Building the Rails for Institutional Crypto

Newly launched “Zero” network, backed by major market infrastructure players, targets institutional adoption by solving interoperability, security and scalability, the three hurdles keeping digital assets from mainstream financial rails.

Transcript

Narrator 0:03

Welcome to From the Block, where Ryan Rugg, Citi's Global Head of Digital Assets, and Karen Webster, CEO of PYMNTS, unpack the real questions CEOs and CFOs are asking about stable coins. From infrastructure to innovation, it's the practical path from concept to competitive advantage. In this episode, Karen Webster and Ryan Rugg sit down with Bryan Pellegrino, co-founder and CEO of Layer Zero Labs to discuss building the rails for institutional crypto.

Karen Webster 0:36

Hey everybody, I'm Karen Webster and welcome to From the Block. Ryan, who needs no introduction, how are you doing today? Very well, Karen. Excited to have this conversation with Brian. Me too. This is for everyone who needs to be reminded From the Block is a podcast that delivers straight talk about digital assets and the people innovating the space. So before we introduce Brian officially, I want to I want to pose a question to you, Ryan. So here's the question What happens when you try to make every blockchain speak the same language?

Ryan Rugg 1:15

You get a headache. But that's why I'm so excited to have Brian on because like this interoperability has been the like million, billion, trillion dollar question since I've started in this space, right? And it's also where the most amount of risk is. So like the work that they're doing is so fascinating because no one wants to recreate the siloed banking system or financial services that we have. They want true interoperability. So like the work that they're doing is really exciting. Just went through an additional fundraise and we'll dive into that with some really key players. So, you know, it's such an important topic. Like, you know, no one wants just a city token. Like we fully recognize that. And we're designing for interoperability. So, you know, talking to tech providers like Brian and other out there about what they're seeing, what they're doing, how they're mitigating their risk is so important.

Karen Webster 2:01

Besides the headache, you obviously get a whole lot more, which is what you just described. And the so much more part, uh, as you alluded to, will be provided this week by Brian Pellegrino, who's the CEO of Layer Zero Labs. He will join us to break down all the issues around interoperability, traditional financial institutions, and the future of what it means to be a truly connected digital assets and crypto ecosystem, which is really what Layer Zero Labs is all about. So, Brian, welcome. Thank you so much for having me, both of you. Are you ready for this? I mean, we do talk, we do promise straight talk. So we'll hope I'm ready.

Speaker 3 2:40

Fire away.

Karen Webster 2:41

Let's start with the basics. So Ryan alluded to the fact that just last month, February 2026, you guys raised a bunch of money, announced the launch of Xero, which is a new high-performance layer one blockchain that is really about global market infrastructure. You develop this with partners. We're going to talk about this Citadel, DTCC, and Google Cloud. And the network is aiming to bridge TradFi with on-chain, permissionless, and immutable technology. It's a mouthful and very hard to pull off. So, you know, people like to put new innovations into sort of frames of reference. What's the right analogy for us to think about what you're doing? Are you more of a messaging platform like a Swift or a Rails orchestrator like an Audion or a Spreedly?

Speaker 3 3:33

Yeah. So I think historically we've we've always been. Prior to February, we've been the messaging layer, right? That this is the only thing we've done. And so it's more even of a packet on the internet than anything else, right? It's just arbitrary, arbitrary bytes, and anybody can use them. You can send any data, and that's more or less largely been used for transfer of value. And so we have a little over $100 billion built on top of us, kind of moving hundreds of billions of dollars back and forth. And that's really what people use it for. But this primitive was very simple. Connect 168 chains today, and it was really just the messaging. Zero itself is totally different in terms of a departure from that. And really, it was us. We saw a huge, you know, uh again, been in this sort of doing this for a very long time. And layer zero has grown immensely to connecting all of these things and powering all of this. And what we saw continuously was, you know, I didn't think it would happen that fast, but like almost, you know, regulatory uh reframing in the United States, all of these things happened. And now you had massive, massive, massive sort of demand from the floodgates were opened and people wanted to use the technology, and you really have the timing and moments to actually get the adoption and to actually move the technology forward. And yet almost nothing on the other side could service that, right? Like um ever everybody was having to move to private and permissioned continuously, uh, which I think there'll still always be sort of a battle for on both sides of these things. I think there is still like a trade-offs, active trade-offs being made there. But really, the focus was how can you make this neutral, public, uh, permissionless layer actually work for the demand side and give people the option of both.

Karen Webster 5:13

And that's what you're doing?

Speaker 3 5:14

That is what we're doing.

Karen Webster 5:16

And zero changes the narrative in what sense?

Speaker 3 5:21

Right now, there's basically two approaches that you can take. One, you can be really decentralized and you can be Ethereum. Great. You're gonna get about 15 transactions per second, right? That's just like with the world that we live in. Or you can be really performance focused and maybe a little bit less um less focused on decentralization, and you're going to get speed, and you're gonna get about a thousand real transactions per second. If you count votes, it's more like 4,000, but Solana is at about a thousand real transactions per second. Zero already day one today is you know capable of scaling to millions of transactions per second, uh, being as decentralized or more decentralized than Ethereum, right? So the simple question we started with was can you be as fast as Solana and as decentralized as Ethereum? And we really, really overshot. And as you mentioned, you know, some of the some of the partners we're working with, some of this, it's really was like uh an aha moment for a lot of people because it's the first time we've been able to do uh something like this.

Karen Webster 6:18

So the the aha is about the best of both sides, as you, as you, as you put it. But when you think about your partner, Citadel, DTCC, I mean, these guys are pretty regulated, pretty permission bound. And you know, Citadel in particular has spent a long time lobbying the SEC to make sure it stays that way, right? Um, to regulate DeFi um in a pretty robust way. But now they're obviously a strategic investor. Have they changed their mind and or have you changed your approach to how you define permissionless?

Speaker 3 7:00

No, so our our approach hasn't changed uh at all. I think there's when we thought about the groups that we weren't, we were this was two and a half years to build. Uh only 24 people uh out of our entire team were even aware about it until the week before. So we were entirely stealth throughout the entire industry, all very few external partners. And so for us, we went to talk to the external partners. We really only targeted a couple of groups, and one was the DTCC, one was Intercontinental Exchange, one was Citadel. And it was just like, you know, take the largest component of each stack along each piece of the stack and find a way to get them sort of excited and interested. We're fortunate that all of them, you know, really leaned in and really did all this. So Citadel and specifically, it's funny, they took, they took a ton of flack for their comments. And uh first, first glance, everybody in the space, it's very easy to want to be like, you know, yeah, these market makers, we're you know, we all hate the market makers, right? When you read the comments, when you actually talked to them, majority of it is they want to have an environment that is like fair to play in. That's more or less the established that we've seen. And you know, my first, my first instinct, frankly, was market makers are gonna want to find every edge internally in this. And they were like, no, no, no, we want a fair, clean box to play in that sort of is open and we will come and we'll compete and we will win from our perspective, right? And so uh I think every every person in the stack, most of the space is driven really by just uh by a couple of things, right? I think people are driven by some fear of disintermediation, right? Fear of disruption. Uh, I think uh people want to be on top of that. I think the most forward thinking are figuring out how they can disrupt themselves and be ahead of this. And with that fear of disruption, sort of comes a changing world order where maybe you can jump from a fifth or seventh up to first if you're sort of front and foremost to this. And the second is just PL. I think almost every every group that I speak to uh across the entire landscape right now, from the institutional side, is just driven by one of those two things is just fear of disruption and how do you get in front of it? If the world is changing, how do you sort of make sure you're also a leader there? Uh, or it's just pure PL driven. Uh, and I think that is really powerful forces for for almost everybody.

Ryan Rugg 9:09

I would agree with you. Like I would definitely agree from like an institutional point of view. It's like, you know, from my perspective, city's been around for 200 years. How do I make sure that they're around for the next 200, right? How do we innovate? How do we provide, you know, but again, it's based on client demand, right? It's based on, you know, we view this as another set of rails that if our clients want to use it, we want to be able to provide those services. So, you know, there's definitely potential to, you know, grow business, but also like the efficiency gains by this technology and, you know, connecting multiple parties, multiple networks together, multiple assets is really powerful. So I think that, yes, it is about, you know, protecting your current business, about fee generation, but I feel like these transformative technologies only come around like, you know, a few times in a lifetime if you're lucky, right? I mean, and this is truly rethinking the way that they're doing business, um, moving away from just cash and, you know, kind of investment accounts.

Karen Webster 10:04

Yeah, I would agree that those are two um strong forces, but part of the first force, you know, the disruptive nature, is also about managing the downside, right? Managing the risk. And, you know, there are a lot of good ideas and there are a lot of innovations, but you know, when you're a regulated financial institution, when you're a regulated exchange, you do have to be aware of the downside and where the risks are. I mean, Brian, how do you how do you address that? Because when there are hacks, there there's big dollars that are lost. And and and clearly when you're connecting 165 or 168 um bridges, rails, there's that opportunity.

Speaker 3 10:53

One, it's it's interesting. You most people think so. One, we we've always liked security is first and foremost for us, right? We we did a couple of things that are very atypical. One is all of our contracts are 100% immutable uh in terms of the interoperability side. So we we can't change them, we can't upgrade them, we can't do any of this. And people like people want to have the control. And there's all the reasons why they say, oh, we'll add these great features, we'll do this. And you look, there's been almost five billion dollars of hacks in the bridging space, like by far the most hacked space in the industry. And everybody's always worried about all of the validators are going to collude and going to be malicious. Zero of the hacks have happened because of that. It's never happened, right? The every single one of the hacks has been only two reasons either a key compromise, so people have lost their keys and basically given the upgrade keys to the hacker, or they've tried to push code that was benign on there. You know, they're pushing an upgrade. They're they're trying to do something that's good, and the code has a bug in it, right? Just human error. So for us, we put out, and we said 100% immutable contracts, and we put out the largest bug bounty in the world, not even just crypto in the world, $15 million if you can come and hack it. And uh it's never been hacked, it stood, you know, stood the test of time for a very long time now. And so part of it is you have to just you have to just write good code. But at the same time, if uh if you want largest institutions in the world to be able to trust you, there's only they they shouldn't have to trust me in Layer Zero Labs, that's for sure, right? Uh they they really should have to trust the underlying infrastructure, the code. And so there's you have code, it's how much is it secured, how long has it been in production. Like these are the things that stand the test of time, and then in the same way that sort of we trust the entire internet stack this far deep, uh, this far in. And so um part of it is you have to write good code, right? So that's that's just like the bare minimum. And from there, it really becomes on what are the remediations of a hack itself, right? You look at something like uh Ethereum or any of the sort of large networks today. They've been, you know, Bitcoin, et cetera. Like you, you the point of a blockchain is that you have pen and paper ledgers, which have very high error rates, and then you have like digitized ledgers that are set, you know, centralized uh and they have a central point of failure. Blockchain is just is just you know distributing that over typically jurisdictions, geographies, et cetera. It's just adding layers and layers of redundancy or resiliency, right? And it's proven to be really, really resilient structures at scale for trillions of dollars for like a very, very long period of time. So I think actually the underlying structure is more secure. But I think the root of your question is what is the layer of enforcement when something happens, somebody bad? And that that's just a layer of enforcement ends up shifting to where this now lives at the asset issuer. So stable coins are a perfect example of this, where stable coins are continuously getting sort of law enforcement requests and they are are freezing certain accounts or funds and in doing this layer of enforcement. So I think there is a um partitioning or separation of like the the underlying infrastructure layer itself. And this is the internet too, right? You you typically are not getting uh, you know, the the telcos aren't getting a lot. It's a lot of uh, you know, the application layer lives on top of it. So that's just the assets in these cases. So I think enforcement kind of moves up the stack. I I think this is very similar to the internet structure. Uh and what you want at the base layer is again as as secure and as resilient as humanly possible. And then when you talk about the remediation efforts, those end up living in the application layer or in the asset issuer layer.

Ryan Rugg 14:17

Ryan, how do you respond to that? So, I mean, it's so critical. As you said, Brian, like this is where like the most hacks happen, right? And you know, and you know, you haven't seen like the nodes convoluted yet and all that, but like, is that possible? Like the rapid speed of technology and like, you know, yes, solve for security issues for today, but when we're putting like massive amounts of like money and assets onto Ledger, we have to solve for problems of the future, right? Like it's like, you know, our clients trust us with safety and soundness, right? Like that is the one thing that like, you know, banks kind of give our institutional clients and like with this new asset class, and you know, it's no different. So I think a lot of it standards and you know, I love that you put out like the bounty out there to kind of you know, bug solve because like those communities are the ones that are going to be able to do it. But like, is it enough is my question, right? Is it enough for to get the trust of large institutions on these like multi-network strategies?

Karen Webster 15:12

To move so much of their volume on on them. I mean, you know, that that's really the interesting point. You know, where where are the use cases? Where are the tests? And what are you learning from from those situations?

Speaker 3 15:28

Yeah. I mean, so the world right now, the world is very messy in the world of blockchain, right? So one of the one of the problems is that the biggest thing is. Well, the world is pretty messy too. Yeah, the world is messy in general, but even just this microcosm of a world is is very messy. And so seeing asset issuers connect 168 chains, the problem is that this is 168 different sets of trust assumptions, right? And so actually, an asset issuer doesn't natively go to all of them. They pick and choose and they find what networks they think are attractive enough versus the security and so what they think is secure, and on and on. And this is like a very hard and messy problem overall. Fortunately, some of this is going, you know, some of this technology and sort of like math gets to solve some of this with zero knowledge proofs, which is part of the big things we're doing with zero, is sort of like the underlying to not need to have to have some of the concern, but but in a truly broadly fragmented system, uh, you really do have some of that underlying, which again points to um the need for like this remediation layer above. Uh the base layer is always you you should think about it as the internet, right? Uh, and you can make it in a single network extremely secure, extremely, extremely secure. But the moment you want to go between all of these different networks, and we we do a lot to help asset issuers like remediate this, but the moment that you do that, you run in this problem of totally different trust assumptions and they are not coordinating and they will not roll back together. And there's all of these different things that happen. And so you can do a lot. So, asset issuers today, one thing we invented with them is the ability to take before any transaction is done, you take every chain that you're connected to and you fork them all locally and you run the state transition locally, and you verify that like the resulting state at the end of the transaction doesn't break any invariants. And so, like a very simple invariant would be like solvency, right? Like solvency of the system is such a simple thing. You look at some of the old hacks, and it's like the Axie Ronin hack was sending, you know, $650 million over here in like left zero dollars here, right? It's just like very clear, like, okay, the sister system is no longer solvent at the end of that transaction. Like, don't do it, right? Uh, and so there's all of these things from from compliance to again, these like technical invariants that you that you can add in and layer to this. Um, and so there are layers that you can add on top, but at the end of the day, each of the individual subsystems uh are untrusted systems. Now, that I mean that happens in all everything today as well, right? Like uh even financial institutions interact. And you have, you mentioned Swift, right? You have these layers of joint trust that are spun up to try to tie some of these things together that are how uh how they interact, how what remediation will look like. People are opting in within a subset of of um of institutions. And so the same sort of thing. So optimism superchain was sort of trying to solve for this, where there's here's you know, eight parties that will all roll back together, we'll all share the exact same trust assumptions. So there are things like that who have tried to do it, but uh I I think it is a more common problem, even in uh historical systems, uh, than most people give it credit for.

Karen Webster 18:34

Well, I mean, I do think that the traditional financial and payment ecosystems are pretty are pretty strong. They're very trusted, which is why they work today. So I think you know when I think you're you're asking for this leap of faith to to trust you know this 168 chain coordinating layer um where you don't really know what the 168 chains are doing.

Speaker 3 19:08

For the payment structure that exists today, right? Every bank prior didn't necessarily implicitly trust each other, right? They're all they all their own ledger, they have their own. There were layers of trust that are built on top of that, right?

Karen Webster 19:20

Like it's actually and regulations and regulations.

Speaker 3 19:23

Yes, of course. Yeah. So you have you have an enforcement layer that is built at the asset issuer layer, at the application layer, at the institution layer. These are things that are layered on top of the core technology, but there are you know the ability uh for all of these things now to interact between each other, even though even though individually, in a lot of ways, there there wasn't this base layer of trust. That's something that was developed over time. And I think you're going to see the same sort of thing happen here over a long enough time horizon.

Ryan Rugg 19:50

Thinking about like networks and the evolution, and like, you know, we've done a lot of work around that, especially kind of in my prior roles, thinking about, you know, kind of phase one, that messaging layer that like kind of Swift, you know, developed, but built by the industry for the industry, right? It's kind of like it's a consortium of members that you know participate in it, then evolving to kind of like the payment networks where you saw like the visa error, where I feel like this is like combining both the messaging and the movement of assets. But there's so many, you know, to see how these have evolved in the past and is history going to repeat itself where this trust least layer has to be built by the industry for the industry, where we, you know, potentially partner with like various tech entities out there, you know, it'll be it's it's too early to know right now, quite frankly, how the institutions are going to adopt this. But like safety, soundness, security are like table stakes.

Speaker 3 20:42

Yeah. So I think you've seen at least the early indications from the fintechs, right? And so I think the fintechs are kind of like out of front. You see PayPal, PYUSD is built on top of us. They have their own. So for us, the the core technology really moves the decision to the asset issuer, right? And so PayPal, PYUSD, they they define the chains that they want to go on and they say these are networks that we're willing to trust, and they define sort of the requirements for how many block confirmations you need, for who is creating attestations for all of these things. And then the state of Wyoming does something totally different. And then, you know, Tether and these others do something totally different, and BitGo and each. And then what you have now is you have like an almost an aggregating factor where Stripe is now like launching a bunch, and Stripe is sort of layering in. Here is a set of assumptions that everyone will use. And you can think about this as your VSAR MasterCard layer, right? Where it's like many uh institutions or uh companies can can um launch under Stripe, and Stripe is sort of defining, hey, here's how we're going to price the risk, here's how we're going to do this, here are the efforts uh for remediation for all of these things. And I think you will see this trade off between individual asset issuers sort of controlling their own and saying, I I want to make the decision for my own asset, and I want to make the decision for like what the security looks like on the underlying. Cause ultimately, if uh if I'm no longer solvent on the underlying because something happens. Happens, then I'm on the hook and regulation might form around that. But but I think you will see a mixture of call it a conglomerate or like a broad group who is jointly defining a layer of trust and then individual asset issuers. But I think you're you're seeing that bifurcation already start to happen, uh, even just on the fintechs and the stablecoin adoption side.

Karen Webster 22:20

How does permissionless with conditions work in your world or doesn't it?

Speaker 3 22:25

No, I I uh I am a huge advocate that the base layer, and I talk about it a lot, like I'm extremely fortunate that we have BlackRock and Larry Fink and sort of others heavily championing for like public networks, right? Because there's there's a world that is just like not the case. Everyone's like, cool technology, thanks for giving it to us, totally private networks, right? And there's still like that's a world that could happen. I'm a huge proponent that the base layer needs to be neutral, multi-jurisdictional, broadly resilient, et cetera. Very similar to the internet structure. And then permissions are the same thing on the application. You can build anything on the internet today. And people build a lot of incredible stuff, and people build a lot of useless stuff, and people build a lot of like bad stuff, right? It's the full spectrum. And what you have is the enforcement layer is entirely on top. And so the applications themselves, the Facebooks of the world, the Googles of the world, they need to enforce a set of rules in the same way that asset issuers in institutions interacting on top of the internet need to enforce a set of rules. And so I think what you want is the base layer itself to be as neutral as humanly possible. It's just technology that is frictionless, it is not bound by any sort of spit, you know, because like multi-regional becomes just like a huge issue. You want it to be pure technology. And then on top of that, you want the applications in the assets to be able to define their own things. And this is who can access the asset, who, you know, how this gets used, what are the sort of checks or guarantees that must be done on top of this? Who uh can do that? I think that's stable coins are per stable coins are you know $300 billion, one of the largest drivers of adoption on top of permissionless technology today. And stable coins are entirely centralized, right? It is a single entity who has attestations that they have got treasuries uh sitting backing sort of the assets that are on chain. They have the ability to unilaterally ban somebody and you know, freeze the account and take the funds and do all these things. It is an entirely centralized in every sense of the word and entirely permissioned in many of the ways of like the controls that they have for access controls. So it's free-flowing, and then they can sort of block anything at a point in time. And I think you're going to see a very similar evolution where at the asset level or at the uh application level, you will see many layers of controls. And it's like totally fine for those things to be built in. Uh, and I think they they should be in many cases, but the rails themselves you want to be uh global, permissionless, and neutral.

Ryan Rugg 24:52

It's a big change, Ryan. Big change. You know, and I hearing Brian talk, it's like, are we gonna go from a world like similar to the analogy that you gave on the internet, a bunch of intranets, right? Until kind of those standards kind of evolved across CCP IP, across the kind of ecosystem that allowed it to scale to truly truly be global multi-network type of strategy. So it's a new world out there, Karen. I don't know.

Karen Webster 25:17

Brian, you you've been in the space for a long time, 15 years. What perspective about the space has changed for you over 15 years? And what things do you think have fundamentally survived? Because there's been a lot of change in the crypto digital space.

Speaker 3 25:35

2011 forward, when I first got in the space, I was a professional poker player. Uh, and I woke up one day, and online poker was banned in the United States, right? There was DOJ symbols on all of the websites, all of the payment processes were banned, my money was frozen, I had no career anymore, just overnight, one day to another, right? And so I came into this space in the early days through sort of through 2014. It was very libertarian-driven in terms of um cypherpunk, libertarian. This was like the early movement of crypto. Um, and this was really the the you should own your own keys, you should have control of everything, or at least have the ability to have it and build these sort of um broad global decentralized systems. My main perspective is that people have become a lot more jaded over time. Um, I gave a speech about two years ago that I think really summarized. I said, listen, at the end of the day, and I find this so fascinating that every, I mean, if you if you asked me five years ago, we would be where we are now in terms of adoption. Like I would have been like, you know, 20 years, like not even remotely close, right? Uh now Bitcoin ETF's most successful ETF of all time. You had adoption across every piece of the stack. And my speech was basically like, listen, most of the institutional side of the world would have like, if they could have snapped their finger over the last decade and killed the industry, they would have just killed it, right? At like almost every point in time leading up to it. And so uh the fact that we have all of this adoption is not because they you know wanted it there. It wasn't, it wasn't because there was like any driving force. Really, the reason is that it has become almost impossible to ignore, right? The technology itself, you look at tether, one of the most profitable, you know, the most profitable per capita employee uh per headcount uh profitability on the planet. 10 to 15 billion dollars. You look at hyperliquid, same exact thing. Hyperliquid's now doing more volume than something like Robinhood is every single month, right? Like the world is just changing pretty rapidly. These things have been become very hard to ignore. It is just very clear that the technology itself has immense value and has brought everybody to the table now. And obviously, changing regulatory environment and these things have helped accelerate that. But that like that, that is the only thing that makes it interesting. And that is the only reason why everybody is here at the table now. And yet everybody's solution to that is let's make these very heavily centralizing sort of trade-offs in the in the last mile here, when finally everybody's been sort of like forced to pay attention and see the value that will just immensely diminish the underlying value of that, like all of the things that have made it interesting so far, and all the things that have actually made it what it is, and everybody's sort of driving into. And so um I think that is is the biggest trade-off is you have a whole bunch of pragmatism right now. And I think pragmatism is amazing. Um, and I think the space like should be pragmatic, and we're trying to be pragmatic about much of the stuff that we're doing. But I think that if you take away the underlying of like decentralized, permissionless, global, like these core things, uh, you lose everything that makes the technology itself valuable. And that is not to say that you don't need this layer on top of it, because I think you do. And again, we've tried in the interoperability side, it was very everyone went the super centralizing route when they said, we're gonna put up a structure in the middle, everything will route through us, and we will be this layer of trust for all of you. Everyone's reinventing Swift. And it sounds great because if you are the network that connects the whole world, incredible. So much value will accrue there, but you're gonna have a really hard time convincing Goldman Sachs to give you right access to their entire bank ledger. You know, it's just like not going to happen. So our stance was always we are going to take totally immutable, permissionless, censorship resistant, like core rails. And then we are going to move up the stack and we're going to work with all the institutions. And now I can tell, you know, hey Goldman and JP Morgan, if you guys are handshaking, you don't, you know, you just handshake directly. You don't need a third party, you don't need attestation, you don't need to trust us, you don't need to do any of this, right? And so um, and that resonated way more than I thought it would. And again, we've grown from absolute zero to 85% market share, hundreds of billions of dollars of assets, hundreds of billions of dollars of volume, and it really was adhering to those core things. And I think people didn't think those would be the driving factor. And when we talk, we work with more and more institutions now. And I think a lot of that um, you know, Fidelity FCAT just announced they're running a DVM within the network, like more and more things I think are going to come out over this year. And then obviously at the announcement in February, you know, groups like DTCC, like the Intercontinental Exchange, like um, you know, Citadel, et cetera, are names that people do not expect to be really tied in deeply to a bunch of this stuff. And so uh that resonated a lot. Uh, and I think like that matters. And if we lose that in the last mile here, I think you're going to have a technology that is just substantially less impactful broadly than it can be. And you can do all of the things that you need as a layer on top. So I really think people should think about the technology layer as they think about the internet. And the internet is extremely unopinionated, and there is, you know, zero um baseline enforcement in TCPIP or in some of these things, right? And yet we still have this incredible world that is orderly and structured and has rules and regulation and has all of these things. And these are all things that are built sort of on top of the layers that give us the internet and give us the core piece of technology. And so I think that is the way that the world is going to continue to develop. But I think there is a huge amount because of necessity, because we went from, you know, 2,000 transactions per second actually seemed pretty great a couple of years ago. It's like for what we're doing today, like this seems wonderful. We're like well on our way. We can see the path to Visa style throughput. We can sort of see the light at the end of the tunnel for 40,000 transactions per second that Visa does. Uh, but now uh with the floodgates opened and you see the demand side of millions of transactions per second and sort of really performance systems and responsible for huge, huge amounts of sort of the structure that the world is built on today, that just carries a very different weight. And you need uh something that can actually deliver that. Or you will end up just making, you'll end up with entirely private networks, you will end up with everything moving to just small centralized clusters. And I think the end impact will unlock much more value globally for everybody, for individuals, for institutions, for all of it. Uh and I think our goal is to provide the layer that can both provide that and connect everything.

Karen Webster 32:15

Provided there's trust. I mean, the internet isn't unregulated. I mean, you have to admit that the internet does have operating standards. I mean, yes, the applications that are built on top of the internet, but it's not as if the internet is just out there kind of flopping around without it.

Speaker 3 32:29

But the internet is, though, right? Like in terms of, I mean, you don't see uh a bunch of the internet, you see what's indexed and what's indexed by Google, right? Like, but but TCPIP itself is entirely unopinionated. It's just a simple standard that moves bytes around, right? All of the enforcement layer comes at the again, Google, Facebook. So who's indexing the internet, who's accessing the internet is at the telco level. It is at like many of the individual levels of the things that have been built on top of the core technology. And I actually think that is like I think this is the right way.

Karen Webster 33:04

But they're all regulated too. I mean, I think that's I think that's the I think that's the I think that's the the trust layer. I mean, when you're accessing a technology, those who are accessing the the technology have regulators who basically define or are operating roles or both that define the appropriate behavior. And when something goes wrong, there's an appeal to whatever regulator is overseeing that particular that particular issue. And I think when it you know when it comes to content on the web, that's one thing. When it comes to moving trillions of dollars of volume every day, that's another. But I think building the trust layer in a permissionless environment, you know, it's uh it's the chicken and egg, right? It's how do you get one before the other?

Speaker 3 33:55

Yeah, I I I think stable coins are again, stable coins, post-genius, pace, all of this. You're you're seeing, right? That that is the layer of regulated assets that are going to be built on top of the again, the neutral are going to be built on top of the TCPIP. And so I think like 100% you are seeing post-genenius, hopefully post-clarity, once this happens, like you are seeing this framework and regulation come up for how people can interact with the underlying, for what assets can look like themselves. Can they pay yield or can they not pay yield? Who can access them? What all of this looks like. So I think again, I think 1000% you are going to see more and more regulation. And Europe has its own set of regulation, and you're going to see the assets and the applications sort of adhere to this in the same way Google and everyone else does. And this is the layer that is going to get built that is like broadly accessible. Uh, and so yeah, I think uh, you know, I I think we're saying the same thing, but that that that is LIV the word.

Ryan Rugg 34:51

Where we talked about that, you know, being regulated, having the structure, having the governance in this market now is actually a positive, right? The companies more regulated, more controlled, have the reporting, all that are actually going to be the ones that are more successful. So I think that you know, talking about kind of the state bringing it back to your you know, stable coin issuer kind of analogy, being able to, you know, block users and all that, like that we need that control, especially when you start moving into the trillions. As you said, like this is like significantly, you know, substantial amount of like value that you know, banks and other entities are moving for their clients that they ensure that we bring that safety right to them. So I think it's fascinating to see how these are evolving, to see how this trust layer is going to evolve in the future. I still think we we we've definitely seen a lot of you know volume, you know, increases, but I still think we're early days in here.

Karen Webster 35:41

Brian, thank you so much for your great perspective and best wishes for success. I mean, obviously you have a lot of big names behind you who have looked at this very carefully and who trust that you will um do the right thing for the assets they're putting um within your environment. So good stuff, Ryan.

Ryan Rugg 36:02

Do you have any final thoughts? No. Thank you for you know joining us. Always insightful. Congrats on the fundraise. Uh, you know, best of luck in all your endeavors. I know what you're doing is not easy, right? You know, you you make it sound easy, but it's it's definitely very complicated in the amount of hacks. And, you know, I know that you take that very seriously. So congratulations on your success and the best of luck. Thanks, Brian.

Speaker 3 36:25

Thank you so much. Thank you both for having me.

Narrator 36:27

That's it for this episode of the Payments Podcast, the thinking behind the doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode at payments.com forward slash podcasts. Thanks for listening.