The Pomp Podcast - #1053 Brandon Arvanaghi On Offering Corporate Treasury On Crypto Rails

Episode Date: July 19, 2022

Brandon Arvanaghi is the Founder of Meow. In this conversation, we discuss yield generation, why corporate yield differs from the retail yield products, Meow's new fundraise, onboarding new companies, the risks associated with this technology. and the future of Crypto and corporations using crypto rails. ======================= Crypto wallets and browser extensions are outdated, limited in features, and don’t meet the needs of today’s Web3 users. Core, the free, non-custodial browser extension built by Ava Labs, is more than just a wallet. Core is packed with features that give Avalanche users a more seamless, and secure, Web3 experience. Did you know you can also bridge Bitcoin natively across the Avalanche Bridge, and take advantage of the thriving DeFi ecosystem on Avalanche? This is just one of the innovative properties that make Core so powerful, giving users an all-in-one operating system that brings together Avalanche apps, Subnets, bridges, and NFTs in one high-performance browser experience. With Core, any crypto user can easily swap assets, display NFTs in a beautiful interface, and store your assets in a Ledger-enabled wallet. Plus you can put real dollars in your Core wallet in just a few clicks. Go to www.core.app to access the full power of Web3 on Avalanche! ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Valour (formerly DeFi Technologies) represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U.S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at valour.com =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Brandon Arvanaghi is the founder of Meow, a brand new company focused on corporate finance on crypto rails. In this conversation, we talk about yield generation, their brand new fundraise, why the industry is so quickly adopting corporations and their balance sheet, and what exactly the risks of this type of technology and these use cases are. I really enjoyed this conversation with Brandon, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors.

This episode is brought to you by Avalanche. Crypto wallets and browser extensions are outdated, limited in features, and don't meet the needs of today's Web3 users. Core, the free non-custodial browser extension built by Avalabs, is more than just a wallet. Core is packed with features that give Avalanche users a more seamless and secure Web3 experience. Did you know you can also bridge Bitcoin natively across the Avalanche bridge and take advantage of the thriving DeFi ecosystem on Avalanche? This is just one of the many innovative properties that make Core so powerful, giving users an all-in-one operating system that brings together Avalanche apps, subnets, bridges, and NFTs in one high-performance browser experience. With Core, any crypto user can easily swap assets, display NFTs in a beautiful interface,

and store your assets in a ledger-enabled wallet. Plus, you can put real dollars in your Core wallet in just a few clicks. Go to core.app to access the full power of Web3 on Avalanche today. This episode is brought to you by LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by a 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low-latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. LMAX Digital features a central limit order book that streams various cryptocurrencies, and it's all paired with US dollar, euro, and yen. They also allow you over the internet to execute your crypto trading strategy with precision.

LMAX Digital, you may never heard of them. It's because they only serve institutions, but they're secure, they're liquid, and they're trusted. You can learn more at lmaxdigital.com slash pomp. Again, check it out at lmaxdigital.com slash pomp. This episode is brought to you by Valor. Valor represents what's next in the digital economy. They provide simplified, trusted access to crypto,

decentralized finance, and Web3 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols through a single stock purchase on a regulated exchange. They're currently listed on the OTC at DEFTF and on the Canadian NEO Exchange at DEFI.

For more information or to subscribe to receive company updates and financial information, you can visit their website at valor.com. That's V-A-L-O-U-R.com. Valor.com. Go check them out today. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the

opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Brandon, welcome back. How are you? Thanks, Pomp. Doing great. Great to be back. You guys raised a lot of money. Why do you need so much money? We're kind of going for it all here. We're not just going for yields. Right now, businesses can sign up with us and earn up to 4% potential yields.

We have a conservative yield offering we always have. But phase two of the company is why we raise the money. That's not the end-all, be-all. We're going for the entire corporate finance stack, and we think it can fundamentally be done better when built on crypto rails, but without making that clear to the end user. Okay. What is corporate finance, for those that don't know?

Like, explain, is that just like counting, hey, how much revenue we have and what our expenses are, or what does that entail? Sure, yeah, specifically things like invoicing, things like treasury management, things like spend ultimately uh forex is a big one but these are like the practical use cases of crypto not the cosmic brain things like anyone could pitch anything in 2021 and get funding correct we're we come from the ground floor of an exchange so we know what actually like people need and that's kind of what we're going for and that's what the money's going to be used for so people uh so far uh until recently they come to meow which i'm saying it correctly right uh

is um uh and they look for treasury management like yield generation meaning that rather than have cash sit in the bank at whatever bank and earn 0.03%, I think is the average in a deposit account, they can come to you and earn up to 4%. Where does that yield come from? Yeah, so that's a great question. So how we've done things differently from day one, and this is back when we started in April of last year, 2021, we made it so that the customers actually had to pick exactly where their funds went. So it's not like a black box, you give the money and it says, all right, we'll give you an interest rate. They have to pick, do they want it to go to an institutional lending desk like genesis do they want it to go to this desk do they want it to go

to a defy protocol their money goes exactly where they want it to and we also only face accredited investors so we don't face retail so those are the two two differences for us but it was mostly it is mostly institutional lending desks that traditionally lend to crypto hedge funds etc so when i run a business let's say i'm the cfo at some large corporation i'm staring at you know tens of millions of dollars sitting on our balance sheet uh i'm like damn we're getting crushed with inflation i want to earn a little bit more yield uh i come to the platform and i'm able to pick who the counterparty is in the sense of the actual lending desk uh and there's a yield that is associated with that um what kind of diligence can i do or like how do i decide right

if there's 10 different options or five different options like how do i as just a regular cfo that doesn't know that much about crypto know who to go with yeah so it's kind of painful for us but we have to write like 30 pages of like the risk profile of everything uh and explaining exactly what could go wrong with everything. And we get on calls with all of our customers and we make sure they understand the risks fully. Uh, we send them documents, we send agreements and when they are accredited and when they understand the risk profile of these offerings, uh, they pick what makes sense for them. Some corporates like to do pretty aggressive high yield stuff, you know, ranging in like six, 7%. Now we never dabbled in the 20% stuff that a lot of the retail apps did.

That just didn't add up to us. Like that was sketchy from day one to us, but we, we definitely curate to some extent, but it's ultimately up to the investor. So 4% sounds a lot closer to what you'd see in the traditional world than there was people running around offering 10, 11, 12, 13, crazy numbers. Why did those high numbers sound so risky? And what is your analysis as to what people were doing there that you guys don't do? Yeah, it's a great question. So unfortunately, retail only competes on one vector. So retail yield apps, for example, it's the rate and retail investors tend to be uninformed and that's why they go after the highest rate possible. And so one retail app would be offering 10% and then the next one would try to one-up them and say we offer

12. And that would keep going and going and going. And the only way to do that in the crypto world was through the anchor protocol. That was UST. So pretty much all these retail apps or the vast majority of them were taking people's cash, converting it to UST, putting it into the anchor protocol, which, as you know, UST blew up, and giving a dollar liability to their end users. So even though the interest in the anchor protocol went back to the asset that was UST, the yield half was saying, we're going to pay you in dollars. So that was where the mismatch came. And when UST lost its peg, and it went to zero, that's why they lost a lot of money. So those were the incentives for retail. Corporates is a totally different story. They care about being

conservative, they care about like, you know, risk reward, they care about understanding the risk profiles. But that's why retail apps got in a lot of trouble this time around. And not all of them, but most of them. Most of them. Yeah. When you look at the corporate finance world today, of your customers, what percentage of their balance sheets are they putting in? I'm assuming it's mostly stable coins, maybe it's other things. But what is the percentage that is exposed to kind of yield generation in this new financial system versus staying in the old financial system? Yeah, so it's mostly something like 10 to 20% of their balance sheets that they put with us are excess cash they weren't planning on on spending um anytime soon at least and they deal with

dollars they don't need to own a wallet to come with us they they go and they transfer this from their bank account like they would an ach or a wire okay and it's mostly web two companies you know uh that's what we're very proud of that's why we were able to get a series a done is because we prove that web two companies want a compliant bridge to these yield sources are you able to name any of the companies publicly there are some testimonials on our site uh those are the ones that I'd be able to, um, uh, alt is a, is an example of that. Um, yeah. And the site has some other ones. Yeah. Okay. And when you see this, talk a little bit more about, uh, I sitting there as a CFO, I've got this cash. I basically just ACHU. What is like technically happening for me

to then get exposure to this as a corporation? So we have the relationship with the different lending desks. We have the bridge to a DeFi protocol. If you'd like to do that, our team is some of the founding engineers at, at Gemini. Uh, so we built the rails to convert your dollars to the stable coin, put it into the DeFi protocol if you pick that. But if it's an institutional lending desk, we have an incentive rate from them. And we just need to take your dollars and batch it with other people's and send it to that desk and pass you through the potential rate that you're earning. So from your perspective, it's one bank transfer, you're done, you see your interest accrue daily, you know, compounding yields, and you can withdraw on one to three

business days in almost every offering that we have. So what's interesting about this is if you go back to the late 90s, internet company, internet company, internet company, that's all anyone wanted to talk about now it's just companies right and and quote the internet uh one the retail users got normalized to it so if i want an answer i go to the internet if i want to do something i go to the internet right uh but two is also uh the user experiences the user interfaces have kind of abstracted away a lot of the technical components and simple example being uh ip addresses now there's human readable domains uh and many many others um how important is it for all these different rails and all these different technologies that are being built today which

most people in the industry talk about they they kind of wave around this look how shiny and innovative this is like how cool it is look what i made the technology do versus no that's all going to go in the background and you know 10 years from now when true mass adoption is occurring people will have no clue what we're talking about yeah abstracting everything away is the right answer right now historically that the companies with that make real money in the crypto space have been a bridge to the you know the ip of crypto effectively so coinbase was a bridge open sees a bridge, etc. And that's what we are. It's mostly been speculation to date, frankly, you know, Coinbase and OpenSea and things like that. But I think stable coins are going to be pretty much

the first use case that is not fully speculative. I mean, it is a superior payment rail to ACH or wire, especially when going internationally. And we want to be the first company that provides access to businesses as easy as, you know, their existing payment rails. So they think they're sending a dollar effectively, and it's really going to a contractor. It's a seamless sending a bank transfer right now. Yeah. How much money did you guys raise? We raised 22 million. 22 million. And when did you raise the money? Just a month ago, actually. Okay. So you fundraised during a market downturn. What was that process like? And how did it differ from when you raised, I think in 2021? Yeah. 2021, like literally anyone, you say you're web three, it's over.

Like here's your money. Like any company could do that. The thing that allowed us to raise in this market, which was egregious, by the way, was the fact that we had revenue. So we were built on fundamentals. We were very close to being profitable. If we didn't have revenue, it would have been a very different story. No one was pitching on narrative right now. No one's getting deals right now, period. This month to the previous month is night and day. That month to the previous one is night and day. But fundamentals are very important to us, having revenue, being lean. We're only nine people. Yeah, that's really how everything's changed. Everyone cares about revenue. And what about the actual fundraising process? Did you have to go talk to like two or

three times more investors? Was it just, no, we knew who we wanted as investors and the conversation was different? Yeah, we were thrilled with Tiger very early. I mean, the process took about a week um and there was intense diligence and we had you know we had multiple term sheets which we're very grateful for really really good people but oh yeah people competing yeah ultimately uh tiger was was clearly like you know we were so thrilled i mean they're no nonsense they do intense diligence just so professional and all this um yeah we're very happy with what was the diligence process like when you intense is a unique word to use during a diligence process of what was so intense so i mean this is no joke i mean compliance is a big

consideration now because a lot of the you know a lot of the yield apps are facing that scrutiny I mean, we've been built to compliance first from day one. So explaining that story clearly with our lawyers, with counsel on the other end. And there's a lot of – I mean, they make phone calls to people 10 years in your past in the diligence. So they're calling like old high school buddies and stuff? Yeah, feasibly. I don't know exactly who it was. Yeah, exactly right.

All right. And now talk to me about outside of just the treasury management. You mentioned kind of all corporate finance functions, so things like invoicing. Like, how do you think about where invoicing kind of intersects with this, like, brand new financial world? Well, yeah, you know the 24-7 nature of, like, stable coins, low fee. That's just practical, right? I mean, this is, like, really the first non-speculative use case for crypto, besides Bitcoin being the greatest store of value in history, in my opinion. That's pretty powerful.

And things like contractors overseas, I mean, they prefer stable coins already. If they can get their hands on a stable coin, that's what they want to do. People in Argentina, for example, the inflation is 20%. They want to hold dollars. And it's a nightmare trying to get a bank account or hold dollars. So that's what we're focusing on is international payments. We think foreign exchange is really interesting as well. And basically, we have the fundamental thesis that corporates and crypto is a very inevitable convergence.

And if we build practical rails for them, every corporate is going to want to use us instead of their traditional bank account ultimately. When you say foreign exchange, that's something that I think in crypto, most people just say, either I'm in like the crypto universe or I'm in the Bitcoin universe. There's really not any exchange between those two assets. How do you think about foreign exchange and like what you guys can do for corporations? So Circle just came out with a Euro stable coin as well, right? And the markets are nowhere near as deep as traditional finance. Forex is very deep for the major currencies. But feasibly, if they get as deep, the trading pools, for example, between like USDC, USD Euro, then you have a more efficient system. Anything done on chain involves less pen and paper

less transaction costs 24-7 you know weekends you can have your money um we definitely see that happening i mean defy definitely proved that it works in this downturn they were the ones who got paid first you know they were senior on everything uh from all the all the crashes so explain that more like there's centralized finance there's decentralized finance uh you said that defy works and they got paid first what do you mean yeah so some of the people who pause withdrawals for example um they had and they were borrowing from defy protocols and if they didn't pay back those loans they would have had their collateral liquidated now in c5 there's things like bank bankruptcy there's cronyism there's favoritism etc defy protocols are dumb

in the best way they're dumb in the best way which means you can't call someone you get liquidated if you don't actually you know pay your interest pay your loan back it's over and that's what you actually saw on chain there was no nonsense with them uh so that's product market fit i mean there's no question about people rehypothecating or repludging collateral in two different places for example it's it's just you give the collateral in the form of bitcoin to a defi protocol or if and you have to pay or you get liquidated and that was that transparency was so key in downturns like this when i hear people say that defi worked uh and c5 didn't uh i think that it's probably too much of a like a reductionist uh perspective of like uh obviously luna ust you

You know, that kind of ecosystem did not work. And then obviously on the centralized side, there's company, you know, take a Coinbase, right? Zero issue, all of that. So how do you think about C5 versus DeFi given what we've watched play out over the last, you know, three, four months? So DeFi, I think, is very good at over-collateralized lending and borrowing because it can automate a lot of that. That's not a giant market, though. Ultimately, if more of this kind of lending activity takes place on chain, it's more efficient and it's at lower cost. So this world of kind of C-DeFi is coming out, which is really C-Fi but on-chain.

There are protocols like Maple Finance, for example, that are doing that. And when you have these protocols on-chain, you avoid pen and paper, you avoid Telegram chats, you avoid a lot of the issues. So there is certainly a place for both. DeFi is doing very well on over-collateralized right now. Under-collateralized is a different story. I've seen people pitching under-collateralized on-chain lending. Is that possible, and what are your thoughts in terms of how viable that will be in the DeFi world but without the over-collateralization? It's extremely hard, and it's not viable.

Like it's – in the long run, it probably is, but what is missing is the regulatory aspect. I mean if someone doesn't pay you unsecured, you have to go to court ultimately. You don't have my collateral if that happens. And so you need – we don't have police forces. We don't have court systems on chain right now. And there's no concept of credit scores. on-chain. So that's why collateral is king on-chain. That's why over-collateralized lending is the first kind of lending that takes place on-chain. So when you have these kind of court

systems on-chain or, you know, regulatory bodies that recognize that this is a loan on-chain and they come in and intervene, that's how you can do, you know, unsecured lending or credit scores on-chain. You just said collateral is king. When the finance world of Wall Street kind of traditional system sees collateral is king on chain why don't they all just run and be like oh my god we'll never lose money as long as we have over collateralized lending on chain yeah i mean because it's a very small market that's not the point of credit in most cases it's it's mostly when you do collateralized lending it's mostly for you know traders and there's margin lending and stuff like that but that's nowhere near i mean the entire financial system runs on

unsecured lending now getting that on chain is going to be a it's going to be a longer process than most people uh want to admit but the over collateralized part is work is running like a clock. And that's what we should be grateful for. Can you decentralize unsecured lending in the sense where reputation credit scores, like all these things that we know the centralized system relies on, whether they work perfectly or not, like that is how the centralized system works. If you look at something like Bitcoin, the whole idea is that, hey, we can build these banks without rehypothecation. We can essentially go back to kind of a strong financial system that isn't built on this huge credit component. Is the idea of bringing unsecured lending to

the DeFi or like on-chain world, just trying to recreate some of the problems from the legacy system in the new world? Or like, how do you just think through what are the pros and cons of doing that? Look, unsecured lending is going to take place, whether it's, you know, whether it's Bitcoin, whether it's ETH, whether it's dollars. It can be done more efficiently when you have basically an open API, like a compatible API everywhere, which is on-chain. So it's going to happen whether whether we believe in it or like it or not um and yeah like things like decentralized credit scores and stuff that's i mean it could be the case we have big problems with like oracles right now the truth is what we need is like what you would want is enforcement if someone doesn't

pay you back and there's no way to enforce it on chain currently you need like someone to hold you accountable a court system or something like that and we're a long way from that obviously one of the sayings in the Bitcoin and crypto world is code is law. And to a degree, as you said, collateral is king on chain. And so the code is the law in that scenario. Exactly. As we get more of these kind of recreation of the traditional world, like unsecured lending and many others, will some of the thought process around something like code is law change? Or is it just somebody has to figure out how do you take the law and actually codify it so that it's enforced on chain? That's a very good question. I think the CODA's law thing is its own, it's its own kind

of saying, and it's a great saying, and that's why Bitcoin is like so solid. You know, there's only going to be 21 million of them. And then, yeah, for unsecured lending, it's regulatory bodies written on paper is law, as we have with the traditional financial system. So you're exactly right. It's very different. They're two different kinds of law. When I think of the decentralized financial world, I've said now for months, maybe even years, that it's not about decentralized finance, in my opinion, it's about automated finance. And the reason why is some of it will be centralized, some of it will be decentralized. You could look at, I'll use USDC as an example, second largest stablecoin, based on last time I looked, they have centralization, they are not a

decentralized stablecoin, right? But the technology is definitely superior to the legacy financial system and so when you look at that is that considered defi or is that like this you know i call it automated finance because now you can actually use economic value uh stably backed by a dollar right and and use it across the world in an automated fashion but it's not decentralized yep you're exactly right yeah i was using the word efficient you're using the word automated it's exactly right that's what we're talking about here i mean there's the hard assets like bitcoin then there's the efficiency automated aspect of the centralized world and you can cut so many costs i mean the internet what it did for efficiency the internet was really just an

efficiency improvement at the end of the day right so like i don't love the internet web three comparisons necessarily but the efficiency improvements from kind of the crypto world is going to change the world as well just from the efficiency improvements not because we're recreating what government is or think like we have more data on what government is than anything in the world it's the efficiency automation that is extremely extremely valuable the bitcoin world would argue uh decentralization is really important for security obviously bitcoin is the most decentralized uh network in the world it's the most uh secure computer network in the world uh as you mentioned earlier it has proven to be a fantastic store of value over a long period of

time uh you know decade plus um most of the other components of the industry they talk about decentralization uh if you go and talk to regulators they they have this concept of a dino decentralized in name only uh there's uh an idea within the community of like a spectrum of decentralization it starts out centralized and eventually will become decentralized but it sounds like you're actually making a different argument which is like maybe the ultimate goal of some of this technology is not decentralization uh because the security component of it isn't nearly as important as the efficiency like if you think of those two as a trade-off so you get security or you get efficiency at the layer one it sounds like you're making know the efficiencies

where there's tons of value to unlock yeah i'm not sure there's a ton of value to decentralize the u.s dollar if people want to send u.s dollars they could do it more uh more effectively yeah we've seen that we've seen people try to do that before uh but yeah for the bitcoin world that is the most important thing decentralization is king like we're protecting bitcoin is just a child safety lock we're protecting ourselves from ourselves and that's why it exists and that's why it's going to be tens of trillions hundreds of trillions of dollar asset uh but for the u.s dollar i mean businesses want to send u.s dollars places like that's the world we live in currently and you have a way more efficient way to do it there's no need to be cosmic brain about this

i mean a dollar is a dollar there's going to be centralization on the back end now if that entire kind of regime is going to fall. That's a different conversation. But yeah, there's no need to decentralize. I mean, you just need reliable kind of proof of reserves. You need an easy on-ramp for that. And you get more people involved in the ecosystem. That's good for Bitcoin ultimately, which is the decentralized store of value that we have. You mentioned that Bitcoin is a child safety lock. What does Bitcoin as a child safety lock mean? It's, you know, it's just there's a fixed money supply in Bitcoin and we can't bring ourselves to do that. It's like that scene in Limitless where he says, oh, you know, there's no safeguards for human nature. You know, why don't

we just like crack a beer and live off the interest? We can't do that. That's the innovation of Bitcoin is we are preventing ourselves from inflating the currency. There's no way to change the currency value. That is a child safety lock and that's why it's valuable, just protecting humanity from its worst inclinations. So I think you, myself, many people who are watching this, they get that. Do the corporations yet understand this or are they so focused on efficiency and the kind of the conservative approach to their balance sheets, that that is a secondary thought they may have later, but right now they're just focused on dollars.

The truth, I would love to have a company that like 24-7 focuses on Bitcoin in the balance sheet, but it wouldn't be much of a company. Like we wouldn't do a series A. We have that as an option. We kind of, you know, nudge people like, hey, Bitcoin's great, right? So we're going to do our part there, just to be clear.

But what they care about is 24-7 settlement right now of US dollars, low fee transacting, things they can't get from Fedwire and ACH, Things they can't get from their legacy bank accounts. So we are, at Meow, we believe we've built a better solution for them. And that's largely on the U.S. dollar rails with the ability to buy Bitcoin seamlessly from that same account. What about things like payroll? Like one of the big problems in the legacy financial system is that people only get paid every other week.

So, you know, twice a month or once a month. And there's tons and tons of studies that show, I think it was in 2019, the top four banks made like $8 billion of overdraft fees. And when you go in, you actually analyze those overdraft fees. In many cases, it's not that the people don't have the money. It's that their grocery bill came in on the 12th. Then their car payment came in on the 13th. Netflix hits on the 14th. Bam, they get paid on the 15th.

But they actually overdrafted on the 13th and 14th because the paycheck hadn't hit yet. And so if we were simply able to pay people at the end of every day, it would drastically eliminate, one, the overdraft fees and that kind of whole part of the legacy banking system. But also, two, is it would give people more economic freedom and flexibility. And so is that something that stable coins or kind of these crypto rails could help solve? Yeah, certainly. You can't really do that in legacy finance. I mean, it's not a good UX. Things like Layer 2s can help with that.

Right now, the gas is too high to do like microtransactions on a fraction of a USDC. But things like Layer 2s can help. And you can even do that partially in a database, partially on-chain. But yeah, you're certainly right. That's a real use case. Like when we talk about real use cases, I think stable coins are dominating for legacy finance. stablecoins are king, and we see their adoption about to blow up in a good way. And I think that's ultimately very, very good for Bitcoin. I mean, it gets everyone thinking about this space, and they

start thinking, okay, this is how I'm using my payment rails. There's a much easier way to buy Bitcoin now with this. And that's kind of where we plug into that, too. You mentioned that you guys only have nine employees. That's a small number compared to many other companies that we've seen, both in the crypto ecosystem, but also just in technology in general. Why do you only have nine employees and what the hell do they do my co-founder says when everyone says it has a slightly uncomfortable amount of work then you're at peak efficiency and everyone's slightly uncomfortable the amount of work we have and it's very much the ftx model i mean ftx there's rumors that are 20 people there's rumors that are 60 i don't know exactly how many but they punch above

their weight there's like 250 to 400 is it really okay that's good to know i like that i like no moving it's a moving target and i think that actually part of the beauty is that they don't want people to know yeah exactly yeah is that everyone thinks they have 20 people the lore is Fantastic, yeah. But, I mean, you have things like automated infrastructure you can stand up and tear down in AWS. You have partners that eliminate the complexity. This is not, like, it's much easier to build a company now

than it was in 2004 when you'd have to build your own servers and bring them into your apartment or something like that. So if everyone's busy 24-7, you've got a very good system, and that gets us to profitability, that gets us to a lot of things sooner. It's the only way to build a company right now, I think. Yeah. When you were out fundraising,

what part of the business did people get most excited about? Was it what you've already built and kind of let's go scale this to the world or was it okay this is a great start this will get people kind of onboarded and then let's go build out all the the technology and services around it for the rest of corporate finance yeah it was a little bit of both what they got very excited about was compliance no one was pitching compliance to them on the corporate treasury side they got a lot of pitches uh and the other thing that excited them was going after you know when i told them you know the treasury angle is very much a wedge to get into the entire corporate finance stack things

like payroll things like invoicing things like spend um that excites them because they know when you have a superior payment rail lower cost one you can pretty much beat all the incumbents which are you know decacorns uh on margin you have a lower cost way to do things and you can pass those savings on to your customers so um yeah they were they were excited about that part for sure when you guys go sell the product into some of these corporations who's making the buy decisions cfos ceos is it a combination yeah on the treasury side if it's like a series a company or earlier it's very founder led. Now, when you get to series B, series C, the founder has sway, a lot of sway, but it comes down to the VP of finance or CFO at that point. And the things

that they care about are very different. So at the seed and series A level, they might like partially over collateralized offerings. And when you get, you know, into bigger companies, they want fully over collateralized. Like we have an offering where we have 150% collateral in Bitcoin against any dollars that we loan out. So that one has really good product market fit with like the Series B, Series C, et cetera. And when you start to think about your process of selling, the company's name is Meow. That sounds insane, but also is memorable.

Why did you name it that? What was that process like? And then have you had anyone be like, we can't take you seriously because your name's Meow? Yeah, and you know, we had no business naming the parent entity Meow Technologies Inc. when we started out. That made it really hard to get bank accounts

and stuff like that. But there's like an S-curve value to this name. We know what we're doing here. I mean, ultimately, it's a name that can be anything. it's a name that's in a high entropy space like the crypto world you need to be able to be nimble and it's kind of a burn the boats name you know like we have to succeed like there's no it's not a hedge like we're telling everyone the name is meow and so we have to succeed uh so that's the idea there and it's memorable and the shirts are soft so that's that's the plan has anyone

said anything any customers been like uh is this a real company or like you know it's the people who were actually turned off by it or the people who never would have been customers in the first place they're they're like the wall street people who wouldn't they like to pretend that they were you know oh they would have explored this but the name is meow i can't take it they were never going to be like they're never open-minded enough to do this kind of thing yeah uh but now people like the brand and uh i think we've you know we've we have product market fit so i think we're past the uh the hard part now how do you measure that you have product market fit i mean the revenue and the metrics like in the bear market like i don't think there's many funding around announcements

in like june may obviously so uh that was based on solid fundamentals and we don't take that for granted we care about the customer very much here what are the metrics that you look at on like a day-to-day basis that you find most interesting things like aum things like you know our conservative kind of risk management approach like protected all customer funds like every single penny we didn't lose a penny for customers in this downturn um things like revenue um month over month growth and uh yeah now we get to now that we have like you know a lot of runway the ability to scale the team we can do the more ambitious swings for pay and and spend we have free usdc on our site which a lot of companies don't have what does that mean it's like you can

you get from your cash account you can send usdc at no gas no inner like no two percent trading fee or something like that and it's really just like circle and coinbase that have that and we're coinbase is a great company but they're not targeting corporates they care about the top 50 institutions in the world like the biggest 50 like hedge funds for example and retail so there's this corporate gap which is just totally underserved in the market because no one thought it was a real market um and that's because retail is the early adopter to things and And we come around and we say there's a corporate market. And that's kind of what we're focusing on.

And when you look at the customer base today, do they start out with like 1% and then go to 2% and 4% and 6% and like they're growing into it or do they just show up and they're like, hey, let's do 10%? Some people get their feet wet with like 5% of their treasury, et cetera, and they grow to like 10%, 20%. Some people like to go 60%. There is like a scaling up.

There is like the build the trust relationship. And that's very important to us because we want to be around. We want to grow with them. That's why we also like serving startups that, you know, raise like $6 million, $7 million, because we get to grow with them. When they do their subsequent raise, we're around as well and to be part of their picture of the treasury effectively. That makes sense. You mentioned revenue. That's a wild concept for some folks to wrap their heads around.

I know. How do you guys make money? We're able to take, you know, the difference in the interest that we pass back. But ultimately, we think it could be a SaaS play with the suite of offerings that we have for corporates. and just yeah we're gonna go head-to-head with the with the big with the big dog soon i think i mean we what does that mean i think the deck of corns call them out let's go we're going to war let's know who the enemy is things like brex for example you know like we one of our branding like our value props is like web3 brex that's kind of what we're going for

why don't they do this they're a great company just to be clear they're they're great um we think we can make a wedge that is that is kind of web3 you know and they can uh but we serve different markets to some some extent we just want to be like head to head with these people um and you know i think we have the wherewithal to do that got it i'm an investor in ramps it'd be nice to know ramps yeah they're both great companies yeah brad so no i'm joking uh when when you start to think about um this market specifically you mentioned regulation earlier what needs to change in order for people to get more comfortable to actually start to use some of this technology uh i think it'll happen i don't think it'll i think regulation won't come

as quickly as everyone wants. I think there's a lot of pending lawsuits that the SEC, for example, wants to see resolved before they make a larger statement or make things super easy. But I do think there should be a little bit more transparency in these C5 companies of what they're doing with the funds.

Like the terms of service will say, oh, we kind of use Yearn. We kind of use Yearn and they're offering like 6%. And Yearn would be offering 1.2% at the time. So in our heads, when we saw that, we're like, what's going on here? Someone needs to keep these people accountable. you know whether whether your ethos is that's like a regulatory body or it's like kind of

pure policing um there has to be more accountability certainly yeah that makes sense um what's your like 30 second pitch on anyone who's watching this that uh they say hey i want to learn more about this who's it for and what do you guys do yeah if if your business wants you know free access to usdc compliant way to buy and sell crypto and hold it or a compliant high yield strategy in dollars uh you can go to meow.co and sign up and we'd love to we'd love to chat with you that's the website meow.co yeah is uh still the name name cracks me up we have xyz too meow.xyz yeah that's like the web three things yeah yeah well the uh by the way the guy who uh uh i know a guy who had the dot co like domain ending and uh that was the business was go convince everyone to buy

dot-cos and uh he targeted the startup world that's why i took over in the startup world he was explaining to me and he's like yeah i took uh dot-co and i ran around and we went to accelerators and like all the stuff like hey you go try to buy the dot-com but the dot-com is like you know expensive yeah instead why don't you get the dot-co and uh you want to know what the breakthrough for them was what happened twitter deal really if you ever see a shortened twitter uh url it's t.co interesting yeah and he's like and then it exploded because if it's good enough for twitter right then every startup is like hey i guess i could use that dot-co is like columbia right that's i think that's where it comes yeah whatever it was right so it's like when you learn about how

some of the stuff works similar to you all right it's like one or two deals and then exactly right it's game on yeah we don't need.com it's fine yeah trust me the guy or woman who owns meow.com is sitting there saying somebody's gonna pay me a lot for this one day we explored it yeah how much was it it was a million plus it's not happening a million dollars from meow.com yeah i don't know if i'm surprised that that it's over a million because that's high or low i think it's like right around we're like yeah but we're not gonna do it so yeah they can you know if you guys want to play ball you well well uh i've seen people even do like a little equity exchange like hey rent it to us we will use uh we'll use it we'll give you like you know 50k 100k of equity and uh

if we become the next facebook then like you're a genius if not then like you still own the domain we wouldn't do that unfortunately i tried to help you yeah uh all right where can we send people to find you on the internet yeah uh join me out as our twitter handle check it out that's me it's my last name it's a killer it's arvin aghi uh but join me as our handle we'd love to chat with you if you have any questions just talk to us uh we're happy to explain the space explain what we do um yeah if you need usdc or you need to you know high yield strategies for your treasury uh yeah we'd love to chat chat arvin aghi arvin aghi yeah you know how many times i said your last name and i never said it right have you actually said my name it's always brandon this is brandon well

because I, listen, here's a secret. If I see a last name, I don't know. I'm not even, first rule of content is don't make a fool of yourself by trying to pronounce people's last names. Last question for you is, given the bear market sleep schedule, has it changed at all since last time?

One of the sponsors is Eight Sleep. I slept eight and a half hours last night. So I feel like a fucking boss right now. What's your sleep schedule changes in Bullard Bear Market? Yeah, no, Bear Market's quieter. I guess you sleep longer. Eight Sleep, I have that too. So let me, yeah, it's great, great product.

You sleep longer during Bear Market. So you're not as worried because you're like oh there's not so much noise quieter yeah it's just no it's not about worry or anything it's just like quieter you don't get as many like people like the the looky-loos go away in the bear market you know there's there's that is just us again you know it's just like the the people who have been here and are going to be here in the future not the uh uh we're both in miami and uh what was uh art basel diesel however you say uh basel obviously i can't speak english um but uh when that came to miami yeah and uh like nft crowd and all that i literally was like this

is insane you can't do it there was people with yacht parties and this party and that party and everything and it's like too much yeah we deserve the crap this probably is not gonna be sustainable um all right man thank you so much for doing congratulations on the fundraise and anyone wants to go check it out go to meow.co and uh and learn more but i appreciate you coming on thanks a lot all right