Eric Swartz Is Bringing Traditional Finance On-Chain with AI and Crypto

Eric Swartz, Founding General Partner and General Counsel at Panther Hollow Ventures, joins Kyle Lawrence and Moish Peltz to break down the future of institutional finance on-chain. Eric reveals how Panther Hollow’s unique “closed loop” investment strategy is reshaping the market, and discusses the upcoming Canton accelerator designed to foster the next wave of blockchain innovation. The conversation explores using AI for smarter fund management and data analysis, adapting to regulatory challenges between New York and New Jersey, and the real reasons institutional players are finally taking crypto infrastructure seriously. 

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Transcript

Kyle Lawrence [00:00:13]:
Alright before America's birthday. We're very pleased to not only be back, but have somebody who is near and dear to our hearts for a very specific reason. I know I lead off a lot of shows with this specific point, but Mr. Eric Swartz, you are in the company of two folks whose names are routinely butchered. I know it sounds ridiculous, but my name, Kyle Lawrence, you would think is easy enough, but no, it gets just run through the meat grinder repeatedly. Moish Peltz. It's impossible for people to get it right. Moish or any derivative thereof.

Kyle Lawrence [00:00:46]:
How many times in a given day does somebody mispronounce your name?

Eric Swartz [00:00:52]:
It's every time it's said. But I, I've never had like a huge, I'm not that guy. So like I just, like, I just kind of let it go and I, I think it's fine. Like I, I, I accept I am Jewish, so it doesn't bother me that much.

Kyle Lawrence [00:01:08]:
I guess that's fair. Let's, you know if I would go to Starbucks or, or one of the places where you give your name. I stopped giving the name Kyle because it invariably. I got Kyle. I got one was Cyle, which is Sile. It's absurd. So I started giving James but then I would forget that I gave them that so they'd be like, James, James, look around, there's nobody there. It's a real curse, man.

Kyle Lawrence [00:01:31]:
So we're, we're brothers now. I feel this, this is good.

Eric Swartz [00:01:34]:
I agree, I agree. I mean honestly, like the, the, the, the connection is real.

Kyle Lawrence [00:01:39]:
Yeah. Well, may the Swartz be with you. And with that I will, I will leave. That's it. Very, very pleased today to have Eric Swartz. Eric is the founding General Partner and General Counsel at Panther Hollow Ventures, a New York based closed loop investment platform focused on the institutional infrastructure layer of digital assets. We're going to talk a bit about

Eric Swartz [00:02:03]:
that in a minute.

Kyle Lawrence [00:02:04]:
He also serves as the Chief Strategy Officer and General Counsel at Kinsu. His career spans the CFTC, Goodwin Proctor, Lowenstein Sandler, Sterlington, and most recently General Counsel at Framework Ventures. And before I ctu, I will say that Lowenstein Sandler, great firm. About a decade ago I had a real bare knuckle in the street fight with them and the other attorney did a great job. Both our clients lost, if we're being totally honest. So I hope, I hope I don't offend you by saying that. But in any event, give it up. Warm B&O welcome for our guest, Eric Swartz.

Eric Swartz [00:02:39]:
Thank you so much. It's a pleasure to be here, sir.

Kyle Lawrence [00:02:44]:
It's a pleasure to have you. Well, well, thank you for making the time right before the long holiday weekend. We greatly appreciate, you know, everybody's time and willing to spend some time with Moish and I.

Eric Swartz [00:02:53]:
I mean it's, it's really my pleasure. I feel bad for you in that you have to spend this time with me. But I mean, in any case, I mean, I mean technically I don't have

Kyle Lawrence [00:03:06]:
a week to end this. Right.

Kyle Lawrence [00:03:09]:
Great interview.

Eric Swartz [00:03:10]:
Yeah.

Kyle Lawrence [00:03:11]:
Good seeing you guys. How you enjoying the World Cup?

Eric Swartz [00:03:16]:
I mean honestly like we have been so busy that we have like kind of descended into our own little like private sphere where the World Cup doesn't exist and all sports ball related things don't exist because my, so my partner is Peruvian and not particularly into sports. She's very like spiritual and, and, and into like meditation and the like. And, and so, and so am I honestly. But like not like as outwardly as she is, although she's, she's getting me to come around a little bit more about it. I did mention it here of course, but, but it's, it's, it's been fun. I mean we've been doing a lot of hiking, doing a lot of working on literally like a lot of the regulatory analysis around the products that we're building around like the architecture from a cryptographic like ecosystem and also technological perspective. So like architecting the ecosystem in such a way such as to produce kind of similar trading activity to what exists in traditional finance markets today. And the way we've sought to do that is to essentially provide multiple venues for rates and derivatives protocols.

Eric Swartz [00:04:42]:
Under collateralized lending, over collateralized lending, repos, SEC lending and all derivatives including FX. Our target market size being about a quadrillion less 200 trillion of equities. We're excited to even say that out loud. When we say bringing a quadrillion of value on chain, we mean it here at Canton. And I mean we have the shirts to prove it.

Kyle Lawrence [00:05:18]:
Oh, there you go. Whoa.

Moish Peltz [00:05:19]:
Quadrillions. There you go.

Kyle Lawrence [00:05:21]:
You nailed it. that's awesome.

Eric Swartz [00:05:23]:
Kind of, I mean they, they, they made these. I think they're amazing. Like it's one of my favorite shirts for sure. But I figured I'd show off the, the Canton swag and the Canton ecosystem given that we're about to launch our Canton Cohort 1 accelerator here in August and applications are open so if any folks want to apply, we'd love to have you. We'd love to Build the future of finance together. Bring a quadrillion of value on chain. Like the shirt says.

Kyle Lawrence [00:05:59]:
From your lips to God's ears. I mean that's a great, that, that's a great introduction to what you do because as a, as a securities attorney and somebody who got his start in, in finance, I'm always interested at, at the way these funds are structured and the new ways in which people are approaching these types of platforms. So if I can kind of backtrack a little bit. Your, your company is described as a closed loop investment model, which is not something I, I've really heard of. Can you explain what that is, what its genesis was and, and how that, how that structure impacts the legal relationship that you have with, with your company, which kind of serves as like a GP advisory but also as an investor in some of these projects.

Eric Swartz [00:06:42]:
Yeah, we do control deals that are. So I guess the way we deal with our conflict issue as between the accelerator and the fund model is also a way that we help market the fund, which is that the actual accelerator is owned by the fund 100% less, whatever, any kind of side deals with the related ecosystem or its major participants. So that's really how it works.

Kyle Lawrence [00:07:17]:
What does a closed loop investment model mean exactly? How did you come up with that? What does that mean?

Eric Swartz [00:07:24]:
I think Jaclyn came up with it to describe what I call really just an interrelated thesis, like using a hedge fund and venture fund to express a thesis in a specific way across various ecosystems at the right time. Exactly when the institutional financial activity is starting to come on chain, get in front of it, build out an entire ecosystem across multiple networks for these exact types of transactional activity so that we can then really focus in and develop a front end that is, I would say Bloomberg equivalent or at least parity in terms of like features is what we're going for. It may not be exactly as good as Bloomberg because like frankly it's going to be AI generated and data driven. So. But that's how we hope to compete. We have under the hood a foundational LLM focused on finance called Reasonary and that's driving a lot of the front end development for our joint venture project, which is just kind of like a syndicated JV that serves as the aggregator that sits above deployments of rates and derivatives protocols on each of Ethereum, Canton, Solana and Sparknet.

Kyle Lawrence [00:09:09]:
That's interesting. And I understand you have some news to report that just came out today, hot off the press if I'm not mistaken.

Eric Swartz [00:09:16]:
Yes, I'm very, very excited to report the formal launch of the funds today. We here at Panther Hollow are very, very excited to have a publicly solicited private placement like what we're currently conducting for our venture fund and plan to conduct for our hedge fund in early September. So we're, we're currently marketing our venture fund and we're working through the process of coordinating efforts to really make a splashy launch of our Canton accelerator beginning in just a couple weeks. As I said, those participating will be receiving investments potentially in the form of digital asset development credits, really bringing out the full ecosystem that digital asset envisioned from day one, which was essentially that portfolio companies would utilize these credits to jump the line and get really great access to incredible Daml developers ready to kind of deliver the types of traditional finance products that we need to build and coordinate with our teams of internal technologists in connection with all of those builds.

Kyle Lawrence [00:10:53]:
What's interesting to me is the things you're talking about. It's very innovative. It's using the foundation that's been built in finance over the past several decades and just implementing new technologies into that and doing it better. You're New York based, which Moish and I are as well. And what's interesting is that most people, most operators in the space just want to leave New York as quickly as possible because New York is not always friendly to these types of projects. How do you navigate those waters? What specific New York based issues have arisen in the course of the development of Panther Hollow?

Eric Swartz [00:11:33]:
Well, the first thing I'll say is like, we're New York based. Like, like the Giants are New York based, so that's good. Bloomfield, New Jersey, pride of the Meadowlands here. Very close to the stadium actually, no, no more than like 10 minutes max. But we are in New Jersey because of exactly the reason that you stayed. Honestly, it's very hard. Like we wouldn't be able to obtain a bit license for what we're doing.

Eric Swartz [00:12:08]:
Yeah, and if New Jersey had passed that crazy law that they were considering to adopt their own bit place since we would have not been in Jersey either, to be honest.

Kyle Lawrence [00:12:20]:
You know, it's funny. And now that, now that you say that I see it, it actually says New York metropolitan area based Panther Hollow. So forgive me for not picking up on that. You know, I, I people, 

Eric Swartz [00:12:32]:
Our lawyers told us we had to do that because they were like, they, they, they, they were like. And I was like, okay, that's fine. Because like you need to have a specific, as you guys know, for investment advisory act purposes. You need a specific like jurisdiction for your investment advisor. And I'll both, me and my partner live in Bloomfield, New Jersey together and, and, and in our hacker house, which is just outside the city.

Kyle Lawrence [00:12:57]:
Awesome. I love that. I. At the risk of offending you and anybody who's listening from New Jersey, you know, people have said to me, oh, people from New Jersey say they're from New York all the time. People from New York don't say they're from New Jersey. And I don't think I could have said no fast enough. But I, I take it, I take that as I think 

Eric Swartz [00:13:14]:
that's very true. Honestly. Like, that's, that's very true you New York people. But us Jersey people do love Jersey. Like, I mean, and, and, and like I, I mean like I don't mind. Like it's, it's, it's, it's, it's got downside though. Like honestly, it does, Sure. I mean Jersey is just so, so overpopulated.

Eric Swartz [00:13:34]:
Like you don't get like a rural suburban feel in the way that you do in, in like for instance the suburbs of Philadelphia, which is where I lived most recently. Like, I love that area. It's so beautiful.

Kyle Lawrence [00:13:46]:
Underrated food city Philadelphia. I'm a big fan. And now that the trains are so much easier to get to and Fro, I'm a big proponent of that town. I like it.

Eric Swartz [00:13:55]:
Although the Phillies can, can walk through the fire too. Like if you, if you at all can work remotely. Like I worked remotely from Philly and like basically had like a New York based legal practice, New York based investment practices and like really like, like, like. But I lived out of Philly because it was just cheaper and like we could have the right cost of living and it just made sense. And then I moved back most recently. Really excited to be back home though. It's, it's exciting to launch the Hacker house and like to really like in earnest begin this journey of bringing traditional finance on chain in a way that I think delivers a product that is cost effective and doesn't require a quantitative shop acting in the best interests of LPs as fiduciaries to hire a team of six to get to a level of execution that's acceptable and that's kind of what's required. I mean like literally as a hedge fund in the space, I can tell you that's like basically what's required.

Eric Swartz [00:15:06]:
That's why we don't do it because and why we are a pod of a multi manager quantitative shop called Valmar which is an incredible platform in and of itself and it really is the way we're able to exist as a hedge fund. Because I can't hire six people before I even launch the hedge fund. Like I just can't do that. Like I, I so it's just not even even post launching the hedge fund. Like I wouldn't want to even consider doing that. Like it just doesn't make any sense at all. Like that's why on the, on the quantitative side of things like because of the immense amount of like trading infrastructure that is currently non automated you need a lot of people. Yeah.

Eric Swartz [00:15:52]:
Conduct good trading activity and like good. And act as a good fiduciary and really deliver on best execution from a quantitative analytical perspective. And we intend, I mean I'll give you a little background on why we're called Panther Hollow and why we're a quantitative kind of high frequency focused like type of shop. Like I mean I, I started my crypto journey after about eight years in private equity at Susquehanna International Group on the floor sitting five seats from Jeff Yaz who had an extreme amount of patience and for some reason interest in crypto at the time and sent us in as kind of like an expeditionary force to just do weird and creative transactional activity in this budding ecosystem of on chain finance. And it was just incredible. I mean we as a team there are heads of major market makers, myself, GPs of funds, major digital asset holding company part CEOs and like from that team that was established that, that launched back then and like in many ways I think of it as kind of like our version of the PayPal mafia. Like that team was so action packed.

Kyle Lawrence [00:17:32]:
Yeah.

Eric Swartz [00:17:33]:
And just so right in the right place at the right time. Like it was just uncanny. Like we, we got to see a level of infrastructure and institutionalization during the pre FTX crash bull market that was super unique. Like and we had a level of access that was super unique. Like we just like had obviously a giant financial institutions level of access. So we saw every deal, did every deal that made sense including suing Aptos at the time. Precede. Right.

Eric Swartz [00:18:12]:
So like really like the bottom bot. I mean like even we'd be making money probably even now, you know what I mean? And I'm sure that they sold well before now. But, but yeah like just like really incredible opportunity. You sat on the floor like I said and we did a lot of, I did the legal for their venture and liquid portfolio and eventually started doing a lot of the research for the liquid portfolio around literally like making events oriented bets with respect to the results of regulatory and legislative announcements. And we made a lot of money on those, I'll tell you that much. That was by far the most exciting thing. And I think we printed rooms full of cash using that strategy. But like it was very unique.

Eric Swartz [00:19:05]:
I mean like we, we had a uncanny, like I was just obsessed with the space and so like I would like see like, oh, this is coming. Like I would be like working out in the morning but like I'd be like watching things. And then I found for instance, like I read the Biden executive order on crypto and saw how positive it was and told them at like, I don't know, like 602 and we achieved like an 8% accretion or something like that or had the opportunity for an 8% accretion in that time window.

Kyle Lawrence [00:19:39]:
That's, I'm, I'm glad you read that. I remember when it came out I tasked all the associates in the group with reading it and none of them did except, except me. But I'm glad you did. Glad the two of us read it. Associate, he read it too, but he was in charge.

Eric Swartz [00:19:55]:
You got to read this stuff. I agree man. Like I, I mean, listen, like the reason why that team was so successful and I was their researcher is because of the amount I was willing to read. I was, I was, I was reading all day, every day, all night, every night, just like reading, reading, reading, reading. And I read really fast. So like I was an M and A attorney, you know, like I read like 300 pages documents in the morning. And then so like it was just, it's just different, you know, for someone like me after eight years of doing that and then another six years of practicing crypto. But like my practice in crypto is very unique.

Eric Swartz [00:20:33]:
Like it relates much more to the smart contract and technology elements. And that's what makes it not necessarily like the practice of law. Because I think, I think that's an interesting question that you guys kind of touched on in respect of like the, and we're actually still structuring just to make sure because my existence as a lawyer is confusing. And so we're just like, well maybe we just actually set up an engagement then and just like create like a separate line of how the liability works and have a malpractice policy and just to the extent these are considered potentially legal services, so we're just structuring for it. Like that's, I think the best answer for any regulatory problem is just like think it through from like first principles and figure out like, what, if anything, you need to do. But like the way we're thinking about the conflict of interest is pretty minimal because the ownership by the fund of the accelerator entities and we really frankly, like, I mean given the fundraising environment that currently exists, like, we want to do that for our LPs because they're putting their faith in us in this very hard time. And I think that's a real, real vote of confidence and a real, A real statement of conviction. And so in order to reward them, that's how we, for kind of the market as it currently stands, we wanted to provide that type of value.

Eric Swartz [00:22:08]:
I mean we have a similar arrangement for the administrative services business and several protocolized businesses as well around the rates and derivatives deployments into Starknet and Ethereum specifically, potentially Solana. Although, I mean it's earlier stages.

Kyle Lawrence [00:22:30]:
Yeah, that, that makes sense. Since you brought it up talking about betting on regulatory developments, I asked this of every single guest we have on the show. Kind of tricky because it's been in the news a lot lately. Clarity Act. Is it happening this year or not? What do you think?

Eric Swartz [00:22:46]:
We're much closer, but my read at least based on like, so some of my friends are top policy executives and like they are advisors to the fund. Can't say specifically who, but they're great people working within the, the, the trade associations and the, the halls of our government. And like, so we like, we love those folks. I mean we really appreciate them. We try to stay mostly just updated. Like so I would say is like, I mean, with respect to Clarity, like it's sitting right. Like it's out of, it's out of committee. But like I don't know that it's gonna get to the floor.

Eric Swartz [00:23:32]:
Even if it were to get to the floor, how popular it really would be right now is very questionable.

Kyle Lawrence [00:23:39]:
Q3 already it's. Which is. I can't. Jesus, I can't believe I said that out loud. Sorry, let me, Let me take a second. Sorry.

Moish Peltz [00:23:45]:
Oh my gosh. I didn't think about that until right now. I mean I can live updates to Kalshi odds which, which are. It says 8% before August or. Or 41 before 2027. So 41% chance this year.

Kyle Lawrence [00:24:00]:
I like fly.

Moish Peltz [00:24:00]:
I think, I think I'm. I think I'm taking no at 41.

Kyle Lawrence [00:24:03]:
Yeah, I think that's a safe bet.

Eric Swartz [00:24:05]:
I mean I was, I was like. So I was bearish on this. I don't know anymore. I'm like 50/50 on it. I would Actually say I'm like little more bullish than maybe the market because the same thing happened when the ETFs were under consideration and they did proceed like where they were like 5/50 like this. And then they ultimately did proceed and I called that one actually that was another big bet. Like frankly I think, I mean it's always here. If you're at a big prop shop, you don't know what your bets are really.

Eric Swartz [00:24:39]:
Right. Like, like, like I just know that like we had a large accretion event, there was a big opportunity.

Moish Peltz [00:24:47]:
Right. Yeah.

Eric Swartz [00:24:48]:
That we identified and made sure we, we took advantage of to the fullest extent we could.

Moish Peltz [00:24:55]:
I'm curious, I'm curious how you think about, I mean you're mentioning, you know, you're reading a 300 page deal memo before breakfast, but also now with AI, there's never been more ability to synthesize and digest massive amounts of information. And on the other hand, I just think from all if you're going to put a quadrillion dollars of value on chain, there's just so many different, there's so much different uncertainty of all these different. Whether it's swaps or events, contracts or, you know, everything has its own kind of uncertain position right now. And I'm just curious how you balance those two things of having this, this now insane ability, you know, to access information and synthesize it and to do whatever you can with you know, obviously only limited time to actually make those decisions and then balancing that against this huge regulatory uncertainty. And you know, where we obviously we have agency and now we're part of building out these legal solutions. But, but how do you think about balancing those two things?

Eric Swartz [00:26:01]:
I mean what's interesting about what we do is that there is regulatory clarity. Like we know how to deliver traditional finance products. The only change is the mechanism by which we're delivering them. So like in many ways we're actually very well, we're well suited to take advantage of this current opportunity because we actually do have Clarity from the SEC in that they have said, hey, you're security, then you're a security, then you're a security. And we know a lot of the assets we trade are securities. So we are in that security box. So we have to comply with applicable law and we intend to in various ways, including obtaining the regulatory licensure for the protocols to deliver these services as brokers and then also having in place those licenses and the related oversight that you need for that to over to essentially monitor the ecosystem in the same way that in a centralized manner, folks would be in those positions.

Kyle Lawrence [00:27:14]:
If we can pivot a little bit to AI, which I know Moish is chomping at the bit to, to ask about. You've talked a lot about and I believe you were quoted in the Street. You know, Panther Hollow consistently pairs crypto and, and AI in its. In its marketing language. You know, founders building the institutional layer of crypto and AI.

Kyle Lawrence [00:27:34]:
It's kind of all over your site. Explain to me what or how Panther Hollow is utilizing AI because you know, when we talk a lot about we're just a traditional old shop that's just kind of, you know, doing things slightly differently. To me, this is the sort of exponential leap into the future that funds of all types are utilizing. So how are you guys using i? What's the sort of next six months look like for you guys in on this front?

Eric Swartz [00:27:59]:
Yeah, I mean what we're building is like the actual funds of Panther Hollow are very traditional publicly solicited private placement funds. So the funds themselves are not super interesting or tokenized or anything like that. But the way our products work, like the real underlying products, like the protocolized businesses into which we invest and accelerate and in some cases control invest, essentially just deliver the same equivalent product that is existing under the terms of the applicable templatized documentation and in compliance with applicable law. So I mean the main things being right, like it can't be a bear asset and the way we usually deal with that problem is to have soul bound tokens. But you can also have the infrastructure like what Canton has. But however you want to most simply deliver that mechanism in case folks aren't aware of what a soul bound token is, it's a token that's bound to a wallet in a way that it cannot be transferred outside of that wallet. And so it's essentially personal to you. And it's a way to produce an evidence of confirmed KYC on chain that can then be used as an input and whitelist feature in a smart contract ecosystem for these products.

Eric Swartz [00:29:42]:
So you won't be able, it is permissioned in that way. Like you won't be able to access this unless you're in compliance with applicable regulatory requirements. So you're conduct, you're going to be complete like kind of like full fund admin KYC type experience is basically what. It's very white glove because our clients are major financial institutions. So it's all like banks. And that's kind of very consistent with what they're used to. And so that's the mechanism by which we mostly have to work with them.

Moish Peltz [00:30:20]:
And so there's a lot of excitement about Canton. Maybe you can speak a little bit about why you're.

Eric Swartz [00:30:26]:
I wanted to get to the AI element of it though.

Kyle Lawrence [00:30:29]:
Yeah.

Eric Swartz [00:30:30]:
So like, the way the AI element is, is usually expressed in our investment activity, at least currently in our current investment program is we, we, we have used AI to deliver a trading terminal like experience. So it's just much better at data synthesis and it's much better at signal production and it's much better at sort of creating a front end that's very attractive from a UX perspective and, and, and, and delightful from like a kind of like marketing imaging perspective. So because they're able to do that so effectively and, and, and we're able to produce a product like that, I think that's how we plan to really try to compete with the likes of like, I think New York Stock Exchange, CME and Bloomberg all wrapped it up into one is kind of what we hope to deliver.

Moish Peltz [00:31:33]:
No, I, it's, it's super exciting because I was just reading an article, right, about how you were talking before about how it's really hard to, when you're, when you're, you know, building a fund to have those resources and all the different, you know, roles, you know, obvious, you know, six or 10 or 100 people that could fill each of these typical roles. I think it was the Wall Street Journal, I forget where I was reading it, just had an article about how there are now this great diversity now of new funds that can start up because they don't need to have all those differentiated roles to compete with some of these larger shops because of the benefits that AI is now bringing to the table. And so something that Kyle and I see now in the way that we do our legal work is, okay, we have access to AI tools that make our work product faster, higher quality, more efficient. And so I could just imagine on the fun side, you have access to tools that are now allowing you to really amplify and multiply your output and the ability for you to create amazing products, amazing user experiences, but also to digest information and synthesize and make strategic decisions. So I just think for every industry, like, it sounds like you're doing the right thing. It's like leveraging the technology, you know, it's changing every day. And I was like, refreshing earlier, like, all right, when is Fable going to be back online so we can keep playing with it? It's just really exciting. And so I think I think when you talk to people like you.

Moish Peltz [00:33:06]:
So I'm curious, you know what, what you see as that opportunity and how AI might be able to enable more upstart enterprises to compete with either larger or more established or less nimble businesses.

Eric Swartz [00:33:27]:
So I was having a conversation on X about exactly this very recently. Essentially a lot of software as a service businesses are sleepy and feature set and sleepy in delivering a product that their customers really like. And a great example of that is the company Figma. I don't know if you guys have ever heard Figma.

Moish Peltz [00:33:53]:
Yeah, I've been on a Figjammer too.

Eric Swartz [00:33:55]:
Yeah but like there's, and so we were chatting about it because Gamma, which is like a Figma like competitor and an upstart potential kind of disruptor of that market is, is incredible. Like it's like way better than Figma. Like I hate Figma. I wouldn't even open Figma. Like I like and I am like a very technologically savvy person but I just thought Figma was like a waste of my time. Like only engineers really want to use Figma. But like what's great about Gamma is like you don't have to be an engineer at all. Like you can just use Gamma like it's, it's a useful tool.

Moish Peltz [00:34:36]:
Your agent can use Gamma

Eric Swartz [00:34:39]:
Director agent to use Gamma. I mean like literally like for deck production, many, many tasks, website production like like and, and, and these, these tasks can be completed by any AI too. Like because if you're on a budget like sometimes you don't have the money for like this specialized AI for every single thing. I mean we here definitely do specialize our AI and, and, and, and do a lot of research to do that. Like I'm not, I'm not gonna pretend we don't and I think anyone who doesn't do that, I just highly suggest trying that. It's a very useful exercise. But we also just like use what we got sometimes. Like we, sometimes we, we can't use the highest thing for whatever time period or like, I mean we're, we're on a budget.

Eric Swartz [00:35:24]:
Like here at Panther Hollow we started with a Telegram account and literally a Google Meet account. A Google account, like you know what I mean? Like a Google workspace. Like that was it. We didn't even have a website. I mean we had like my LinkedIn post of what Panther Hollow was for a long time. That was it for like the first two years I think. And I took that down pretty quickly because I, I started marketing myself as an attorney again after we had that first successful accelerator because it takes a while for these things to come to market. Right? Like you need to come to fruition.

Eric Swartz [00:35:57]:
And I didn't, I didn't yet have the ability to market. My track record, which is essentially that other than kind of the research activity for the liquid desk that I told you guys about, that's more relevant for the hedge fund. Of course the venture side, we took that a zero cost basis investment. So like providing legal services like you guys do. We invested that in a manner very similar to a lot of the attorneys that did the tech kind of like bubble back when in the kind of like the dot com bubble. So we were just trying to take a lot of interesting opportunities and we got one particular opportunity called Water Cooler Studios Inc. Which was an incubated project that we had about three years ago. We accelerated them.

Eric Swartz [00:36:58]:
They would go on to receive investment from Fidelity and Brevin Howard and launch a liquid staking protocol on Monad called Kinsu and a lending and securities lending and protocol on Canton Network called Cenote. Probably one of the hottest financings in crypto in quite some time. I ran it like a private equity auction and it was incredible. I mean, I think the participation level is quite exciting. We had 30 participants. Like eight, nine leads. Like it was like a real true auction.

Eric Swartz [00:37:40]:
It was really nice to see the space come to a place where you could actually do something like that. I mean, honestly, like I don't think we could have back when I was sitting on the floor at sea. So we've really come a long way.

Kyle Lawrence [00:37:54]:
You know, we're talking about new developments and new ways of doing things. And when Moish, you were talking about AI before, my mind just wandered back to the salad eating halcyon days of going to the printer. And I know I'm dating myself by saying that. And while yes, it's cool, we could be more efficient and we could do things so fast, but there's something magical about going and sitting in the printer's office for five days while you work on an S1 and try and get the paper to sleep slotted in the right spot. I do miss that.

Moish Peltz [00:38:21]:
Oh my gosh.

Eric Swartz [00:38:22]:
I get that. I get that. I mean like I, I miss. Thank you. Like the, the. I miss holding a merger agreement in my hands sometimes. But I left that world behind me when I, when I came into this one. I'm like digital now, man.

Eric Swartz [00:38:40]:
Yeah. Did I tell you this? I'm, I'm, I'm. I'm straight up track changes only.

Kyle Lawrence [00:38:49]:
Nice.

Eric Swartz [00:38:49]:
I, I went over, I, I, I cut over about five, six years ago when I switched into crypto. I started, I was like, it just was too much paper. Like being a venture lawyer is different than being an M & A attorney, right? Like you only have like what, like, like three, four documents you're really working on as an M A attorney at any given time. As a venture attorney I'm working on like 700. So like, you know what I mean?

Kyle Lawrence [00:39:13]:
Like I, I, I reckon I recognize the practical or the impracticalities of going to the printer but, but doggone it. I just miss those folks.

Eric Swartz [00:39:23]:
They don't exist. I mean listen, we're just, we were, we were. I had that fancy part of my career in my three piece suit days, you know, like I loved it so don't get me wrong, I'm like I'm so that person, I'm easily corruptible. But like I, and I loved private equity and I still have very close friends in the space and growth equity and honestly they're getting very interested in the space, they're coming to our events, talking to me about it like either in LinkedIn or like in various ways. So like to be honest like it's just vibrance. That's what I would describe it like especially around the Canton ecosystem specifically. I mean Canton has really just come in and disrupted traditional finance, right? Like in the way that crypto always had potential for but never would deliver on because they didn't have traditional finance market experts at the helm. You know, like actually evaluating the underlying infrastructure from a regulatory mechanical perspective and then also from like just generally from like a high frequency trading perspective.

Eric Swartz [00:40:39]:
Like there's just so many things that a company like digital asset can do that are way, way preferential. And then from a business development perspective it's just unique as well right? Because DRW's connections to the, the greater financial world including Goldman Sachs who leads every financing round of digital asset. So I mean it's just an incredible ecosystem. We as an accelerator within the ecosystem feel really, really honored and are very, very proud to be a part of what DRRW and incubated and digital asset and what digital asset put out into the world in the form of the Canton network work and is now led by our close friends at the Canton Foundation. So we, we love the team led by Yuval Ruse, a close personal friend and mentor and, and someone who, whose opinion we really value frankly as we, we try and build these traditional finance products because the first layer of infrastructure that they've built is so thoughtful that it's just a good jump point from a mechanism perspective of getting up to date so that you can then build out these smart contract ecosystems that I'm describing, which in many ways are honestly simpler on Canton because of the bilateral nature of how the network's consensus mechanism works. It's just bilateral contracts in the same way any order book runs. So it's really, really much more just exactly what already exists, which is of course, I'll tell you, being one of the business developers who talks to traditional finance folks that are considering market adoption of crypto. And what they're looking for is true parity between their existing businesses and what would be an on chain RWA version.

Eric Swartz [00:42:43]:
So if you're, if you promise and deliver that, that's all they're looking for. It's funny, it's like they're not looking for some special mousetrap. I think a lot of people like get confused like no, that's in fact, that's the exact wrong way to approach this. They want you to faithfully and like very, very, very, very accurately reflect every underlying rule from these very well developed templatized documents. And that's really the expectation. And so I mean, obviously a lot being governed by the documents themselves, but the automation part being the opportunity to really bring about the margin increases for banks that bring them on chain because there's pressure as to these products. So that's why you go after the repos and the SEC lending first, because those products have really low yields, right? And that means they have really low returns because you can get really significant yields higher than those in other markets in other ways. So I think with that in mind, like when you're going after a pro, like a product to bring on chain, what you need to really, really keep in mind and think through carefully is why would someone want to bring this on chain? What's, what's the purpose? Like why is that? It can't be just because it's like magical and like all of a sudden there's a magic internet version of the money.

Eric Swartz [00:44:25]:
And that's what I would call like of, or your LP interest or whatever you want to call it, like, like, like whatever asset we're talking about. I mean that's, that's basically your securitizes, your, your existing kind of your, your and I think to a lesser extent, but a similar extent, like, like some of the, the institutions in the existing institutions in the space, like wanting RWAs to trade on crypto Rails is just very unrealistic. It's just obvious non compliance in my view.

Kyle Lawrence [00:44:59]:
Exactly. I completely agree. It's almost as if you reached into my soul and are seeing the world through my eyes. Because that's the question I ask every one of these people who says I want to do a tokenized offering. And I say, cool, why? And they're like, oh, because I read about it in, in, you know, on WSJ.com and I don't know what it means. It's like, if you don't know what

Eric Swartz [00:45:17]:
it means, then why not the offering for you?

Kyle Lawrence [00:45:21]:
Probably not.

Eric Swartz [00:45:22]:
And frankly, like tokens and governance tokens for Dapps, it's like not super clear to me that they'll exist on Canton. Yeah, like, I could see it just being equity tokens. Like, there's definitely a world where that's the case.

Moish Peltz [00:45:36]:
That's what people want. Right. They just want real exposure to the value that's created on that chain.

Eric Swartz [00:45:43]:
So give that to them in a very traditional manner. And that ecosystem gated. Right. So like, it's like, like it does all people who can receive that product. Right. So it's not like a retail ecosystem where you, you don't have the dollar thresholds met. They all would be able to. So it just makes sense to deliver it in a format that folks are most comfortable and that there is the most regulatory certainty about.

Eric Swartz [00:46:08]:
Because even like, like, I mean, what I would say for folks is like, remember that even after clarity, after all the rules, after everything is just like sewn up. No one's been practicing that for a long time. And honestly, I don't even know how they wrote all this. Like, to be honest, like, I, I mean, I know and I, I am not at all against us adopting it. Whatever it is, I'm sure we can fix it. But like, like, I don't have a lot of faith in the fact that we've gotten it right yet.

Kyle Lawrence [00:46:40]:
You don't think the US government is going to release a panacea for everything that's wrong in finance crypto? The hell you say?

Eric Swartz [00:46:49]:
I mean, honestly, like, no, that would be my answer. I think that, I think, I, I think like, there will be like a little more certainty around how markets may work going forward. But like, I don't know what that'll mean other than that you'll have a bunch of people spending a lot of money to figure out the real way to do everything within.

Kyle Lawrence [00:47:15]:
I agree.

Eric Swartz [00:47:16]:
Like, there's a process of creating the rules and then there's a process of figuring out how to comply with the rules. And, like, that's what won't have happened. And then, like, when there are fights, like, dealing with the fights, and that's what won't have happened. And like, honestly, I think you need that to happen for like 10, 10 years, really, before you really know anything.

Kyle Lawrence [00:47:35]:
It's true. I mean, that's a great succinct description of an argument that I've had for decades of people. And this is not a political thing. It's like, well, this statute passed, therefore everything is fixed. Or this statute is wrong, or got passed and nothing got fixed. And I was like, well, it literally just got passed yesterday. It hasn't even gone to an effect yet, let alone have there been any results of it, let alone enough results for us to study and determine what

Eric Swartz [00:47:59]:
was wrong, right and wrong.

Kyle Lawrence [00:48:00]:
And that just gets lost these days with the, you know, instantaneous nature of how we get our information and the instant gratitude that seemingly everyone on the planet needs every time they do anything. It's. It's a hard needle to thread.

Eric Swartz [00:48:13]:
I mean, honestly, like, I have this argument with Kyle Samani on X all the time. I'm just like, why are you trying to be a lawyer under the Clarity Act already?

Eric Swartz [00:48:23]:
Right. I don't even. Like, the iteration that we're talking about today is like, I, I've seen like 70 versions of that. Like, I, I at this point. Like, I. From the ver. Earliest versions that Lum has put out. So, like, what is the point of all this? Like, I need to, like, have a final situation before I feel like even that it's relevant to discuss anymore.

Eric Swartz [00:48:45]:
Like, we're at the point where we're like, maybe gonna get something like that. And so, like, why even. Like, like, let's get something adopted and then we can look at it and talk about what maybe the rules should be. And then once the rules are adopted, then we can start thinking about what the analysis is. Analyses may.

Kyle Lawrence [00:49:00]:
Should.

Kyle Lawrence [00:49:01]:
Exactly.

Eric Swartz [00:49:02]:
I just, like, I have to take, like, a more, like, practical approach than these people. Like, I just, I'm not a believer in, like, first of all, I don't think this iteration of the bill will pass. I think a much more liberal version of it will. I frankly, like, I. That's. That's a huge belief of mine.

Eric Swartz [00:49:19]:
Like, I don't. I actually think that this bill is. Is far more friendly than what we'll ultimately get. But it's great starting place. It's like a starting position.

Kyle Lawrence [00:49:28]:
You know, the journey of a thousand miles does indeed start with a single step. And here we are. We are butting up against time, Eric. But before we let you go, any final thoughts? Anything you want to share with our listeners and viewers out there in the. In the metaverse, such as it is?

Eric Swartz [00:49:44]:
Yeah, no, absolutely. I mean, the one thing I would love to share is just like, if you're a builder out there, build on Canton with us. Apply today. We want to see traditional finance come on chain and we want to create the confluence with DeFi. So whether you're building in DeFi or you're building traditional finance on chain or RWAs in their parlance, we're here to accelerate your growth and help you launch on Canton as soon as possible. So we're going to be launching again in August and we just really want to have that first class be one of the best accelerator classes of all time. And I think to crypto's credit, I mean, Coinbase being evidence of YC's greatest accomplishment in many ways, we think we now may pick up that torch and we are really excited about the opportunity to try and do so well.

Kyle Lawrence [00:50:50]:
Great.

Kyle Lawrence [00:50:50]:
Super exciting. Yeah, I can't wait to see you guys launch and the things you build and the cohort that you, you put together. So looking forward to seeing your success.

Eric Swartz [00:50:59]:
I appreciate you gentlemen and, and thank you so much for the kind words and thank you so much for having me on.

Kyle Lawrence [00:51:05]:
Thank you for coming on and we hope to see you again and we look forward to seeing all the cool things and innovative things the Panther Hollow Ventures will be releasing tomorrow and beyond. So, Eric Swartz, founding general partner in GC at Panther Hollow, thank you so much for coming by.