Unchained - Why Every Company Will Have a Stablecoin — and Why One L2 Isn’t Enough - Ep. 912

Episode Date: October 1, 2025

This week on Unchained, we’ve got a double-header. First, Zach Abrams, CEO of Bridge (acquired by Stripe), unveils Open Issuance, a platform designed to let any company launch its own stablecoin. He explains why the stablecoin duopoly is ending, why fragmentation won’t slow adoption, and how stablecoins could pair with AI to reshape global money movement. Then, Kenny Li, co-founder of Manta Network, joins to reveal why Manta is pivoting away from being just another L2. He argues that the scaling wars are oversaturated, that mercenary users make infra battles a fight for crumbs, and that the real prize is at the application layer. Thank you to our sponsors! Mantle Aptos Guests: Zach Abrams, Co-Founder and CEO of Bridge Kenny Li, Co-Founder and Core Contributor of Manta Network Links: Unchained:  How New Stablecoin Startup Bridge Got Acquired by Stripe for $1.1B MetaMask Stablecoin mUSD Goes Live Why JPMorgan and Shopify Are Rolling Out New Products on Ethereum Layer 2 Base Tempo Launch Announcement: The Blockchain Designed for Payments Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. Today we've got a double header. First step is Zach Abrams, CEO of Bridge, the Stripe acquired startup that just launched Open Issuance, a platform that allows every company to launch its own stablecoin. He explains what this means for stable coins, payments, and even AI. Then in the second half, we're joined by Kenny Lee, co-founder of Manta Network, who reveals why Manta is pivoting away from being just another L2 to focusing on building applications. He makes the case that the L2 wars are a fight for crumbs and that the real opportunity is an app that can bring in the next wave of users.

It's a packed show, but before we dive in, let's hear from Aptos and Mantle, for sponsors who make this show possible. Aptos is the no-compromise infrastructure for global financial markets, fast, reliable, and 100 times more cost-efficient than other blockchains. See for yourself why Aptos is the chain of choice for institutions, users, and developers alike at the Aptos Experience, October 15th and 16th in Brooklyn. Mantle is pioneering blockchain for banking of revolutionary new category at the intersection of Tradfai and Web 3.

Follow Mantle underscore official to learn more. I'm here with Zach Abrams, co-founder and CEO of Brinch. Welcome, Zach. Hey, Laura, excited to be here. Yeah, excited to have you. So Bridge was acquired last year by Stripe, which at the time was the largest crypto acquisition. It's since been eclipsed. We don't have to go to that.

Yeah, it didn't last long. Yeah, I mean, after the election, just everybody was like getting their horses, you know, ready for the race. All right. So since then, Stripe has announced a bunch of things. Like it's blockchain tempo, there's been a lot of eyeballs on their next movement crypto. And today, Bridge is announcing a new platform called Open Issuance. So tell me about it. Yeah, we're very excited.

We actually, the original idea for Bridge was that we thought that everyone was going to want their own stable coin. It turned out back in 2022, the market wasn't quite ready for it. and we needed more regulatory clarity, but we're extremely excited. Open issuance is a platform through which any business, whether it's a bank or a, you know, marketplace or a fintech can create their own stable coin. And we are really excited about this because the market itself, you know, we think that, you know, folks are going to want to control their dollar and they're going to want to be able to program those dollars to work uniquely well for the platforms that they're building.

Before open issuance, you kind of had two big issuers or even today you have these two big issuers that dominate the stable coin market. 85% of all stable coins outstanding come from those two companies. but, you know, they're very specific in how they run those companies. They're focused on AUM, and they control what blockchains that you can issue on to. They control the mint and burn fees that happen. And as a result, a bunch of use cases for stablecoins just aren't possible or aren't economically viable. And so we think this is super important for growing the stable coin ecosystem.

And we think it's super important so that, you know, all different types of platforms. that want to come and take advantage of stable coins can do so. So we're very excited about it. Yeah, so I understand the problem that you laid out there, but then, you know, when if I think about a world with many stable coins, then it to me sounds like the fragmentation issue that people talk about in Defi a lot. So describe like what this world will look like, you know, once this is kind of more widely used. like, is it that it'll be, you know, one way for the businesses themselves and then everyday users won't know, kind of this is happening?

Or, yeah, just talk a little bit about, like, how this world will look. Yeah, and I'll go into that. But maybe before talking about that, the question, I'll talk, like, more specifically about some of the problems it solves. And then, you know, the sort of flip that question on, like, what it would look like if there were only two, two issuers. And so one of the first use cases for bridge was cross-border payments. And we had, you know, this company, Zulu, they were one of our first customers. They were moving money between the U.S. or between Columbia and the U.S. And so they would take, you know, Colombian pesos, convert them into stable coins, send

those stable coin to bridge, and then we would convert those back into dollars. That flow of funds is burning stablecoins. that is like the way issuers think of that. And because their businesses are focused on accumulating as much AUM as possible and making interest off of those payments, that is a flow that is not economically interesting to them. And so, you know, they charge burn fees to get out of those stable coins. Well, those burn fees now have gotten to such a point where the costs of moving cross-border payments through stable corn rails at times is more expensive.

than Fiat. And as a result, stablecoins are going to be unlikely to solve the cross-border payment problem unless there are issuers or folks who want to issue stable coins that don't care as much about AUM. They're using them for payments use cases to save costs in other places through the system. And so these are the types of problems where you have two folks, a very specific business model. They've done amazing things for this stable coin space. But the stable coin space will only be one-tenth or one-one hundredth the size that it needs to be. Another example is like, let's say you're building a bank and you want to pass on rewards to your customers.

You know, that's not really possible with current stable coin issuers. And wait, but just explain why that is that you're talking about because the, the treasuries are held by Circle and Tether. So, okay, got it. Exactly. And their businesses are driven by earning the, you know, taking that. that yield, that's their revenue. So if they give that revenue to someone else, then there's, no business. And so they're not economically aligned with a lot of the, you know,

neobanks who want to build, you know, competitive products on stablecoins. And so we just view stable coin issuance as this very important gap in the market to enable a bunch of different use cases for stable coins that maybe some folks just don't want to enable their business models are not aligned with them solving those specific problems. And then to come back to flipping on the question on its head, the other thing that we believe very deeply is that stable coins are going to be huge. You know, there's going to be many trillions of dollars of stable coins. And it is, you know, while it can be hard to envision a situation where there are tons of, and tons and tons of different stable coins,

it's also really hard to envision a situation where there's only two. And you have trillions of dollars of stable coins managed by two companies. And everybody is like building and issuing and moving money on chain and all this stuff. And it's just two companies that are managing all the treasuries. Like the entirety of the world's economic system would kind of topple over by this oligopoly. The world will want. But actually explain that because I, I think, you know, what we have traditionally seen in history is that when it comes to business,

there are a few dominant players in each sector. So why is it that you don't think that that will happen here? I think that there are some markets where there end up where there are, you know, you end up in like monopolistic situations. But then there are other markets where the market just wants alternatives. It will not allow one company to win the entire. of the market. And like payment processing, which is the business that Stripe is in, is a great example. You know, there's Stripe and there's Adion, but there's also World Pay and checkout and

so on. The market wants, you know, multiple processors. That is like to de-risk their business. Some processors focus on like different aspects, you know, different type processing for different types of companies because the market is just so big. And we think this stablecoin market is going to be very similar to that. You know, the systemic risk that would happen if you just had two issuers and they were investing in all the treasuries would be too great. You know, the, the market will want alternatives and will want to de-risk. Okay. And actually, so just to understand one thing. So I understand, like, from the businesses' perspective, why they would do this, but, like, from the user's side, is the user going to be using so many different stable coin? Like, that's the part

where I'm like, I don't think that's going to happen. Yeah, that's a great question. And there's two answers to that question. So first, we think that all these platforms will have their own dollar that they control and that they benefit from so that they could program it uniquely for their platform. And they can control what blockchains it goes on to. Like, if they build their own L2, it will be a, they can ensure that it's available on that L2 instantly, that they get the economic, benefits from and they could pass those back to their users. And we are building an interoperability network that will enable folks to move those stablecoins between any of these

platforms, one for one, and permissionlessly. So if you're using wallet A and you have a stable coin there and you send it to wallet B, it will seamlessly convert into wallet B stablecoin, where they then accrue the yield and so on. And all of this will happen without the user knowing. That's one answer. The second thing is that we believe that stable coins will just become core infrastructure. And over time, this branding of stable coins will recede into the background. And a lot of these applications will just show that you have digital dollars. And you will not care who the issuer of those dollars are.

You're just, you just have your money in Revolut or you have your money in Dollar App or you have your money in Wise. So you have your money in Remitly. And as you send it, these dollars change shape for yield attribution and control and so on. And like I imagine there is a cost to all that swapping. So how does that get paid? So through the bridge, great question. So through the bridge APIs, we convert everything one for once. So, you know, $1 is sent and $1 is delivered into the wallet.

we abstract away the gas and any fees that might come from our service. The interoperability network that we're building will not have any bridge fees and will have the ability to easily abstract away the gas that folks might pay so that you can ensure that dollars are delivered one for one. Like a great example is like you don't want, let's say you're sending money between, you know, Coinbase wallet and like, you know, Phantom or something and you send a dollar, You don't want, you know, 0.9999.99.99.99.99 cents to arrive. And so we've, like our APIs and our system abstracts that away.

Okay. Got it. Yeah. That's like a cost you're willing to bear because in order to grow the business, like you can make your money elsewhere. Right. Yeah. And to your point, I do think that like USDC and USDT will remain, you know, very popular brand like branded assets that will accrue meaningful amounts of liquidity in like defy and trading and and this sort of thing like i think that that is an area where stable coins have very material network effects and it helps to aggregate around one party to have better liquidity you know so you can place deeper trades and so on and that's like a very important benefit that they bring to the ecosystem.

And as a result, that's going to become more and more and more important over time. Okay. So this is, you know, I don't know how you would want to count it, but it's clearly one of the first products that you have been launching since the Stripe acquisition. So why was it that that was like something that you decided to focus on kind of early on? Like, is this something you're hearing from a lot of businesses or, yeah, I'd just be curious like why this, why you chose to focus here. Yeah, we, I've spent like my whole career in fintech, and one of the things I really like about fintech is that it's very financially rational.

And like an example that the like easily comes to mind is like Robin Hood. You know, Robin Hood won not because it's like some genius invention, but but because they had free trading and everyone else costs $5. And for me, issuing your own stable coin was similar. You know, it's like, let's say I'm building a neobank and I'm sitting on billions of dollars of assets and I'm doing that on same ones. Why would I not want all the economics from that? You know, why would I like outsource the management of those treasuries not have my assets, you know, segregated in some capacity? Because, you know, that presents higher risk to have it, you know, all pulled in one place. You know, and why would I, you know, if I become totally dependent on it, then all of a sudden,

in year two or year three, if I want to scale and do cross-border payments or some other use case that necessitates, you know, burning or something, surprise fees come in and so on. Like, you don't want to be building Zenga on, you know, Facebook. And all of a sudden, they like change your interests and goodbye, goodbye business. So it just made financial sense to me that folks would want this.

And it was hard for me to envision that stable coins would scale without this. this infrastructure because it fills a very important gap for folks who will want to build core payments or fintech or bank applications on top of stablecoins. And at first, it was like, that was it because at the time, you know, we really didn't have folks who wanted it because the perceived risk of issuing a stable coin was really high because this was back in 2022 after Tara Luna and after FTX. And then we've seen over the last six months as we've had regulatory clarity that there has been a ton of interest in building with this platform. And we saw that with native markets in USDA.

We saw that with Metamask. You know, we've seen that with Dakota. We've seen that with Phantom. And we think we'll see that with every major platform that they will want to control their dollar. Yeah, you know what is so interesting? Back when the Genius Act was passed, I was kind of outraged about that clause that the issuers couldn't pass off the interest. But now I'm suddenly realizing that that sort of hobbles them competitively, which is kind of, I don't know how I didn't realize that before. But in a way, like what you're describing is so fascinating to me because it's almost like your individual money market account that you just have in your own wallet or something like that. And you like, but it's, it's, it's, it's, but it acts like kind of liquid cash. So that's fascinating. Exactly.

I mean, it really is, like a stable coin really is a better form of a dollar. You are a better transactional asset because you, you know, today with the dollar, you can either save it, you know, by putting it in a savings account, in which case it's harder to transact with and so on, or you can spend it. You know, you put it in an instructing account. And in which case you get like zero interest. and so on. And a stable coin, you get both. You know, you get, it's like, you know, natively yield bearing. And it's, it's very transactional. You can use it for payments and you can issue cards

on top of it and so on. Another reason why it makes financial sense, like we thought that these things would, would become, you know, very important. But it's taken a little bit of time. Yeah, yeah. No, I love it. One other thing that I wanted to ask about was just the kind of of like security bit because in a way that's sort of what circle and tether are offering right it's like they're they're kind of managing this reserve and they're making sure it's fully backed and all this stuff so how have you solved that problem for for this product yeah i mean this is this is like you know in many ways that is the product uh the the the the product is like is managing managing reserves is is ensuring liquidity and is ensuring security.

And this is something we've been building, like, really since day one of the company. We actually ended up issuing our very first stable coin probably two and a half years ago. Just the business has like, you know, really started to scale. And like the, you know, we've had to rebuild and retool the platform, which is what this announcement is about because of all of that scale. But under the hood, all of the assets are managed with core banks. You know, BlackRock is the primary partner we use to manage to manage the treasuries. And we have a bunch of other banks that we're bringing online as the platform scales.

And then on the actual like stable coin issuance side, every single, you know, all of this smart, you know, at this point, we've issued dozens of stable coins. all of the smart con we have like a standard smart contract that's been audited you know umpteen times you know and then any additional time any any edits end up getting audited again and again and again and this is like you know ultimately the core of what we do is like we have to ensure that the that that there are never more you know tokenized dollars outstanding than there are actual dollars and treasuries under the hood and that's like that's that ultimately that's success for us And actually, I just realized one other thing. Are there any security issues from the side of the customer who was creating their own stable coin?

Like, you know, like I just think about, you know, all these companies, they have these multisigs and stuff like that. So is there anything just like internally that would be best practices to protect, you know, their company stable coin? There's actually like a real benefit to, it's like very beneficial to have your own stable. So one of our early customers who is in NeoBank, they issued a stablecoin. They were, you know, they're one of our first and one of our biggest to scale with stablecoin issuance. Pretty early on, they actually have one of their customers that lost the keys to their multi-sig wallet. And because we had issued the stable coin and it was their stable coin, they could elect to remotely burn the stable coin. and recover the customer's funds,

which is not something that would have been possible if they were building on top of, you know, USDAC or USDT. And so, you know, that was a process where we had to work together to do it. You can't just like remotely, you know, they couldn't just remotely burn on their own. But there are these benefits that come.

And you could kind of think of it as like added security for folks who were building stable coin based applications to ensure that or to give more protections to their customers in case, you know, something happens on the wallet side or they can't recover their keys or whatever else. Okay. Okay. Yeah.

Yeah. I'm sure that would give like piece of point to people. You know, like becoming your own bank is like appealing. And then when you really think about the detail, sometimes it's like, wait a second. Yeah. I mean, I was at coin. I worked at Coinbase for, you know, a while. And one of the things we would frequently say internally was that Coinbase,

Coinbase's like killer feature was password reset. Pretty much, pretty much. Yeah, yeah, exactly. So I did want to ask you also because it has been a while since you were last in the show. And at the time, you said that you had a few hundred customers, I think, like 300 or something. And you, you know, we were talking about some of them were like gigantic companies, weren't really tiny. And I just wondered, like, since the strike back position, you know, how has,

business change for you? Like how, you know, how I'm in also with the passage of the Genius Act. Like, I'm sure that you're, there's like very exciting moment in time in stable coins. So I'd love to hear kind of like what it, what it's like, what it's like, what it's like, especially like considering this right back position. Yeah. I mean, after after the acquisition, we very viscerally felt a shift along the adoption curve. before the acquisition, it was like, you know, a bunch of folks who had on their own had gone along the journey and decided that stable coins were going to be super helpful to them. And most of them were small teams, developers outside of the U.S. You know, it was like the earliest of the early adopters, you know, in Argentina or Mexico or Europe or wherever else.

And then after the acquisition, it just like immediately shifted. And we were talking to, you know, large fintechs. We were talking to treasury teams for enormous, you know, e-commerce companies. We were talking to banks. And so the last year, it's really felt like we've gone through like five years of like, you know, the adoption curve all at all at once. And, you know, this is now like manifesting in the customers that we're supporting. You know, it's manifesting in like, you know, the other day we announced that we were launching with Remitly and we announced we're launching with Ramp. There's a bunch of, you know, now banks are like super keen on exploring the stable coin space.

We're doing more and more work with the networks because we want, you know, because stable coin settlement we think is going to be really important. And all of these bits of infrastructure that, you know, in use cases that we thought were going to happen are really starting to come together. So we're going to just clear the air for people, including myself, because I also as a bit mixed up on the relationship between the various entities and projects that are kind of interrelated here. So just explain in like very clear terms, what the relationship is between Stripe, Tempo, Bridge. You could throw in privy, like, go ahead and just explain it all for everyone. It's a, it's a, it's a, it's a great question. So Stripe, Bridge, Privy are, you know, Bridge and Privy are part of Stripe. And you could really think about us as different layers of the stack.

So Privy is like the account layer very close to the very close to the blockchain. Pretty much everybody, actually everybody who builds on chain needs a wallet. They provide that wallet. Bridge is one layer of abstraction high. bridge is like the bank account. Bridge moves money across the Fiat world and the blockchain world. We use wallets and we issue stable coins, you know, but we're kind of act like the bank, if you think about it. And then Stripe is, you know, ultimately the application. You know, they're basically taking bridge services and taking privy services and delivering them to Stripe customers in ways

that makes sense for them. And the most obvious example is like pay with crypto via Stripe checkout, Stripe, which is, which we launched with Shopify. And so that product sits on the entirety of the stack. And so customers can, developers can come to, you know, us and they can work directly with privy if they just want wallets. They can work with bridge and privy if they want wallets and, you know, money movement. Or they could work with Stripe if they just want everything taken care of.

and abstracted away for them. Tempo is the lowest level of that stack. It is the actual payment rail. And Tempo is an independent company outside of Stripe, incubated by Stripe. And it is one payment rail that Bridge will use as folks want to build us. But they can also use Solana or Base or, you know, any other blockchain. And the same thing applies for Priby. you know, they will, privy will provide wallets, but they'll also provide wallets elsewhere.

Okay. So in terms of like how much you are working on tempo, it's like there's another group working on tempo and they might reach out to you for help or, you know, to use bridge in some way. But like you're not like, I don't know, giving your input necessarily on on that. Yeah. I mean, they're an independent company building a blockchain that will be a totally. decentralized blockchain and payment rail. And we think that many bridge developers will want that blockchain because it solves many problems that exist elsewhere. It will be a very good blockchain for, you know, we do government aid programs where we send tens of thousands of different payments out all at the same time. It will be a very good blockchain to facilitate that type of activity. And so folks might choose to do it. But if they don't want to use it, they can use,

you know, Solana or Base if they want it to. And I want to ask this question, but I'm a little nervous that listeners might get touchy about the question. So if you're one of those people, you know, I just have to ask this. But I just be curious. So, you know, Tempo is going to be this like payments-focused blockchain. What is it about the current options that is not ideal? Like what problems do you still come across with your type of work that need to be resolved that you think perhaps tempo could be, you know, because they're focused specifically in payments that that chain could resolve? Yeah. I mean, it's a, it's a, it's a, it's a good question. I'll give a couple of examples. So, and by the way, we work with all of these teams and we think they're all great. And we support many developers who are, who are building with them. But, but on Solana. For instance, when you need to create a wallet that accepts USC, you have to, you know, prime that wallet to be able to accept USC, which costs, you know, cents. I think it's like 20 cents or something like that.

And we had a very large developer who is coming to us. They have millions, millions and millions of customers. And they wanted to create Salana wallets for all of their customers. The upfront cost of creating all those wallets was really, really high. And it made it not feasible. And it's one small thing, but it makes it such that that blockchain is really hard for very scaled applications to create millions of millions of wallets for their end customers. Another example that we've run into is just like TPS limitations. You know, how many transactions can we push through these various blockchains?

In many ways, we've made like tremendous progress over the last couple years, but the TPS requirements of Stripe alone are, you know, an order of magnitude, if not more, larger than even the highest performing blockchain today. And so, you know, while a lot of these blockchains are getting better at minimizing gas and getting better at, you know, moving lots of transactions, there's still this like, you know, this continuous path that we need to get to to be able to handle payment scale applications. You know, and if a bank or, you know, if we're moving like serious money, you know, trillions of dollars a day, you know, many, many, many millions of transactions a day across blockchains, there needs to be something that is built specifically to solve those problems. Okay.

Yeah. I mean, I guess like one other thing is just when you talk about that, I'm thinking, well, if you do build a chain that can resolve those problems, then is it the case that you, like, would you want to restrict that to? payment use cases and if so how would you do that? I'm just thinking about like, I don't know if you're following this little more happening in Bitcoin right now about the NFTs and like what Bitcoin is supposed to be for and like some people want a hard fork and it's a whole thing.

So I just, you know, and like I am seeing these arguments on Twitter where people are saying, how can you limit like how people are using this? Like it's so, yeah, it's just another question that comes up when you describe like, you know, how tempo could result. all of these types of things. Or maybe it doesn't matter. Maybe like if they do really have that many TPS, then then yeah, you don't need a restricted or.

Yeah. I mean, it is, it's going to be a blockchain that's decentralized. And so, you know, people can build whatever they want on it. So, you know, all those folks who are growing dissatisfied on Bitcoin can come, I guess, to tempo and build their, build their NFT applications on tempo. But, but that's not what. we're focusing, that's not the problem we're focusing on. And like the tempo team specifically is focus on like,

like we've just really wanted more, a more reliable, you know, blockchain that solves a lot of these very little problems, you know, like another example is that gas can be paid or on tempo will be able to be paid in any stable coin. That's like really nice. So you don't need to acquire these different assets to be able to be able to fund transactions, which is another really complexifying factor to moving lots of money across various blockchains. Yeah, yeah, for sure.

Okay, so I want to go back to, you know, just like, because you kind of gave a sneak preview of how your life has changed or how the world's average has changed since the acquisition. And I'm sure, you know, just what we talked about, like with genius and I'm sure you're very well. Tempo is not the only stable chain that's launching. So I was just curious, like, you know, based on the conversations you're happening right now, because I'm sure you are in a lot of rooms or you know, like, what the future is going to look like and how crazy it's going to get or how cool it's going to get. So I just would love to hear, you know, based on what you're hearing or what you're discussing with people,

what do you think the future of crypto or payments would look like? Like, you know, in, I don't know, a year or two. I mean, I guess the first thing I'll say is that I have been like constantly wrong about what would happen over the course of, over the course of a year. You know, I did not foresee a year ago. We announced this strike acquisition in October. So like, you know, I did not foresee that we would be in this situation where there's, you know, such regular. momentum that, you know, we're seeing basically every fintech do something with stable coins, that there is like this increasingly consensus view that stable coins can be helpful in some way,

shape, or form if you run a global money business. And so, yeah, I didn't, I didn't see that happening. That being said, if I had to like look into my very murky crystal ball, I, I, you know, the payments world is like one of network effects. And so what I expect to happen is that progress will be steady and then dramatic. And a good example of this is like stable coin settlement across the card networks. Visa and I think maybe just Visa at this point does stable coin settlement. But right now, stable coin settlement is less efficient. than Fiat settlement.

And the reason is because the banks are paying in with Fiat and then Visa has to create the stable coin and then pay out the stable coin. So it's an extra step to pay out of a stable coin. But if the banks are starting to settle with stable coins and then Visa is also paying out in stable coins, then it's much more efficient. And so that like flywheel needs to like slowly be cranked. And then once it's spinning, you can get all sorts of amazing things like, Like, you know, imagine you're a merchant and someone pays you and the money is instantly

available in your bank account versus T plus two. Those sorts of things become possible where you actually have streaming of payments into your bank account and so on. But it necessitates slowly building, you know, settlement to Visa, settlement from visa, you know, over, over time. And the cool, the amazing thing that's happening now is we shift down this adoption curve is we're starting to see banks lean in. We're starting to see the networks lean in.

We're starting to see all the cross-border payments companies lean in. And so all these folks that are tying together our global money movement infrastructure are beginning to crank the flywheel. And what I think is going to happen is over the next, you know, year to three years, is that we're going to start to see a very, you know, stable plans have historically, been like trading, you know, and then they were like cross-border. We're going to start to see like 10, 15, 20% of all global money movement shift to these tokenized rails. And this is going to be the core way in which money moves. And real success is when like stablecoins just become

infrastructure, you know, coming back to our other conversation, it is that there just is no world where people go to the stablecoin store and pick between 700 different stable coins. that all of this is going to happen with stablecoins converting between a Visa stable coin and a bank stable coin and a, you know, coin-based stable coin and a phantom stable coin, all of it happening under the hood as money moves between all these different parties. And so I'm like, we've long believed that that, that, you know, tokenized money is just going to be core global money movement infrastructure. And we've started with some of the earliest use cases, and now we're starting to shift to some of the much, you know, more mature and much bigger and much more, you know, critical money movement opportunities.

And out of curiosity, I'd love if you could just pick hypothetical people around the world to describe, like, how their lives would change. So it could be like any geography or like type of worker or, you know, family relationship or whatever, but I'm sure there's a few different use cases that you think will be transformed. Yeah. I mean, maybe just taking a step back before going into people, I have like, this is one of the things I love about fintech is, you know, seeing it from like, I worked at Square pretty early on and just enabling people to be able to accept money a little easier.

You know, like a flower merchant being able to accept a card. payment, whereas before it was really hard for them to be able to get a card reader and so on, just dramatically changed their lives. And so very small improvements in the cost of doing business, very small improvements in the market. I mean, this is what Stripe did. Stripe by making it easier to accept credit cards online, dramatically change the fortunes of, you know, people who are building businesses all over the world because now all of a sudden they could serve the world, whereas before they were only able to serve folks locally.

So very small changes in the way money moves and the way you, in the cost of accepting money and the cost of sending money, have these like profound ripple effects that sometimes are very hard to, uh, to, to notice. Some of the things that we're really starting to see already are that, you know, one of the big things is like people all over the world for the first time, have actual economic choice. You know, like before you, if you were, you know, a host on Airbnb or you were, you know, data labeling on scale AI, or you were doing work on Upwork, you could only get paid out in your local currency.

Now you have economic choice. You could pick the currency that you want to hold. And, you know, a lot of people all over the world are picking right now to save in stable coins. Another example is like cards, for instance, have never become widely popular across the African continent for a bunch of different reasons. And because of the instability of local currency, you know, the lack of card access and the instability of local currency is huge swath of the African continent doesn't have access to core services that we just take for granted. Like you, you can't pay for AWS, or it's very challenging to pay for Google ads,

or, you know, how do you pay for Open AI? You know, if you wanted to use any of these, these, like, these services. It's very challenging now. Merchants will decline your payments because they don't, they can't get Naira out of the country. So it's very hard to accept those payments. But now, if you have a bunch of folks holding stable coins and, you know, they could either pay directly with those stable coins, which they would love, or you could issue cards on top and then the stable coins are settled directly to the end customers. Another big thing is like, imagine every consumer deposit is earning 3%. You know, that's a lot of economic surplus that is delivered back to consumers and businesses.

And, you know, maybe the last thing I'd say is like, you know, I mentioned this before, but imagine every merchant right now, you know, you're selling something online. It takes you two days to get your money, sometimes five days because of risk and whatever else. Imagine after every single swipeable card, every single payment, the money lands in your bank account immediately. That saves like days of working capital for you. It enables you to operate your business more nimbly. So I think there are going to be this like, and those are the ones that just come to mind.

And like I said, I've been horribly wrong at predicting the future. So there are probably more that are like way more profound that that will occur over the next, you know, one year, five years or 10 years. Yeah. A long time ago, I think this might have been, I don't know, eight years ago or I truly don't know. Anyway, Roya Mabu, who is an Afghan entrepreneur, came on the show. And she talked about how she had this, like, blogging business where there were all these little bloggers on her site. And many of them were women. And in Afghanistan, they had a hard time paying the women because a lot of them didn't have bank accounts.

Or if they did, their male relatives would confiscate their earnings. So they set them up with Bitcoin wallets. And then they taught them how to do that. And obviously, the male relatives didn't know how to confiscate the Bitcoin. And so that's how they were paying them. And I, you know, I feel like that's like an example of, you know, it's very similar to what you were talking about with the merchants who suddenly had a way to, you know, sell to the world with Stripe.

Like, but that's like a more, just even more kind of, what's the word like, you know, someone who doesn't have access to to outside, you know, money. Totally. Yeah, that would be like another example. of how stable coins could change people's lives. Yeah, yeah, totally. Yeah, you mentioned the credit cards that could be created out of people receiving stable coin payments. And you have a product that you announced in the spring just like that.

Stablecoin backed credit cards. And that started in Latin America. And I was wondering, like, you know, again, why was that like one of the first things that you did? And I would love to hear kind of the strategy behind, you know, choosing that, that region. I mean, we, one of the, maybe coming back to this theme of being a bad prognosticator of the, of the future. Like many of the things that we have created, it has come from demand from the developers who've been building on bridge. and we've just seen a lot of developers who've been building payouts products

so maybe you're helping a platform pay workers all over the world or they're building neobanks. You know, maybe you're building a, you know, Cleva is building with us. They're a neobank in Africa or dollar app, you know, across Latam. And all of them want other means to take stable coins and be able to spend them in the world. And stable coins are clearly this very important infrastructure on top of which you can build savings and savings products. But then in order to spend them, either you need stable coins to be accepted, which is slowly starting to happen with, you know, strike turning it on for all of its merchants and so on.

But that's going to take a while to compound. Or two, you need stable coins to be interoperable with the networks that exist today. And the biggest of those networks are Visa and MasterCard. The really cool thing that we're doing with them, though, is that stablecoins are really the first global financial building block. So, you know, before stable coins, if you were building a financial product, you build on U.S. banking staff to serve U.S., Mexican to serve Mexico, and so on. Stable coins enable you to serve, you know, hundreds of different countries all at the same time. And so our card issuance product also enables you to deliver a card into those markets. And so I think it's at like 57 or 58 different countries now.

So you could build a stable coin savings product and then launch a card into 58 markets all at the same time, which is like completely unheard of before stable coins. Wow. Yeah. I honestly like was thinking because I have some people that. that we pay in that region. And I was like, hmm, I wonder if they might be interested in this. I did also want to ask because so Bridge has its own stable coin, USDB. Talk about how you guys use that.

Yeah. I mean, it's the same way that we've been talking about with the open issuance platform. So USDV is built on top of the open issuance platform. And it's mostly meant as, you know, an easy way for developers to, who want to come in and want access to the underlying economic, of a stable coin immediately to be able to be able to access them. Because we know that in order to build like world class financial products for their

customers, you know, you need access to the underlying economics. And so we built USDB as a means for folks to come in day one, hit our API, you know, convert dollars or other stable coins or whatever else in the USDB, earn the economics, you know, and then you can convert back into USDT or USDC or dollars or whatever else when folks want to spend or save or what have you. Ultimately, we think everyone, this is kind of like a USDA for us is like a, you know, trial product because we want, we believe everyone ultimately will want and benefit from their own stable coin and we make it so easy to do so that.

then you could just hit a different API, create your own stablecoin, customize your reserves, you know, and then have much more control over the asset and what blockchains it's on and so on. Okay. And so just to understand, so basically like if they come to bridge and they want to use it right away when they start using the API, they could, if they're going to have stable coins, they could just get USB kind of quickly and easily. But if they end up using the open issuance platform, then they kind of can create their own, but maybe in the meantime, it's like USTV. Exactly.

Exactly. And ultimately, this is kind of because, you know, most people today, there's a perceived, it feels like a big deal to create your own statement coin. You know, and that's because like when people create a stable coin, it's like news and like people write about it. And like, you know, folks are like, oh, my gosh, you created a stable coin. Ultimately, we think that is,

going to go away and everyone is going to just think like oh of course when money is on my platform it's going to be my money and when money is on someone else's platform it's going to be their money but but and i would think of usdb as like a graduation path to to get folks there because um it's readily available and and right there out of the box okay and then i did also just want to ask a little bit more about like the connection between bridge and privy because you you know, I, so I understand, like, you know, Stripe has its own customers. You have your own customers. Privy has its own customers.

But then you also said, like, customers could also use multiple parts. So I just, are there, like, specific ways that you've been working together with Privy? Or is it really just developers choice if they want to work together with both of you? Or how does that work? I would say that yes. So it is, first and foremost, it's developers. choice. You know, this is like, we're just like, we're totally, and they share a very similar ethos, like totally in service of developers and the folks who are building on our APIs. Like, we have not

tried to force any one thing or direction, what have you, on folks. Like, it is ultimately, we believe that like all the folks who are building a stable going application will show us what is most useful. And then we will make it easier and easier and easier for them to scale whatever it is that they want to build. That being said, there are clear ways in which, you know, if someone wanted to come to us and use bridge and privy together, it's just easier. You know, there's like, you know, through the bridge APIs, you could create privy wallets. You have one set of APIs through which you can access multiple products. If you want to go down and operate closer to the blockchain, there's a seamless graduation

path to do that and to use privy. And similarly, if you come in and you want wallets and you want to build the privy, it becomes very easy to come and use bridge with that. But if you don't want to use bridge and you wanted to use another partner, you could, you know, privy is not going to force you to force you to do that. I would think of all of these as like different doors, you know, that folks can enter based on where they are, you know, and what their preferences are. It's the whole stack works, you know, better together, but we're not going to force the stack on on on on anyone.

The market is like way too early for any of that. Like we want people to have the to build the best products for their whatever their needs are. Yeah, that makes sense. So I have to ask you because you are part of the winning USDAH proposal by native markets. bridge was. And as I'm sure you're well aware, that was a huge deal in crypto. Like people, I, I don't, I don't know if the hyperliquate team expected that. But anyway, so obviously the, the USCH coin just launched. And you guys are the issuer. You also offer its global compliance and global compliance profile and Fiat Rails. So just explain like what

it is that you're doing for USCH. And, you know, just, you know, I mean, I know it's been a few days, but if there's anything notable to say about, you know, what's been happening since launch. Yeah, I mean, USDA has built on top of the open issuance platform. And I think this like just just highlights how much easier open issuance makes the issuance process. You know, like when we sort of won the bid and then we were ready and had deployed the token, I think we won the bid on Sunday morning, and we were ready and had deployed the token Sunday afternoon.

It did not officially go live and, like, you know, with market makers and what have you for, you know, just because the team wanted to ramp up and slowly do some stuff for like another 10 days or seven days or something like that. But it was like ready pretty much immediately for the, for the ecosystem. And like that's, that's like amazing. You know, like it is, this was this process where like when PYUSD was launched, it was like years.

And, you know, like Robin Hood announced that they're rolling out as stable coin and it still hasn't rolled out. And with USDA, we, we launched a stable coin in hours. And so, but I just need to understand the timeline because obviously they had proposed it before. So was there legwork ahead of that? You know, like, and hopefully this won't seem conspiracy theorist, but they even made the proposal, like right after, you know, the announcement was made that proposals were open. So it looks like they had actually been working on it before. So like when you give that little time frame, is there more legwork kind of before it that, that you,

that you're not counting, or? Well, we had been, we, we had certainly been talking to the, to the, to the, to the team. I mean, I mean, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, any of the, any of the oil, wait, you know, and, and honestly, Paxos could have wanted to build a stable coin on hyperliquid a year ago, if they wanted to, uh, or, you know, agor or any of the, any of the other folks in the process.

Ultimately, I think any of these processes, like if there is a stable coin that's issued on the next blockchain, what's going to happen is some team native to that blockchain is going to be like, oh, I think we should have our own stablecoin. They're going to put forth a proposal to the community. And then just like what happened here, a bunch of people are going to pile on, pile on behind to try to compete. So somebody has to be first to kick the process up. I think that they believed, I don't want to speak for them. I would just say, like, I had zero idea that this was going to turn into the mud fight that it ended up becoming. But we had, we really talked to the team before and spent time with them and so on.

But honestly, we didn't know, you know, halfway through the problem. we had no idea what was going to happen. Yeah. But I don't know if you. So my question was really more like when you say that it just took, you know, a few hours to basically launch it. Like is that like for any company that comes to you and they want to launch their own stable coin, is that the timeline that they should expect? Or does it, is there like a longer timeframe?

If there is no customization to the smart contract, yes. If there is customization to the smart contract, then it needs to be audited, and then that takes time. But, but, you know, you could come to us and you could literally be hitting our API and say, hey, I'm taking USD. I'm getting a bunch of dollars I want to settle as USDC. And then you could just change an API parameter. And then all of a sudden, you're settling in your own stable coin. And that's really it. We just think that this is going to become a core part of stablecoin money movement.

that people are just going to want the money to be their own. You know, it is another, another quick example of this is, is like, imagine you have like Bank for America and J.P. Morgan that are both using stable coins. You know, Bank for America and JPMorgan are going to use USC. Like, they're not going to have deposits that are held at another financial institution, which is Circle. And they're not going to use each other. other stable coins. So like Bank for America sends Bank of America coin to JPMorgan. JPMorgan's

not going to hold Bank of America because then J.P. Morgan's deposits are held a Bank of America and vice versa. They're going to want to send a stable coin and at the end of the day, net settle money so that all deposits are with the appropriate institution. Oh, wait. This is so interesting because now then I am remembering that deposit token thing, which is like a slightly different version of the same concept. or like a different way to solve a similar problem. Yeah. Yeah.

And I think deposit tokens are the same thing. Like every, whether it's a stable coin or a deposit token, ultimately the only difference between the two is whether the stable coin is backed by, you know, cash and like mortgages and other things or cash and treasuries. But, but ultimately they're representations of a dollar.

And so I view these as like very, very similar. Okay. Yeah. So I wanted to ask about a couple of other recent, you know, bits of news that you guys announced. So the bigger one, I think you tell me, is the Shopify-based agreement, which, you know, Bridge was a part of. I also saw you partnered with M-Zero on the Metamask, M-U-S-D coin. So maybe just kind of wrap it up and talk about, like, those two deals and, like, you know, why, you know, you think they're important or how they came together or just whatever you think is important to mention about those.

The two are very different. And we think of a lot of what we're doing is, you know, we're just like helping to push the stable coin space forward and doing so with all the developers who want to build using stablecoins. And so Shopify wants to move into more countries. They want people in a bunch of different countries where they can't settle Fiat to be able to accept and sell goods. Because just because, you know, it's really hard for Shopify to spin up bank partners and custody and payout fiat and XYZ country doesn't mean that person should be shut off from the global economy. And so we view this as like a very big opportunity for Shopify, a very big opportunity for sellers in emerging markets. And just a very important bit of like, you know, turning the stable coin flywheel where a stable. coins become accepted across Shopify merchants, they become accepted across Stripe

merchants, then hopefully more people are paying directly with stable coins and so on. So very excited, very excited about this. We think this is like, you know, the more and more acquires. We also work with Shifor so that stable coins can be accepted through all the folks who use Shep Four as a payment processor. So we're very optimistic about what this will mean as like. more and more folks come online to accept stablecoin payments. And then on the on the MZero side, they are a different partner.

You know, they're helping us issue stable coins. And we think, you know, stablecoin issuance solves this like other very big problem in the in the stable coin space. And MZero has like a very unique approach and an amazing team to building a decentralized issuance service. And some folks who are going to want to issue stable coins, will want the infrastructure that they provide, but the backing of bridge and, you know, the money management of bridge.

And so that's how we partnered with Metamask to launch MUSD. And like, you know, it's been a couple weeks now and it's like very successful and growing and we're super excited about it. Okay. And just to understand, so basically when you work with M-Zero, then it's almost like it becomes like a white label product. Is that how to think about that? It's still bridge is managing the funds under the hood.

And instead of hitting the using bridge as like the issuer and the creator of the smart contract, M0 is the issuer and the creator of the smart contract. And M0 has also built very similar to our interoperability network. MZero has built a bunch of stuff to make the stable coins that they, issue interoperable. You know, and over time, you know, I think you'll be able to move between an M-Zero network and a bridge network, and you kind of just get to pick whether you're issuing with them or us, and we're kind of indifferent. Interesting. Wait, so in a way, you guys are competitors, but you, no, no, I would, I would, we offer very similar services, but, but people

are going to tend to choose them, the audience that will choose and want M-Zero is different than the audience that will choose and want the bridge, or at least has been historically. And so, you know, I would think about it like different segments of the market. Like Metamass from the very beginning wanted to work with a regulated, you know, issuer under the hood, but wanted to work with M0 to do the smart contracts and some of the interoperability. And that was their choice. And we are happy to support it.

Because ultimately, what success for us is that, you know, there are more stablecoins and folks fully control the assets that they issue so that the stable coin space can be as big as it can be. Okay. So last question. While you've been talking, hopefully I don't have too many people who work at banks who listen to this show because honestly, while you were talking, I just kind of kept thinking like the downfall in banks is going to be pretty fast. Like maybe what I just said is a little bit of hyperbole. Maybe downfall is like a strong word, but I just was like, they're going to be disrupted so quickly. I don't know. Maybe I'm wrong. I could be wrong.

But point is the reason that I'm mentioning this is that, you know, as I'm sure you're well aware, we have another technological revolution happening at the same time. We have these AIs. And I was just wondering, you know, like from these conversations you're having, because I'm sure you're having a lot. When you look at these two trends, like, where do you think that could go? Like, what does that future look like to you? I would say, I think that stable coins and AI make, you know, an enormous amount of sense together. I think that I was talking to someone and they were telling me that, like, with each new technology,

there tends to be a new money movement paradigm that supports that technology. you know, like the internet's internet was like really accelerated and enabled by cards or vice versa. Cards were really accelerated and enabled by the internet. I think that stable coins represent something very similar in this world of AI because stable coins can be held by non-humans. You know, it's you can't really, you know, non-humans can't hold fiat because you need to sort of be KYC and open a bank account and so on. payments can be streamed, you know, money can be programmed. It is just a better financial instrument, I think, for this world. But I also think that it's going to take us some time to figure out the right context

through which, you know, in the right use cases, that where we begin to scale adoption. I'm like really excited about what Cloudflare is doing, you know, with their paper crawl and like they're issuing a stable coin. that will be used, you know, hopefully by these agents as they, as they crawl various websites and hopefully that use case scales. But we're in this phase right now of experimentation where people like you and me squint and, like, kind of see the opportunity, but we need a bunch of entrepreneurs to figure out how to turn the promise into reality.

Okay. Well, it's been so fun chatting with you. Thank you so much for doing this. And congrats on your new product line. Amazing. Thank you for having me on. Hey everyone. Thanks for watching that pre-recorded interview with Zach. Next up, we have one other pre-recorded interview with Kenny Lee of Manta, who's in Singapore, Edtook in 2049, and he and I discuss an upcoming pivot by Manta and the future of L2s.

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institutions like BlackRock, Franklin Templeton, and NBC Universal are building on Aptos, and see for yourself at the Aptos Experience, October 15th to 16th in Brooklyn. Mantle leads the establishment of blockchain for banking as the next frontier. UR is the access layer that transforms Mantle Network into a purpose-built vertical platform, the blockchain for banking, that enables financial services on-chain. UR unifies and vertically aligns Mantle's focus on payments, trading, and assets, MI4, Ameth Protocol, Functions, FBTC, supported by developer grants, ecosystem incentives, and the industry-leading distribution platform

through the UR app, reward station, and by-bit launch pool. All economic activity within UR will be captured by Mantle Network to further drive value to token holders and establish its significance in blockchain for banking. Follow Mantle underscore official to learn more. Welcome, Kenny. Hi, Laura. Thanks for having me here. So you've been working on Manta, a layer two on Ethereum, for several years now. And you have some news you want to share today about the direction of

Manta. So go ahead and take it away. Yeah, sure. So hi, everyone. I'm Kenny. And I've been core contributor over here at Manta for the past probably five years now. And it's been quite a long journey with a team of around 40 people all over the world just kind of building together. And one of the reasons why I really wanted to have this conversation is because I think, especially now, you know, the landscape for infrastructure is very much changing, especially around thinking about it as a commodity. And so, you know, happy to chat more about that. But, you know, as we think about it and how we want to move forward as a project is we're really starting to focus a lot on the revenue generation side, which ultimately just boils down to user acquisition, right? and really providing like a clear value proposition, which I think has been kind of a struggle

on the infrastructure side, but now that we are very much focused on the application side as well, I think we have much clearer sort of goals in mind. So yeah, happy to jump more into detail about that also. So essentially, you are in the process of shifting from solely building this layer two. And I know you're not quite ready to explain

what it is that you'll be doing. doing it, but why did you decide to make this shift? Yeah, and we can talk a little bit briefly about, you know, what direction we're headed in. Happy to, happy to, you know, speak on that more specifically. But the reason why we decided to make this shift is because, you know, when, when Manta launched our L2, we were one of probably four or five different L2s in the space. And I think that was truly a golden age of experimentation on the infrastructure side. And one of the sort of main differentiators we had back then was that we were the first L2

that actually started leveraging Celestia for data availability. And that was extremely unique because every other L2 at the time was fully settling on Ethereum. And so this advantage that we had using Celestia allowed us to enable extremely low gas fees and our throughput was much higher than, you know, the competitors in the market at the time. Now, fast forward to 2025, two years later, we're one of probably 500 different L-2s in the market today, right? I mean, you know, don't quote me on that exact number, but it's quite a handful. And I think especially with, you know, the way that things are going right now, I think we're starting to see a lot of commoditization in the industry.

in this space. And so, you know, as a project, as a team, we realize that, you know, there's not really, at least on the innovation side, not too much differentiation at this time. That's sort of the first problem. The second problem is we frankly don't see enough adoption in this space, right? Like they think like there's been a lot of interest. There's been a lot of trends. There's been a lot of hype. But, you know, just the sheer growth of users, especially moving on chain, significantly hasn't really had that much impact, especially in the recent sort of months. And so we decided, you know, one of the ways that we can move forward is not just by focusing on the infrastructure side, but actually thinking about how do we actually acquire more users, which ultimately happens on the application layer.

And so that really drove us to the conclusion that, you know, we've got to do more than just continue building infrastructure at this point. And so it seems like, you know, this trend that we're seeing with like all these L2s, but a few kind of dominant ones has been going for a while. So I just wondered, like, was there any specific moment where you realize that like this, this is just going to be how it is and like, you know, it would make more sense if you guys moved more to an application type focus? Yeah, that's a really good question. I don't think there was any specific moment.

I'm trying to think, I don't recall exactly how we came to this conclusion, but at the end of the day, I think what really struck us was the amount of actual users on, you know, not just our network, but many different networks, right? Like, it's frankly, extremely mercenary, right? Like, you see users going from chain to chain and, you know, for their benefit. And I would do so in the same position. And so completely understand. But what that essentially means is that, you know, when there's not too many, not enough users in the ecosystem and there's way more L2s, then there's just not enough to go around, right? And so at the end of the day, you're essentially fighting for the crumbs. And, you know, instead of continuing to fight that battle, we decided, you know, why not just expand the pie? And so expanding the pie in our terms would be essentially building out the use cases that we believe will attract that sort of next way. wave of users.

And what would you say your time trying to build an L2 told you about the future of L2s? Like, what is it that you think the future of the L2 landscape will look like? Yeah, the future of L2s. Okay, so actually prior to building Manta, I was in the cloud computing space. So I built my first company in that space back in 2011. And so, you know, that was my first. foray into touching the pure infrastructure level, right? Like pure almost like actual physical servers. And so I learned a lot about application architecture at that point. And, you know, the way

that cloud computing delivers scalability and uptime at nearly 100% rates is by scaling out horizontally. And, you know, there are, especially for Ethereum, right, like that, that Trilemma that Vitalik has so aptly described in the past, right, especially around the scalability side, right? I think Ethereum definitely focuses on the decentralization and security, but that opens the gap for the scalability, which I think is a solution on the L2 side. And so that's where I think the value proposition of the L2s come in in conjunction with Ethereum. But L2s themselves, right, like as individual actors, I don't think will be efficient or sufficient enough to really drive that scalability home. And, you know, one of the sort of examples I like to give is pump fun on Solana, right?

Like, at its peak was probably around 300,000 daily active users. And by, you know, that same comparison, if you look anywhere in like the app store on your iPhone or your Android and you see Duolingo, right, like that's 20 million daily active users. So almost 100x, the amount of DAUs when comparing an average application in the Web2 space with one of the killer applications in the blockchain space. And so I think like, you know, with the numbers of users that we currently have, sure, an individual L2 can host many different applications and still, you know, have that uptime. But when it comes to scaling out to that massive amount of users that we see in a normal successful Web2, application, I think it's going to be hard-pressed to say that one single L-2 is able to deliver on that scalability. And so the way that I see the landscape playing out for L-2s is not one single L-2

necessarily taking over the space, but L-2's in coordination to provide horizontal scalability. So thinking about applications as they scale up with the amount of users, instead of just existing on one singular L-2, potentially spinning up ephemeral L2. as well, just like you would see in a cloud computing model to sustain additional scalability. Okay. So, um, so basically like there's more, there's more reliance on the L1 than like had been imagined. Is that what you mean? And then like L2s are more like, um, supplemental or something. Is that, did I understand that? How do you finish? I would say the, the relationship between the L1 and L2, I don't think is going to be.

too different. But the differentiation between L2s doesn't really make any sense, at least not in my mind. The way that I see it, an L2 is very similar to cloud infrastructure where you have virtual machines, and it's essentially the same thing. If you need more virtual machines to scale out your application in order to serve more and more users, the L2s would essentially act the same way. Like having one L2 today, because you serve 10,000 users and then it jumps to maybe 200,000 daily active users, you probably will just scale out in terms of the number of L2s that your application exists on. So you're taught, so okay, so but then I guess the question is, are these L2s going to be application specific or no? I think, okay, so yeah, that's a really, it's an interesting way to describe it,

because right now we describe L2s as general purpose versus application specific. I think the L2s will be application specific, but it may not necessarily be one L2 per application. Right. It could be potentially multiple L2s per application. So it's like a broader version of specificity. Okay. So we have seen a wave of announcements of new chains. And there's been a ton of commentary on the various choices that these entities made. So, for instance, Robin Hood decided to launch an L2 on Ethereum, Stripe and Circle chose to launch their own chains. I'm sure you saw the long Twitter conversations that ensued about all these choices. So I was just curious, like, what's your take on, you know, which of these strategies make sense?

Like, you know, what do you think of Robin Hood's choice, of Stripes and Circle's choices? Yeah, take it away. Yeah. That's a really interesting question because I guess when you look at Web3 applications, at least specific examples of successful app chains, I think most of them come from not being able to exist on a general purpose infrastructure anymore. And so I think DYDX kind of paved the route for that. And so I think it's very rare to actually see chains later becoming successful application use cases as compared to, you know, the D-Y-D-X route. And so I think, you know, whether or not these larger institutions entering crypto will make their own chain successful with their own apps and their own user base, right, which already exists leagues ahead of, you know, what we see in crypto. I think that's probably a better shot.

I don't know if that is necessarily the right example for Web3 Native applications, though, because I think Web3 Native applications have a very different, I guess, different path, right? You don't start off with millions of users on day one that you can start funneling into this and start figuring out exactly how the ecosystem shapes out. I think that's the advantage that applications like Robin Hood have. And so I don't necessarily disagree with their strategy. It's more so a question of like, you know, are they able to, I think, essentially convert their existing user base into some type of on-chain user activity? I do think like there is a lot of friction to converting users. And we see that a lot with traditional applications trying to move into sort of, newer technologies. I would see that a lot with, what is it? Even like, I guess a very crude

example of this would be like influencer coins, right? Which you would think that they would be able to monetize their entire user base and all that, but the actual user acquisition is very low compared to their, you know, actual, actual community. So I do think there's still a lot of frictions and challenges, but I do understand why they would do that because they do have a much larger user base starting off on day one for their chain. Okay. So, but, but then for like, Stripe and Circle to be a layer one, like, do you know, what, like, explain like which, you know, which of these choices do you think makes the most sense and, like, why? In terms of what, Stripe and Circle being a layer one and Robin Hood being a layer two or, um, so I, I can, I, I think Stripe and Circle are a little bit different

than Robin Hood. And so that's why I under that's my understanding of why they went different routes, right? Robin Hood is a direct consumer application. And so, you know, I'll download Robin Hood on my phone and I'm going to use that app, you know, to buy whatever I want to buy. Um, but, you know, I'm not going to download stripe on my phone and then, you know, use it to, you know, pay for everything. Stripe comes up as a payment terminal after I've shopped somewhere. And so I see Stripe more as a platform. And USC and Circle, right, like definitely more on the platform side, right?

Like I don't download the Circle app to do whatever Circle does outside of minting USDC. So I do understand why, you know, Stripe and US Circle decided to go more of the platform route, which is traditionally what an L1 would be, versus the L2 route that Robin Hood took more, maybe to focus on specifically an app chain. Okay. So here we are in this place where there's a ton of L2s, as you mentioned. And you know, you also said like you don't think they can all survive.

So, you know, talk a little bit about like the choice you made as a founder and like what, you know, you feel like these other, layer 2s will have to go through. Like, you know, what process should they kind of go through to consider, you know, what the future of their L2 should be, especially like amidst, you know, what looks like it'll be a consolidation period. So yeah, talk a little bit about how you think about it and sort of like lessons learned. Yeah.

I think, you know, I've talked to a lot of, you know, different teams, different founders of these L2 projects. And I think many people are taking various different strategies, and only time will really tell, right? So I can't really say which ones will be good or not. We're going through that experience ourselves. I do see some other sort of potential strategies right now that are in play. You know, some chains are not necessarily focusing on being app-specific. They are focusing more on specific verticals, right?

So whether it's entertainment, whether it's defy, whether it's institution, RWA, et cetera, et cetera, right? Like we're starting to see these sort of verticals emerge and an ecosystem subsequently being built around that. And so that's sort of the first strategy. The second one is going more app specific. In fact, you know, just doubling down on one specific application and transforming the general purpose L2 into that app chain that, you know, we were talking about earlier. you know, third one, I'd say a little bit more skeptical, right? I know things like DATs and stuff are pretty hype right now, but I don't really see how that really contributes to, you know,

continuing innovation and evolution of L2s themselves. And so, you know, maybe that one's off the table for now. But, you know, for us, we're taking a more, I'd say a bold approach because, you know, this type of adaptation, evolution maybe, is not new to us, right? Like for Manta, when we first started, we specifically were building an L1. And we were building, we built the fastest on-chain ZK proving L1.

So this was specifically for private transactions. And this was built on top of Pocod. And at the time, we realized that, you know, we built an amazing technology. A lot of the innovation around the ZK side, that we put together is still in use today by a lot of other projects. So we're very proud of that. But a technology with no product market fit is ultimately a great science experiment.

And so that's what we realized when we built our L1. Because it was one thing to build this, but it was another thing to convince people to come and use this. And so that's when we had our first sort of identity crisis. And we realized that, okay, we need to be. build something that actually can get closer to the users. And where are the users? At the time, primarily they were on Ethereum. And so that was honestly our first pivot.

And so we pivoted directly from an L1 over to become an L2. And so we focused more so on the scalability side and started acquiring users in that way. And like I mentioned, right, when we launched, we were one of five. Now we're one of 500. And we're starting to see that the industry is consolidating. And this isn't new. you know, we've seen this in waves with every sort of generation of innovation in crypto. You see, you know, Bitcoin and Bitcoin forks.

And then all of a sudden there's this consolidation and now Bitcoin's still around and everything else is kind of fallen by the wayside. You've seen Ethereum and Ethereum killers and, you know, these forks as well and everything kind of fell by the wayside. That consolidation is happening, you know, historically. And I think the consolidation is happening on the L2 side as well. And so, you know, for us, we think that, you know, simply trying to be an L2 is no longer enough. I think like definitely focusing on the applications, focusing on the use cases, and thinking about how to be more direct in terms of user acquisition is going to be the right

strategy moving forward. So there's something that I'm very curious about. I'm sure you know that there's been multiple very, very important. various projects that have launched over the years, and they don't necessarily succeed, but they have a token, and you kind of never hear from the founders again. And, you know, you could imagine they probably are just living off

whatever money they had made. So I was just curious, like, you know, how, like you're clearly trying to do something different where, you know, you have, this new announcement that you're going to make, like a pivot, why not do like a piece out that that these others have done or like, you know, what is it that you think the crypto space can do to incentivize people to not do what we've seen so much of? Oh, man, that's a really tricky. I guess it's multiple questions, right?

Like, one is why haven't I pieced out yet? And then two is how do we not continue to encourage that kind of behavior in the future. I guess it depends on what you came into this space to do, right? Like when we started Manta, we believe that if we could solve the privacy problem, we would truly be, you know, it's like one of the historical contributors to the space. And, you know, that was very dreamy because, again, you know, product market fit, we were quite naive. And then, you know, we decided, okay, we need to focus on user acquisition because there's not enough users in the space. And so we decided to go the L2 route. And then after

that, now we are, you know, more direct to consumer by going even on the application side. I think at the end of the day, right, like what keeps me going is probably what keeps a lot of founders that are still in the space going as well, because it's not about just making a quick but and ending it, right? Like it's, it's not why we got into this space in the first place. There's, there's tons of money to be made around here. Like, you don't have to start your own project to do that. And so, you know, I think it's a, it's a bigger challenge and a bigger responsibility.

And so it's, it's one that, you know, I take very seriously and one that I think my team takes very seriously as well. So I guess that's the first part. I don't, I don't really, I never really thought too much about it. It's just another day that we have to keep working and grinding. But then the second part about the incentivization, right? Like I think that's a deeper question about tokens. Because, you know, I think like when it came to like the Bitcoin and Ethereum eras,

it was there was a lot of utility, right? You can't deny that there's utility in Bitcoin. You can only, if you want to transact on the Bitcoin network, you have to use Bitcoin. And so the utility is very clear. And Ethereum, same thing, right? Like you need to use Ethereum no matter what transaction you do on Ethereum, right? Like it's just used to pay for gas. And it's similar with Solana.

But I think that now, you know, the bar, the standard for token issuance has definitely been lowered. Right. And so we see this emergence of governance tokens. We see emergence of tokens that have zero utility, right? Meme coins and all this other stuff. And I think it's become a little bit normalized to be able to do that. And so that gives a fairly easy way out for the people that do want an easy way out. But I am hopeful in this space because now I think people are starting to talk about, you know, token buybacks and revenue.

And so, you know, using that as an indicator of, you know, token performance. And I think like if that is the trend that continues, then we are maturing as an industry because now we are thinking a lot more sustainably than before. So last question, Kenny, you mentioned that, you know, obviously Amanda is pivoting in some direction. I know you're not quite ready to announce yet, but do you want to give a hint of the direction that you guys are going? Yeah, sure. So there's a lot of interest right now with institutions, right? I think that institution has been quite a broad term for a lot of traditional financial services that are starting to explore or enter the crypto space. And so, you know, at Manta, we're starting to think in that direction as well.

But from our side, we're not thinking specifically just about, you know, how do we attract the money into the space, but more so how do we build new age financial tooling? for these customers in this space. And so a lot of the innovation that we're working on internally, which you'll see in the upcoming few weeks, is exactly around that, building these sort of financial tools that we believe will be extremely useful and extremely valuable for this type of customer base.

All right. Well, we're excited to see what you guys announce. Thanks so much for coming on Unchained. Thanks, Laura. Thanks for having me. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Oranovich, Margaret Curia, and Pam Majumdhar. Thanks for listening.