The Wolf Of All Streets - Robots, AI & Crypto - What’s Coming Will Blow Your Mind | Avery Ching

Starting point is 00:00:00 I'm Scott Melgar, host of the Wolf of All Streets podcast here with Avery Cheng, the co-founder and CEO of Aptos. You guys have built some absolutely incredible tech. Yes. Now it's time to get the world to use it. That's right. Absolutely. So what are you primarily focused on at the moment? What are you most excited about? I'm most excited about Aptos taking on the role of the global trading engine. And what that means to us is like, there's been a lot of promises in crypto for many years, ever since Bitcoin was out there, how crypto would change the world and make the world's economy on chain.

Starting point is 00:00:34 We're, you know, what we've seen over time, my background is I'm a technologist, the technology wasn't ready yet. But what we're seeing now is the technology is finally there. You have something like an Aptos that can do payments in under a hundredth of a cent. Finality times that are well below other blockchains at about 600 milliseconds today and going to get faster over time. And we're seeing the scale that can rival the largest payments networks in the world, whether it's Mastercard, Gisa or all of them at once.

Starting point is 00:01:01 And so for finally, for the first time in history in crypto crypto you have a technology infrastructure that can finally address all those use cases And push things forward and so a couple key use cases we see moving forward in the future One is trading today's exchanges in the world You have the your stock exchange of the NASDAQ your London stock exchanges all you know really valuable for a lot though The world's financial markets, but they're all despaired They're just there there there are centralized and they're only accessible to a small proportion of the world's financial markets, but they're all disparate. They're centralized and they're only accessible to a small proportion of the world's population. We see with blockchain, we can actually build out systems

Starting point is 00:01:32 that are gonna be one global market, that are gonna allow everyone in the world to transact with, and that are also gonna support the kind of composability, interoperability that wouldn't be possible. Example would be like, if you wanna take out a loan and then make a trade and then have it upon the trade and do another action, you can string all those things together on a blockchain permissionlessly. That's something not possible in today's environment. And so you start to add up the trading parameters Aptos is building, the infrastructure has

Starting point is 00:01:58 already been built around stablecoin, as well as the kind of the road assets are coming on train, you have a very powerful trading infrastructure that can support the world's economy. Does that require tokenizing all of those assets to make them available in one system? Or does it work with the current system and how the assets are actually? I think we're going to see a transition definitely from today's kind of off-chain assets into on-chain. And it does over time require the tokenization, doesn't happen to happen all at once it can happen in pieces. You can imagine today we have ETFs which are in some sense making the Bitcoin and others like other assets accessible to a larger part

Starting point is 00:02:37 of the population. Tokenizing assets is just another form of kind of making those available and it's going to be you you know, happening over time. But we'll start to see like even IPOs happening on chain. We'll start to see private credit, private equity happening on chain. And it'll be kind of piecemeal. But as time progresses, you know, it starts to become this avalanche of activity that will produce over time like a single exchange or can be a couple exchanges that are global, that are accessible and that support everybody in the world. I don't think people realize, certainly not people from the United States, how difficult it actually is to access our markets, to access our stock market from abroad.

Starting point is 00:03:18 I mean, most people in the world can't even buy Tesla stock. That's right. That's right. And even for today, a, you know, a lot of the people in the US even don't invest into equities because it's just too hard or they don't have access to banks or whatever it is. In America, there's a relatively non-surable portion of the population that is unbanked, that is not playing with our financial system. But you're right, worldwide it's far worse. And so the ability of crypto to kind of make that a worldwide global activity for missionless

Starting point is 00:03:47 is going to really change the way that the world thinks about finance, not just the way we think about the US. Yeah, the United States, I think we take for granted that we have a functioning banking system and we have access to payment networks like Visa and MasterCard. So I think we've seen adoption all over the world, specifically of stable coins and other parts of obviously the crypto industry. But now it is surpassing our incumbent systems as well, as you mentioned. I mean, the speed of transactions you talk about absolutely blows Visa out of the water. It does. That's mind blowing because it was always that we were sacrificing something.

Starting point is 00:04:25 That's right. It's finally ready. The technology is ready. It took this idea from Bitcoin, like how do you build a permissionless financial system? But it's possible with incentives. It's possible when you construct an economy in a certain way. And now that we see the technology has caught up to it, having a permission system with great technology that can support, you know, again, payments under a hundredth of a cent that, you know, compared to a swift network that takes one to five days to clear,

Starting point is 00:04:54 has 68% of overhead and fees, that money moves worldwide now. You can do things like dollarization that happen globally. Everyone can transact in any currency they like. These financial barriers have been completely unlocked and if they look forward to the future in the next five to ten years, we're going to see the global economy just elevated to such a scale that we never imagined it was ever possible. You obviously have partnerships and relationships with some of the biggest financial institutions in the world. Do you feel like right now they're starting to actually care more deeply

Starting point is 00:05:28 about the things we just discussed? Like, they can now see it, this is so incredibly fast and cheap, this is a superior way to be doing what we're doing. And are they coming to you then to build out this future? Because I would imagine that they don't wanna go the way of Kodak or Sears or Blockbuster and be replaced.

Starting point is 00:05:46 Yeah. The end of the year is always a tough one, for sure. But many of the financial institutions are starting to see this change is really happening now. And with all the legislation in Congress, the stablecoin bill, the market structure bills are starting to pass. We've seen a lot of inbound interest around for the largest financial institutions towards the top of this technology.

Starting point is 00:06:08 Today already BlackRock, ThankingTempleton, Apollo, Brevin Howard are all issuing tokenized money market funds on top of Aptos. We've seen the growth of stables to a huge degree where USDT, USDE, USDC all have over collectively like 1.1 billion of stables to talk about Aptos. And so this is only going to go in one direction. There's no going back at this point in time. And a lot of other institutions like Robinhood have talked about publicly about tokenizing equities.

Starting point is 00:06:35 And that's all going to happen as well. So Aptos is definitely here to be the infrastructure for all this change to happen. But we're seeing a lot of that inbound, as you mentioned, from the largest financial institutions in the world, thinking hard about how they can be the innovators in this space, how they can disrupt, and how can they provide their customers a superior experience of what exists today. You alluded to it, but tokenizing treasuries and money markets seems to be the proof of concept for what can be done, because it seems that's what everybody's focusing on. Is that because they feel there's more regulatory clarity to do that right now or

Starting point is 00:07:10 do you think that it's just a test case for seeing how things will move on chain, how this will actually operate before I guess they start taking larger risks? I think that you're right that a lot of this can be early adoption. People want to just understand what's possible, Starward, not unless the largest use cases out there? I mean, I think even at even a meta when we're thinking about the rendeum the idea was to go big for sure But you'd start with kind of the first use case the second use case and build up over time in terms of traction and adoption But the future is I think pretty clear to most people that you know one day Neo banking will be kind of the clear winner.

Starting point is 00:07:45 We'll be paid in crypto, it'll be tied to a credit card, you can spend it immediately, but you can also earn yield. Like today, a checking account might earn you 0% yield, quarter of a percent of yield if you're lucky. It's crazy. It might cost you fees, I don't know. But ideally you have your paycheck coming into your crypto wallet, where it's then earning yield

Starting point is 00:08:04 automatically and then only when you spend it at time of conversion, that's when the kind of money Ideally, you have your paycheck coming into your crypto wallet, where it's then earning yield automatically. Then only when you spend it, a time of conversion, that's when the money flows out of your wallet. That kind of future is definitely on the horizon. We see that with Aptos coming soon. It seems like we've reached this pivotal moment where the industry can actually do all the things that it wants to because we're going to get some legislative and regulatory clarity. You talked about being at Libra DM, obviously under the, at the time, I think it was Facebook before it was Meta Umbrella, a lot of names, but effectively tried to launch a private

Starting point is 00:08:32 stable coin and obviously incredible pushback from the United States government had to appear in Congress and discuss it, rebranded, and eventually you left and created Aptos. Do you think if that was created today, it would have been a very different story? Yeah, I'm pretty sure today if it was created, there'd be no issues at all. It'd be a different world we live in. So timing was definitely an issue with Libra and Diem. Today the administration is much more supportive of crypto. And with the stablecoin and other bills going through, I don't see why that would be an

Starting point is 00:09:03 issue at all. Do you think that that's then the future of stable coins is private stable coins across social media networks? And every bank has their own stable coin for transactions and every platform basically has their own form of money You know for us we're we're still playing nasty against them So I'm core with the infrastructure that's gonna help these things move quickly and support trading these assets extremely quick Forex is gonna be huge market in the future and even trading between stables of the same kind of underlying fiat-backed currency, so USDT to USDC and back and forth, I think is going to grow massively.

Starting point is 00:09:36 To your point, every large institution is thinking about issuing a stable. There's a ton of yield out there and there's a lot of incentives and there's a lot of opportunity for people to do that. So I think we're going to see a massive expansion of stables coming in the coming years for sure. But ultimately, you know, I think customers will kind of figure out which tables work for them. Yeah. And there will be again, the kind of a, you know, a trimming of the crowd. It's interesting. Then we'll get back to the interoperability challenge because if there's Amazon coin and Meta coin and Goldman coin, if you're going to want to send one from one platform to another, that money has to be able to move freely and that's going to be its own challenge.

Starting point is 00:10:17 That's where the, you know, it's Forex and blockchain can really help a lot, right? So that conversion happening in the backend,, extremely fast, with the dozens of disruptor payments. So you can imagine a world where if you pay on Amazon with Amazon, you know, coin, but you want to settle it with USDC or something like that, that can happen with a single transaction on chain, be seamless, and also not add any latency to your customer path. So I think that's where blockchain is going to really show the advantage of the interoperability and the advantage of the permissionless nature of it to kind of compose different kinds of programs in the back end to support almost any kind of use case around finance that you need to make possible. I think you touched on it in the beginning, but maybe the most compelling part for the average person is that this can all happen in one place.

Starting point is 00:11:01 Happen in one place. It will not be so fractured as it has been now. Exactly. So again, if you think about the different stock exchanges around the world, if they were put in one place for centralized liquidity, it's just a much more efficient, effective financial system for everybody. And so the biggest barrier there's been technology to support that. Now that Daptos, we've had some around Zaptos, around our new consensus book, or Raptor, around many different innovations to support. All the world's finance coming to one

Starting point is 00:11:30 hub, one global liquidity hub, and that can then support, you know, an amazing amount of value for everyone around the world. You just mentioned Raptor. That's brand new. This is brand new. In the most TLDR basic terms, what does that actually mean? It is a huge breakthrough in consensus-based technology. The agreements of all these transactions happening real time supports over 250,000 transactions in the finality time of 750 milliseconds, which is just crazy. That's crazy.

Starting point is 00:12:02 So the whole world's financial economy can work on things like that. With something like a Chardines, we can scale it up to a million, two million, 10 million transactions per second in the future. So it's pretty clear that GIST technology is here to really replace all traditional rails, all ways of doing value transfer. And that is going to be something that we all look forward to bringing faster into the future with new tech that we build.

Starting point is 00:12:24 I guess there's a few ways that could play out, right? So we talked about the innovator's dilemma, obviously. Those systems can get replaced, but those are the strongest incumbents there are on the planet, right? You're talking about the big banks, governments, payment networks, they're not going to go quietly into the night. Two, I guess, is they adopt it or get entirely replaced. I mean, how does this play out in your vision? In my vision, I believe that they all, I think a lot of them just adopt. I think that a lot of them are seeing

Starting point is 00:12:52 the traction that crypto has. A lot of it's been excitement on different types of tokens, but now the rural use cases are actually here. And they're looking for also ways to innovate and disrupt and move their business forward. Ultimately, having a global market is going to be very valuable for the leaders in the space. And so for the ones that come in early, they push things forward and can accept and appreciate the value of these new rails. It's going to be a massive value add for that company and utility for customers around the world. Can you give any hints as to who else might be coming or what will be sort of the next

Starting point is 00:13:30 big use case without obviously offering specific names or anything that's privileged? For us, I think the biggest thing is to see decentralized exchanges kind of take on this new technology and just build out something that's a product globally accessible. We're seeing some of the largest partners in the space, really, really excited about this, this technology moving forward in that area. Yeah. I mean, Aptos isn't just about big financial institutions though, right? This technology can do so many more things. So I'm imagining, and I know for a fact, obviously, there are people building out gaming and metaverses

Starting point is 00:14:06 and NFTs and AI and all the other things that are so popular and have had their cycles throughout crypto. So what else is being built that excites you outside of necessarily the financial system? So we're definitely focused on building Aptos to be the global trading engine. But the global trading engine can do amazing things

Starting point is 00:14:23 on top of it, right? So one good example is the area around Deepin. So seeing kind of new innovations around crypto to be like, you know, I think earlier we just talked with the healing folks around how they support kind of global payment plans for cell phones. But there are so many examples of kind of real world utility and assets that need to be coordinated with the blockchain and then have payment roles for it. That's something that I think Aptos is the only network that can support that. Most of these deep end projects today are kind of just doing a small amount of their

Starting point is 00:14:54 kind of crypto settlement on chain. But for the kind of full vision of decentralization, you need to kind of build out a full infrastructure on crypto. You need to support all the coordination happening on crypto and then all the payments infrastructure. So if we're kind of providing an application service, whether it's a cell phone plan, whether it's gonna be compute infrastructure, storage or networking access,

Starting point is 00:15:15 or anything you can imagine in the real world being sold, that has to have an underlying payments infrastructure. That's where something aptos is really gonna shine and support the largest use cases in the world People might ask actually why we need this many transactions and that fast where it's at such a scale now that as we said it far exceeds anything that's existing I Had this eye-opening conversation recently with Paulo Arduino the CEO of tether and Bimfinex. I said, you know, what's your vision for the next five ten years? He said well, we know the robots are coming.

Starting point is 00:15:46 There's gonna be a billion robots. All of them are gonna be powered by AI and they're all gonna be transacting with each other, both on our behalf and on their own behalf. Yep. And it blew my mind, but that's, you will need, you will actually need that kind of scale if AI is transacting with itself

Starting point is 00:16:01 and this isn't just humans transacting. That is completely true. You're gonna see a world where price changes that happen in the market are gonna have a huge downstream effect. People are gonna redounce their portfolios, AI bots are gonna then interact with each other. Businesses are gonna change their strategies, right?

Starting point is 00:16:16 So every soon kind of price feed update is gonna have a massive impact downstream. It just can't happen today because existing systems kind of have broken that line of connection. But when everything can be transacted on chain, when the world's economy comes on chain, it's just a natural evolution that all these future transactions that we couldn't do today are gonna happen in an on-chain manner as well. So where do you think that marriage between AI and blockchain will be the strongest? Is that really the answer?

Starting point is 00:16:43 It's going to be on payments and finance, right? We already had the kind of situation where automated portfolio managers were really big, maybe five, 10 years ago, helped betterment and others, kind of help people to rebalance their portfolios and do portfolio management and construction. In the future, we're going to see AI really get tailored around the kind of way you think about your portfolio's construction and kind of have rebalance your portfolio almost instantly, right? Or to be able to take actions on your behalf. You know, if I booked a restaurant today, but you know, that restaurant, you know, reverted my booking because it's no longer available closed, it is going to find the next

Starting point is 00:17:18 booking for me automatically, prepay that and figure out all the right things to do. So it's very clear that the transactional need on chain is gonna be massive as this vision comes to pass. Is blockchain really the only payment solution that would work with AI? It's all the way, yeah. Unless somebody comes up with something brand new, that obviously couldn't work with traditional rail.

Starting point is 00:17:40 It's only two things. You've got centralized infrastructure, you have decentralized infrastructure. If you want a world-based system where people can all trust it, I think it's kind of improving over time. Centralized infrastructure does not work for that. No one has built a centralized infrastructure that people around the world are willing to trust. That's where blockchain really comes in, and that's where blockchain can solve all these problems over global combat. And how much do you think that legislative or regulatory environment, not specifically just in the United States, but internationally could hinder that progress?

Starting point is 00:18:08 Because it sounds like one of those situations where governments will say this is beyond our control and we know that they're going to obviously want to be able to regulate and legislate around those things. To me, it just sounds like it's going to move too fast for them. I think the governments will definitely work together on these efforts. I think when the US moves, others definitely pay attention to it. We've already kind of seen the impact of the push on market structure and stable points to impact many other parts of the world like Japan. I just am very optimistic that with government acceptance,

Starting point is 00:18:45 with regulation passing, that's gonna be supportive of the new world. And with the technology like Aptos kind of being there to support on the technology side, and then the obvious demand from consumers around having global access to financial products and to payments rails around the world, and even Forex and stuff like that,

Starting point is 00:19:02 you're seeing the acceleration is gonna be happening a lot quicker than I think most believe. Avery, I love everything you're building and I can't wait to see our robots transacting with each other while we're traveling to the next conference, man. Thank you so much. Thanks, Scott. Let's go.

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The Wolf Of All Streets - Robots, AI & Crypto - What’s Coming Will Blow Your Mind | Avery Ching

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