On The Brink with Castle Island - Nick Neuman (Casa) on Adding Support for Stablecoins (EP.487)

Episode Date: December 18, 2023

In this episode, we host Nick Neuman, CEO of Casa to discuss their recent stablecoin launch and: Casa's value proposition How customers use Casa The decision to expand beyond Bitcoin to Ethereum The rationale behind supporting stablecoins Building custody tools for security versus convenience Nick's views on experimentation on Bitcoin Further reading: Protect your stablecoins: Hold USDC and USDT with Casa

Welcome back to On the Brink. This is Ria from Castle Island, and in this episode, I'm joined by Nick Newman, who's the CEO of Casa, which is also a Castle Island portfolio company. In this episode, Nick and I spend a lot of time talking about Casa's decision to expand beyond Bitcoin to allow users to manage and secure their digital assets in one place, as well as Casa's recent stablecoin launch. We discussed Casa's mission to help end users become self-sovereign without trading off convenience and reliability, how Casa has built features that afford end users the flexibility as it relates to securing versus actually using their assets. Nick's optimism about the recent experimentation taking place on Bitcoin and a lot more. So with that, let's turn it to my conversation with Nick. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them were the guests on this

podcasts are solely their opinions and do not reflect the opinions of Castle Island Ventures. Kest and those may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International Group, AIG, $85 billion.

This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin.

Hi, everyone. Welcome back to another episode of On the Brink. This is Ria from Castle Island and I'm joined today by Nick Newman, who is the CEO of Kasa, which is one of our portfolio companies. Nick, thank you so much for joining us today. I'm excited to have you on again. Hey, Ria. I'm excited to be back. Thanks for having me. Definitely. Okay, so I know a lot has changed since the last time that you were on. I think it was in April 2021. So why don't we just start off by a level setting for the audience? And why don't you explain a little bit about what CASA is today and what the value proposition is and why it's important for CASA to exist?

Well, it feels like we've been through a lifetime in our industry, or maybe three lifetimes in the last couple of years since April 2021. I've seen a lot of crazy stuff go down, that's for sure. So as a refresher on CASA, we were created really because we saw a lot of the problems that have happened over the last couple of years, especially with custodians and exchanges, we saw those as huge risks for the ecosystem. And they were things that this wasn't the first time this has happened with FTX and Celsius and BlockFi and all those different companies melting down and taking user funds with them. And so CASA was created at a time where there really weren't great self-custody solutions that were super secure, resilient, didn't have single points of failure,

but they were also actually usable and easy for any. to pick up and do. And so you really had two options. And the company was started back at early 2018. And so you could either keep it on the exchange. Option A, take risks that your account is hacked or the exchange goes bankrupt and you might lose funds. But it was a little bit easier for most people. And then option B was you keep it on one or more hardware wallets, but those are each a single point of failure. So if you lost your seed phrase, your hardware while it broke, you just lost all your money. And that single point of failure caused a huge amount of anxiety for people. So enter CASA, we were looking at the problems in the ecosystem and

said, the key here is that all of these things are single points of failure. So how can we remove that and build a system that is just more resilient overall? And so we really created the first easy-to-use multi-key vaults. And that is based around multi-sig or multi-signature wallets. And those were a thing that existed in Bitcoin and somewhat in Ethereum when we first started, but they were just really hard to use. And so we really made it simpler for people to do that. And what a multi-key vault is just for anybody that doesn't know is that it just means

that it's self-custody, but instead of just having that one key, like, one hardware wallet protecting your assets. You've got multiple keys protecting those assets. So if you lose one, you don't lose all your money. And so that was really the core change and innovation that we built around CASA was making that easy to use and approachable for people. The interesting thing is when most people who know about multi-sig or multi-key vaults think of this, they think of, oh, now I've got to juggle a bunch more hardware wallets. I didn't like using one hardware. hardware wallet. Now I've got a ton more to use. Or I got to find multiple people. And I'm going to have one hardware wallet and somebody else that I got to pick like a friend is going to store another

hardware wallet for me. And it just sounds like adding a lot more friction and too much of a pain. We've really built CASA so that if you're already using a hardware wallet, you need no additional hardware to use CASA and really significantly increase your security. And that's just because with CASA at our standard entry level offering, you've got a key on your phone in the CASA mobile app, a key on the hardware wallet that you're already using like a ledger or treasurer or whatever, cold card, and then one key that's held by CASA. And so you need two of those three keys to actually move money.

And so you've removed the single point of failure. If you lose a key, you don't lose all your funds, but you haven't added a ton of additional hassle. You're still just using the one hardware wallet that you had from the beginning. And so this has been really attractive for people who are storing larger amounts of money for longer amounts of time. And so that's the gist on CASA and really why we started the company, what we've been solving for the last few years. And to go into what's evolved since the the last time we were here on the brink. We started off just protecting Bitcoin, but in the last few months, we added support for the Ethereum ecosystem, starting with Ether, and then just

this week we're at announcing support for stable coins, so Tether it in USDC. And so what's really exciting about this for us at CASA is this makes CASA the only way you can use highly secure vaults, multi-key vaults, to store Bitcoin, Ether, and stable coins, all in one place. Before this, you were kind of hopping, like, if you wanted to use multi-sig, you were hopping between different apps to manage your cold storage, and you had some for the Ethereum ecosystem, some for the Bitcoin ecosystem, and that's just too much trouble for people. And so people would stick with like, oh, well, Ledger handles it all, so I'll just keep it all there.

And now we're covering the vast majority of most people's wealth in their crypto assets all in one place, but with that added benefit of having multiple keys protecting your funds. So we're pretty excited about this. We think it's going to be a real game changer for how people think about self-custody. And we're already hearing from our customers that have had early access to this, that they really love it. That's awesome. That's great to hear. Just out of curiosity, how many customers I've always wanted to know actually end up using that third factor, that CASA key? Do you have a line of sight into that? Because I feel like on a lot of conversations that I've had around self-custody, this is exactly what we discussed. It's like single point of failure that exists, either if you hold your assets on a centralized platform or if you choose to self-custody and take ownership. And

ownership of everything yourself. And now you have, with CASA, you have the solution where you have an ability to recover your assets, even if you lose one piece or one P. So how many customers have actually ended up using that? Without giving exact numbers on this, because I don't have those off the top of my head, more of like the general gist of it is that we see two types of customers. there's the first type which uses the CASA recovery key really as an emergency or as a recovery key. So this is, I've lost one of my hardware wallets and I need to recover my funds and add a new hardware wallet in and I need to approve adding that hardware wallet in because anytime you add a new key, you've got to approve with two of three or three of five.

of your other keys depending on what security level you're at. So they're actually using CASA to help when they are in a situation where they've lost one of their keys. And that's kind of how we designed the CASA recovery key initially. But then we've also got customers who regularly use the CASA recovery key when they move funds with CASA. And so they've actually set up their security in a way where maybe they don't have access to all of their keys easily themselves.

They've put them across country lines or state lines that require them to travel a pretty decent way. Or maybe they actually travel quite a bit. And so they don't want to bring all their keys with them all the time, which is the right way to do it from an OPSEC perspective. And so they will actually use the CASA key as part of every transaction. And so they get this extra level of verification from CASA. Now, it takes a little bit longer because part of the security. verification that CASA does involves waiting a certain amount of time before we'll sign a transaction to help you move funds. But this is a way that's kind of emerged for some of our

clients that are using the CASA key in a different way than we'd initially planned or designed it to be used, but that it actually works pretty well. And it adds to people's overall security because they say, okay, the emergency is actually going to be, or the case that is usually less frequently, maybe not an emergency, is me actually going and getting all of the keys that I need to move funds myself. Whereas I'm going to include CASA as part of the verification and use the Kasa key more regularly to provide a little bit of extra convenience and a little bit of extra security whenever I'm moving funds. So those are the two different types of ways that we see people using the Casa Key today. And I would say that the, obviously, the people who are only

using us for when they lose a hardware wallet, that's much less frequent than the ones that are using us when they move funds. That said, overall, CASA to date has really been a long-term storage product. And so we don't really have people moving money a lot in and out of CASA. This is meant to be your cold storage, your long-term fault. And so that's generally how people treat it. That makes a lot of sense. And that's super interesting. It seems like a worthwhile trade-off to have to wait a little bit longer

and not have the added responsibility and security risk of having to carry your keys around with you. I want to double-click on your decision to support Ethereum and expand beyond Bitcoin. It's a shift from Casa's historical strategy, which was to be very Bitcoin-focused. Can you talk a little bit more about that decision? What was it driven by and how it's been received? Yeah, so the decision was really guided by our customers. Ethereum support was the number one request for a solid two years from a feature request standpoint from our customers. And so I think while some people in the Bitcoin community weren't super happy about it,

we've actually had a lot of our customers say, thank you, this is what I've been waiting for. Now I can move a broader set of my assets into CASA. So that means that CASA is helping people get better security for a broader range of, like a larger portion of their wealth. When you set aside some of the more religious aspects, between Bitcoin or Ethereum, maximalism, I think that

the fact that we're able to help our customers do more things and feel more secure across a broader range of assets just feels good. We're just answering the needs that our customers are telling us that they have. So that was a big part of driving

the expansion into Ethereum. And I think the second big part was a couple of steps out and now starting to see it as we're launching our stablecoin support. But stable coins today don't run on Bitcoin, but they are becoming increasingly a more and more important part of the crypto industry and how people around the world are using crypto assets. And in some ways, they're like one of the dominant use cases that have emerged

out of our ecosystem that aren't built around speculation. And so that to us was really a big pillar of the ultimate vision for CASA. Because the ultimate vision for CASA is this idea that private keys make us much more secure around the things that matter most to us. And one of those things is our money. And so when you really start to look at how, okay, now with CASA, you have a combination of Bitcoin and stable coins. in a really secure self-custody setup

that only you have control over, I think that that is a game changer for people because they can build this portfolio of money that they control with different types of aspects between Bitcoin and stable coins that we can talk a little bit more about if we want to dig into it. But I think that this capability really rounds out

some of the things that CASA has been building towards when it comes to giving people control over their money. And so to get there, we had to expand beyond Bitcoin. And yes, maybe stablecoins will come to Bitcoin with some of the protocols like Tapirut assets or RGB. But I think that for right now, stablecoins are not on Bitcoin. They're in some of the other chains. And so in order to support what we are really trying to build a right.

around self-custody money, we had to expand. Yeah, having all of these assets, even as a user of CASA and as a user of some other custody options and wallet infrastructure out there, just having support for all of these assets on one platform makes so much sense from a user experience perspective, from like a peace of mind perspective, from an anti-fragility perspective. So I'm super excited to hear that you, one, added support for Ethereum, but are also launching support for stable coins. And I'd love to hear a little bit more from you about what that support is going to look like initially and how it might expand over time. Is it that users will be able to put away some amount of stable coins for long-term storage?

Or are you intending to add more flexibility around it? How are you thinking about that? So to start with, we're really just thinking about this as stable coin support in our vaults. And so that's going to lend itself towards longer term, more secure storage. And so CASA's got our three key vaults and our five key vaults. The three key vaults are more secure than a hardware wallet, but a little bit easier to move funds out of than the five key vaults, which are super secure, but very difficult to move funds

out of because you need three out of the five keys in your setup to actually move funds. And so where we're starting is just people can store USDC and Tether in either of their vaults and keep that really safe for longer-term storage. But I think that this will expand into other types of use cases around stable coins as well as we add support for it in our mobile wallet, for example, because part of the CASA app is just a really simple wallet on your phone where you don't need anything else to send funds. As we look at things that are developing in the ecosystem around interest-bearing stable coins, I think those are things that we're hearing some early noise about.

I know Castle Island's been talking about and looking into some of these projects. And so I think that that will be an expansion point in the future as those types of things evolve more and become things that people want to. hold for the long term and save money in. I think that the approach that we've really taken is how can we ship updates in a real, like, fast, bite-sized way that are really driven by our customers. And so when we shipped Ethereum support, we had customers telling us, hey, I really like to store my USDC or my tether with you guys too. And so that's the next step. And then we'll ship this this week, start talking to our customers and seeing where do you want to go from here?

What are the ways that you're actually thinking about using CASA to store money that you can control and how can we best enable that for you? And so we have some ideas, like I said, about what that looks like. I think that a lot of this is driven by what our customers are telling us they need and what we're seeing from a need in the market. Got it. I think we talked about this a little bit when we had coffee a couple months ago, but I'd love for you to kind of articulate for listeners how this decision kind of gets you closer to being a platform that's powered by crypto rails and kind of gives its end users the inherent properties that bring us all to crypto, but it kind of abstracts away and makes it similar to using banking or finitely.

tech services in the traditional world. I think we talked about this as a potential vision or end state of CASA. Can you talk a little bit more about that? Yeah, so this kind of gets back to the ultimate vision for what CASA is trying to build around letting people actually control and secure their money themselves. And to back up slightly about why that matters, we saw earlier this year the U.S. Bank system, the most robust banking system in the world, had systemic issues and Silicon Valley Bank collapsed. And for a few days, everybody was in this panic where they were trying to figure out which banks were safe to keep their money in, which ones were potentially going to be subject to a run on the bank like Silicon Valley Bank or signature had had over that couple day period.

and everybody was trying to open accounts at the only banks they knew were too big to fail and would be backstopped by the government, like J.P. Morgan or Bank of America. But not everybody could actually do that because J.P. Morgan's getting flooded by request to open accounts, especially for like small businesses.

They just don't even care about opening an account for you. They literally don't want your money because they're just too big. It's not worth the time. for them. Suddenly, all these people in small businesses are scrambling to figure out where to put their money, and there is actually just not a clear, safe place for them to do that. And so this happened in the U.S., in a highly developed, very robust banking system, and it's not something that happens very often. It seems like it's been about a decade, a little bit longer,

since that happened previously back in 2009. That's happening more broadly, or that risk is more prevalent in other countries around the world as well. So then we're thinking like, okay, this is where crypto comes into place because why can't you hold some of your money yourself today? You know that you're a safe place to keep your money.

The bank is a black box that you don't know the inner workings of. So you're kind of giving them your money and trusting that they're doing the right thing. And for the most part, especially in the U.S., that's fine. The regulations are there in place for you to be relatively safe, especially if you're at one of these too big to fail banks. But in these times where things are really melting down from a systemic perspective, people need some way to have a backup where they don't actually have to be worried. is this money going to be there or not, because they're the ones holding it. You care the most out of

anyone in the world about protecting your own money. So you should have that option in our system today to protect some of your own money. And yeah, you could have cash under your mattress or gold bars and your safe in your house or whatever, but that's just so impractical that nobody really wants to do that. People make fun of that. And so when you think about now Bitcoin and stablecoins and what that, allows us to do, that is all digital. And so suddenly it's more practical than ever in the history of the world to store meaningful amounts of money yourself, where only you have control over that. And so this isn't saying that, okay, now everybody needs to switch to this being the only way that they store their money. Some people might want to do that. But for a lot of people,

it probably makes sense just to use this as the equivalent of the schmuck insurance, where you've got some money set aside just in case things really happen in a bad way in the broader banking system. And so now that is possible when you actually combine Bitcoin and stablecoin and stable coin storage all in one place, because they do slightly different things, right? When the original SVB collapse happened, Kasa hadn't launched our Ethereum support yet. So people could, if you were holding Bitcoin in a multi-key vault with Kasa, you had some protection against that. Like you were still able to move some value around in the form of Bitcoin, but Bitcoin's also volatile.

And so most people don't want their entire portfolio of assets sitting in Bitcoin because of that volatility. So that's where the stablecoin piece comes in. They have a different risk profile than Bitcoin. They are stable to the dollar, obviously, but they do still have some ties to the legacy financial system. So Bitcoin is completely divorced from the legacy financial system, whereas stable coins, the good ones, are backed by some mix of dollars and treasuries and maybe some other assets, but very safe backing, but legacy financial system backing.

So that's what gives you the stability. And so you can see how you can build this portfolio between Bitcoin and stablecoins that allows you to protect against different kinds of systemic risk. And so you have some of your money in Bitcoin, you have some of your money in stable coins, and maybe this is like your rainy day fund that you keep on the side just in case things happen to your normal bank account that you are using on a day-to-day basis. And so then how does that evolve over time? Well, as more places start to accept stable coins and Bitcoin to actually pay for goods as a medium of exchange, you're able to shift from, hey, maybe this is only my rainy day fund just in case bad things happen elsewhere to maybe I'm actually transacting out of this relatively frequently because settlement times are faster. Maybe there's some incentives built around that for. for some of the merchants.

And I think that something really interesting gets built up over time with that, where people are able to reclaim ownership of their money, don't have to send it off to some black box bank or exchange or something like that, and just trust that they're going to do the right thing. They can trust themselves and know that they care the most about securing their own money. And so I think while a lot of people are really focused on building in the more speculative side of the crypto industry. We're really focused on how do we use private keys to give people control of their money. And the best way that we see to do that is through this combo

of making a great experience around storing Bitcoin and stablecoins. I agree with that a lot. I think this infrastructure is essential and going back to what you were saying around the, I guess impact and consequence of everything that happened with SVB and the flight of people to too big to fail institutions. And I think another vector that we like rare is its head every now and then. And it has most recently with Jamie Diamond's comments around crypto assets. And you just as a potential user of their services began to wonder like what happens to me if I, perform some amount of activities or of my career is in the crypto space and am I going to be censored? And you don't think that these things are going to happen until they do. So I definitely

agree that we need increasingly to protect ourselves against these potentially more probabilistic situations. So you never know when that kind of thing will happen, whether it's specific to you or whether it is a broader industry-wide or economy-wide problem. And so if you take the steps ahead of time to put aside a little bit of money that you know you will be able to access, it's not about ensuring that you don't lose it all, usually. Like, don't lose all of your money. Like if JP Morgan decides to shut off your account, they're not stealing your money. You just have to move it somewhere.

but for a short period of time there, you may not really have a great ability to make payments that you need to make. This happened with SVB. Businesses were trying to figure out how do they run payroll like on Monday after the weekend when all the banks were closed. And so sometimes bridging that gap

is just about having enough money to be able to pay for your obligations in the time when you need to pay them while you're figuring out how to access your broader treasury as a business or savings as an individual. And so this is a very American-focused part of the discussion so far where it's about people that live in an ecosystem where you have a really established banking system and people generally don't steal your money. But it's still a use case that I don't think people have thought about a ton, since the financial crisis, and now it's kind of being brought back to the four with some of the problems that have been happening systemically and individually. And so this is a good time for

people to be thinking about how they protect themselves against this kind of stuff. I was really surprised earlier this year seeing on Twitter just some viral posts from people who out of nowhere for no reason had their bank account closed with like Bank of America or chase, and sometimes it was people who were in the crypto ecosystem, so they hit some threshold of activity where they were sending too much money to Coinbase or something. But then sometimes it was also just non-crypto-related people at all who have a family and suddenly can't access the money in their bank account and are sitting inside the Bank of America branch trying to figure out what's happening. And nobody has answers because the decision was made by

some risk department person deep in the depths of some building in Ohio or something, I don't know. And so I think that when you can't get answers about that and you're trying to figure out how do I access my money so I can even move it to another banking institution, that's super scary. It's unclear why it happened in a lot of cases. And so having that rainy day fund is really valuable. Yeah, definitely. We talked about mostly the last few minutes has been discussing the opportunity for crypto, for CASA in the West in the United States. I'd love to get your take on other geographies. Obviously, there's a huge value proposition for crypto outside of the West, especially in emerging markets. It's an area that we have been very excited about at Castle Island and investing pretty heavily behind. But I would love to hear kind of in your words, how you view that opportunity for crypto broadly and then CASA specifically.

And maybe it'll also be helpful to understand how CASA users are geographically distributed today. I won't pretend to be the most expert person on this. I think that you guys have had some amazing guests on the podcast to talk about this, who are actually from some of these countries that are experienced, seeing major inflation problems, and so they're seeing a lot of usage around stable coins evolve very naturally. But from my perspective, I think this is a really interesting use case and something that when we talk about Bitcoin and its inflation resistance, there's certainly that aspect with the supply cap and the long-term benefits that Bitcoin can really

provide here. But I think that over the short term, a lot of people in countries with inflation problems are looking for access to dollars. And they didn't really have a great way to do that before. And now suddenly with Tether and maybe some of the other stable coins, they're actually able to access dollars in a relatively seamless way that it doesn't require black market transactions with tons of cash that they then have to secure in some way. It's all digital. And so the practicality of it is significantly better than it was before. And then the markets and actual access to those markets is also significantly better than it was before with the growth of exchanges using tether worldwide. And so what is so interesting about this to me is just that it has a

real potential to meaningfully improve people's lives in a short amount of time. A lot of the things that we talk about in our industry are planning for 10 years from now and planning for a long way out where some of the things that are getting built today will hit the escape velocity with real use cases that are solving problems in people's lives. The thing that's so interesting to me about stable coins internationally is that they are solving a problem that people have right now on a short-term time horizon.

And so there's a bunch of companies that are working on this around the world. And I would say that CASA is not necessarily, we just added support for stablecoins. So we aren't today doing a bunch of work in this, but we're really taking a look at it and taking a look at how we can help in these areas and help solve problems for more people internationally who are looking to use stable coins,

whether that's individuals or businesses. And I think that as you get into some of the use cases beyond the saving and protecting against inflation by saving in dollars, you look at things like international remittances, which have been talked about a lot, where people and businesses can move money across borders just 10, 100 times easier than they could before. And so that's another area that's interesting to us, especially on the business side, as you think about businesses that are going to need

to secure treasuries, meaningful amounts of money, in stable coins, if those become more and more part of their business operations. And so I think that there's something interesting there for us. And overall, we're looking to collaborate with companies that have grown up in these areas around solving really specific problems for their customers. And I think that a thing that a lot of these companies have leaned in on is like that first mile experience around how do you onboard into a stable coin from the country's

fiat currency? How do you get that wallet experience where you're able to transact relatively easily in it? What they might be missing is how do you get that high? security savings account or vault. And I think that's where CASA can come in from a partnership perspective. It's not easy to build these things like a multi-key vault in a highly secure way. And so we've built out our API that actually lets people tie into CASA software and security stack. And that might be something that people can offer to their users and help users put away a portion of their savings for longer-term highly secure storage.

And so that's something that we've been thinking about and talking to people about as we develop our stable coin offering. And then to answer your last question there just about like, what does CASA look like geographically today? We're actually surprisingly geographically distributed, but I would say that it tends to be in more developed countries. So we've got a pretty good-sized customer base in the U.S. today. And then we also have a good-sized customer base in Europe and Australia is actually

surprisingly large for us. And then it kind of goes down from there into some of the Asian countries and some South American and Central American countries. And so we're surprisingly diverse and distributed globally today, but I would say that it tends to be still in more of the more developed countries serving people who are securing larger amounts of funds, especially in Bitcoin. Got it. I think that's a good segue to talk a little bit more about your customer personas and how

that's evolved since the inception of CASA as you have added more features and products and assets to the platform. You talked a little bit at a high level about individuals and businesses, but would love to double-click on which customer personas are you servicing today? How do you segment them? What are they using CASA for? Yeah, so when we first started, CASA was a waitlist-only super high-touch product that cost $10,000 a year. And we were really going after the OG whales in the Bitcoin ecosystem. So we built that up for about a year and grew the business well through that time. Then we started to see, okay,

there's room to expand to a broader range of people here. And so we started offering different plans that had at lower price points that had different levels of security, different levels of service. So not all super high touch white glove service. We introduced the three key vault. We introduced the mobile wallet. So that expanded to a broader range of people who need better security, but who don't need this ultra high security, high touch service and also aren't willing to pay so much money per year to actually secure their assets. And so now we have a pretty broad range of security offerings helping a broad range of people secure their Bitcoin for longer term time periods. And since we added Ethereum support a few months ago,

we've started to see that expand into the Ethereum ecosystem too. And so the types of customers and use cases that we see, the main one tends to be people who have families. They either have a spouse or they have a spouse and kids, and they really are making sure that they're securing their assets in a way that are secure for the long term, thinking about generational wealth for their families and thinking about something that they feel like if they pass away, their families will still be able to access. And we're doing some exciting

stuff around this that'll come out early next year. So I can't talk too much more about that. But that is a thing that we just hear a lot from our customers that they care about is how do I make sure that if I die, my family still has access to my money? We also see a I would say, smattering of businesses and family offices and some hedge funds that use our product to either secure business treasuries or to secure their long-term investment into crypto, that they aren't really actively trading, but they've made a long-term bet with a portion of their assets and they're holding this for the next five years. And so that's on the more business side of things. I think now that we've added stablecoin support, we're going to

see some more opportunity in that business and family office area. So those are the main couple of types of customers that we're seeing right now and that we've grown with over the years. And it's significantly easier than most people think, especially if you're already using a hardware wallet, to use CASA and to increase that security. And so one of the things, that I hear a lot is just people saying, after they've signed up and set up CASA, they're saying, wow, this was way easier than I thought it would be. I wish I hadn't waited so long to do it.

I've been wanting to set this up for quite a while now, and I have just kind of had it on my rainy day list and never really gotten around to it because I just thought it was going to be hard. Then when they actually sign up, they realized, oh, that was pretty easy. I was already using a ledger. I just plug it into CASA.

and move my funds and I'm good to go. And so, yeah, hopefully that answers your question. We do serve a surprisingly broad range of people and use cases today. Yeah. No, that's exactly what I wanted to hit on. I would love to get your views as you look forward. Obviously, historically, the biggest value proposition of CASA has been that it provides this cold storage, this really secure way to,

put away assets that you don't intend to touch for a period of time. As you add support for other assets like ether, like stable coins that maybe have more utility and use cases on a day-to-day, how do you think about balancing this security with maybe more flexibility? We've already started setting CASA up to handle that need for more flexibility. And that's just by nature of the fact that we have multiple security levels available in the CASA app all managed in one place. So you can have your mobile wallet, your three key vault, and your five key vault for all of your assets all in one place. And that's kind of this continuum or the spectrum between convenience and security with low convenience, high security at the five key vault end, high convenience, lower security at the mobile wallet. And as we start to grow into some of these other assets like Ether and the Ethereum ecosystem and then stablecoins,

I think that we're definitely going to see people using that broader range of security levels more frequently. We've had these different security levels in the Bitcoin ecosystem for many years, but really people use the product for long-term cold storage. And that's just because that's what people do with Bitcoin a lot of the time. And so that makes sense. But as we get to these other assets, I think we're going to see people grow and really utilize the full range of our offering. And so that's going to be really fun, just from I'm a product person, from my perspective, seeing people use more parts of the product and use the product in new ways. I'm really excited to see what people do with that. But there's also,

I think, going to be some really core ways that continue to actually go deeper into that high security cold storage realm, but in different ways with different utility. And so an example of that might be Ethereum staking. So Ethereum staking has very similar security properties and needs to long-term storage of Bitcoin or any other asset. You stake from a wallet, and then when you unstake your assets, they go back to that same wallet. So if you lose the key, keeps of that wallet, you've effectively lost your funds. And that means you really need a secure way to be storing those assets. Well, Koss has a really secure way to store assets that you aren't planning to move for a long time. And most people aren't going in and out of staking with their

ether because there's already a pretty significant time delay to stake and unstake. And so that's an area next year that you can look for us to expand into, because it serves a really core need for the Ethereum ecosystem that I think is underserved today. A lot of people today still don't have great staking options. You know, they're doing it through an exchange or doing it through a home node or some other kind of DIY setup. And that's an opportunity for CASA to make something really easy there. Yeah, absolutely.

It definitely seems like you have all these foundational building blocks in place that you've worked so hard to build over the last few years and now you're really able to tap into the value proposition even more by adding support for new assets and new functionality. So I'm really excited to see how you expand on that front over the next year. We spent a lot of time talking about alternative assets outside of Bitcoin and I definitely want to spend some time on Bitcoin as kind of a last topic. A lot has changed in the Bitcoin ecosystem. There's a lot of experiment. taking place as it relates to ordinales, even using Bitcoin as like a data availability layer for zero knowledge rollups and potential restaking asset. So there's a lot going on.

And I'd love to get your views on what's fundamentally exciting to you versus maybe what do you see more as a fad or a speculative frenzy. So I'm pretty excited about, while I don't really own Ordinals myself, I'm pretty excited about the new interest in Bitcoin innovation that it's brought back. I think in a lot of ways, Ordinals reminded the broader ecosystem or opened up a pathway for the broader ecosystem to come back and develop on Bitcoin again, which I think is really critical for the long-term health and security of Bitcoin. I do not agree with people today who say that ordnals are an attack on Bitcoin because they're driving higher fees, Bitcoin should be an open fee market, and whatever the most useful, highest value way

of using Bitcoin is, will be willing to pay the most from a fee perspective. And so for the people who want that to be making Bitcoin better money for the world, we need to build tools that actually make Bitcoin usable as money and make people around the world want to use it as money. Bitcoin having high fees on the base layer is really the only, in my view, I think it's very important for its long-term sustainability. And so seeing more innovation come back to Bitcoin, where now people are starting to, like we've had more layer two projects announced for Bitcoin in the last year than we did in like the four or five years before that. Will all of them work? Probably not. But is it great to have

other alternatives besides Lightning? Yes, because Lightning is going to be good for certain types of Layer 2 use cases of Bitcoin. Nothing's going to beat Lightning in terms of the ability to send really small, fast payments in opening up some of those use cases that come from that type of usage. But I think that Lightning also has some drawbacks around managing channel liquidity and the necessary on-chain fees to open and close new channels, that kind of stuff. So seeing more innovation that's being brought to the Bitcoin ecosystem by Ordinals, in my opinion, can only be good for Bitcoin. And as somebody who I appreciate Bitcoin's economic benefits for people.

and how it can help give people better money from a inflation and hard money perspective and all of the digital gold aspects around Bitcoin. I think that while that was the dominant narrative over the last few years, it's not the only thing that gets me excited. And I actually get really excited about seeing some of these new use cases getting built on top of Bitcoin. And will it be ordinal? will it be BRC 20s?

I don't know. But I do know that catalyzing people to build on Bitcoin again is a really good thing. And that's what I'm here for and excited to participate in as an ecosystem. I completely agree. And that really resonates with me. I think finding new and incremental ways to leverage the security assurances that Bitcoin offers is very exciting and should be something that not only Bitcoiners are excited about, but other stakeholders in the industry are excited about. We could spend probably an entire

another hour talking about innovation on Bitcoin, but I definitely wanted to hit on that as a last topic and just say that I think CASA is really important infrastructure, and I'm so excited to see all the ways that you're going to continue to. to make impact across different ecosystems and really allow us to harness the core values and properties of public blockchain networks and the assets that exist on top. So thank you so much, Nick, for coming on and telling us a little bit more about what you guys have been up to and what's coming next for CASA. Thank you, Rhea. It was great to talk. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about

Castle Island, visit castle island.V.C. To listen to all of our podcast episodes, please go to On the Brink-Podcast.com or just click on the tab in our website. Thanks for listening.