structure and exchange investments.
When I left there, I was consulting with SBI in Tokyo for a year and I was consulting to the options
clearing corporation that clears all the equity trades and then I joined the OCC
as the chief commercial officer there in the last handful of years I've been
focusing on crypto and I've been on a couple of boards of stock exchanges a
new stock exchange in Kazakhstan so So I have a market structure
background and a little bit of experience trading foreign exchange. Yeah, just a little bit, huh?
That's great. Now, I'm just curious from your perspective, like a fresh perspective, why
Hibachi? What excited you about it? Yeah, well, I mean, there's a few things. The first is I knew Varun and Vinod from a long time ago where I sort of had
the opportunity to be an early advisor on Hashflow and earlier platform that they did and that's
still successfully operating. But when they called and said, we're really looking at stablecoin foreign exchange, that's a fantastic opportunity.
And the reason is pretty simple.
Foreign exchange is a walled garden.
The banks, the money center banks that are in the interbank market, they have credit lines for each other and quoting agreements with each other.
And so all of the liquidity is via
those banks. Anybody outside of the banks who wants to trade foreign exchange, they're either
getting it secondhand from a bank or they're getting it thirdhand from somebody who's getting
liquidity from a bank. But that market is completely opaque. There's no transparency
about what the best bid or offer are
in the liquid interbank market, and there's no transparency as to what has traded.
So if you leave a resting order, there's no way for you to know whether you deserve a fill other
than what the bank tells you or whoever's tending that order. And then if you call the bank for liquidity, the market might be two bid at three,
but they might quote you, you know, zero bid at five. But if they know which way you're headed,
like if your company calls every month and to make payroll or to pay a supplier,
then they'll know what your direction is. And they might tell you it's three bid at eight,
or they might tell you it's three bid at 10. So completely non-transparent. And that request for quote, your really only
choice is to accept it or reject it. And both are kind of blind. So that's suboptimal, really.
And then the way that the post-trade handling of foreign exchange is that you have to have a Nostro account set up in the destination currency so that when you receive currency, you know, you're receiving it into your bank account.
That is going to take the trading day plus two business days.
There's going to be banking fees.
You have to operate within the local business hours of those banks.
So it's operationally heavy and expensive, manual kind of.
With the emergence of stable coins on blockchains, first of all, you don't need nostril accounts. You
have a wallet and that one wallet can satisfy every stable coin that you want to hold.
Second is that there's atomic settlement. There's no T plus anything. It's instant,
which also means that there's no counterparty credit risk. You don't need to worry about what they call her stat risk, where your
counterparty, maybe you make the payment, deliver your side, but it doesn't get delivered to you.
So there's a lot of things about stablecoin that are better just as a product.
So what intrigued me about what Varun and Vinod had started was really a couple things.
It's democratizing access.
It's a level playing field when in a central limit order book, everybody can see the best
bid and the best offer.
And as long as they're qualified to trade, which means that they've been KYC and AML
screened, as long as they're qualified to trade, they interact directly with the best bid and the best offer. They're not being intermediated. It's
not blind. There's a time in sales, a record of the trade so that if they leave a resting order,
it's obvious to them whether they deserve to be filled on that order or not.
And I would liken it really to foreign exchanges email moment. People weren't asking for the ground mail to move faster.
They weren't saying, how are we going to speed up these mailmen?
They just accepted that it took three to five days to get a letter delivered.
And then email came along, totally different infrastructure, not built for messaging particularly,
certainly not for individual to individual messaging.
And they started using an email address and sending their friend a message, instantly
delivered, instantly responded to, no stamp, zero fees.
And of course, email just exploded.
And I think that stable coins is a new infrastructure. Blockchain is a completely new infrastructure for transacting in currencies,
and obviously stablecoins is the vehicle that you would do that through. And people are getting
comfortable with wallets and understanding that there's a lot of operational cost and
uneven playing field that they can avoid if they trade foreign exchange using stable
coins at the central limit order book. That's what Hibachi is building, and I'm really excited
about being a part of it. Oh, man, there's so many different rabbit holes we can get off
through that discussion. That's awesome. I'm really excited to talk about this, honestly.
I guess, first off, why does this have to be on crypto rails?
Why can't you do this through any kind of traditional means?
I mean, it's the same thing with email.
Like, why couldn't you send a letter, you know, electronically?
And the answer was until there was the infrastructure there, that was fanciful thinking. I mean, you could send a
Morse code. There are electric ways of communicating. But until there was really
the kind of robust and proven infrastructure like the internet, it really wasn't much of an option.
And that's the case with stable coins. And stable coins are still nascent. I mean, 98% of stable coins are issued against dollars, backed one-to-one by
dollars. So we're still in an adoption phase that you're seeing every day. There's news reports or
press releases about banks and companies who are adopting blockchains,
and obviously part of that means that they're putting in place the policies, practices,
and procedures for operating a wallet and how to manage their private keys and how to on and off ramp into fiat.
This is going through a learning curve, but it's an enormous market.
through a learning curve, but it's an enormous market. And there's, I mean, it's the BIS reports
that it's $9.6 trillion a day. That's a big market. The adoption, there's early adopters,
fintech payment providers, and neobanks. They're very sophisticated, blockchain savvy. They've got all those policies
and procedures, and they've got the institutional know-how. They are not burdened with a lot of
legacy technology that ties them to the old infrastructure. They aggregate a lot of customer
volume. So the adoption is happening, but just like email, it takes some time.
And we view it, we think this is the equivalent of like 2007 for the App Store.
Like being the first central limit order book for StablecoinFX is like being the first app in the App Store in 2007. So we think that we're positioned right and hopefully we're early enough to be the first ones to develop
liquidity and trust in our exchange that's a good point yeah and do you think users will come
to about you to either just swap and hold stable coins and in different denominations or is it more
just to go and speculate on you know the trading? Yeah, I wouldn't go with either of those, actually.
I think, well, not that they won't,
but I think that people are converting currency
because they need to make payments in those currencies.
So whether it's making payroll,
whether it's paying a supplier,
I think that there's corporate need for it.
Now, is there speculation?
Absolutely. And if that's, at this point, still mostly directional, because the universe of options for interest bearing stable coins is still pretty nascent. you have a more robust set of yield enhancement platforms, when you have lending opportunities
or in a variety of different currencies, then people have been doing the carry trade between
dollars and Japanese yen for decades. And you borrow cheaply in yen, you can lend it in dollars
at a higher interest rate.
And as long as you manage your exchange rate risk, that's been a stable of a lot of hedge funds. I think that we still need the interest bearing part.
And regulation is getting there.
But the regulation, I mean, the Genius Act is only since July.
So early days on regulatory clarity, but it is happening.
And so I think that there are definitely people who just prefer to hold in a different denomination.
Maybe somebody thinks that the U.S. dollar is not going to be the reserve currency in a few years.
And so they want to move their assets into a safer currency.
You can do that.
There's people who can be trading in and
out directionally, speculatively. That's absolutely a big activity. And then there's people who need
to make commercial payments. And I think all of those are valid and happening. But until we really
get kind of the carry trade, the carry trade is going to be less prominent until we get more of the
interest bearing destinations in those stable coins. That's my view. That makes sense. But
well, you need some pretty strong, you know, fiat to crypto rails on that end too, right? If you're
going to be doing payments, or do you think people are just going to settle in stable coins
in the future? Both. So I know, I know that for me, that well, first of all,
there's lots of issuers that do on and off ramping. There's lots of on and off ramping services. I
don't think that's underserved. But I think about, you know, for myself, like when I've been a
consultant, would I be perfectly happy to receive payment in
Stablecoin instantly? Yeah. I mean, when you think about it, so I used this analogy yesterday.
Maybe it's a good one. I used to do a lot of contracts. When I was global head of sales
and strategy at SunGuard Futures, we would execute contracts with clients and we would write that we'd sign the contract in ink, put it in a FedEx envelope, send it to our client.
They'd countersign, they'd keep a copy, send a copy back.
But with electronic, you know, payments or electronic messaging and stuff, we started using DocuSign, right? And
signing in counterparts. And all of that activity, which would be the equivalent of on and off ramping
fiat, went away. Now, there's lots of payroll providers and a company sends their payroll
value to the payroll provider and the payroll provider sends it to the bank account
of the consultant or the employee. And then that happens like once a month usually,
or once every two weeks. But if you could pay with no cost, no latency, instantly into your
employee's wallet, you might want to say, I'll pay you every day.
I'll pay you every day. You'll get the same amount or whatever, however many hours you book in,
instant, free. I think that these are going to be the downstream effects of adopting stablecoins.
But on and off ramping is a well-serviced component of using stablecoins for now.
Yeah, I guess that's true.
Why do you think this hasn't been a focus of so many different projects that have been around?
You know, stablecoins have been around for a few years now.
There's plenty of Xs and whatnot.
I'm curious why, if FX is such a big market, why it's been overlooked for so long, especially
because it's had that walled garden, right?
You would think this would be one of the first things that would be democratized?
Well, the walled garden is the protection, right?
So it's a phenomenally profitable activity for banks, especially because it's not an
explicit fee, right?
Nobody knows what the actual price is in the market.
So this is a really good business for any company to be in
if they have access to that liquidity.
And of course, they're going to defend that.
If I'm a shareholder of a bank, I want them to defend that.
But it's kind of like if the post office had tried to suppress email.
When the infrastructure emerged, right, and then it's not up to the post office whether they bring an envelope down to the letterbox, right?
Then people have their own access.
Now, why hasn't it happened sooner?
I think stablecoins are, over the last 60 years, issuance has increased 58 times,
right? So it's growing rapidly, but it's still only 2% is in what I would call a contra currency.
So if you look at foreign exchange, it's the dollar against euro, it's the dollar against euro. It's the dollar against yen, the dollar against cable or British pounds, the dollar against, you know, there's obviously dozens of currencies.
But in those first three or four, you're really talking about 50, 60 percent of all the trading volume.
There needs to be more issuance in these other currencies before it's a more viable way of avoiding the fiat banking FX market, right?
So why hasn't it happened sooner? sooner. I think it's constrained by, first of all, it's constrained by companies comfortable
with wallets, and it's constrained by, which is, there's more and more, and it's constrained by
issuance in the other currencies. But that's happening. And for people to purchase stable
coins and have them issued in other currencies, there need to be uses. Well, being able to make
payroll or being able to pay a supplier or exchange currencies, that's going to be uses. Well, being able to make payroll or being able to,
you know, pay a supplier or exchange currencies, that's going to be a great use. So I think that
there will be a virtual cycle that happens as, you know, more issuance means more trading and
more use and more use means more issuance. And I think it'll go like that. But it's still early days. I mean, foreign exchange is not a market that
changes quickly. That's a good point. And you made a good point. It's more of like a chicken
and egg problem, right? Because you want there to be, like you say, contra stable coins, but
you need to use for those in order to justify their existence. I know for our payroll, I'm sure
people wouldn't like to be paid in something besides USDC just to pay their rent and whatnot, but it's just not,
the liquidity is not there. So you guys, you would be like that bastion of an exist, like a reason
for those stable coins to exist in a lot of ways. Yeah. I mean, first of all, if you could have
direct access to the best bid and best offer, there's a lot of cost savings just in that.
When you're trading a million dollars, which is like the minimum amount that you could trade in the FX market, the spreads can be $10,000 to $20,000.
the $10,000 to $20,000. When you look at the sort of midpoint versus what FinTech payment
providers say is the exchange rate available to you, it's a significant cost. So it'll come,
it's happening. Companies are very, very good at finding ways to reduce their expenses.
Yeah, definitely. Do you think there's like some bootstrapping of liquidity that needs to happen when you
start an exchange like this where you have to start smaller?
Yeah.
Yeah.
They call it the cold start problem.
Right.
So absolutely.
First of all, that's also a chicken and egg, right?
Yeah.
You need price takers, people who are going to cross
the bid ask spread to attract market makers who are going to show both sides and, you know,
provide liquidity. And you need market makers to attract price takers. We have, I mean,
we're fortunate because Vinod and Varun in previous ventures have built big relationships with practically all of the major cryptocurrency liquidity providers.
And there's some TradFi relationships there and the ARK community.
There's a lot of market makers that have committed to providing liquidity on ARK and will be the first
central limit order book on ARK. And then there's also a number of trading firms that have been
past clients and they've literally reached out like incoming to us saying that they're interested
in being able to access our exchange but we're at we're absolutely
you know right now we're still in build phase and we're absolutely going to build out a um
business development function um and uh and reach out to who we think are going to be the likeliest
target clients we've got a design partner program that is incorporating,
that's inviting in prospective users to say like, look, these are the kind of microstructure elements
about how you do the exchange that matter to me. This is how I want to be able to access the market
or this is the product specifications that suit my needs. And we're building relationships
that will lead to that early jumpstart. We also have sort of incentives for participating in
tokens or other vehicles of sharing in the prosperity of the exchange and the success
of the exchange. So we're very mindful of the
cold start problem. We've been focusing on it quite a bit. And, you know, time will tell,
but we're pretty optimistic about having a liquid market from the get-go. I mean,
think about market makers. They're not, they're really, their access to liquidity in foreign exchange is also secondhand,
right? So the opportunity for them to be the bid, to be the market maker, the showing the bid and
the ask and to capture that bid ask spread, that's their business. Finding arbitrage, that's their
business. So they want to have more, they want to have more venues where they can be trading and
our exchange is going to be a great one for them.
Yeah, I can see that's how that's really valuable. I'm really glad you brought up
ARK because I wanted to talk about that partnership you guys announced. I'm really
excited for those types of chains to come online just because we need that type of
like dedicated stable coin space. What do you think that brings for you guys as far as
unlocks in your architecture? Could you repeat the question? Yeah, yeah. What are you excited
about with the ARK partnership? Basically, what does that unlock for you guys? Absolutely. So
in general, I'll just maybe double click on the architecture of the exchange itself.
So the way Hibachi works, it's an off-chain central limit order book.
So it's not necessarily dependent on any chain.
So it's like purely chain agnostic.
So the way it works is we run an off-chain limit order book and then we prove its off-chain state on-chain
using ZK proofs.
And in this particular instance,
when we say we deploy to the ARK on ARK,
we're basically posting ZK proofs on ARK.
Now, obviously, the reason we decided to go with ARK
or chose the ARK partnership
is on the technical front,
obviously ARK has their own opt-in privacy features,
which is quite nice where essentially if we are expecting
many of the FX users to be institutions
who do in fact care about privacy,
then I think having that native opt-in privacy of the L1 layer
is actually quite interesting.
And then going beyond that,
the native gas fee is going to be denominated in USDC,
which is actually quite nice, again,
because if you're transacting,
you don't have to own the native assets uh of dl1 in order to
process transactions which is actually a big deal right so and then obviously uh circle uh and usdc
it's you know it's obviously one of the most uh like i guess uh regulated is you know it's kind
of word but also uh they have a lot more credibility uh in terms of you know
with institutions and so on uh where you know something that is like circle branded uh is
likely to be taken more seriously uh especially in the fx world where you know that is dominated by
uh large firms and institutions uh i think i think having that uh makes i i think our theory here is that that is more likely to draw more teams to issue these new emerging market stablecoins on ARK ecosystem.
And if these stablecoins do, in fact, get issued on ARK, then it makes sense to make that chain the primary chain where we post ZK proofs.
So I think that's one of the reasons why we went with the Circle partnership
and ARK. That's the whole reason why we chose to go with that. But that being said, the
underlying architecture itself is not chain dependent. So the ZK proofs can be posted
on any chain. Whenever the stablecoin uh issuance happens uh will basically
post uh the proofs over there right so that is not really uh that is pretty independent of the
underlying l1 love it no i'm sure seeing circle and uscc on there makes the institutions feel a
little bit more warm fuzzy i'm actually curious from the institutional side of things, because I know from other instruments like options,
it's had a similar cold start problem
where a lot of these institutions
that play in the options field had some real,
they were really wary about hopping on
and doing crypto options because of the whole,
knowing your counterparty.
And I'm curious if there's a similar side of things
for fx there's well 100 regulated businesses care an awful lot about who they're trading with that's
yeah they have legal obligations and they have obligations to their shareholders to only conduct in, you know, a first-class business in a first-class way.
So a big part of our compliant posture is making sure that it is vetted participants.
I think there's more to the difficulty with options than, I mean, I was an options trader on the floor, you know, with like just yelling.
Yeah.
I was actually there when, for what was the first electronic options market, which it's a long story and I won't bore you with it, but they put terminals in our hands for us to enter the trades as we're trading.
We were trading.
It wasn't matching electronically, but we would put the trade in.
And if you remember, oh, my God, this is like 1991 or two.
If you have ever seen a picture of how big a cell phone was, it's the size of a brick.
It was slipping out of people's hands and people are getting their teeth knocked out and scars and uh then they put velcro straps
around them and it was a mess but the problem with trading options electronically is that you have
only so much um only so much uh uh liquidity of yourself you have only so much liquidity of yourself. You have only so much capital that you can trade.
But if you're trading on, say, like three maturities, like one month out, two months out,
and three months out, and 10 strikes, and a put and a call each, right? So now you're at 30 and 10 is 300 and a put in a call is 600. You're pricing
600 times. And if somebody comes in and hits 20 of your bids, you may be overextended in terms of
how much capital you have available. So you end up with very, very small amounts spread across all these strikes and all these puts and calls.
So it's very hard to aggregate, to put a lot of liquidity in options.
I think that's one of the things.
It's been done, but it requires an enormous computer build.
And, you know, this is tens of billions of dollars in market cap exchanges that are still kind of struggling with it.
And there's and the other thing is that for most electronic matching, the message to trade ratio is much lower, like many more trades per messages.
But options, every time there's a movement in the underlying your bid and
offers are going to change right for the Delta component of it so there's tons and
tons of messages so electronically trading options has got some some
challenges we're you know hopeful of the day when we will be able to list
derivatives like that for right now we're really focused on perpetual futures and spot
transactions. Spot transactions being actual conversion of currency and perpetual futures
being just the price management, market risk management. So that I think is going to be the
challenge for everybody. It's not just something that,
and we don't have some sort of inventive solution to, it's a problem that everybody faces.
Wow. Yeah. I'm actually interested in that long story, so maybe some other time, but
I'm curious what you see the end state of this type of market being is, do you think it's going
to be all these contras paired with USDC? Do you think it's going to be all these contras paired
with usdc do you think this would be contra contra do you think uh yeah where do you think that goes
there's there are there's active trade in like euro yen and sterling yen um they're very small
it's like maybe a percent or two percent of total volume um 89 of all transactions have a dollar component
right okay it's just how fiat is i don't have any reason to believe that stablecoin fx would be
different um so so i i expect it may change the the makeup of what people trading uh but i'd be surprised and it's all
because of the liquidity in the dollar versus any of these contra currencies
it's almost always cheaper to go ahead and trade in the two legs than it is to get a quote on the
on the spread yeah that's what i would assume too know, I'm really curious how you guys think of permissionlessness versus permissioned, right?
Because I think so many crypto projects over index for, oh, we're so decentralized, we're crypto first.
And they really get in their own way.
Where I think the smarter application is try to look for where blockchain rails actually help you and actually build a new and novel product.
And I'm curious where you guys think that line is, at least for where Hibachi is, like in the
current state, where the future state leads, where do you think that line is between just the right
amount of permission versus permissionless? I think you're muted.
I think you're muted.
So, yeah, I don't think we are positioning ourselves as a permissionless product by any means.
Right.
If you want to fight that battle either.
I think generally speaking, I think, I mean, in general,
the whole idea of centralized exchange
and decentralized exchange is sort of a meme.
So I don't think there's no such thing as a,
maybe unless you're talking Uniswap or something,
then that's short.
That's like fully on-chain, everything on-chain exchange.
So that is really decentralized.
But for building something like this,
I think there'll always be trade-offs, right, in terms of what you're building after.
And I think it really comes down to the trade-offs are really a function of who you're building for and who your target user base is.
So our philosophy here is that an exchange needs to check three boxes, right?
an exchange needs to check three boxes, right?
One is it needs to be performant,
in the sense that at the end of the day,
if your exchange does not have the latency
or the performance that is expected
of an institutional-grade platform,
then it doesn't matter what you do.
Like your user's not gonna trade on your platform
because it's permissionless, right?
So they're gonna trade on your platform
because it's got liquidity
and it's got the performance needed for them to be able to deploy the algorithms and do things
like that right so it needs to be performance uh the second bit is obviously uh when we launch
about should we launch with this you know privacy as something in mind so i think uh that we think
is still important at least to the users that we're going after,
who don't want their positions to be publicly visible to anybody.
Which is the reason we chose this off-chain architecture where the central limit order block stays off-chain, and then anything that is happening is not visible to the entire world.
So as a result, you basically give users
the institutional-grade privacy that they want.
And then lastly, obviously,
can the exchange prove its softancy?
So otherwise, you can just say
it's centralized exchange with extra steps.
So basically, the key thing here
is not necessarily that the custody is decentralized or you know somehow
anyone can deploy their shit coins without anyone's permission unlike other projects already
doing that I don't think we care or we necessarily want to compete in that market I think the thing
we do care about though is can we guarantee the performance and privacy while enabling anybody to verify exchange softancy.
So you essentially prevent scenarios like FTX, right?
Because one of the reasons why FTX went down is because no one really knew what was going
on behind the scenes and there was no way to verify what was going on either.
So at the moment, we say that we can use ZK proofs to verify the critical exchange operations,
so the users at any given time can have mathematical guarantees that the exchange itself is acting
as an honest operator, we think that's sufficient. Like you don't need to build a decentralized
sequencer or do all the crazy things to be, I don't know, like the best category one, L1 or something on L2B.
It's why I don't think that really matters here.
So, I mean, it probably does for other projects.
I'm speaking from the context of, you know,
how we are designing it for the users we're building for.
I don't think they necessarily care about
the degree of decentralization as much as they care about knowing that the exchange is softened and having good liquidity in performance.
So that's what we're building for, obviously.
Other teams might have a different philosophy and approach to this, and I don't think there's a right or wrong answer to it.
It's just a matter of where you draw the line
slash what kind of trade-offs you make
as you design it or not.
Yeah, that makes sense.
I'm curious, does Arc give you any benefits
from the security or ZK side?
So I think, I don't know if Zk is like a security solution necessarily uh right so i think
uh what you're doing with zk is you're saying that uh it's more of acting in this case it's it's more
functioning as a scalability solution right because uh there's two schools of those otherwise
so you know you go fully on chain or you are like a centralized venue,
like Binance, Coinbase, anything,
where you operate like a black box.
Now, obviously, there's benefits to operating a centralized venue
because you control pretty much the entire stack
and you can build for the end users in mind.
Now, obviously, the downside of it is that it is a black box
and you don't really know what's going on behind the scenes.
And sometimes it results in $6 billion being stolen, right?
So, now, how do you avoid that?
Is you can say, like, let's just put everything on chain, you know?
That's the only way to go about it.
Now, that is one's philosophy.
And then obviously there are venues that do exactly that.
But then you also end up in a situation where maybe North Korea is trading on your decks
and then you have no way to stop them.
So that is also another extreme end of the spectrum, right?
So, and we think the good sweet spot here
is where I think ZK kind of becomes interesting.
Because what you're saying is that
you can run any kind of complex computation off chain,
but then you can allow anybody to verify that computation
in constant time complexity
without them having to run the
entire and try to run every single transaction themselves. Which basically means I can pretty
much run anything in a centralized way but then allow anybody to verify that that computation
was in fact correct using smart contracts which basically make it a lot easier to build scalable systems
that can still be proven on chain and be verified which significantly reduces the cost of verification
but then also allows it gives you the solvency guarantees with that without you having to
re-architect the entire thing right so which which has other trade-offs in terms of scalability and such, right?
So now obviously you can say we'll build an L1.
That itself is fast.
And sure, maybe at some day we'll have an L1 that is like basically
processing transactions at like some millisecond latency.
But until then, I think, I feel like this is actually a pretty good trade-off
yeah definitely and i'm wondering i'm guessing uh arc helps with the compliance side of things too
yes okay
oh cool yeah so i'm just curious roadmap stuff um if we have to look out a year from now what what's one headline you want to
read about hibachi in the in the press uh hibachi is the is the venue where stable coin fx trades
so there you go how do you get there though what's so what's what are the steps to get there how about
that uh chip you want to take this one or do you want me to? I don't know that I have a better answer.
You know, look, I think there's a bunch of important steps. I think, you know, one step
or one headline is we will be gaining in succession regulatory certifications and licenses for making our products available
in more and more jurisdictions. That's absolutely part of it. Another part of it is when we'll
hit some volume milestones. I think that there's going to be, I mean, here's a headline that might, that
if history is our teacher, there will be breakdowns in the system and we will have established
our trustworthiness. That we have been operationally robust, that our governance has had the right setup, and that
the trust that people place in using our exchange will have been merited.
I don't know what that headline is going to read, but these headlines happen.
So I think that there's kind of two places for us to get to where Verun said, right?
We're the place where FX trades, where FX stable coins trade.
One is liquidity.
We're working on that.
The other is trust.
Currencies are not intellectual property.
Anybody who wants to list an exchange can pretty much do it.
an exchange can pretty much do it. And the thing that's going to differentiate us is going to be
the security that regulated entities have, knowing that when they participate on this exchange,
that they don't have to worry about their counterparties not being KYC screened or not,
you know, that they might be trading with somebody who's on an OFAC list or
that hasn't been AML
screened. That'll be a big thing. Another big part of it will be establishing relationships that
the exchange operates like it says on the tin. Our rule book is fair and that we stick to it
always and that the governance is right and that customers' interests are protected. So I think that there's a lot of things
that'll set us apart and those things are gonna be,
that's the defensive moat.
That's what has the liquidity kind of, you know,
attract more liquidity is gonna be the trust
that we establish.
So I don't know what the exact headline will be,
but when it comes, I think that we'll have shown that we were building an institutional, ready, compliant exchange that operates reliably and that people will trust trading on that exchange.
I think that's a great way to frame it because it's not a matter of if something's going to go wrong, it's when.
And having those protections in place are huge.
Do you think custodian integrations is a big one too that you guys are looking at?
Yeah, I think we are working with a few to get that rolling as well.
Because obviously not everybody wants to send funds to a smart contract either.
So that is something we've been looking into fairly closely.
Yeah, honestly, I feel like more teams should be looking at it.
I feel like no matter which venue or which vertical you look at within crypto, people are going to want to trade where they're comfortable trading.
And a lot of times it's just going to come down to, okay, we provide the liquidity in the backend to where people already are.
So I'm glad you guys are looking at that too. Cool.
Anything else you guys wanted to touch upon?
I know roadmap items were big on the list.
Anything else you want to talk about?
I think we covered a lot of ground. So I think, yeah,
so I don't think of anything that we missed necessarily.
But obviously there's a bunch of new exciting things coming up in the coming months. I think you mentioned, I talked about the roadmap from a product perspective,
like including things like vaults, adding spot markets,
getting the info down to zero downtime,
where like, you you know almost no
maintenance windows will ever get in the way of people trading right so uh and and then obviously
uh custodian integrations uh adding fiat off rams on rams mobile support so these are all like you
know uh in the pipeline so i think in the coming months, users should see significant improvement in the product,
which is currently still in beta phase.
But I think you're getting pretty close
to being out of that
and then hit the ground running.
So it's going to be exciting in the next few months.
Definitely.
I'm looking forward to that, guys.
I think this is going to be really exciting.
Cool.
Well, thanks, everybody. Appreciate you hopping on. Chip and Varun, thanks again. looking forward to that guys i think this is going to be really exciting cool well thanks everybody
appreciate you hopping on chip and barun thanks again no thank you thank you Music
