Unchained - The Chopping Block: Perp Wars & Stablecoin Battles: Hyperliquid, Aster, Tether - Ep. 911

Episode Date: September 26, 2025

 Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This week, we’re joined by Farooq Malik, co-founder and CEO of Rain, as two parallel wars erupt across crypto: the Perp DEX war between Hyperliquid and the CZ-backed Aster, and the deepening battle for stablecoin dominance. As Aster rockets to $30B in daily volume, we debate whether it’s real adoption or points-fueled froth — and what it means for Hyperliquid’s lead. Then we dive into Tether’s shocking $500B valuation play, Circle’s shrinking moat, and how Rain is building real-world rails for stablecoin payments. If crypto has two new battlegrounds — trading venues and money itself — this is where the future is getting drawn. Show highlights 🔹 DEX Wars: Aster vs. Hyperliquid – Aster hits $30B daily volume; is it real demand or a points-fueled surge? Hyperliquid’s dominance faces its first real threat. 🔹 CZ’s Return to Form – Aster’s Binance links, aggressive fee model, and possible “James Wynn” conspiracy theory raise the stakes in the perp DEX arena. 🔹 Wash Trading & Open Interest Gaps – Aster’s $2B TVL contrasts with $1.25B open interest vs. Hyperliquid’s $10B, sparking questions about organic traction. 🔹 Incentive Wars – Aster rewards takers 2x over makers; Hyperliquid and Blur praised for long-game design that built sticky liquidity instead of short-term volume. 🔹 The Execution Advantage – Haseeb: “Asia executes better than it innovates”; Aster may stumble now but could out-iterate and outscale its rivals. 🔹 Stablecoin Shockwave: Tether’s $500B Valuation Leak – Tether quietly seeks $15–20B in private funding, aiming for a $500B valuation—matching OpenAI and SpaceX. 🔹 Circle vs. Tether – Circle trades at 0.5x supply, Tether seeks 3x; the panel debates margins, moat, and whether USDC can survive the “reverse momentum.” 🔹 Rain’s Real-World Stablecoin Rails – Farooq Malik shares how Rain powers payroll, P2P, cards, and merchant payments on stablecoins—without touching fiat. 🔹 New Use Cases: Stablecoins in the Wild – On-chain credit cards, just-in-time lending, cross-border Facebook ad funding, and more—all enabled by 24/7 money. 🔹 Global Adoption: LatAm, MENA, Asia – Rain’s data shows stablecoin usage exploding outside the U.S., especially in regions with FX controls and unstable banks. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate ⭐️Tom Schmidt, General Partner at Dragonfly  Guest ⭐️Farooq Malik, Co-Founder & CEO of Rain ⁠Disclosures⁠ Timestamps 00:00 Intro 01:02 Aster vs. Hyperliquid 14:25 Regulatory Capture: L2s, Sequencers, CFTC 26:08 Tether’s $500B Valuation: Bubble or Bargain? 31:36 Tether vs. Circle: Stablecoin Economics 42:56 Rain: Stablecoin Payments Infra 47:16 Stablecoin Use Cases; Cards, Payroll, P2P 54:04 Global Stablecoin Growth Learn more about your ad choices. Visit megaphone.fm/adchoices

I can't predict whether hyperliquid will stay on top. It sounds like you're saying, it sounds like what you're implying is that like this is the passing of the guard and like CZ is now going to take over. Not a dividend. It's a tale of two pawn. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unimmedged trading firms who are very involved. I like that eat is the ultimate.

D5 protocols are the antidote to this problem. Hello, everybody. Welcome to Chopping Block. Every couple weeks, the four of us get together and give the industry insider perspective on the crypto topics of the day. So quick intro, this first you got Tom, the Defy Maven and Master of Memes. Hello, everyone. Thanks. We got Robert, the Cryptoconnasaur and Tsar of Super State. Good late evening.

And joining us today, we've got special guest, Farouk, FinTech founder at Rain. Hi. Nice to be here. Great to have you. And I receive the head hype man at Dragonfly. We're at least interested investors in crypto, but I want to caveat that nothing we say here is investment advice. legal advice or even life advice, please see chopping block that XYZ for more disclosures. So we wanted to kick off today with what seems to be the topic dejure, which is the Purp Dex wars that are really kicking off in full steam. And a lot of this has been catalyzed by the growth of a new project, actually not so new, but recently rebranded and now in the

public zeitgeist called Aster. So Aster is a perpdex that is backed by Easy Labs, which is formerly Binance Labs. And Aster used to be called APX Finance. It was back, I think it was seated like two years ago. But it recently blew onto the scene because CZ tweeted, hey, there's this cool new exchange called Aster. What do you know? Astor very quickly rocketed to becoming the number one perp decks by volume as of

today. So they've done as of today. So recently they were like number two, number three behind hyperliquid, but they were very closely competitive. certain days hyperliquid was doing like $5 billion in daily volume. They were doing like $4 billion consistently. Today, they did $30 billion in volume, whereas hyperliquid did $10 billion in volume. Yeah.

So now, that being said, their open interest is quite a bit lower. So their open interest relative to the open interest of, I was kind of, I looked at some of the stuff online because it's kind of difficult to see exactly they don't aggregate it any place, but it looks like about $1.25 billion in open interest compared to 10 billion at hyperliquid. So very, very different look of open interest, which tells you there's a lot of wash trading going on right now, a lot of points farming. So not really clear that this is apples to apples, but the TVL is now at $2 billion. They also are making more revenue because it charges fees. So they're making about $9 million a day in fees compared to hyperliquid making about $3 million

a day in fees. And this is right on the hind legs of hyperliquid. Recently, hitting 20% of Binance's volumes in Perps, which was a very celebratory moment for the hyperliquid community. But now all of a sudden, CZ coming back up from behind. Many people have compared this to, hey, never bet against CZ. FTX is in the grave. If hyperliquid is the next one to take on CZ, it might end similarly poorly. Now, that being said, there's been a lot of discussion about, hey, is this really real? Is this organic?

obviously the price action and the amount of volumes accelerating so quickly relative to the open interest implies that there's clearly a lot of people speculating on a token, airdrop, et cetera, et cetera. But the value of this token has skyrocketed to now being worth $20 billion fully diluted. Now, not that much of the token is circulating. So it's on a relatively small float, and we don't really understand the circulating dynamics. But it's become very clear now that the Perp Dex Wars have really. accelerated. And Hyperliquid now has a bevy of competitors to take very seriously. Now, all that being

said, I want to emphasize that if you look at all the Perp-Dex competitors, so the big ones right now, obviously Aster at the forefront, lighter, which we're investors in, then you have EdgeEx is another big competitor that's kind of, they're now like the big four are these guys. All of them have much less open interest than Hyperliquid. So, and Hyperliquid, obviously, if you just look at the seven-day or the 30-day. Hyperliquid is obviously far ahead because they've been doing this for a while. But the dynamics going on right now on Aster, especially given that Aster, people are paying full-fraid fees to trade on Aster is very, very scary to anybody who's holding hype. And I should also disclose it. We also are investors in hype. So boys want to get your sense. What's going on with

the PIRP-Dex Wars and how do you feel about the rise of Aster? Well, this is not the first perp-dex war. One of the things that I find amusing is that up until a couple days ago, everybody had decided that Hyper Liquid was the winner of the Perp Dex wars and there weren't wars anymore and that it was sort of a decided, you know, narrative. It's amazing how quickly things can change. We've been having Perp Dex wars for like six years. I mean, who remembers the OGs? You know, Bitmex was like the king of this stuff, right? There was a time where the decentralized perp exchanges like, DYDX were the kings. You know, a lot of perp venues have come and gone.

Things that had massive market share that were dominant have in the past quickly been dethroned. And so I can't predict whether hyperliquid will stay on top. It sounds like you're saying, it sounds like what you're implying is that like this is the passing of the guard and like CZ is now going to take over. It could be. I mean, I think one of the things that's driven a lot of these over the years has been the combination of, you know, liquidity, which.

is a little bit of a network effect combined with points, tokens, airdrops, distributions, farming, whatever you want to call it, to attract all the users and to build that critical mass. And so I don't necessarily know that even if, you know, Astor takes the throne, it will be a permanent thing. We've seen so many new points, new tokens, new distributions, at least temporarily capture that critical mass that I might posit that the purports will never end. And that, This is a battle that's going to be going on in perpetuity. And that, you know, we might see, you know, new entrants come and go. Or maybe at some point, you know, the market structure will just evolve where it's like,

oh, yeah, like now that we have CME perps, like everyone uses that or yeah, I hope that's not the outcome. But, you know, we'll see where this goes. But I don't think this is the end. I think, you know, in a year we'll say, oh, man, but what about this new perp that wasn't even talked about, you know, on the September 24th show? So it's drama. Everyone loves the drama. In general, I think it's good for people.

More competition is better. You know, more venues better. Let the best perp win. And good luck to all the combatants. Tom, you have a take? I love Robert with the, he's like the Roblo, the NFL hat. Just like, the man loves perps. Doesn't care who's winning.

I love perps. Let both teams rule. I mean, I think I agree with a lot of that. Like the only, the market is very, Red Queen like in that way, and that's really been the only constant in my entire time of crypto, is there's a new competitor, someone else comes up and creates a better product, and they replace them. And I think really, like, Tether is the only one I can think of that's been around for so long, everyone thinks is going to die and has never really died. Oh, wait for Tether to launch

a PURPS exchange and compete in the purports. Paulo, if you're listening, you know, there's your man. Yeah. I think for Aster, look, I think it's genuinely just Occam's Razor, it's, it's It's basically just points farming. And it's very clearly incentivized volume. I mean, like, they say in the dock, in the deck, like, takers get two X the points of makers, which I'm like, that is so obviously backwards from how you would actually want to be incentivizing liquidity on your decks.

And so I think this is kind of another thing that's short-lived, and maybe market participants know it. Maybe they don't. But you generally, the way, you know, upstarts disrupt incumbents is through product innovation. And this is just not that, no, no disrupt to the Astor team. But like, I just don't think that's kind of what's happening here. On the product side, right?

Like there's, I mean, this is a very lucrative product set. And you can make a lot of money very quickly in perps, right? And then there's the other thing is it's like one of these high velocity things where users are getting, they can realize that like dopamine hit also very quickly. So it's like, it's kind of the perfect storm where you'll have like kind of to Roberts point, you'll have these ebbs and flows of existing products. And historically, like, I mean, to his point, again, we've gone from one partner to a player to another player to another player to another player

very quickly within a cycle, right? And so each cycle will have its protagonist, then the next cycle will have its protagonist. And sometimes people will come out of nowhere. Other times they'll have been around the whole time. And so it's one of these things where as we continue growing, I think it'll make sense that people want to build in this market because you can actually extract a lot of value very quickly

and you can have a product which is from a product perspective, very similar to a different product. But changing a couple of parameters, you have a much more lucrative product for your customers, also potentially a higher velocity product for yourself. And the other downside is that the cost of standing one up is not very high. Yeah, I think the point about the, the way they're doing the points program is clearly set up to incentivize volume. And I feel like there's a lesson that people learned a long, long time ago with like F-coin, that that is just not the right way to do it.

It's always a mistake. That's right. That's right. It's like always a mistake to just nakedly incentivize volume. It just gets you the wrong answer. It gets you the wrong behavior. It's not sticky. Like that's not what makes an exchange durable.

liquidity is durable. Liquidity is actually something that you want to incentivize so that you can win in the future, but getting more volume just running through a pipe over and over again doesn't give you any advantage tomorrow.

So now that being said, so it's easy to look at that and say, ha-ha, very, if you look at hyper-liquid and the way that hyper-liquid incentivized behavior, probably the single master class like absolutely incredible insight

and mastery of the art of how you create incentives to create a durable mode. And I think like the probably the two best to ever do it were blur and hyperliquid in terms of the foresight and the insight in the way they design their incentive programs. And it paid off in very clear ways for both them. I think for something like Astor, you can see, okay, they're making a huge mistake with the way they're creating their incentive program. And I think it's very easy to on that basis wave them away and say, aha, well, they're idiots. They don't know what they're doing.

And therefore they're not really a credible competitor to hyperliquid. I think that's a mistake. and I think that's a mistake because if you look at, especially teams in Asia, what they're really, really great at is iterating. They're great at like just throwing shirt at the wall, making a mistake, and then be like, great, we're going to change that, we're going to go to this thing. We're going to change that and go to this thing.

We're going to figure out what this person is doing right. We're going to copy them, and we're going to go do it over here, and we're going to do it at better scale, faster, cheaper, with more distribution. And that's a big part of the reason why the Asian exchanges are so dominant globally is that they're really, really, really good at executing on playbooks. The West, writ large, this is a huge characterization, generalization, but a largely correct generalization, is that the West tends to be better at innovation,

and the East since we better at execution. And this, like the PIRP-Dex market is finally in a place where it's less about innovation and more about execution. And I think a lot of that was really, the carpet was sort of laid out by hyperliquid of showing the way to do this, right? like the distance between D.DX, especially like DYDX V2 and hyperliquid was enormous. There was a lot of ground to cover to figure out how to do a perpx in the right way. But we're pretty much there now, right?

The products are very, very good. All of them are very good. They have differences, obviously, but they're all so much better than what we were working with just, you know, even three, four years ago. So given that, I think there's a good reason to be afraid of Aster, especially given the backing of Binance and the strategic element that they're bringing to pair. and I think their mistakes likely they can iterate on. So I don't think you should take the numbers of face value.

And I think the other thing that's scary about this is that the market doesn't seem to be appreciating that. Right. Like valuing Aster at 20 billion FTV, which, you know, it doesn't have a lot of float. So maybe FTV is not the right number to be fixated on. But at 20 billion FDV, it does feel like it's probably being valued too highly. But if you just look at the numbers on face value, you look at the run rate revenue on its face. It's like, well, it's easy to just draw the line out, which, is concerning that the market's not looking past that right now.

Yeah, good luck to all of those trading on Asper. Good luck to everyone trading. Okay. All right. I'm listening, I did like the conspiracy that James Wynn is CZ. Because it's part of the sort of feature for Masters. They have, you know, clinical hidden orders, which are really just like orders that I'm guessing are on their server

that are just like not, you know, accessible or revealed. It's not like actually encrypted in any. way. But then obviously that allows you to sort of conceal your position, which was sort of the whole like James Wynn saga. And then James Wynne actually tweeted, hey, like, this is, this is why, you know, Aster exists because of me. And so I saw people kind of having some conspiratorial, you know, musings as to like who the actual identity was, which I don't really believe, but I just thought it was kind of amusing. Yeah, I find it hard to believe that CZ would be on Twitter, larping as a James Wynn for weeks at a time and becoming the accidental fringe main character for a while,

you know, as an insane, terrible, amazing, lucky, unlucky trader, you know, I just don't see it. Well, you know, this is during his period when he's not allowed to work at finance, so you got a lot of free time on his hands. There you go. Yeah, he made up an alter ego and lost $100 million trading pervs. The intrigue is the best part of the industry, right? Like the level of intrigue and conspiracy around seemingly normal things is actually one of

the fun things about the industry. Well, so speaking of intrigue, there's now been a big discussion going on on crypto Twitter about regulatory capture in crypto. And so I think we're finally at the stage as an industry where we can have this as a problem of this sort of regulatory infighting. So if you remember way back in the day, there used to be a lot of anger directed at Ripple for trying to say that Bitcoin was Chinese and therefore Bitcoin needs to be regulated or Bitcoin is bad or something like this.

because of the Chinese mining pools. Since then, I've never really heard anything at all about regulatory capture in crypto or this sort of regulatory infighting of, oh, you should be regulated and I shouldn't. But now there's this hullabaloo going on accelerated by our friend of the show, Max, Max Resnick, who's at Onza, and Max Resnick tweeted this.

A centralized sequencer, so he's talking about L2s, and the underlying claim is that L2 should be regulated. A centralized sequencer that can change the matching or execution of orders obviously must be regulated. Otherwise, any exchange could set up a quote-unquote immutable matching engine program

and then run on their own server in order to bypass all U.S. security laws. If a base contract is upgradable and a multi-sik can stop trades from going through the slow path, then, you know, yada, yada, yada, L2 should be regulated and they should not be treated the same as an L1.

This shut off a bit of a firestorm between the Ethereum people and the Solana people about, hey, is Solana trying to like kind of kick out the legs under the chair or kick out the ladder behind them and say, oh, no, the L-2s are too centralized. and they shouldn't be allowed to operate on a level playing field with the L1s. And there's also been increasing rumors that we were just talking about the hearsay show

as a rebrand from the chopping block. But there's been a lot of rumors also that there's people in D.C. who are now trying to spread FUD from the regulatory perspective on hyperliquid and trying to get hyperliquid to get some regulatory attention from the CFTC or from some of the agencies in the U.S. Now, my perspective has been chatting with a lot of the agencies is that it's not working. right now they don't give a shit about hyperliquid and the mandate right now very clearly is don't mess with defy leave defy alone but obviously things can change and things can evolve and so it's a little bit disconcerting

to see this degree of infighting within the industry of people pointing fingers at each other and trying to say hey you're you should be regulated and I should not be want to get one of get thoughts from the from the panel here how do you think about the regulatory wars that now seem to be playing out within the industry I think it's going to get worse before it gets better, right? I think this is just generally anything that happens anytime there's a technology shift and there's early participants and late entrance, you're always going to have people that are going to try to use their advantage or their relationships than try to close the door behind them. Oh yeah, you know what? We shouldn't let any more people like me in here, right? So,

like, this is just human nature and this is, this happens in every industry. And I think that, like, there's always valid arguments whenever people are trying to push for these things, both for and against. And the challenge always is, is like, do you just assume that where we are right now is the maximum level of innovation that we're going to tolerate in a market? Or do you think that there's going to be better stuff that's around the corner from a regulatory perspective, right? And so, like, a lot of times, if I'm ahead, I'm going to want it to be, hey, you know, nobody else should be able to do what I get to do. And you know what? And a lot of what I get to do potentially is illegal. So like, I'm even going to stop doing this piece because look how horrible it is. I just,

happens to also be the smallest piece of my revenue item. And then you can become essentially states evidence against everybody else. And then you just pull up the moat. And now you have this like really exciting opportunity ahead of you. This happened, you know, this happens in like telecoms. If you look at a lot of countries, there's like monopoly now because people successfully did this. And you look at other countries where there is no monopoly. There's continuous development.

There's cheap costs. There's better products because nobody pulled up the drawbridge, right? And so there's always going to be this level of intrigue. And I mean, I think part of this is just means that we're growing up as an industry, which is probably like a good home market. You're not surprised, but it doesn't even sound like you're upset about it. Sounds like you're just like, uh, you know, like libertarian. Like, you know, like people use the government and screw their competitors.

And I know it's not. No, that's not libertarian. I don't think, I don't think. I don't think that like people that do this are small-minded, right? people that are pushing for regulatory capture are generally small-minded. And it's largely driven by an anxiety that you can't compete in an open market. And I think that calling that out is important because if they weren't that, then they wouldn't be worried about losing an open market because they are just better or

faster or whatever it is or better at execution. I think people generally, they resort to this because they have this anxiety that they're not better, faster, differentiated, have no meaningful differentiation, aside from this, like, nuance around how you ended up building the piece of technology ended up building, right? So I think it's important to call that out. I think people that feel that best technology, best product, best teams, best execution will win. I think that generally those folks are not the ones propagating this type.

Yeah, two points. One, I think regulatory capture is actually extremely bad. It's bad for markets. It's bad for industry. It's bad for everything. Right. So I actually dislike that somebody, let's just say, you know, Max or otherwise, you has gone out to try to like throw L2s under the bus.

Okay. Like I think that's bad behavior and I don't think we need it. That being said, I also think that the argument that set off this firestorm is just flat out wrong on security's laws. And again, I am not a lawyer. I will preface any legal statements with that. I think he's incredibly wrong on the law here. I think he either chat GPTed something incorrectly or he was at a dinner party where people We're talking about a very similar concept and he misunderstood it.

But I don't think there's any risk that an L2 is an exchange. I think there's much more credible arguments out there that an L2 is a clearinghouse and that it's settling transactions or settling trades. I've heard people speculating that L2 could be clearing houses. I have not heard anyone with a legal background speculating that an L2 could be in exchange. And it's possible that, like, he just got this, like, basic conversation that is sort of happening out there, very wrong. But I mean, I think Hester Perth said that layer twos might have to face exchange registration depending on, you know, how they're sort of structured. Yeah, I mean, okay.

An exchange is something very specific, right? Exchange Act regulation includes things like clearing houses, et cetera. And so I think that what happened here is people who are not lawyers just decided to start slinging mud without researching too deeply. Oh, wait. So, Tom, I did not, I did not catch this. Can you walk through what Hester Perr said in the context there? Yeah. I think she was on a podcast and said, hey, if you have a matching engine that's off chain, but, you know, it settles on chain, that looks like a lot like an exchange. And my face, you know, exchange registration.

And so I think of, I think maybe what she's referring to more is kind of like, frankly, yeah, like DYDXV2 or like Paradex or these things where, hey, it is actually, they've arbitrary control over, you know, trade execution, order sequencing, things like that. And then, yeah, I definitely understand that argument, right? There's a spectrum between you, you have total control and the ability to make arbitrary state transitions and you're, you're something like arbitram or optimism where, you know, you're literally just running, you know, EVM transactions and putting them on chain. There's not, you know, you know, The multi-sig really exists, again, I believe with a time lock, too, as sort of a mechanism for upgrade or escape. And so there's a range within there, but I think it's wrong to say that like every centralized sequencer looks the exact same. Totally. And by the way, I think you're right, Tom. I think there's things that look like trading app chains, which might be like exchanges. But I think the argument he was trying to make was against like the Ethereum L2s, you know,

like there's a broad category that is everything from like a base to an optimism to an arvidrum to whatever and i think maybe that's where there was some misunderstanding in that those don't look like exchanges you know there might be decks applications built on top of them you know they definitely don't like like exchanges to me they look like not exchanges but if one were to try to like attack them that's not the line of argumentation one would use they would probably try to go for something else yeah there was a a great line by dan robinson in response to on to Max Resnick. I think it was a callback to this play, A Man for All Seasons, where he says, I think it's bad form and a bad strategy to try to summon the regulatory demon to strike down

your competitors over technical or ideological agreements. Where will you hide when the demon turns around on you? And I think that's exactly right, is that if you sort of start this arms race, it doesn't end. And or the way that it ends is like when you cut down the neutrality of the laws, will that that cycle of violence of okay the laws are going to be overturned and overturned and overturned for whoever's in power to attack their competitors then there's going to be a certain point where the next salana is going to do the same thing to you and so I do think it is very unwise to try to like you know the the you brought the word up libertarian before the spirit of libertarian innovation and crypto has always been that everybody should be free to innovate

And the more that you start trying to shift the Overton window about what kinds of innovation are acceptable and are not acceptable, it's a very dangerous game to play. Now, it's certainly true. And I very much see the wisdom of Hester Purr's point in that podcast is that, yes, there are certain structures that do give control to the person running the off-chain orderbook. And we've known this for a long time. And this is part of the reason why things like hyperliquid and things like lighter have done so much to try to make the order book itself non-discretionary.

for the operator, right? That the operator themselves have no control and it is truly credibly neutral. Same thing with Habachi, same thing with many of these perp-dexes that have tried to solve that last bit of centralization in perp-dexas, which is the order book. But I think the overall strategy here

cannot be that like we decide this person is okay to get regulated and this person should be free from regulation. It kind of has to be that the spirit of all of this, whether or not L2s have centralized sequencers or whether or not they have multi-sigs or whatever, I'm sure they all do. Once you start litigating the individual questions of like, oh, how many people are in the Discord, how many people are on the multi-sac?

How many people are in this? How many people are in that? It's like you really don't want to play that game because then for an L-1, okay, well, for L-1s are also continual. So for an L-1, how many people are in the Discord? How many validators above 50%? How many blah, blah, blah, blah, before we end up at the place where like, hey, how decentralized is Bitcoin even, right?

many core devs have to make a decision before the GitHub repo changes. And, you know, does that fit some legal threshold? So I think there's, yeah, I think I'm pretty pretty sure at this point, but it does feel like this is something that probably should not go any further. And I think the uproar over this is good. It's part of the immune response of crypto. She was like, hey, this norm that, like, we compete in the marketplace, we do not compete in the regulatory sphere is a very, very good way to keep the, this Chesterton's fence, you know, that we don't cross. Because once we do a lot of shit, you can't undo. So, okay, let's switch topics a little bit. I want to come on the stable coin side because, of course, Farouk, you're a founder working on a business that very much

touches stable coins. And we're going to go do a little bit of a deep dive on it right after this. But one of the big stories of this week has been about the biggest stable coin in the world, which is Tether. So there's a story reported by Bloomberg that Tether right now is looking for a private placement, basically meaning they're trying to sell shares out there to private investors at a $500 billion implied valuation. They're trying to place roughly 3% equity, which would mean $15 to $20 billion that they raise. Just to give you some high-level numbers on the company, UST has about $172 billion circulating currently. They claim their Q2 profit was $5 billion, and the company has 99% gross margins. So they are obviously an incredible company.

we were just chatting recently about their USAT, which is the US dollar stable coin that's going to be genius compliant that's going to be operated in the U.S. led by Bo Hines, who was previously the digital asset emissary in the U.S. So they're making big moves, but a $500 billion valuation would make them one of the most valuable private companies. So that's the size of Open AI. That's the size of SpaceX. That is as big as it gets for a private company. Want to get thoughts from the field. What do you guys think? Farouk, why don't we start with you? what do you think about tether at 500 billion? I think if the market will bear it, it's worth it, right?

Like, I think that's just the general. Do you buy a 500 billion? Are you a buyer? I think that there's a lot of upside here still. It's still so early in this market. And I think that there's massive opportunity to figure out exactly what the future of stable coins will be. The other reality is, is that dollars for the most part, I mean, regular dollars, right?

Most of them circulate outside of the U.S., and there's always going to be an opportunity to be the official or the de facto Euro dollar or international dollar. And I think that that universe is still very much up for me, that crown is still very much up for grabs. And so if Tether was to seize that crown more dominantly, right, from essentially cash or from some of these like correspondent banking networks, there's a lot of upside still, right? I mean, I think right now, if you look at this type of business,

it's super efficient. Like you don't need a whole lot of people to run it. they have a tangible mode because like adoption is really important. And then the other thing is is that they have something that a lot of people don't have, which is distribution, right? Like it's not as simple as having people hold it. It's getting counterparties and people globally to accept it for a transaction, right? And they actually have the type of penetration that people would dream to have, right?

Like there's people that would think about it as, hey, if I'm presented with a choice, I'll pick to other. And so that's really, I mean, it's really unique. I mean, look, I think in the long term, a big part of what Rain's value proposition is that we don't make people choose tokens. We can give you the same interoperability with any new token that we support out of the box. And we can solve this like distribution or acceptability problem for news token issuers. But at the same time, we still support Tether. It's like one of the big currencies that a lot of our customers they use, right?

And they have on their platforms. And so for us, it's, you know, it's important. How much of your guys volume is tether? For us, it's probably right now, like, it's like less than 50% for the most part. Because we've, okay. Yeah, like, we just don't, we don't touch a lot of the use cases still where it's like predominantly the currency being used, right? Like a lot of P to P wallets is where tether is really popular. And there's still chains where we have support for them.

But we have, like, our customers are still like developing solutions. how we want to engage. And for us, we've also been in a wait-in-C mode on like where the regulatory treatment of Trayther is going to come out for domestic use cases in the U.S. And so the U.S.AT stuff is really interesting. Like, we are pretty maximalistic when it comes to Seable coins. But at the same time, like we have to run a like a reasonable regulatory scope business. And so for us, like, we can't just go into everything just because customers want it.

We have to really think about like, how does this impact our regulatory position? or like state regulators or national regulators. And so for us, we support it where we are able to with confidence. And we have been waiting and monitoring for where we can add support or do more because we've been waiting to like see how like what's their genius compliance plan. What is like their Mika compliance plan? And so as we expand, like we can't just make it available to everybody. We really have to think about like the the ins and outs of how this impacts our business.

And so it's probably less than it could be. if all of those answers were, like all those questions were answered. And like, Tether would probably become very similar to how it is in the global market, which is like 60, 70% of market share. I think it's a terrible deal. I mean, just to look at the numbers of this, right, using Circle as a public market comparison to it, Circle has about $74 billion of stable coins issued, and they trade for less than half of that in their market cap.

Tether, much bigger, $173 billion of stable coins issued, they're currently trading if this deal goes through at three times that. It's roughly on a comp base of six times of expense. But the margins are totally uncomfortable. I agree. I agree. Circle is a worse business than Tether. Tether does not have that many employees. Circle is relatively inefficient, right?

Circle is worse at its margins. These are things that could hypothetically be fixed by Circular. Over time, they should maybe reach an equilibrium, but it's trading for more than six times the premium of circle. It's closest competitor. And yes, there are times where the number one in the market is significantly better than the number two in the market, where Uber is significantly better than Lyft. But is that like a 6x valuation difference?

What do you think is fair price? What do you think is fair price for Tether? Honestly, like, again, I have not been invited to invest in Tether, but if you should be this deal at $200 billion, I would probably invest. At 500, like, it's sort of like stomach churning. Would you take it at 300? At 2x, their stable coins, no. I mean, rates are going down. You know, I think Tether's genius in the sense that they are raising when the numbers look best, when the chart looks best, when their income looks best. You know, if the Fed cuts a couple more times and the Fed funds rate is at 2%, Tether's business looks a lot worse.

And I think this is the perfect time to raise. I think they're going to raise it because it's a rare asset. You know, it's hard to acquire. And good for them. But I think it's overpriced. I mean, the dot-plog doesn't say rates are going that low. Go ahead, Tom. Yes.

I have the total opposite view. I think Circle is a terrible business. I mean, just for reference, it pulled up their 10Q. Q2, their adjusted EBITDA was 126 mil. So you're like literally looking at what like 140. of tether compared to, you know, what was it, like, four or five X the valuation. Yeah, and I think to your point, like, the, like, this is one of those markets where, you know, either you do reach escape velocity and you're just totally untouchable or, you know,

the other crabs in the pot pull you back down and you get sliced into little bits and you have nothing. And I think for Circle, that is like kind of slowly what's happening where it's like every single deal that you have to strike with every single exchange, every single large holder means like less and less revenue. And then everyone else sees that and they think, well, I should have some of that revenue too. And I think that's just going to get harder and harder and harder. And there's like reverse momentum in that way. Whereas for Tether, they've been obviously able to escape without really doing, you know,

many of many of those deals. And I think that therefore is just going to kind of continue. And therefore, there's going to continue to get bigger. I do also. You can't improve your margin from 99%. Sorry. Maintain their margin. They're not going to get sliced by, you know, a million employees or by, you know, every,

every single exchange coming out of the woodwork and taking their pound of flesh. I do also want to pat myself on the back for saying, I do think Tether should have bought Circle pre-IPO when no one was buying the shit at like five bill. That would have been an amazing scoop. And then, you know, they really just kind of run away with the market. And now if there was only one stable coin and they rolled that whole thing up, the narrative would have been sweet. It would have been sweet.

It would have been genius. Tom, great. So you're a 500 billion, Tom. So you're a buyer of 500 billion, Tom? I don't know. I mean, I think the comp is is maybe a good trade in absolute terms. I don't know, but it does seem like this is one of those trades that might be obvious in retrospect, where everything else you can kind of rationalize your way out of it and say there's a bunch of

competitors, et cetera, et cetera. Tether just continues to win. And the question is like, what's going to stop them from winning? I don't see a lot of close followers in their rear of your mirror. I mean, if it was a public offering, like an IPO type thing, I would want to get in. That's because I think it'll pop. I mean, but here in a private round, private placement situation, limited exits, it's more difficult to make that assessment.

But I mean, look, the thing is, is like, Tether from a rev share perspective, right? Like, they've just had significant less pressure, largely because aside from the trading use cases, the consumer side of it, like, Tether is competing with a $100 bill in a shoebox under a bed where you're also not getting stable, like you're not getting yield, right? Where Circle is competing with like prepaid balances and omnibus accounts, things like that, for like institutional use cases. And there, like the comp is actually a bank that is paying you yield on these monies, right? So like there, it's like a fundamentally different type of business.

Like if you are being asked to hold on to a $100 bill where you can do whatever you want with it until somebody wants it back. And even that, they can't actually redeem it back directly. They have to go to find someone else to redeem it back with. That's an amazing business, right? Yeah. So it's interesting. So I definitely am not familiar enough with the bottom line of Circle to be able to compare the two as effectively as Robert, I'm sure you can or Tom.

My intuition, though, is that I don't think. So two places where I disagree with you guys, but I think I'm probably in a similar camp. So one, I think it's pretty clear that the stable coin market is not a uniform market. I think if you rewind the clock like six years ago before USC exists, did. It seemed very obvious to me that there was basically going to be like one big U.S. dollar stable coin and that it would be more or less an obvious network effects market. And there'd be no reason for a second one to exist, right? Even if there was a second one,

it would quickly get wiped out. And it would there would just be like one dominant one. And that's how it works. Like there's one Google, there's one Facebook. There's one LinkedIn, whatever. And that's not what we've seen. Right. And it's surprising. And it's worth like kind of reconciling why, why is that surprising? What we've learned in practice is that actually there are really separate submarkets within stable coins that don't really fully penetrate each other. So like the thing that you use to trade on Binance or trade on hyperliquid really doesn't need to be the same thing that's on Ethereum Defi. Because the reality is that like the balances that you have on Binance don't really

permeate, you know, the yields and the opportunity costs don't really necessarily permeate from one to another. Like these are kind of captive pools of money that just sit there and they do their own thing. Or to Farooq's point, the sort of money in a shoebox where you're in an emerging market and you're just like trying to save money or trying to get out of the local currency, that really doesn't go on defy. You know, there's not a lot of overlap between those two. So because of that, it turns out there are these cleavages in the U.S. dollar stable coin market that were maybe not obvious ex ante, but now they're very clear. And those cleavages like USTC is dominant in DFI.

Like USTT really has very little penetration in DFI. And when it comes to emerging markets, USTT is dominant in most of these markets. When it comes to exchange trading, USTT is dominant. And there may be other cleavages like that that we haven't seen yet, right? There may be, you know, for cross-company settlement that maybe that's a totally separate cleavage

where they're not touching crypto trading and they're not touching emerging markets. And so there really could be a different stable coin that's used for that. Maybe JPMorgan coin is going to be used for that. Who knows? So for that reason, I don't think that it's true that you will see one of these two players

eclipse each other. I think it's quite likely that USC is going to continue to grow, Tether's going to continue to grow. I think it is clearly true that, like, to Feroog's point, one of those two businesses has better margins because the opportunity cost looks very different for somebody in emerging market versus a corporate or even DFI, right? Defi does have very different opportunity costs than a lot of those players. So I think Tether is a very, very good business in that regard, and it's going to grow like

crazy because it is going to grow like crazy. I think this $500 billion number, like one thing I think is also true is that I don't think actually Tether is very likely an IPO. And not because they can't. I mean, right now they obviously can't because I don't think they could pass an audit. But they could eventually, almost certainly, get the business into such shape that they could. I think the main reason why I don't think Tether is going to go public is I don't think they want to. If you just look at the ownership structure, like very famously, Giancarlo is super private, doesn't really want to have the thumb of U.S. regulators on top of him. And I think he also knows that like, look, this

administration might be very crypto-friendly, the next one might not be. And I think they have very, very long-time horizons at Tether. And that's part of the virtue of the business. It's part of why they're so good at what they do, is that they're one of the few businesses that really can't think on long, multi-year time horizons and has that kind of risk appetite as well. So I think actually Tether, despite all the craziness of the company, I think they're actually quite risk-averse. And I think from their perspective, it's like, hey, this is an amazing cash-low business, right? We're making $5 billion a quarter. Why would we want to go public? you know, what exactly are we going to be getting from going public when we can just pay ourselves

this, you know, it's like a 99% net margin business. Usually those things are privately held. Those things don't go public. Like, it's not like they need money for growth. What do they need money for growth for? It's like a, it's like a, it's like a Berkshire Hathaway, right? Like, I mean, you can kind of build that type of business with this float. And that's why, like, for me, like the way that I think about it is like if they have all

this free float that's coming in the door, that can all be reallocated. It's not like it's sitting around. They can be reallocated. It's 99% margin. business. You can invest that in a bunch of other things. You can make bets. You can make R&D investments. You can do a lot of these things. It becomes a private investment business, like a Berkshire Hathaway, like an insurance company. And then that valuation can be totally fair, right? Because if they're throwing off more float than the world's largest,

like 10 insurance companies with way less downside risk, no exposure to, you know, natural disasters or any of the other risks that an insurance company generally take, like the business looks actually really interesting, right? Yeah. So I'm actually pretty skeptical of this 500 billion number. I think this was probably a first, because it got leaked in the story and like very plausible to me

that it was strategically leaked as like a, oh, hey, anybody's interested, you know, come hit us up. But my guess is that this is probably like the trillion dollar Aramco. I were like, what, the $3 trillion dollar Aramco IPO? Totally, totally.

We're like, maybe you start asking for 500 and you go to 300 and everyone feels like they got a deal, you know? Yeah, yeah, yeah, exactly. My guess is Atlanta probably, yeah, somewhere, but it's a good opening gambit and it gets people talking and like now all of a sudden people are like, oh, hey, did you see the Tether deal? Do you like get, you know, and there's like 50 people who can do this deal, right?

It's not a large group of investors who can write a billion dollar check. So, I got 50K that I'll toss in into Tether if you're willing to take my money. All right. Tether, if you're listening here, Faroo's in for 50. Yeah. You're on your way to the 20 billion. Yeah. And if the market is listening, Super State is raising at 50 billion.

And if you want to meet somewhere in the middle, like 25, just let me know. Yeah. We're actually selling GP at 100 billion. So anybody's good plan. That's cheap. That's cheap. For Dragon Flight, definitely getting it early. I hear you on the IPO thing.

I mean, I definitely don't have a read. But, you know, you did not mention the most obvious path for liquidity for Tether, which is, of course, to issue a token. is a version of their equity via super state. So they could do that too. I mean, that would be an incredible future. Tether, if you want to have your stock trade on blockchains, let me know at any valuation, you know. Robert will run the book for you at $500 billion if you tokenize it on SuperState.

Yeah, we don't run books. Sorry. That's not what a tokenization platform does. Fair enough. Okay. Well, in the spirit of shilling, I want to now move the spotlight over to Farouk. So Farouk, for those of you, for those of you, first I should caveat that we're investors into Rain. You guys recently closed around.

He raised 58 million, I believe, which congratulations on closing. Give us for the audience, what the hell is Rain? Who are you? What's going on here? And how should they understand your business? Because I think one of the reasons why we want to bring you on the show is that what you guys are doing with respect to stablecoins, I think it's be very interesting for people to understand what's going on around the world with respect to stablecoin adoption. Because people hear the stories. They see the numbers.

but they don't really have the like lived texture of how our stable coins actually being used. And I feel like you guys are very, very close front row seat to why that's happening. So talk through that for our audience. Yeah, I'm Faruq. I mean, Rain is a stablecoin payments platform, right? We are focusing on building all the infrastructure for any token to be able to be used like money for payments, whether it's holding, earning, spending, sending. You can do that all with Rain using our infrastructure.

We're natively deployed on multiple blockchains. We have various different virtual machines we support. We're token agnostic. We're custody agnostic. We're wallet agnostic. The way that we've built this is that with the core thesis that, look, money that everybody holds around the world, the bills can take different shapes and colors. They can have different people on them, issued by different people or institutions.

But the way we spend globally is the same, right? Whether it's an American consumer or a Nigerian consumer or a small business in Turkey, or a like a cart owner in the Philippines, we all pretty much spend the same three or four different ways, right? Like cash, we have like QR code payments. We have card payments and we have like checks and, you know, physical transfers or bank transfers or etc. But like the way we spend money or send money is pretty much the same.

The way we earn money is largely the same. And so what we've just realized is like, look, in the short term, there needs to be like a gateway for old style money. to go in and new style money to come out. So like the future of money needs to come out the other end, and then you're living in the future while it's there. And if you can spend that money using stable coins natively, using a card that's issued by rain, powered by rain all the way to the network,

that transaction never goes back to Fiat. For us, it never goes back to Fiat for a partner, never goes back to Fiat for the end user. Once it goes to the card network, from there, some of those payments go to Fiat. Other payments actually stay on chain, come back into the Rain's ecosystem on the merchant. where we also provide services.

And so that's kind of our thesis, which is how do we become this like gateway between traditional financial rails and the future technology rails where every customer that uses rain is actually natively on stable coin infrastructure and we're just adding to the adoption of stable coin technology and orchestratable on chain, like programmable money

for any type of use case. And we have a lot of different types of customers. We have like fintechs, we have exchanges, We have banks even. We have lots of different types of folks where on the back end, it's all stable coins. We have traditional financial services like credit cards, unsecured cards, charge cards. All of those products, like the credit line for the warehouse lending is on the blockchain. The settlement for that with the cart network is on the blockchain.

The user is spending regular money in a regular terminal, whether it's USD, whether it's BRL, GVP, Euro, whatever it is. They're free to go wherever the world and tap their card. that just works. And in the back end, it's all stable coins that we're able to pass through significant cost savings, efficiency savings, because we have 24-7 money. And everybody else that our customers compete with have five-day eight or whatever, 9-30 to 330 money, not including holidays, not including the lunch break or you can't send a wire because you're at a smaller institution that doesn't have this automated. We are able to actually do a lot of stuff faster and quicker. and our customers are able to benefit from that service a larger global customer base

because the digital money is global and we can face international customers because we're not a bank, right? So there's a lot of different things that we are able to bring to the table there. And there's a lot of really cool things we're starting to see and our customers are building that wouldn't have been possible without the stable coin infrastructure that we built and the primitives that we've deployed. So, okay, if I can summarize, you guys are B2C, B, C, Sablecoin payments business. Business are things like B2B as well.

They want to offer B2B as well. Okay, fine. So a stereotypical customer might be a fintech, and they're like, hey, I want to offer cards to my customers. They've got USC balances in my fintech app. They're like, I'm distributing in Africa or in Latam or whatever. And I want to give them cards because they want to spend their USC, but they can't just like swipe a credit, you know,

maybe in like certain places like Venezuela or, you know, places that are really, really having a bad time is there actually merchants accepting stable coin payments, right? Like, we've all heard the stories, but this is only really in places that, like, bad hyperinflation where the infrastructure is really poor, right? In most places, even where people do have stable coins or they do have stable coin balances, it's not enough of critical mass that merchants are accepting stable coin payments, in which case, a user of this fintech can get a card issued by rain,

and that card allows them to pay with stablecoins, but using like Visa infrastructure. Is that the TLDR? So give me an example of like, who's a stereotypical user? What do those users look like? What are they using these credit cards for? We've seen every imaginable type of user, right?

We have like, we have payroll companies in the U.S. that are using us to create a dollar wallet. It's not a stable coin wallet. It's just a dollar wallet. We have earned wage access players that are using our infrastructure to be able to disbursed stable coins directly because they can do that 24 hours a day as you earn money.

So like you have a night shift, you can actually get paid into a spendable instrument at night. And it's non-fungible money. So it's not even float, right? They're actually disbursing stable coins to you at night. As you get off night shift, you're on the way home. You can actually tap the card and pay for it with the money you just earn. So it's not a credit product anymore unless you want it design it to be.

And there's other people, like for example, we have like I said, like a high net worth card program that uses us. The entire warehouse lending line for that program is on the blockchain. We have, and those customers are high net worth, like travelers, like fancy people that are going to fancy hotels and buying fancy things. And they don't know that they're out there spending stable coins, right? They have no idea. And then on the other, and we also have businesses that are like buying Facebook ads and

running their business where they may be getting stable coin settlement in from like a payment payment service provider from the card network for their sales, right? So they're selling a, let's say they're selling a cardigan on Instagram shop. And then they're making that money, comes in from the network and stable coins because they're in some country where they don't want to be able to get paid out in the local market. They don't want to have dollars because they're selling into the U.S. And then those actually go into a rain powered account and then instantaneously,

at the moment that token hits, you're buying the Facebook ad to then run that ad to get the next customer. So there's a lot of these things, which we're, starting to see our customers design, which are use cases that were not previously possible because just the delta between business hour money to 24 hour money is that you can now design and think of things that you couldn't build before. And so customers are building the solutions themselves. And the coolest stuff that's happening is actually stuff that we're finding out because we're seeing it and being like, why didn't we think of that? Right. Like we have

We have like partners where they've connected defy lending protocols to the back. And it's a true defy credit card where each disbursement, each authorization goes to the blockchain, pulls against a smart contract from the defy credit line, disperses into our contract, and then we send it to the network. This is cool stuff. And like that user...

So you're telling me, you're telling me at the moment I swipe my credit card. I'm like, I go into a mall, I want to buy a coat. The moment that I swipe my credit card, my like, my USTE or SUSDE, which is like earning yield. all the time. The moment I swipe my card in the off window, it moves that to a deck, sells it for USC, then moves the USC, sends it to Visa to settle my transaction with Visa, and then sends

the remainder back to my account. And so I'm like earning yield the entire time at the moment I swamink. It only takes the amount that you owe. It doesn't even take any. There's nothing else to send back to your account. It's just, it's atomic. Like we had somebody like a person that has like a pretty serious. significant Bitcoin bag.

They're using one of our partners. They paid for a down payment on their house. And it flagged all of our things because we were like, what the hell is this? And like our compliance team reached out and we got the bill of sale. We talked to like the people that were selling the property. We talked to real estate agent. Like we were able to get this entire thing.

We were like, we didn't even think that people would like, I mean, of course, now that you've seen it, it's like, of course it makes sense. Like you have, let's say several million dollars or something like that in Bitcoin. you're lending that into a, you know, a pool, you're borrowing against that to buy your house, right? So you want to hodel, you don't want to sell, you want to be able to get liquidity. And this person put their deposit down on a down payment on a house and they're going to negotiate the mortgage and all that stuff separately. But there's all sorts of things that we're seeing. Like we have a lot of clients that are in South America.

One of the coolest things we started seeing early on was small business owners in like Bolivia or Paraguay or Argentina, Brazil. using our card because it was cheaper to pay with a credit card to import things from China than it was to send a swift transaction. And so like there's that use case. There's individual. And the other thing is in a lot of these countries, there's no distinction between an average person and a business owner. Everybody is kind of a gig economy worker.

They have sort of a side business. They have a job. They have all sorts of things. And so we're seeing like all sorts of informal economy stuff. All sorts of like our customers are actually seeing stable coin payments. within their own ecosystem now. And so people are actually paying vendors with some of our customers' apps. They pay each other.

And then the reason they pay each other is because it has a card attached on both ends. And so you can actually spend that money instantaneously. We've added like payout capabilities so you can press a button and it'll show up in your bank account, right, anywhere in the world. So there's a lot of really cool stuff that we're starting to see because for us, the future of money can only really be actualized when the consumer is choosing. to adopt it because it feels at least the same and usually better, right? Like you're not going to be able to get people to change their behavior just because, you know, you're saying, oh, well, you know, you really should think about getting the sticker to accept the stable coin because you get to feel cool.

It's like, as a consumer, if you can't pay for your bus ride home, why would you accept money from something? That way. Yeah. That makes a lot of sense. I'm really fascinated by this idea of like the connective tissue, as you put it, between the old money and the new money. And one of the lessons from technology generally is that it's really, really hard to disrupt something that's good enough. And a lot of the infrastructure that you see for payments is good enough.

It's not great. It's not excellent, but it's good enough. And if you want somebody to move wholesale from like that to, like, for example, in the U.S. during COVID, there was this idea that like, oh, maybe COVID is going to cause QR code payments. take off in the U.S. And obviously it didn't happen, didn't even get close to QR code payment taking off in the U.S. But we did get tap to pay, right? Tap to pay really did take off in the U.S. during COVID. And the tap to pay phenomenon, of course, like, you know, is Apple Pay and Google pay and all this stuff. It all piggybacked on the credit card rails. And that's why it was easy for it to, for us to have that transition as a society. And the reason why is that it really wasn't

that much of a leap from a technology perspective, other than just, okay, now you have this NFC thing that you do when you press the thing against the thing. So it feels to me like a kind of perfect analogy that for, again, for certain economies where their borderline failed states, okay, maybe there is enough bottoms up adoption of like, hey, we're going to pay each other in USCT on Tron and you just, you know, you come to the checkout and you just put the little QR code and you pay with finance pay. But for most places in the world, right, like, take like Dubai, I was in Dubai not too long ago. And there's a lot of Russian and Ukrainian immigrants in Dubai since the war. And a lot of them, like they have money, but they have trouble getting banking, especially after

the Russia sanctions. And so like you can buy a house with tether in Dubai. You can buy a car with tether in Dubai. But if you go to the mall of Dubai, you cannot buy anything with tether. Right. If you want to go buy shoes, you cannot do that with tether. And so like this, this, like the stable coin credit card, stable coin charge card, concept. was the thing for me that really squared the circle about how this is going to, like, what's that bridge between where we are now and where we're going in terms of actually modernizing financial infrastructure in all these different places? So that's a big part of the reason why, since meeting you guys and also learning more about

all the trends that you guys are seeing, about how people are using these things, really made me understand a little bit more about where I think stable coins are going. No, I appreciate that a lot, right? I mean, for us, the exciting part for us is when we talk to potential customers that have existing programs or thinking about building something, you're right. It is hard to compete with something that's good enough, but a lot of people have been burned by this like fintech 1.0, right? Banks have promised them a lot of stuff. And then there's been a lot of structural failures in these types of constructs. And then even fintech 2.0 where like people are like, oh, well, you know, now we actually are not the middle where we're actually on top of a bank separately in your contract.

contracting. Even that, people are realizing, okay, well, the participants in this transaction have not changed. And we're trying to do the same thing. And if it was not okay with regulators previously, what is it going to make this okay with regulators now? And so a lot of people are just kind of wary of making the same decision multiple times and then expecting different outcomes. And so they're willing to actually try stable coins. I mean, maybe not immediately for the whole thing, but like for a small piece, like we were getting a lot of people coming in and say, you know what? We're going to try this new thing and because we can launch in three weeks with rain, we'll just start with stable quills. Let's just go. And then they're coming back to us like mid integration and they're like,

actually we're just going to switch everything over. We're just going to take us a little bit longer. This is so much better. Let's just go. And so like there's so many things that we're like seeing where we're actually bringing all this net new adoption into the stable queen ecosystem. And we're bringing it in from like tradfai rails where people are like, well, you know, I'm at this financial institution, which is worried about staying below the Durbin, cap, but I have almost a ton of, I have a ton of deposits and they also don't have any money to like pony up for more equity. And they make us actually put our money into 200 financial institutions at night because they don't want it to be here. And they're like, well, you know, they go to circle

and circles like, well, you know, you can give us $3 billion. You've moved here into USDC whenever you want. And they're like, oh, like this is a totally different type of institutional counterparty. Then, and like we're able to access like a balance sheet that's bigger. We're able to get institutional custody at Bank in New York. We're not facing a community financial institution and, you know, name a state, right? And so, or name a country. And we're facing somebody that at the very least is publicly traded as like audited financial statements, is facing institutional counterparties.

And then you'd expand that to like people outside the U.S. They don't even have institutions that where the dollars are insured by anyone, right? And so you're not even getting one to one backing in a lot of these places because there's no guarantee that like the bank itself doesn't have a correspondent relationship with the U.S. Bank. So like where are they actually holding it? Do you have any visibility? Do you have any security? Like it's very difficult to kind of, you know, for private citizens to think about this, right? And we're businesses to think about this. And so stable coins in a lot of ways in a lot of countries represent financial counterparties that are far in excess of anybody that you would be able to access domestically. Okay, so last question for you, Faroo, before we sign off, tell us what the growth that you're seeing,

because there's also one of the fascinating things from our conversations of, okay, this is a thing that's happening. There's some people using charge cars or blah, blah, blah. How big is it and how big is it getting? Like, what are you guys seeing, given that you have such visibility into what's happening on the ground? We are seeing every single customer that goes live, gross. We don't have a single user cohort that is not growing.

Month over month, week over week. Every single customer cohort is right. It's complete insanity because what this is saying is that like people are able to acquire customers cheaper because they're able to have more meaningful economics. So like our customers, the cack is lower because the product has a wider distribution aperture. And then on top of that, because we are more efficient than a traditional partner that you would want to work with, we share a lot more economics back with our partners. So their payback period is faster. And so that just creates this flywheel for our customer base that nobody's really seen in platform businesses. before. And I mean, I really do think, like, we were doing a postmortem on our stuff like a few weeks ago.

And one of the things we realize is it's largely because a lot of our customers, right, they were able to pivot their customer base, the customer segment because we can service multiple geographies with stable coins because it's a global dollar. And so they were like, oh, you know, I want to launch in country A for this market segment. And they were like, oh, man, there's like 10 different people in that market segment. And some, like somebody forgot the geo-fense. and ad or whatever it was for like this like stable coin wallet and they had somebody from country B sign up for their stable coin wallet and they were able to service them because self-custodial wallet is is a international product the stable coin is an international product

I mean our products are not global products today but we're working on expanding our licensing and our global coverage so that we can continue growing but just those types of elements create this dynamic that you really don't have a traditional fintech right like if you want to launch a card product in the United States or a bank account in the U.S. And you realize that your customer segment in the U.S. is not there. You can't just expand it to Canada or Mexico. You have to go start all over in Canada, start all over in Mexico. And that's the power of stable coins, right?

Like you can actually just say, hey, you know, I'm going to provide this product. And maybe that product is going to resonate with alternative music fans in the Midwest. But you can service them. And maybe then it's also going to resonate with this like, subculture of people in like Bangladesh. You can also service them. And that's this like amazing thing that creates a totally different dynamic for startups and early stage companies because it creates this like opportunity for good

things to happen to you that really hasn't existed in financial products. All right. We got to sign off. Where can people find you and what should they be looking for if they want to get in touch with Rain? Yeah. I'm at Rookster on Twitter and we're at rain. XYZ.

Please reach out. Our DMs are open. Mine are too. and so are the companies. We're happy to collaborate and design the future with everybody listening. Very good. Thanks, Frank. All right.

We got to go. We'll be back next week. Thank you, everybody. See, well.