The World of Stablecoins With Kast & JaffCap's Raagulan Pathy | Blockcast 33

This episode of Blockcast dives into the world of stablecoins with stablecoin guru Raagulan Pathy, the former Asia Pacific lead for Circle. We'll explore his journey from traditional tech to crypto, including his role as CIO of JaffCap, a crypto investment fund. We'll unpack the current state of stablecoins, including the competition between USDC and USDT, and Tether's dominance. Raagulan will also introduce Kast, his stablecoin spending card aiming to revolutionize user experience. We'll hear about Kast's vision as a neobank and its potential impact on mainstream crypto adoption, and also Raagulan's insights on future trends in crypto investments and how JaffCap evaluates new projects.
*This episode is recorded on 5th July, and any content is not financial advise.

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Transcript

SPEAKER_01: 0:00

Hey there, Crypto Curious gang. It's time to plug in and play with the Blockheads at BlockCast. Strap in for a weekly whirlwind tour through the blockchain jungle, where NFTs, shiny coins, and crypto titans tango. Serve that with a side of spicy insights and the crunchiest bits of the digital sphere. Let's dive into the decentralized deep end. BlockCast is live in three, two, one.

SPEAKER_00: 0:35

Hello, everyone. Welcome back to another episode of BlockCast. It's Tim Han here, the GM at Blockhead, together with Mark, Blockhead's founder. Today, we welcome a very special guest, Ragulan Pathi. He was previously the vice president of APAC at Circle, where he was responsible for go-to-market strategies, operations, and representing and building Circle's presence in the region. Prior to that, he was the head of enterprise for APAC at Zoom, and he brings decades of business leadership experience within technology and financial services. He also held senior roles at Facebook, AWS and was previously a co-founder of a cloud software company. Rex, thanks for coming. Thank you. Thank you for having me. It's a pleasure to be here. We're here today to, I guess, you know, talk a little bit about, you know, what you're going to be up to after leaving Circle. Maybe you could share with us a little bit about what's going on with you these days.

SPEAKER_02: 1:21

I guess, you know, maybe before we get into that also, because I mean, obviously we've done some, I mean, I'm in some of the same crypto chats that you're in and at the same time I see you on LinkedIn as well.

SPEAKER_04: 1:30

Yeah.

SPEAKER_02: 1:31

Your career path has taken you in a number of directions and it's kind of led up to this point. So I'm quite curious as to how did you really get into crypto at that?

SPEAKER_03: 1:39

I think the thing for me with crypto is that ultimately it's a technology layer on finance and I've been in in tech for a long time and a lot of my tech career has been working for finance companies I'm just personally very curious on on finance have been my whole life so that eventually leads to crypto if you if you like tech and you like finance and I've been curious of crypto and I've been playing with it for maybe seven years or so but formerly working in it for three years but to me it's just an evolution of emerging emerging technologies previously I've worked on you know remote work and video conferencing and I've looked on like how do you close the gap between employees with tools like Facebook workplace before that it was cloud and cloud software and before that it was infrastructure so this is just the latest iteration except the only differences which I tell people now is that I think I'm done for life I think I'm so deep down the crypto rabbit hole there's no way to dig out of this I think I'm just going to be stuck doing this for like

SPEAKER_02: 2:38

no I mean I love I love the conviction, man. I mean, when you know and you have the conviction, it's great. So what's been up, man, since you left Circle?

SPEAKER_03: 2:44

Well, I tried to like chill and that didn't really work. Although I did have a couple of nice holidays. The thing is, is that there's a lot of noise in crypto. I also invest in crypto as well. I've got a small fund, got a few investors and, you know, a lot of my own money as well. So I broadly love crypto and I love all the themes in it. But the one thing that I was stuck with was that stable coins just have like ridiculous product market fit within crypto. And there's just so much more upside for stablecoins. Like the current market cap of stablecoins is like 150, 160 billion combined. And the US dollar is like 100 times that. There is just so much more to do. What I came to realize working with, you know, a couple of friends I knew were sort of building and sort of thought, okay, let's go into building with them, is that the actual user experience of crypto in general is not great. But some Sometimes, you know, crypto people are like, you know, the user experience is bad and that's a feature, not a flaw. But the friction is intended, you know, because if you know, you know, and then you're going to get in early and you're going to get the price action. But I do think that, you know, we're now sort of 15 years in Bitcoin, 10 years in crypto. It's at that point where it's got to scale to that billion people got to become useful. I do think there's been a lot of stuff that's happened, including like chains have become really low cost and super fast. I think like there is a product market fit for stable coins. And there's also this evolution that's happening in finance where people are opening up the doors to on and off ramp and bridge crypto and the real world. And so I was just thinking like, what would be the most useful thing that a billion people could use? You know, a very big picture. To me, stable coins have a poor user experience. Stable coins themselves are magical, right? Putting US dollars on the internet you can send them to everywhere but they still have a ton of problems right like there's too many chains there's multiple stable coins you got to do bridging and swapping and the on and off ramp is hard so there's all these problems there but if you could make the experience like super simple which is what we're trying to do with cast we're highly focused on the user experience where you can use your stables to spend it you can send it to a normal bank account you can be a remote worker and get paid in a bank account in Europe or US or anywhere and it can land in your account as stable coins and then you can spend it on a credit card or you can send it to another bank account. That would be great because I'm taking a step back from a macro point of view. I just think about what's happened from a macro level. So you had COVID, that sort of surge remote work and with that remote work came Zoom and then there's remote working companies and now anyone building a company today is probably building a company building remote first anyway but the banking and financial services of that hasn't kept up right and actually you've got probably 70 plus countries with remote working visas today right but so you imagine you're a remote worker and you want to go and work somewhere one of these 70 countries you get your visa you land there you can't get banking right so this is what we're trying to solve for it's like if you're building like a Revolut wise today and you want to make it completely borderless and I was really open to anyone how would you do that and make that experience really good. And that's what we're trying to do at Cast. And that's our mission, make that user experience really seamless and smooth with the underlying layer of Stablecoin. Can you tell us more about what Cast is? Whether you're in crypto or whether you already have Stablecoins or whether you are new to Stablecoins, like you want to get paid in a bank account, arrives at Stablecoins or you're getting paid in Stablecoins. That's a hundred million plus user market already, and that will grow to a billion people. But people currently have to either use an exchange, which is a poor user experience because it's like so much going on in every exchange app, or you've got to use probably a non-custodial wallet of sorts, which is also sometimes not a great user experience. We just want to make it really simple. It's like you sign up, Like you sign up to any app, you get your accounts there, which are like a cash account, savings account, hopefully soon. And you can press receive and you can receive stable coins or you can receive money via a link to a bank account somewhere, 100 plus countries. And that lands are stables and you can send it out that way as well. And you get a credit card, right? It's a super simple, nothing like work, you know, complex. For the user. For the user, right? For us, it's fucking complex. Excuse my French. Because we have to deal with all the treasury management and all the different chains and all the different products and tying it all together and the regulatory and the legal and app stores and all the hard work. So our view is like... deal with all the hardest things in the world, do the hard stuff. So the user has a really simple experience. And I think if we can focus really hard on perfecting this, which is what I'm really passionate about, we can grow so crazy because everyone will just tell everyone like, forget everything else you're doing. Just sign up for the thing. It's so simple. Yeah. Simple is hard.

SPEAKER_02: 8:01

Simple is hard. Great. I mean, I actually agree with a lot of that you said, right? Like in terms of how the user experience isn't great. I think it's a huge theme and a problem that you guys are trying to tackle. And at least within the theme, I think the opportunity is almost self-evident. Wise was actually really one of the references that I immediately thought of when I took a look at Cast, right? But I think the question that we have is like, why hasn't this happened already, right? I think behind the scenes, you have like obviously a great front end, but I think that there's a lot more that goes behind that, right? Like you need the different remittance partners. And I would say like, I don't know a lot about the payments industry, but I think maybe you could elaborate a bit more about, you know, just some of the, I guess, the pieces that need to fall in place for this too.

SPEAKER_03: 8:36

Yeah, I mean, like, look, finance is an incredibly nuanced industry, which I found out payments, especially there's a combination of regulation and interpretation of regulation and implementation in each country is different. Finance is built with borders. It's not remotely borderless. So what's happened is that stablecoins, once you're in them, borderless, you can send it on. chain to anyone yeah still some problems with like swapping chains and things like that but okay like leaving that aside but what's happened recently i think is that a lot of fintechs have started using stable coins for their own movement of money they're also enabling settlement so that's one major thing the second thing you have is that governments getting more regulated and banks sort of cooperating a little bit more so that also increases options if they're on and off ramp you've got these are master cards sort of playing their part in terms of trying to enable more. And so you got to think of this as like, a wall that slowly gets broken down. And it's not like immediate, like everything that I want to build with cast and we want to build is not available today, but we can see enough that it's going to break down. And then three to five years, we'll have perfect product, right? Which would be like, Hey, like I can get paid cash anywhere. And it appears a stable coins. I can send it anywhere. I've got a cash account or check account as they call it in the U S and a savings account that pays me my, whatever the interest rate is, say 5%. Maybe I can invest in stocks on chain like the whole the whole piece should be basically on chain

SPEAKER_00: 10:10

right yeah i think this idea of using crypto assets as the underlying for you know cross-border i guess settlement remittances and all that not new in the past i think the off-ramps i guess were less formalized than what it would be today right for example like a bank or payment partner i think yeah the time seems to be right timing seems to be right for this to really take off

SPEAKER_03: 10:30

well that's what we hope so but also the thing is that in undertaking this as well because of the nuances your You also need a team that understands, firstly, the right partners to engage, the regulatory framework, and how would you go and set this up. There's still a lot of like, it's not like, a pure to try to achieve this it's not like a pure crypto non-custodial completely decentralized view you actually have to take something in the middle but to be honest with you stable coins are in the middle anyway right because they're not really decentralized and and completely and and frankly in crypto most trading happens through centralized exchanges

SPEAKER_00: 11:10

and they're not decentralized either so yeah i think that's very interesting what you say right like decentralization is a spectrum right i think a lot of us when we first hear about blockchain technology or cryptocurrency, at least for me, you know, you start off at the super libertarian end, right? Like, oh yeah, decentralize everything. Governments suck, you know, everything sucks, right? I just want to be responsible for everything. And then you think about like what happens in real life and your view, I guess, starts to moderate, right? You know, there is a financial system that has been in place for, you know, many years that arguably works, I think, fairly well, clunky, but, you know, it serves its purpose. And, you know, the regulations that have come up, I guess, important in a sense to help us do the right thing

SPEAKER_03: 11:48

look the way that you can view cryptos you need the radical view because if you don't have the radical view the mean will never move right like you think banks are gonna or like financial services are gonna willingly change like they've got no motive to like they've got huge profits they got incumbent user bases and so you need that leftist student view that people have in universities when they rally and they protest and things like that so that you can push people away from that mean where they're stuck today, right? But I think we've been doing a pretty good job of it. And look, I'm a deep crypto guy myself. So I have those libertarian views and I hope that we stay with that because that's what keeps pushing, you know, things forward. The crazy people at the front. What we're trying to build a cast is like take advantage of that, but put it somewhere just slightly behind that so that user experience is unlocked for like a billion people.

SPEAKER_02: 12:40

I guess maybe we kind of like backtrack a little bit, talk about, I mean, it might be kind of boring, but I mean, you know, on the regulatory part of things, right? It's one question on that. how does this work in terms of like do you guys need to get a license or is it like you know your banking partners or your remittance partners are the ones that have that license and then you just direct the traffic to

SPEAKER_03: 12:56

them it's a it's a mix of both um it's a mix of both us having licenses and look this is a complex question because it depends on who the user is and which location they're in and you know where they sign up through so it's a complicated answer but one of the things we do find is that one of the things is cast is we don't hold any cash ourselves so we are an on-chain product and that's an important distinction because as soon as you start dealing with cash and we have some of these licenses but the way you operate is different You have to operate much more like a bank and that gives us slightly more flexibility that's kind of closer to crypto. But to do the on and off ramp, you still, you know, to enable it, we rely on partners and we try to like abstract that so that user experience is really simple, but we rely on partners and they're doing a lot of the hard work. And one of the things that I learned working at Circle is that it's really hard to be specialized in all regions, right? So crypto is very decentralized very global and we can you can do that but when you go to each country each country will have their local fintech their local partner who are managing the nuances of license and regulatory and on and off ramp for that country so we're trying to build a network of all of these partners slowly and over time so the user doesn't sit and to be honest with you this is wise and relevant many others do today anyway so you use the product you don't realize that actually they're using a secondary party sometimes they're direct but a lot of times they're using a secondary party to settle and do all of that anyway. And you just need to share the spread with them like that. That's how it works. Yeah, exactly. I mean, we just, we don't need to make all the margin. We focus on the user experience and we think there's enough margin to build a profitable business. I think the main thing is just the user experience.

SPEAKER_02: 14:45

So question about user experience. There are some, I would say like remittance options out there, but the frustration that I've frequently has come across is really like the transfer limits and also the kind of currencies, right, available. So do you have any kind of like just broad ideas on like, you know, in terms of transfer limits, for example, because I mean like Like that will also expand the use cases between freelancers in the gig economy versus, you know, potentially a web-free company, you know, like kind of remitting money that way.

SPEAKER_03: 15:07

Yeah, so there's a lot of partners we're looking at who are focused on like dealing with lots of currencies, 50 or 100 currencies or 50 or 100 countries at least. We're for the moment highly focused on being a US dollar product, right? And we may add euros as well. Major reason is that 60% of global trade happens in US dollars and something like 99.5% of all stable coins in the world are US dollars. I have a couple of friends who are like, oh, it's going to change. I'm like, it's not going to change anytime soon. And there's when people pay each other for work and mostly doing in US dollars. What we need is partners so that when you have your US dollar stable coins, you can turn it into that local currency as you need. And there's specialist partners doing that. And we hope to sign them up so that they can do that sort of last mile sort of work. But we think the use case for the customer base that wants this, which are globally mobile, they are going to be mostly US dollar for now. Over time, it will change, right? In a few years, we might have five or 10 different currencies, you know? Yeah, and look, there's benefits and good and bad for each, like crypto and stable coins give you some more flexibility, like things like user limits and other things, right? 100%, yeah, I agree. Which is why people will come here. And so each person will have to have a trade-off and often they may have multiple products, right? They may have a remittance product like Wise and then they may have may also have

SPEAKER_02: 16:30

this, you know, and that's fine. Frankly, I see this product as, I mean, this is my semi-uninformed perspective. In a way, you're kind of disrupting almost like, you know, the smaller local exchanges in a sense because, I mean, you think about where we do most of our trading, right? Like, for me, it's really on the bigger exchanges. Then, when I do have an account with, say, the more localized exchanges, it's really because I want to off-ramp. Like, there's a direct kind of line to the bank, at least previously.

SPEAKER_03: 16:52

Yeah, yes and no, but we also expect to work with a lot of these local exchanges and have them as like an invisible partner so they can do the on and off-ramp as well right okay okay but i'll tell you what we're doing which is different which is what i get asked like how is this different to an exchange see the thing is is that we don't plan we are consciously making a decision that you can't buy crypto on our platform what i mean is that it's like non-stable coins right because that keeps us our risk level down and keeps us very utility focused as opposed to others who start and then they get tempted into like hey what if i can make these great margins by creating crypto swaps which is a trap that everyone falls into understandably because the margins are so good. But we think that just by creating this very pure product of like you bring your US dollar stable coins on and you can do on and off ramp and that's pretty much all we do. We think there's 100 million people that could use that in the short term, short to medium term, right? Also, frankly, if you want an exchange, like there's so many good ones out there and you see you're not going to win that game, you know? It also means that we can partner with a lot more people and they don't see it as like, threatening in any way because it's like we're not going to like partner with someone to help their customers you know and then suddenly we're going to sell them crypto

SPEAKER_02: 18:07

so there will be a clear conflict

SPEAKER_03: 18:09

yeah

SPEAKER_02: 18:10

right so we

SPEAKER_03: 18:10

avoid that as well right

SPEAKER_02: 18:12

did you like i mean just potentially how much money like you know could you could you actually transfer and this is would there be caps like kind of like

SPEAKER_03: 18:18

once again that question depends on your residency and if there's any yeah limitations so the more that you you try to transfer it it's a slightly complex question because it's related to your residency, the regulators, etc. But yeah, you could transfer very large amounts, but as the amounts go up, you have to do more KYC and more proof of wealth and things like that. But I still think that on stablecoins, you will have a much easier process compared to a bank. We also have in our roadmap a non-custodial version, which will come. When the non-custodial version comes, then arguably we would have less limitations because, you know, you're self-custodying. Now I get asked, why didn't you just build non-custodial from the beginning? Which is probably your next question. And so let me answer that really quickly. So non-custodial is a shit user experience, right? Just being really forthright. And so I think in crypto, we have this like temptation to go and build what's crypto cool, but it doesn't scale into like lots of users necessarily so we're taking this view of like let's just focus on the user experience like let's get this user experience really right how would a user want to do it what would they want to do they want to get paid in a bank account and lands the stables they would want to bring any stable coin on that's legit let's say like usdc usdt and take it out on a different chain without having to do bridging and swapping so all these things we're trying to solve for sign up is super quick i've got the team working on it now i've asked them the moment that you download to like getting money on getting a card is about five minutes and getting money on say six or seven minutes i've got a mission to do it in three right you can do sign up the card in three minutes but the whole process on any chain and making that super smooth we're like relentlessly going to focus on this user experience once we've got that right in six months or 12 months time then build the non-custodial version of that user experience and there will be people who prefer non-custodial for a bunch of reasons but we've rather give them that option with the same user experience that we've built.

SPEAKER_02: 20:32

I think that's smart. Yeah, I guess, you know, one of the questions we had here was, you know, just the number of options available. And I guess based on your time in Circle and now what you're doing, right, maybe you could weigh in a bit on the USDC versus USDT competition.

SPEAKER_03: 20:48

So if you take some time back two, three years ago, there was three players, really. It was actually USDT, USDC, and BUSD. And it was roughly 60-something billion for USDT, 40-something for USDC. Actually, USDC was above 50 at one stage. Pretty close. BS3 is nearly 20, right? Over time, Circle had a bit of bad luck with what happened to SVB and that created a bit of a decline, which has been stopped and then started going back up again, which is good. And at the same time, USDT has continued to grow. To answer this question, actually, I'm going to try to give you the quick version of this because I could be here for, we could do a whole podcast on this. Most people don't understand that US dollars themselves work in actual actually two networks. One is US dollars onshore, which is, you know, you bank with one of the 24 primary brokers who print treasuries and, you know, people like JPM and Wells Fargo, et cetera. And then you've got the Euro dollar market, which is basically US dollars outside of the US. This was set up in like the 1950s. And basically what happened was that it was established because people were scared that they'll get their US dollars seized. right so circle so usdc is a us dollar onshore product it's a product that ultimately the reserves are held onshore in the us you know with blackrock as well as key banks including b and y mail and this is all public right and then you've got the euro dollar market which since the 1950s was set up so that people could ultimately the dollars go back to to the fed But imagine like you're a bank and you don't want a direct link. And so you have an intermediary offshore, which happened out of London and Hong Kong primarily, and maybe a little bit of Paris as well. And so there's all these dollars that are circulating outside of the US, which are held basically on a database that doesn't, go back to the US. It still kind of does through correspondent banking, et cetera. And so Tether is essentially the on-chain version of the Euro dollar market. And that's the distinction. Okay. Okay. That is a great analogy. But anyway, go on. So now the question is like, why is one doing better than the other, right? So I wrote a post about it the other day. The first and primary and the major reason is it comes down to trading and liquidity. Tether's got thousands of pairs and it's got about 50 billion a day in trading and circles USD has one tenth of that and has less than 100 pairs i actually did the road the stats for i think a few days ago so i remember it from my head i think there's nearly 500 pairs in tether that trade at over 100 million a day and 75 that trade at over a billion a day circle has usdc which is one of the next ones has eight at more than 100 million a day and one with more than a billion a day that is a huge it's a huge gap for him man that's like so the fact the usdc is like one third the market cap of tether is actually pretty good because actually by trading it's like the 10th or like way less right and what happens is that whoever trades would know that when you do a trade and you come out of that trade of the pairs and usdt you come back into usdt and guess what a lot of those same people are like hey i've got this usdt now i need to give you some money for some other non-trading reason and so they just send it Now they could swap it into USDC, but you know, there's 10 bips you got to go through. There's effort, et cetera. And so eventually you just get network effects of people just having USDT because they can trade in it. They can send money in it. There's also on the Tron network, which is the biggest, actually like stable coins are actually a mix of stable coin plus the network. So on Tron, there's 60 billion, 40% of all stable coins are USDC on Tron. And Tron is super smart in making transfers, subsidizing costs. So it's super cheap. And so once you, on usdt on tron it's almost like nothing to transfer to someone so why would you ever get out that network effect is super strong especially in emerging markets now it's super strong ton network is trying to really compete with that as well i think and i think they're doing a good job and others too you know i think base has a lot of usdc now and so they're trying to attack this like low cost transfer to answer your question like when people want to have a lot if you actually look at the stats as people have large amounts like not$1,000 or even$10,000, but as soon as you get to$100,000 or more, then people do rebalance a little bit to USDC. So if you go and pull all the stats, that's what you notice. So I think USDC and then also being more regulated onshore US restricts who you could partner with, et cetera, as well. So that's the nuances of it. I don't know if it'll change anytime soon. I love my previous employer and I wish the best for USDC. But also the other thing is like, I think they're both good at what they do individually. So if you're an institution, you're not, you use USDC. No, exactly. It's a grown up. It's a grown up. Well, yeah. I mean, if you're an institution, you're going to use USDC. They're going to be particularly dominant in the US and maybe in Europe. And Tether is going to be, you know, the king in emerging markets, including Asia and Africa and Latin America, you know, and maybe like Eastern Europe block as well. And I think the two are going to be the biggest for a long time to come. I don't see that changing anytime soon, but they've each got their spot. Yeah, I think that really answers the question.

SPEAKER_02: 26:23

Thanks. I try to be neutral on it now. Great job, great job.

SPEAKER_00: 26:27

Yeah, I guess we can move on to Jeff Cap. You want to take it? So maybe we'll shift gears a little. You know, most of us are here for the tech. More of us are here for the gains. So can you give some insight perhaps to, you know, what's going on with the fund that you mentioned earlier? What's it called? What do you guys do? It's a liquid crypto fund. It was

SPEAKER_03: 26:44

doing better two months ago. months ago, as everyone was. It's been a really tough market to trade. It's a mix, mostly, it's like half my money and half a closed group of investors to start. The main reason I did it is because I've been trading for a long time and I've been sending out tips to my friends for a long time. But I felt that until you get a fund and you build a track record in a legitimate way, people will never know, right? And so the idea is not to scale the fund, to be clear, like cast is my is my 90% plus focus for now but we will at the moment we're not open to external that meant external investors is by invite only but over time as the funds track record grows and gets better then I may look to scale that up as well so I'm personally and it keeps me also very personally interested in in crypto it's mostly non BTC and ETH fund and major yeah alts mostly which is a tricky place to be right now but the major reason is is that like i think that you have so many options for btc and eth you don't need to pay fees for that all right so that's my view on it it is also like a top 50 blue chip liquid crypto fund as well so it's not focused on anything below that and realistically our thesis is built on like who is building quality products for crypto right and so things that outside of the top five or ten majors which you know in that interests me, for example, networks like Sui and Aptos, which I think are doing a great job in terms of what they're building and will help infrastructure with crypto in the future. I think the team at Pendle are doing a great job as well. The only mem we hold in there is Wiff. And I just think that like Wiff is just like this amazing community building a story that's emerged. And yeah, we hold about 10 or 12, but yeah.

SPEAKER_02: 28:43

You're the CIO, is it? Yeah. this leads to my next question like you know in terms of just broad trends yeah right I guess near the midterm you know on crypto investments

SPEAKER_03: 28:53

well

SPEAKER_02: 28:53

firstly not financial advice guys not financial

SPEAKER_03: 28:55

advice firstly I say that if you don't know crypto like okay my view always in life is invest only in what you understand because that's the best way to do it and so a lot of people come to me and be like you know give me a tip and I was like look if you don't understand it like just don't touch it like if you want a crypto exposure to buy BTC or ETH it's relatively safe over the long term it'll go up even if it has a multi-year dip so it's a very interesting time normally if we look at the four year cycles this bull market came early And I thought we were going to sort of moderate for a few three to six months and then start going up again. But right now we're sitting where alts are like 75% down across the board, roughly, give or take, right? BTC is off around 25%. I think ETH is probably off about 30, 35% from its highs. It's pretty bad. That's like bear market stuff, right?

UNKNOWN: 30:00

Yeah.

SPEAKER_03: 30:00

What I'm seeing from a lot of the institutional chats that I'm in right now is a lot of capitulation, right? Especially in the last couple of days, there's sort of capitulation selling. But I don't know if that means that we're just going to like suddenly rebound. Now, from these current oversold levels as of today, we may rebound, but let's talk about like long term. I think... that what's going to happen is that crypto is going to become a major election topic and that is going to be the theme for what's going to happen and the Dems are still not so pro-crypto and Trump is pro-crypto and I think Trump's going to go more pro-crypto and the Dems are going to have to go pro-crypto and then the economy is going to, the US is going to weaken, there's going to be a few interest rate cuts and then everyone will wake up. Now that's what I think but the price action has not been great and so we'll have to wait to see whether that happens within two three months or whether we have to sit this one out and wait till 2025 right i would say one major thing on prices which is um i always tell people there's one fundamentally wrong thing that's happened in crypto recently the idea of crypto exchanges and markets was to give the public open access to upside value where stocks had stopped doing this. What happens is that VCs captured value, the stocks, you know, that were being built. They weren't going public for 10 years. By the time they went public, like all the value had been extracted from investors who had the right connections to get into the VCs, right? Versus crypto, traditionally, you know, it was getting listed earlier. People could do, whether it's 5X, 10X, 100X, whatever it is, they could ride up with the community that's being built around a project, which I think is the right thing to do. But recently, what's happened is that the VCs have started playing the same game, right? The same game of let's go and work with the project and capture the value. And by the time we list, we're at FDVs of like 10 billion. And then... you know, dumb retail will come and take it and

SPEAKER_00: 32:09

take it all the way down, right? Which is wrong. That was actually what I was going to talk about next, right? You know, the alt rotation didn't come, right? This cycle, essentially. I was just wondering how much of that is due to like token unlock schedules, right? Is there enough people, you know, at the other side of the trade to buy up the tokens that are being unlocked, you know, at the VC level, right? I mean, they come in at a low valuation, but the time they list, it's crazy, right? FDV. So, you know, do you think that's a fact and there's no one else buying up this unlocked tokens? I think,

SPEAKER_03: 32:41

well, firstly, like we did kind of, look, a lot of alts did five or 10X from October to March and it's not over, right? There's, bull market is, I think, still very early stage. And I think we're going to get the proper... We haven't seen the proper bull market. I think we're going to see the proper bull market ahead. I hope so. I think there's a lot of people with crypto who hope so. But I think this recent price action of capitulation will probably help reset the base so we can actually go up. But yeah, I do think that... this high fdv thing is is kind of bs you know and i think them trying to bring it to market and getting slapped like some of them have is a good thing because for cast we're looking at a point system and we're looking at a token as well to help with reward early users and to get the community to build with us for the long-term future so i look at like how to design that token and the future token and the point system and everything else right and one of the things that i'm really focusing on is keeping the fdv and the market cap the tge low so that people can the community and the airdrop amount to the community high like 50 and so you are building for the long term you're building for users the users are getting value for for being there early and they're writing it up and that's how it built previously like I think like Matic in the previous cycle when I think it's 200x or something crazy but Solana and others right that's how they built they built they came to market low the community built with them the community reap the rewards with them right that's the way it should be and I think this recent reset will force the market to go back to that. So I think it's a little bit less around the absorbing of the token. The token unlock absorbing is, yes, it's true. But for example, I was looking at SUI, and I think SUI unlocked 2% or 3% this month. But 2% or 3% in price action is not a big deal, right? That can be absorbed, I think, unless they're all selling. I think it's more.

SPEAKER_02: 34:44

I think it's, yeah, I mean, in a way it's really a better alignment of the incentives, you know, from like a startup level when you get investors all the way down on your list. I think that that's actually, hopefully what will come out of this. Yeah. Right. I mean, like, you know, like no one's saying that as an investor or VC, you can't make any money off of this, but I think it's more of like a better, you know,

SPEAKER_00: 35:01

better alignment balance.

SPEAKER_03: 35:02

Yeah.

SPEAKER_00: 35:03

Yeah. You mentioned a previous, I guess, projects having communities built with them and then a retroactive airdrop, right? So I was lucky enough to be part of the ENS airdrop and Uniswap, many of us, I'm sure. I feel that the key difference was or is that they didn't come out and say, hey, guys, do this, this, this. You get some points and we'll give you tokens afterward. Back then, the ENS, to buy an ENS domain, you had to interact with my Ether wallet, choose the contract, which code you want to execute. Man, it was crazy, right? But it was fun. because now you look at the interface, it's so different. And then we were rewarded accordingly for the suggestions that we gave. So how do you see currently when you say, oh, you get a certain amount of points for certain kind of actions? And then, you know, there are some rewards waiting for you at the end. You get all these communities that are just essentially waiting for the token to come and then, you know, trying to dump that for a quick profit. What are your views on this? I think Zcasing was a good example. Something like over 50% or maybe even higher of the wallets that received the airdrop just sold it right away, same day. Look, I think it's a complex

SPEAKER_03: 36:08

topic, but let me be sort of quick on it. I think like designing the system depends on what the market expectations is at the time. right so maybe when you got the uniswap one market expectations are frankly low like you're just like well i'll just do this because i really like it and then whatever i get is like a bonus right and there's less competing projects now there's more competing projects people kind of want to know what they're going to get but i think there's projects are also adopting to people who are there for the long term with them versus people who are just like they're the farm points essentially right i don't think you can completely stop it but i think you Yeah, people who will come along to like– you know, for the long-term. I saw, for example, like Athena is doing like this 50% lockup, you know, for long-term holders. Others are looking at people who are doing basically scam accounts of, you know, in some way, shape or form. So I think that's getting, the market is self-correcting and the projects are self-correcting through natural means. But I do think one of the things also is on the point of mem tokens and mem coins, I think what they have done is is actually fantastic because a memcoin is 100% FTV, 100% unlocked, and it's 100% community, right? And so what's happened is that the rise of memcoins and the pricing and the market cap of memcoins is a complete reaction to community getting locked out of the value of everything else, right? And so I think that anyone who's gonna come to market now should really look at like 50%, like we're looking at 50% of community at least, and then like another quarter to treasury to help with the community over long term. I think that's the right model. Actually, like, one of the ones I really like is Jupyter's. Jupyter, Meow's done a great job in terms of designer token. 50%, he made it really simple and clear. 50% community. I think the team has locked up a lot of theirs for the long term as well. So you're like, hey, this is like, The community can get behind this. Like community is getting rewarded over the long term. Founders are 100% aligned and the team's 100% aligned. Like what's not to love?

SPEAKER_00: 38:23

Yeah, I think if you can show your users that, hey, we're in it for the long haul. Let's build together. I think it wouldn't be an issue at all.

SPEAKER_03: 38:32

Also, the thing is, is that You know, one final comment on this, and this is, I actually, being a tech guy previously, I'm being older, I joke about this like compared to what happened in the 90s. If you look at the 90s, there was dot-com boom. Most companies minus maybe Cisco and Amazon were 100% narrative driven and actually built pretty much nothing really useful. And then later on, 10 years later was when the Facebooks and the Ubers and the YouTubes and all that was built, right? And I think what happened was that you didn't want to build a real company back then, you just wanted to build a narrative. And I don't think crypto people understand that this is what's happening to crypto. So all the things that you could do, you build an L2 chain and it will go up in value. They try and do an L2 or an L1 and it's like, I think like after today's price drops, like SUI is just around a billion and Aptos is probably two and they're probably, you know, two I really love. last cycle it'll be like 20 million or something you know it'll be going crazy and so the the multiple that you get each time as time progresses is just less and so you don't have this opportunity to just spin up some bullshit and then like it goes to the moon and then you don't care about the community and you've got this huge treasury because that payday may not come and so i think the projects that are building now including like that's the way view that we take are just generally trying to build for the next 10 plus years yeah not for the crypto cycle that will come or may not come. Proper business with fundamentals. Proper business with fundamentals, you know, and the user base who's there and not like rewarded and then they're gone, you know. And actually a lot of the things that have come to market recently, you know, you could say that they have good tech and stuff, but I'm like, I still think that those users have come and then they're gone, including like ZK Sync and Agent Layer and these things. I think they're kind of fleeting because it's like, is it revolutionary enough? Is the community strong? enough to stick around you know are they solving big enough problems you know

SPEAKER_02: 40:33

that's a great insight and you know we really like the uh the candor in the front yeah i i can't say i disagree yeah right

SPEAKER_03: 40:40

yeah i mean it's a hard moment for crypto we're going through this like the narrative based pumps are not working so much. Sobering, but you know. Sobering. Yeah. But I think it's overall good because eventually we're going to have to build some useful stuff. And there is some really good builders building useful stuff, which is great, you know, from people building really good blockchains, bring the cost near zero to, which are really fast. And yeah, there's lots of great stuff happening.

SPEAKER_00: 41:08

Rex, I think one final question before we wrap up. You're deep into the, I guess, Web3 digital assets, crypto assets, whatever you want to call it, the ecosystem. Maybe you could share with us two things you're most excited about in the coming six, 12 months from your view.

SPEAKER_03: 41:23

Firstly, like, I am just... Always excited when a cycle comes around in terms of just the new users that come into crypto. I think that a lot of people are making ease of use better. And so the technology, like they get, like every time it comes, they say we've got two or 300 million users in crypto, it will add another couple of hundred million. So that's why I'm kind of like hopeful there is good price action. We really haven't seen retail come in in this one, but a good sustained 12, 18 months will bring retail in. And every time they come in, it expands the crypto user base, right? So I'm excited for that to come. I hope it comes because I think all of us will. We all need it. Manifest. Manifesting. Yeah. I always say that the boom and bust are actually a feature, not a flaw. Yeah. Right. And bust shakes out the BS projects, frankly, and the booms bring in new users, you know, and it's through that continuous cycle that, you know, we move up So that's really good. And I think also the new users bit I'm excited about, and a lot of people, especially crypto people may not love this, but I do think that the price action that's happening right now is shaking out a lot of these projects, which I'm sometimes sitting there looking like, is this a project just for the sake? Like, I don't mind restaking, but really what value does it add? Like, it's cool for crypto and it obviously... you know, when there's other stuff that's being built, that's really useful, like, like Jupiter and Pendle and, you know, whether it's in exchanges or DeFi or stable coins, people are doing useful stuff that's bringing the current world on chain. so people can use it in a much more efficient way. So what I'm excited about to answer your question, the second thing is that there's really good builders in the space that are doing real stuff with long-term focus. And I think the price action is gonna force more people to become like that, as opposed to the pump and dump or whatever you wanna call it, like previous cycles where people would just, it was marketing first.

SPEAKER_00: 43:34

All right. Thanks. Thanks so much for that. So where can listeners find more of your work and how do we follow you?

SPEAKER_03: 43:40

Ragulan Pathy on LinkedIn as well as Twitter. So we can probably, it's a complex name, but on Twitter for cast, it's cast, K-A-S-T dot finance. The name, by the way, is because we want to cast a new financial system is the, and we actually have a whole write-up on it so you can read that. So cast dot finance you can download the app we're trying to get it from download to getting your card and spending within three minutes so it should be super efficient including your KYC and join the telegram community and everything else as well so yeah that's where it is and cast underscore official on Twitter as well so we hope to you guys will tell us the product and give us feedback and we'll go from there

SPEAKER_02: 44:29

awesome man we're really looking forward to it yeah

SPEAKER_00: 44:31

all right I guess on that note it's a good time to end thank you so much Rex for joining us today. No problem. Thanks, guys.