How Stablecoins Won: Bridge Founder and USDC Co-Creator Share the Story Behind Crypto's Killer App

I like very legitimately thought that our business was unacquiraable. Stripe

just like pours jet fuel on the business and accelerates us at a pace that would be completely impossible independently.

>> I think it will be taught differently in schools. You know, people went through

schools. You know, people went through universities because I think they're learning a lot of skills that are irrelevant.

>> What would you recommend they study instead? Then

instead? Then >> drop out and build a business.

Probably a lot of people here have interacted with a product that you created, Sean. You designed USDC years

created, Sean. You designed USDC years ago back when it was far from obvious that it would be a good idea. It was a zero interest rate environment. There

was no business model for it. What gave

you the conviction to think that USDC could work? Uh it probably should have

could work? Uh it probably should have been obvious sooner um than uh than 2017 which was when I wrote the first white paper and began writing the code. We

started circle in 2013. Um so uh probably should have been more obvious at that point. At that point we were uh we were we had firm conviction over uh you know on this concept of um

democratizing access to finance globally on internet rails. Well, we started with Bitcoin um and then uh sort of realized that what we really need is a representation of government fiat money

that could be trusted but run at internet speed. Um and that led us to uh

internet speed. Um and that led us to uh put the dollar first on Ethereum rails.

But the concept was always many many chains, many issuers uh and to open up this new uh sort of you know world of

money running at internet speed. Uh and

so that was that was sort of rooted in the origins of the company. But for USDC specifically, uh it was it was just a mission to make that reality.

>> So why now? Why are stable coins having their moment now? When you worked on this, you know, years ago, you had the idea for it and now it's really taking off. What's changed?

off. What's changed?

>> Well, it's, you know, it was a really hard problem to start with because it wasn't really fundamentally a technical hard problem. the infrastructure was not

hard problem. the infrastructure was not quite mature enough to um to have say dollars or other currencies but mostly when we talk about stable coins today we're talking about dollars uh in volume um the infrastructure wasn't quite there

but still the key problem was not the technical one it was more related to um uh the regulatory hurdles that needed to be cleared the kind of partners and distribution that needed to be amassed

around it um and you know those those sorts of elements so we didn't shy away from a hard problem I we knew that this needed to ultimately be encoded in law, but that takes some time. Um, and so we

devoted a lot of time to just going in and educating regulators and explaining how this could work. Um, there were elements of on the economic side, um, you know, elements of the Chicago plan, which is this notion that money creation

should be separate from lending markets and stable coin, uh, stable coins effectively put that into play. And so

we, you know, we sort of had these conversations, but it was always going to be a a long-term, uh, sort of playbook to run. at the time uh the interest rates were very very low and so you know conversations with people like

Biology for instance who you know who helped us at Coinbase uh really sort of imagined this as something that might take 10 years uh to really result in something that might be a credible business model. Thankfully it was faster

business model. Thankfully it was faster than that. Um but uh yeah that's how

than that. Um but uh yeah that's how that's a little bit of the picture. I

mean, I was at Coinbase when we were working with you on USDC and it kind of was like a science experiment. No one

knew what the business was or how it was going to be used. It was it's hard to like even put ourselves back in that point, but there was like DeFi really wasn't that much of a thing. Like people

were kind of buying cryptokitties was like maybe that had come along.

Maybe not even at that moment in time.

Uh so it was like the entirety of the ecosystem was so nent and and much of the ecos ecosystem kind of evolved around stable coins over the subsequent like six seven years.

>> So it was pretty counter trend to be doing this uh so early.

>> Well I would say even in circle there was not uh there was you know there was some support for it but there was not a lot of support for developing USC at the time. We were doing many things um

time. We were doing many things um >> when I first >> J supported it. Jar supports everything uh my co-founder but um yeah it was a really it was a tiny team with not a lot of resources which which played to our

benefit I think in being able to execute.

>> Yeah. When I first met you um and was covering you know crypto for Fortune magazine I did for years uh you guys were working on a Bitcoin powered sort of Venmo competitor uh that got some

traction in Europe.

We so we had many things. We had this conviction around you know what the world of global finance might look like on internet rails but we were very flexible in how it might actually be achieved particularly in the near term um when we were sort of struggling to

get say you know we were pursuing money transmission licenses in the United States. So getting states even to

States. So getting states even to understand what this was and while we might need to be licensed um at the same time that we had several product experiments um that we were working with and so we did start with Bitcoin um and

uh and then you know move obviously moved to to Ethereum which is where we launched USDC and the many others fairly agnostic about what the underlying rails uh you know needed to be uh with some charact with some specific

characteristics that are helpful obviously um but it was always a little bit the layer on top the programmable money layer operating operating across multiple chains. So it was of most

multiple chains. So it was of most interest. Yeah.

interest. Yeah.

>> Um I have to share one story. Uh I came to your offices in 2017 and um I arrived on a day when the markets just completely tanked.

>> We have to be more specific.

>> It was [laughter] it was a blood bath.

Um which in retrospect looks extremely tiny. Like Bitcoin was trading at

tiny. Like Bitcoin was trading at 20,000. It probably went down to like

20,000. It probably went down to like 6,000 over the course of a month. And um

I expected you guys to cancel the visit and you know because it was just going to be like a show or something. and

I showed up and you guys were cool as cucumbers. Like there was no frenzy

cucumbers. Like there was no frenzy going on in the office and you were like well you know we've got this OTC trading desk so you know as long as the price is moving we're making money handover fist.

>> Well it was also you know by that 2017 this four or five years in you know there's many little mini crisises along the way. Um I mean I remember when we

the way. Um I mean I remember when we struggled to get a banking partner had one bank that would bank us and uh I was doing a p a panel for Silicon Valley Bank which was the one bank that would bank us in the world. Uh the the night

that the news broke about Mount Gaus and we had bankers walking out of the room swiftly. Um and uh so there's lots of

swiftly. Um and uh so there's lots of little mini incidents like that but you know have conviction about uh about something stay resilient and and manage to stay alive long enough to be successful with it.

I want to talk about those those hard times but uh first I I have to ask you Zach also um you had your own journey through the idea maze. You started the

company bridge relating to NFTTS and you since had pivoted to stable coins. Tell

me about that journey.

>> Yeah, I mean it was it it was shorter than than Circle's journey. I mean it's kind of this the circle story is an amazing I mean it you know is four or five years of kind of like exploration

to sort of find what ended up becoming you know the business that that then like carried it carried it forward for us the journey was about a year I mean we we started in 2022 when NFTs were

taking off and we wanted to enable people to buy uh buy NFTs with their bank account and we were like taking money out of the bank account converting it into stable coins and then enabling people to to acquire NFTs and you know

it turned out that was not not the best idea. But in the course of building that

idea. But in the course of building that business, we realized how hard it was to actually build with stable coins. And it

took us some time. And then, you know, but between that moment and and you know, over the course of the summer, we built a lot of conviction that stable coins could be this like core payment

infrastructure. and somebody needed to

infrastructure. and somebody needed to decomplexify you know the process of connecting you know a bank account or the fiat infrastructure to this emergent

stablecoin infrastructure but but even from then it was like this meandering path of uh you know fear that we like

you know we're either too early or heading down the wrong path or even as we acquire customers I think it you know maybe two years in, three years in, we were still questioning whether we had

product market fit. I I don't know when like I'm curious like when Circle felt like, you know, stable coins had product market fit cuz like you know there was a lot of usage but there was no business

so that's probably not product market fit. Uh now you probably feel that way

fit. Uh now you probably feel that way now that the company has gone public.

>> Yeah. I mean,

I've kind of my pro somewhat provocative view on this is I think to date, um, and in some ways you could still say it's early days, but to date I would assert that the only thing that has found

meaningful PM fit in crypto is stable coins because I don't consider assets or exchanges products. Um, so I I know

exchanges products. Um, so I I know people disagree with that, >> but um, but it wasn't it was definitely not the case immediately. It took it did take some time. And so uh you know

there's so you know the largest uh stable coin in the world has uh a real liquidity mode on central exchanges for in crypto capital markets and USDC's uh liquidity mode developed through DeFi.

>> Uh and so that wasn't early on. It sort

of happened I'd say really started to accelerate in 2020 um and then uh you know grew from there. And I think the biggest mo now that the regulatory hurdle is somewhat it's not it's still a

hurdle but it's defined how to actually clear the hurdle. I think the big hurdles that remain for stable coin adoption um uh are the liquidity mode and then there's an interoperability question as well. And so it's very

difficult to imagine right now unless something significant changes another uh dollar stable coin clearing that mode in crypto capital markets with the way

things uh currently sit. So I minority take maybe but that's my view.

>> I I think that like I think there will be many many many different stable coins. Uh uh I don't know how many will

coins. Uh uh I don't know how many will break that moat but I don't think a lot of them will need to.

>> Yeah, I agree. I think there'll be I think we'll see, you know, anywhere that you can account for something on a ledger. Uh I mean your number in your

ledger. Uh I mean your number in your Oracle database as a traditional, you know, finance company, why don't why not tokenize that? And so I think we'll see

tokenize that? And so I think we'll see thousands of different variations of tokenized deposits and stables. But I I do think there will probably be a handful that matter and those will be the ones that clear the liquidity mode really outside crypto capital markets

and payment use cases and you know all the things that we've been talking about for years but still haven't really become dominant use cases for stables but we're this close now. I've said that for like seven years. We're close but now it's really true. So

>> I feel I feel like yes, we are we are really close, but like we're we're still so like it's hard to even begin to express how early we are still. Like I

think now like looking at this moment of like okay there's a public company or you know what have you. It feels like maybe there's we're at like the beginning of some like you know linear

or like consistent growth instead of like the chaoticness that that has happened over the last like several years. But you know like the regulatory

years. But you know like the regulatory requirements have still not been defined. You know stable coins are still

defined. You know stable coins are still used in a tiny sliver of all global payments like you know a couple basis points of global payments. Uh stable

coins have captured like dimminimous amount of the overall depository you know deposits in the in the US. We

don't have any stable coins that exist really in any material way outside US dollar stable coins. uh like uh most banks and core financial institutions

don't touch it in any in any capacity.

So we're we're still you know and blockchains themselves haven't even been you know optimized to you know facilitate payments at the scale that scale that we need.

>> Uh it's just so many we're we're like so incredibly early.

>> Yeah I agree.

>> So Sean you mentioned that you expect there to be multiple stable coins out there. I mean, uh, Tether and Circle

there. I mean, uh, Tether and Circle have had the first mover advantage and they account for almost the entirety of the market to date. Um, what do you expect to happen to that status quo?

Will it hold?

>> Uh, well, I don't have any, you know, as you would imagine, I have zero special insight into other, you know, their people's strategies behind closed doors, but I I do think when we're talking about stable coin usage today or we see the transaction volume increase and it's

still largely in crypto capital markets use cases today. We we are seeing uh legitimate crossber payment use cases, sort of remittance style use cases, import export payouts to humans who want

to hold dollars on their phones and stables are the best way to do that. Um

and so we are seeing these use cases but not yet at volume. And so most mostly when we we sort of orient toward the state of affairs today, it's it's still consistently toward crypto capital markets. But the more interesting thing

markets. But the more interesting thing is once we get out of just that one use case and we start to crack these other uh use cases, there are new players who have different kinds of distribution channels and different kinds of

capabilities with you know you know bridging partnerships and the like that I think uh will you know we'll see uh we'll see new kinds of stable coins existing stables as well but we'll see new kinds of stable coins crack new

markets in ways that will be quite different and powerful. So that I'm optimistic about. Um everyone has a

optimistic about. Um everyone has a slightly different take on it. I mean I think some people who are focused on stables focus a little more on the underlying assets and and reinvestment of those. Others are very product

of those. Others are very product focused. Um some have stumbled into

focused. Um some have stumbled into stables. Um and those are the people I

stables. Um and those are the people I kind of like the most to talk to. Those

are the ones who hate the word stable coin. Uh like what do we call

coin. Uh like what do we call >> what do they call it? [laughter]

>> They call it dollar.

>> Yeah. Dollar. It's like a streaming dollar or something. [laughter]

>> That's a worse thing for sure.

>> Yeah. I don't I mean I don't know if we keep calling these things stable coins.

Um on you know on our with this new venture we've mostly been interacting with um with AI engineers and AI companies and for the longest time we avoided the word because it got such a toxic reaction and and by the way I

think of circle is maybe the most boring company in crypto in a good way. Um you

know very like you know buy the book front go through the front door. Um, but

we were sort of, you know, this the word stable coin was lumped into crypto and AI engineer communities. For some

reason, my my impression is that even more so than other developer communities have an really strong adverse reaction to crypto. It's changed over the summer

to crypto. It's changed over the summer and now stable coins in particular have achieved some escape velocity relative to their impression of the rest of crypto. Uh, but it's been um, you know,

crypto. Uh, but it's been um, you know, it's been interesting. So anyway, it's a little tangent on the word. I don't know if we keep calling it that, but it seems to be the brand now. So,

>> I think it's done, [laughter] >> but you can keep fighting the fight.

Yeah.

>> Don't call it a stable coin, just call it a dollar. [laughter]

>> Um, Zack. Okay. So, I'd like to return to the point about product market fit.

We've got an audience of founders here who are probably very interested to know uh how you grinded your way there and when you knew that you had finally

achieved it. Yeah, I would say that I

achieved it. Yeah, I would say that I guess the advice that I got or the way that people kind of talked about their products was that there, you know, when

like you would listen to someone on a podcast or you would talk to an investor or something, there's kind of like people talk about this moment of like your pre-product market fit and then your postproduct market fit and and that

makes it sound like, you know, you're in the desert and then you're, you know, in some sort of utopia or, you know, you're sort of meandering down some like terrible road and then there's this

giant cliff that you overcome and then you're on this whole new whole new like plane and that was definitely not the situation that that we experienced like

we came up with this came up sort of with the current you know the the the manif like the first version of bridge and then we you know built our APIs and we launched our APIs and that didn't

feel like product market fit and then we got one customer and they were using us and but we had no idea how big they were going to get. So that didn't feel like product market fit. And then we got like

five customers and you know each month we had this like steady inbound of customers that coming to us but there were all these like teams across Latam and Africa and like who knows how big those customers are going to get. So

that didn't feel like product market fit. And then we got to like a million

fit. And then we got to like a million dollars of revenue and but I looked at our customer base and I was like this is a wild collection of like really oddballs. And so I have no idea if I

oddballs. And so I have no idea if I could build a business around this. So

that didn't feel like product market.

And then we raised our series A and that just created more fear that we didn't have our have product market fit. And

then I I actually I went to um uh like a a founder event kind of like this and I was listening to uh the the CEO of I think it was like MongoDB or or

something talk about how they had gone public and they had about $100 million of revenue, but Amazon had just launched this product and the whole market knew that Amazon was going to cannibalize

their entire business. But then they were looking at their business and they were like, "Oh, we have this little thing that's like a million dollars of revenue today that's going to be really big." And they went public and they ate

big." And they went public and they ate glass. And then over the next couple

glass. And then over the next couple years, their core business basically went to went almost to nothing. And this

little thing became like a billion dollar business. And it made me realize

dollar business. And it made me realize that as like a founder, you know, a company at that scale that was going public was still iterating through the same stuff that, you know, obviously at a different scale that we were iterating

through. And it made me realize that

through. And it made me realize that like the correct mental model of building a company is more like you're kind of just on a stairmaster and you know there's always the next hurdle.

It's not like one unified thing where you achieve product market fit and everything changes. It's just a steady

everything changes. It's just a steady you get to 1 million and how do you get to five and then you get you get to a million users and how do you get to 5 million users and it's just the next milestone and each one is harder to

overcome than the next one. But you're

just perpetually on this on this like journey of trying to overcome what the next obstacle is with each one feeling like it was harder than the one preceding it and each one feeling like

it's more existential than the one that the one that preceded it. And weirdly

that can sound like masochistic but it but it helped me because then it made me realize that like the insecurity that I was feeling around whether or not we had product market fit uh was like cuz I was

like hoping that I would feel a certain sort of way when we achieved product market fit and not feeling it made me feel fear that that wasn't the case and uh this made me realize no the journey

is just going to be this steady thing and and and even today as part of Stripe I still feel like we're on that journey like I still feel like oh we achieved you know x you know this amount of

volume but how are we going to get there and oh if we want to be like really important infrastructure we need to go work with all these these types of companies but we have no product market fit in that segment and and so on. So

that's been that's been my experience of it just a perpetual motion machine of you know fear and obstacles and overcoming them.

>> So there's no there's no easy path out it's just uh uphill the whole time. No,

I mean may maybe you I mean I think I I think it's one of these things where like you look back at companies. This is

the other thing from my my perspective is I had joined a lot of companies that ended up being successful. Like I was at Square pretty early and Coinbase pretty

early and Brex pretty early and when I joined all those companies I felt like they were inevitable that the companies were going to inevitably be be successful but and so that made me feel

like there would be some point in time where I would feel like Bridge is inevitable and now I'm sure that as a if a new employee joins Bridge they feel like Bridge is inevitable but I still don't feel that way. And it's like the

difference between being like an employee and being a founder. As like an employee, you can kind of live in like optimistic world and like do do your job as like a founder, you're like thinking about what is the next existential thing that you have to overcome to make the

business whatever it is that you think it needs to be.

>> How did you know that this was the right time or how did you decide, you know, to step off of this step uh stairmaster and to move on to stripe stairmaster? How

did you decide [laughter] >> to make that choice that you wanted to get acquired?

>> Uh well, I mean I would first off I would say like we didn't want to be want want to get acquired. I don't think that generally speaking I don't think that companies like sell. I think that they

get bought uh at least good ones. And uh

in in this case we I I I like very legitimately thought that our business was unacquirable. Like I I just found it

was unacquirable. Like I I just found it very hard to believe that we had such optimism about stable coins and where this space could go. And it and it felt

inconceivable that there was somebody else out there that uh shared that optimism uh and was large enough to invest behind

that shared belief and had the tolerance to invest on the frontier of this of this next you know big infrastructure improvement. And I I just didn't think

improvement. And I I just didn't think that there was anybody anybody there even even Stripe. And so when I started spending time with John and Patrick, I was my my whole intent was to try to get

Stripe as a customer and like I tried many times to get them to sign a contract and buy our product and they kept deferring. And then uh and as I

kept deferring. And then uh and as I spent more time with them, it just became really clear that they shared this very similar view of how big and

how important this space could become.

And it also became very clear to me that doing this together made it much more likely that we would achieve a much you know bigger combined outcome uh and do

so a lot faster and and this is like been true multiple even more so than I anticipated postacquisition. I mean the

anticipated postacquisition. I mean the acquisition itself sort of kicked off and and like actually very much shifted the space along the adoption curve and then with a bunch of the the work that

we've done and the products that we've shipped it's sort of shown the world what's possible. We just launched this

what's possible. We just launched this open issuance platform that that we could have done as an independent company but the types of businesses that would work with us would be very

different if we were like bridge as a series B startup versus Bridge as part of Stripe. So the the thesis that it

of Stripe. So the the thesis that it would move us you know along the adoption curve and and get our business farther much faster has like very much proven out.

>> How has your life changed postacquisition and also you know for bridge itself the sort of working style the company culture uh joining a bigger organization like Stripe?

>> Yeah >> they forced you to drink a cheeky pint.

[laughter] >> They did they did. Yeah they did a uh it was sort of like hazing. Uh the um I would >> to drink down to the G. [laughter]

>> We didn't do that because I think all of us would have been horrible at it.

Uh but uh I I would say that the um the the two two things. So one is that uh I I actually think it's like day-to-day

it's harder to build bridge as being part of Stripe than it is being an independent business. uh like zooming

independent business. uh like zooming into the micro day-to-day because you have like we're we're pretty independent like we have our own office and our own Slack and if someone at at Stripe wants to message me on Slack, they literally

have to like figure out a connection and then get them to introduce us. It's it's

like anyone here messaging us on on on Slack and we have our own like Google Docs thing and so it's hard to add people in Stripe, you know, to our docs and vice versa. And you know things are

over time those will those will change but we operate very independently but we have all the things we need to do to scale our business like you know we have to go find bank partners and we have to build a bunch of like crypto

infrastructure and build out wallet infrastructure and uh we have our own roadmap and customers that we need to support. We have all those things, but

support. We have all those things, but then we also have all these like other things we need to do. Like we need to somehow figure out how our CRM integrates with Stripe CRM so that

customers that reach out to us can like we know who's on first base and who can work with them. And it's like it's like this whole series of of additional work

that uh complexifies the day. Uh so so day-to-day it's probably harder but uh but like big picture there are these

moments where things that we would be doing like Stripe just like pours jet fuel on the business and accelerates us at a pace that would be completely

impossible independently. uh and that

impossible independently. uh and that was like our cards product when we launched it and that's like you know enterprise adoption that's coming now or banks that we're now working with or the

issuance platform that we're working with and so on. So uh daytoday it's like it's it's just as stressful. [laughter]

I don't know what people I I thought it would certainly like you know you kind of like relax or something and that has definitely not been the case.

>> Okay. Still on the stairmaster.

>> Yeah. Um Sean, so you founded Circle uh more than a decade ago and you're now starting a new company in the AI age.

How has your approach to company building changed between you know what you did then and what you're doing now with Katana?

>> Yeah. So uh a lot so I'll tell you first what's not changed. Uh it was actually been informative you know in founding Circle. So circle was the third company

Circle. So circle was the third company that Jeremy and I did together and and previously you know companies were not in any heavily regulated industry of any kind like finance or otherwise. Um and

uh and so we knew that going in. We kind

of knew what we didn't know. Um and so made a heavy investment in educating regulators early on at the state and federal level but also internationally.

And there is a similar pattern there when it comes to um optimizing AI workflows that touch money globally and uh thinking through uh standards that

may ultimately become written into law for AI safety uh and how we think about the you know the nation state issues that have already emerged around sort of foundational LLM uh you know sort of

management and so there is some pattern recognition there that is similar. I say

I would say though what is really different is the tactical formation of a company now is very different than it was 12 years ago or even five years ago.

Um and an example is uh you know at circle we have I don't know um a lot of risk analysts and compliance analysts who do amazing work um and they sit down at their terminals and they sort of you

know um police for for moneyaundering maybe open cases gather evidence file SARS and the like. So we do the same um but we have AI agents execute that entire workflow and we have a human that oversees that workflow um and optimizes

it. So it's a very different kind of

it. So it's a very different kind of role for the human and they have to be very good at working with these AI workflows but the tactical execution uh the e you know the economics were very

different but I'll say the execution the operational sort of management is very different because we're incorporating uh sort of AI native approaches to all of these things. From a pure headcount

these things. From a pure headcount level, do you think you'll ever need to scale uh up to the size of >> having no way? Yeah, I think the roles

themselves will be very different. New

roles will emerge that I probably don't know about. Uh and so it turns out you

know about. Uh and so it turns out you really do need to still hire human beings. Um um but but the uh you know

beings. Um um but but the uh you know whether it's software you know software development uh or or marketing or um you

know compliance as I mentioned um in every single area uh it's it's not you know circle is what a 1200 person company cannot imagine um you know the

need to build a company at that scale uh now >> it's interesting you say that like the you know like in the early internet people were saying like the internet has like changed everything, you know,

everything about the way people work and something and it shows up everywhere except in GDP and uh and then like with AI now it's kind of like AI is changing like everyone's productivity and so it's

showing up in every stat except for hiring >> and you know you certainly feel that in San Francisco like when you're we're trying to hire engineers in San Francisco and it's like every engine you

know it's like there what has happened to demand for engineering is like you know it's gone hyperbolic. Yeah.

>> Yeah.

>> Yeah. I mean I I do think uh a lot of the you know you can't just go out and vibe code a financial institution. So it

does take some experienced engineers >> but it is a different way of working as an engineer as a principal as an as an architect. It's a very different way of

architect. It's a very different way of working um than uh and I think it will be taught differently in schools and there's a time gap before it's taught differently where you worry about you know people who are going through universities and how they're being

trained because I think they're learning a lot of skills that are irrelevant uh in computer science now. Mhm.

>> What would you recommend they study instead then?

>> Drop out and build a business, [laughter] >> humanities, poetry.

>> Go back to the go back to uh you know, philosophy, polyai, English. Uh no, you know, [laughter] it's a really good question not to be flippant about it.

And I think it's a really hard question.

Um and the generation that is going through universities now, I think are facing, you know, uh a front and center.

So >> yeah. Um, so I've got to ask before

>> yeah. Um, so I've got to ask before before we wrap here. Uh, you both are working on new base layer chains. Uh,

arc in the case of circle and tempo in the case of stripe. Uh, why does the world need a new base layer chain [snorts] >> or two?

>> Or two.

>> Yeah.

>> Ready?

>> Yeah. Uh, I I can I can um I'll go first and curious to hear hear your thoughts.

So we we've been building payments, you know, applications on blockchains for a couple years now. It was very clear to us from the from the beginning that

blockchains were not optimized for this type of activity. And it manifests in um you know we we we in in in in many many

small decisions and a few very big decisions like uh we were working with a very large neo bank millions and millions of customers. They wanted to build on a specific blockchain. In order

to set up wallets for all those c all their customers they need to prime those wallets with a bunch of gas in order to enable them to accept USDC. uh the the cost of doing that was going to cost

this company millions of dollars just to en just to you know enable their customers to have the opportunity to store USDC uh on uh in in these wallets.

Uh we were we were one of our very first customers a separate use case was the government dispersing aid payments and the first time we dispersed those aid payments it was thousands of aid

payments which is not a lot of payments.

uh it it took us like 18 hours to send all of these all of these transactions.

And so there's just a bunch of small decisions that um that add up uh to make it very challenging for uh core payments

use cases to to exist. And then there's a few very big decisions like the big decisions are like you know uh it's really nice that everything is public on a blockchain but it's going to be very

hard to get core financial institutions to have all their transactions be completely public by default so there's some level of privacy that is that is desirable. You're going to want discrete

desirable. You're going to want discrete payment lanes for transactions so that if something is happening in the blockchain like you know what happened

last la two weeks ago with the with all the liquidations that happened you had a huge spike in gas fees across like certain L2s and so on. You don't want

that to happen if you're moving and using these blockchains to to uh run like your core infrastructure to move money. Um, so there's a bunch of these

money. Um, so there's a bunch of these things, problems that that we saw that we felt like needed to needed to be solved. And you know, we hope that that

solved. And you know, we hope that that Tempo is like a independent uh independent entity that's sort of building a building a blockchain to to solve this solve this problem. We hope

that that it solves the problem. But,

you know, we're also happy if if ARC solves this problem.

>> Yeah. I mean, I think just lading off of that, I mean, it's sort of you add up a lot of small things that you sort of look at the existing options when it comes to L1's or L2s. Um, and you sort

of don't find the right match for something that needs to be, you know, sub 300 millies, um, settlement, like final settlement, privacy preserving, um, not competing with block space for like meme with meme coins or whatever.

you know, if I send a wire through old school traditional rails, my bank doesn't say, "Wait, I'm going to process this Tik Tok video first," which is kind of the feeling when you're just trying to have a high throughput payment chain, and you've, you know, got to deal with

whatever is whatever else is going. And

so, you were to add all of these things up and um some dedicated uh chain that can uh you know, have things like g like gas fees being paid in the currency in

which you you know, you're sending. So

we built first on base in Salana which I think is very common um for you know for a lot of people still but our AI actors have to hold uh you know the right

current the right tokens to pay gas fees and it's just simply more reliable and faster if we just don't have to do those things. So I think Tempo and ARC um I

things. So I think Tempo and ARC um I have to be careful what I say about ARC.

Um [laughter] I think that they're are slightly different design centers.

>> Not investment advice.

>> Not investment advice. Um, and I think there's slightly different takes uh, and there may be more takes, but it is really important uh, in order to unlock some of these new use cases to be we avoided this for the longest time

obviously with USDC because platform neutrality is very important. Um, we

built first on Ethereum, but we immediately started entertaining other chains. Um, so

chains. Um, so >> one one of the things that's so great about the space is you have, you know, a couple years ago there was this desire to create uh blockchains that were, you

know, had higher had higher throughput and much lower gas fees and were much more scalable. And then you saw this

more scalable. And then you saw this like creative process where you had L2s emerge, you had Salon emerge, you had Aptos, you had SU, you had all these different folks come into the space to

build to solve this problem. uh and then some of those have have emerged and sort of become the winners and and it's great. It's like the creative creative

great. It's like the creative creative process and we're seeing the same thing now around these payments blockchains where we have Tempo and we have ARC and there's plasma and there's other there independent entities that are coming out

to solve this problem and you know one or multiple of those will be successful which will also be great.

>> Um very very very briefly uh you know one of the guiding lights of crypto if it has a core philosophy is decentralization. What would you say to

decentralization. What would you say to somebody who is concerned that this could introduce centralization into the industry? Give me like your one sentence

industry? Give me like your one sentence that you would say to somebody to persuade them that this is uh not something they should be concerned about.

My take is I don't think any of these any of these blockchains will be successful if they're centralized. Like

no one no one is going a bank is not going to want to build its payment infrastructure on top of another bank's blockchain. Uh and so the only way that

blockchain. Uh and so the only way that Tempo or I think ARC will be uh successful is if they are truly decentralized.

>> Yeah. I mean I think like fundamentally um we are saying it is better for us to trust our money uh to cryptography and software than it is to any one human being or one business that a human being

creates. And so you know the definition

creates. And so you know the definition of decentralization versus distribution or a roadmap to getting there can all be sort of discussed but it's a fundamental tenant. Um so some you know we can't

tenant. Um so some you know we can't just have uh you know the corpo chain uh that and expect the rest of the world to use that. So crypto over corpo. All

use that. So crypto over corpo. All

right. Well Zack Sean thank you so much for being with us. Yeah. Thanks.

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