Takatoshi Shibayama: 0:01

Hey, hey, hey, welcome to this week's episode of Blockheads Bloodcast. I'm your host, Takatoshi Shibayama. I'm also the head of APAC for Ledger. I aim to uncover the creative, intelligent, and radical minds who are shaping the crypto industry today. I'm as crypto curious as anybody that's tuning into this show. We're doing this together, guys. Let's go. Welcome to License the Shill, the offshoot of the Blockcast normal series where we discuss the weekly recaps of what is happening in the ever-changing landscape of crypto, the markets, and anything else that comes to our minds. Before we start, everything we say here is not investment advice, business advice, relationship, or friendship advice. I'm Takatoshi Shibayama, the host of Blockcast. I have here with me Lisa J.Y. Tan, CEO of Economics Design. Welcome back.

Lisa JY Tan: 0:55

Glad to be back.

Nikhil Joshi: 0:56

And Nikhil Joshi, CEO of Emergo, a co-founding entity of Cardano. Welcome back. Hello, nice to be here. And we have a special guest today, Miss Gracie Lin, CEO of OKX Singapore. Welcome to the show.

Gracie Lin: 1:10

Thank you for having me. It's great to be here.

Nikhil Joshi: 1:12

Yeah, it's great to have you here as well. So we're recording this on October 16th, Thursday. It's been almost a week since the huge market crash. We're not going to go into specifics on how and why, all that kind of stuff, because we're not traders and we don't talk about financial stuff too much here. But I do want to kind of highlight on certain things that came up post these things. And then I think a lot of uh crypto projects have taken this incident as a I would say like a way to kind of bash other exchanges and saying that there's been a lot of exchanges taking tons of tokens, token supplies, um, demanding high listing fees and uh you know kind of minute manipulating markets and and um you know profiteering on crypto projects.

Nikhil Joshi: 2:04

Obviously, these things having seen it since 2017 when ICO kicked in and token listings were kind of generally a way for exchanges uh to also make money and also you know show showcase the exchanges, uh sorry, the crypto projects as well, um, and and also give them access uh to the wider uh retail traders. And I and I don't particularly ever saw it as well profiteering, but I mean obviously there are you know some exchanges that uh you know charge like a million, two million for listing fees and take a bunch of token supplies, some don't. Um so um back in June, we discussed about um the token um kind of framework of listing on exchanges, and I thought we can kind of revisit that as it's a nice point, and especially we have Gracie here as well to discuss about like what is the proper way to uh you know for exchanges to also make money, but also give them access, uh give the crypto projects access to their users. And yeah, let's start up from there. Um Lisa, obviously, you know, we we've talked about this in in great detail. Um, you know, what what do you think of all this um kind of mo this moment today where everybody is uh kind of lashing out on exchanges about their token listing standard?

Lisa JY Tan: 3:30

Yeah, that's a that's a very good question. And actually a question I would like to ask Gracie is do you think the pay-to-list model is sustainable, or are we heading towards a Nasdaq style model where quality projects list for free, similar to what DEXs are doing as well?

Gracie Lin: 3:45

Well, I can share a little bit about how OKX sees this, and then I do think that there are different perspectives on what the right model is, and depending on which perspective you take, the answer may be a little bit different. From our perspective, we believe that in order for an exchange to be able to assess each project on its own merits, we need to make sure that we're free from conflicts of interest. So we don't take listing fees. That's something that has been quite clear from the beginning for us, and we we stick to that policy. And so far it's worked out well for us because then you can really decide for yourself whether a token is worth listing or not platform. And of course, as you mentioned, we think about access to the user as well, not just to the projects. And in an ideal world, all these projects would be great projects that our users will get value from having access to, but then that's we don't live in an ideal world. So there will be situations where maybe a project is not something that we want to be providing access to our users for the time being and not having that economic incentive to skew how you think about things really makes it easier for us to do that.

Lisa JY Tan: 4:50

Do you think that in the next say five years, as more on-chain activities are going to be popular, we'll we're gonna look at more trading volume revenue coming in as opposed to other forms of revenue, not listing in OKX cases, but other forms of revenue subsidizing the lower trading volume.

Gracie Lin: 5:11

I mean, I think the the industry is still in the very early stages of our evolution. And depending on what product, I'm talking about products here and not token listings, right? But whatever products come up, and again, it's going to be divided by what the end investor is looking for, what types of exposure they want, what types of products they think will bring them the value and the assets they're looking for. And depending on the product, depending on how it's structured, there are going to be different types of fees that you can take from that, different revenue streams from that. And I think what we see today is really just the beginning of what is going to be an ever-expanding suite of product offerings that exchanges like ourselves can offer to our users. Again, we'll be guided by demand or what the market is looking for. So it's going to be really difficult to say that we think these are going to be the big revenue generators for uh for the future. But right now, trading, trading fees are enough for a lot of exchanges to do very well with without having to depend on listening fees. So that's where we are. And of course, we just keep our ear to the ground, talk to our users, see what else would bring them value, see how we can unlock the access to these products, and then figure out how we can make it make sense for the exchange.

Takatoshi Shibayama: 6:24

And generally, like if we look at the kind of bigger universe of trading venues, now we have DEXs which are could be spot, you know, like just doing swaps. There are others where it's like hyperliquid where you can just create your own perps on demand. And then you have regulated exchanges like yourselves, OKX Singapore, but you also have uh you know global exchanges like you know, OKX, uh Global or Binance as well. I mean, how do you think all of these will kind of like fit into the wider world of crypto trading? And what are their like roles in it?

Gracie Lin: 7:00

Yeah, it will really depend on where regulation goes, and that's one big question mark for all of us. Like you said, there are different types of setups depending on the market that we are serving, depending on the client segment that we're serving, and depending on the regulators that we are engaging with. Right now, there are still very unique requirements from different pockets of these clients that we're serving, and that's why we are all coexisting. Um, and in the meantime, while regulators decide what they want to do about different segments, that will continue. But over time, the expectation is that regulatory expectations will become more consistent across jurisdictions, across market segments, across market setups, entities like ourselves. Where regulation will go in a decentralized space is very difficult to tell. I wish I had a crystal wall, but I don't. And and but then that that will eventually be what I think guides where that segment goes. From the user perspective, it's quite clear, right? Uh for the users that want full access to all the opportunities that they see in the Web3 space, the decentralized world is where they go to. There are some very, very clear value propositions for users like that. There are also very clear USPs for exchanges like ourselves, which are regulated. Um you have on and off-ram, you have the risk management systems, you have uh huge compliance teams to make sure that whatever exposures we open up to our users have gone through that kind of screening and rigorous risk management and controls. So for different segments, they look for different things. And so right now we all have a part to play in meeting those requirements. Where it goals really will depend again on where the user takes us and where the regulator wants to keep us.

Takatoshi Shibayama: 8:44

So I think uh back in June, I as I mentioned, we discussed about this token transparency framework that Blockworks issued. And here they were talking about there's like different criteria for listing, or you know, they want to understand like from each of these projects, you know, what is the supply, what is the relationship with the market maker and the exchange listing agreements. Um, they want like transparency on revenue streams, relationships between you know, their LPs, uh foundation, token allocations, uh, financial disclosures. You know, obviously, you know, this can be from a kind of industry level where we can kind of, you know, I guess exchanges can discuss with each other, you know, what these frameworks can look like so that it becomes a lot more unified and more transparent to eat the users themselves, because I think a lot of the users, you know, generally will go onto an exchange expecting, you know, the exchanges that done their due diligence, they know it's not a scam and they're doing these airdrop campaigns or they're doing different types of launch pads. And you know, they're probably under the impression that you know we're coming to okay extra binance or wherever they are and expecting a a project that basically is not a rug pull, right? And um, they can they can trade uh safely. Um, but I think you know, if we rely on uh regulation, then you know obviously there's going to be a couple steps behind uh getting there. So from the industry level, you know, has there been any conversations amongst the similar uh crypto service providers on what frameworks we can have so that there's some kind of understanding, even from the retail side, you know, what are they getting into?

Gracie Lin: 10:27

I wish that there was. I am not aware of any such conversation that's happening or alignment that's happening, but I do think that you've hit the nail on the head. As an industry matures, I do think at least the bigger players should come together and have these conversations and align on what the industry standards should be, because that that is what would help us to build trust collectively in the longer term. Uh, in the meantime, now the way that I I've observed, based on my knowledge, uh, each exchange has their own philosophy on what they consider and what they look at and what they prioritize when they think about which tokens to list. And even between the global exchange and my Singapore exchange, we might have different criteria and different considerations, which is why the number of tokens that we list on the Singapore Exchange is a subset of what we have on the global exchange.

Gracie Lin: 11:17

So maybe I'll just dive a little bit into it. This is just one example, right? Just what I know best, how our Singapore Exchange thinks about tokens and how we come to the decision on what to list, what not to list. So we have a token listing committee that convenes every single week. And for that, I have myself, I have my COO, I have my head of product, head of legal, uh, head of compliance. So all these control functions, head of risk, control functions, product, as well as business and operational leaders within the Singapore entity. We come together and we review a list of tokens, both new and existing tokens, to see what types of risks we are comfortable offering to our users in Singapore. We do our best. So we look across compliance risk, legal risk, tech risk, because we want to make sure that we know who the project owners are, we know who's behind the project, we know what their history is, we know if there's any adverse news, we know uh if if there's been a hack before, how they responded to it, did they take care of their community? What did they do about that? If there have been adverse news, were they able to explain it and get and rebuild trust with the community? We look at these things. Obviously, it's a lot easier for projects that have been around for longer. If you are a new project, which is what a lot of users are looking for, it becomes a lot more difficult. But even then, you kind of know who the people are. If you know who the people are behind a project, you can make some uh inferences. Again, it's an inference, right? And so it's so that you take some risk in assessing is this somebody that we think we would be comfortable um linking our users up with. So we go through this discussion. Some of them are a little bit more straightforward, some of them are a little bit more difficult. So, for example, if it's a privacy coin, we don't we don't touch that, we don't think about that. Um if it's if it's traceable and we can then monitor the transactions that go through it, fine. That's a kind of a check on that criteria. But there is a long list of criteria. I remember I think about 30 items that we look at. In some cases, it's an immediate rejection, you don't consider that. In other cases, there's some risk to it. We will discuss if that the risk can be mitigated, if you are comfortable enough with some other, on some other dimensions, the risk can be managed, then we will list that. But it goes through a process uh and we take that very seriously.

Takatoshi Shibayama: 13:34

Yeah, I'd love to kind of uh hear a little bit more on that as well, because even with my normal business, um, there is a sort of a token listing on Ledger as well. Uh we have a uh consumer app that we list tokens on. So, you know, we were discussing internally whether as a tech provider, we're not a centralized service provider. Uh as a tech provider, should we be doing these kind of you know um scanning of projects more than just KYB the business? Or shall we just let it let the users decide for themselves, do their own due diligence, and and uh we we just uh do not kind of go between the users and the projects themselves. So, you know, it'd be really good to kind of uh listen to some kind of your your ideas on on what those criteria would be.

Gracie Lin: 14:24

We should discuss this. I do think there's a lot of value in different players looking at different parts. I mean, we all have different perspectives. We come together and then we can discuss what the right approach is. I mean, obviously, maybe there's there's more than one right approach. There's a balance, as you said, right? Uh you're balancing between giving users as much access as they can, as we can, and and balancing that risk for them. Um and where we and each player is kind of landing on different different parts of that spectrum. But it would be great to also hear how you think about it and be happy to exchange ideas anytime.

Takatoshi Shibayama: 14:55

So, Nikhil, I mean, you know, you you've also seemed like you wanted to say something.

Nikhil Joshi: 14:59

I'm only ears on this one. So we we typically, as in Morgo, we have had a number of requests from projects who are pulling our Cardano saying, hey, can you help us with listings? It's not what we do actually, as emergo as one of the founding entities, so we typically pass them back to uh Cardano Foundation, for example, who that is much more of their remit. Um, but it is interesting from our point of view, just to understand, because of course we're still working with various projects in four types of capacity and thematically at the point that we receive it's very confusing. Right. So to go from one from one venue to another and to understand what the requirements are. Um it's it's certainly not standardized. Um and and if you're a particularly a smaller, a smaller project with limited resource, it can become a bit of a quagmire, right? To um to navigate, to operate uh efficiently uh across the different options that are available. So my input here is uh um as a second hand receiver of information from people that we work with, it certainly strikes me that there is a need for a level of standardization, uh both from the point of view of a particular project, and needing to understand what information do we need to provide so that we can at least be considered for listing. And then equally on the other side, where the exchanges are saying, well, it's probably you know, maybe not 100%, but maybe 85% of it is is is it works uh in the last 15% may well be bespoke for for all sorts of unique reasons. Um getting somewhere towards that kind of end state, I think, would be um very beneficial, as well as then of course the people who are buying and selling tokens, right? Uh for them to understand, okay, there has been a level of due process, and now I have a level of comfort uh in before I decide what my risk appetite is to buy or sell particular tokens.

Takatoshi Shibayama: 16:57

Yeah, I guess for a lot of blockchain uh foundations like Cardano, et cetera, they do give grants. And I know you know the Cardano Foundation has a very decentralized uh governance model where users can and choose uh who to give grants, et cetera. So I think there is probably some kind of standard there. But you know, for a lot of the other blockchains, I mean, they as a technology, they're just providing a blockchain network, uh, projects, whether they're scammy or not, can can build on top of that uh platform as as they wish. But I do think that there are grant programs that a lot of these uh blockchain foundations uh do. I wonder if there's like a framework around that as well, because they can't be just handing out grants to whoever has to lend.

Nikhil Joshi: 17:41

Well, you'd like to think so. I think quite right. The found it is in the interest of of any ecosystem's foundation, right, to propagate that ecosystem. That means lending support to projects who want to build on that particular chain. And to take these friction points out, right? If you're if you're trying to integrate into a into a particular ecosystem, if you're trying to build on that particular chain, you don't re you shouldn't feel like pulling teeth, right? And so it would make sense for um at the at the ecosystem or foundation level, there is a uh a playbook, right? So if you want to build on the chain, here's how we can help you, here's how you get a ground, here's how how we'll help you to listen specifically. Here are the partners that we work with typically, this is what we know they're typically looking for. Roughly 70 to 80 percent of the friction is taken out. There'll always be a residual 20, 30 percent where there's something to think about because it's beside and unique. Um that's a great point, Arco. Actually, I think uh there should be something about that. Um it exists. Uh I mean I can talk, you know, I guess with with more uh proximity about Cardano. I would assume some kind of standardization across different ecosystems simply doesn't exist.

Takatoshi Shibayama: 18:54

And Lisa, when you take on projects yourself, and obviously you're designing them tokenomics, you know, you must go through some kind of due diligence process to see, you know, whether you want to take on a project or not. Obviously, your name is going to be attached to that project uh as you provide the uh you know the tokenomic design for them. Like do you have some kind of criteria that uh you go through?

Lisa JY Tan: 19:16

Yeah, definitely. So one thing that we look at, just like any VC, we really do due diligence on the founders and the background. I think this is similar to what Gracie mentioned as well, because the you know, at the end of the day, you only have so much time and you only have so much energy to do due diligence or to work with certain kind of people. And at the end of the day, you can choose to either work with a lot of low-quality people and extract value as much as possible, or you work with really high-quality people and you increase the the lifetime value of the relationship. And we prefer the latter, so we care a lot about the kind of projects, the kind of background, the TAM, where is why you need a token in the first place. Because sometimes you can have a very good project, but you simply don't need a token. The token adds zero value to the ecosystem or the idea doesn't matter, and and there's no point working with them because there's no reason to have a token. But otherwise, yeah, the background of the background of the founders, it's very important, and then the market that they're in, the business model, at the end of the day, you also need to find a way to have a revenue stream that uh grows and creates value to the token holders in the ecosystem and whether the revenue stream is directly involved the tokens or not.

Lisa JY Tan: 20:28

And just going back to grants, so as I speak to more foundations recently, I do notice a different pattern between uh Web3 native foundations and a bit more Web 2.5. The complete Web 3 native DGEN, they don't stop using tokens as a way of marketing. And tokens actually now have a little bit more value, and they're not just giving out tokens as grants randomly to people. It's very selective and the value that they provide, take um Avalanche, for example, they don't give out grants per se, but they give out a lot of help in terms of engineering help, product help, marketing help. Tokens are actually now seen as a very valuable asset. And I know so not in this case of OKX, but in a lot of other exchanges, they take a percentage of tokens, a percentage of total supply. And more often than not, it's not a small amount. Previously, when tokens are just seen as a fundraising tool, as a marketing tool, it's like, yeah, you know, just take it, I don't have to pay so much in cash. I offload from the fiat wall and I just focus on creating tokens because it doesn't cost that much to create. But now that we ascribe more value to tokens and we make sure that the tokens have some sort of more value as they're circulating in the market, this becomes a very costly activity. And I always wonder like, what on earth do exchanges do with them? Are they just holding it as a form of like a VC fund? Do they market make on their behalf? Why do they need so many tokens? This is a question I have no idea.

Takatoshi Shibayama: 21:50

Yeah, well, you know, uh amongst uh some groups of nine, we were circulating uh a Binance um uh Binance announcement right after people have been bashing them. And basically they said Binance does not take money from listing process, all projects, token allocations go 100% to users through marketing campaigns, including their alpha airdrops, launch pool, hodler airdrops, trading events, earn APR campaigns, etc. So that's kind of what they say it is. I mean, I think for different exchanges, maybe they might do it for other reasons, or maybe they just um, you know, hodl their tokens. And I I don't know what they do. I mean, because because it's a very opaque um system, there's no transparency whatsoever on what people do with the token supply. It's it's never clear. And I think it's not really fair for the project sizer because you know, they they're just taking tokens for the sake of what? And and and they don't know what the use cases are in general. And um, hopefully the exchanges do not do the market making themselves.

Takatoshi Shibayama: 22:54

Um, but that kind of goes back to to even um, you know, there's been talks about predatory market makers who take uh, you know, like 10% plus of their token supply. Um, I don't even know why they need 10% of token supply to just do market making. Um, the relationship between exchanges, the projects, and the market makers are very, very opaque as well. And so in many cases can be predatory, or maybe it could be very um equitable. But um, you know, that that's something that um I don't touch, but I did want to kind of ask Gracie about that. You know, I obviously exchanges do um you know have a relationship with market makers to make sure there's plenty of liquidity for various tokens that are listed on the exchange. Um and then um, but you know, at the same time, these market makers also play the other side of like the token market maker as well, to make sure that the uh projects also um have their tokens uh you know well well supplied uh in the exchanges and there's a bid offer uh properly there. So, you know, uh has there been like an evolutionary kind of process uh with market makers and exchanges? Because this also is quite uh opaque to us. I mean, for average retail people, they don't know what what the what the what you know what what goes behind the scenes basically. I mean, is there some kind of uh you know standard that exchanges have with uh market makers, or do you think that all relationships are generally kind of the same?

Gracie Lin: 24:24

I'm afraid I don't really know exactly how all the different types of arrangements with market makers exchanges have. Um from my understanding, we work with the big ones. And the big ones have a certain process, they have also have a certain way of making sure that they they are not subject to conflicts of interest, right? At the end of it, you want to make sure that everyone is incentivized in the right way to bring the right type of liquidity to the market. Um I know that there are that are there's always speculation and there's always market rumors about um about some market makers doing this, some other market makers doing that. But these are all just speculation. So I don't know enough to really comment on whether these things happen. Um but from our perspective, we work with the global, the big, large market makers who make markets across the whole universe or some large proportion of that universe of tokens. And their main priority is to make sure that there's enough liquidity on both sides. So from our perspective, the way we incentivize our market makers is really having some obligations that make it quite clear, you have to make markets at all times within this spread. Um, and then we we give them a fee or a rebate that makes sense from their perspective to cover whatever cost they have to cover in order to maintain their that obligation in the longer run. And and that's that in a very simplistic way is how it is kind of like the limit to my understanding of how we work with market makers. Um there are obviously then some bespoke arrangements that some exchanges do with some market makers, but I'm not privy to that.

Takatoshi Shibayama: 26:04

And Lisa, do you have kind of conversations with um you know your projects that we're working on that um have to kind of allocate certain tokens to certain activities? Um, you know, obviously market makers, if they're taking a huge chunk of that, I mean, it does change the dynamics of of the token uh economics.

Lisa JY Tan: 26:23

Yeah, I mean, this is something we can go very deep into, and I just don't know if uh anyway, we can go very deep into this and uh and and it's very interesting dynamic. So let's take market makers, for example, sometimes they they want a huge amount, and but they want a huge amount for different things. Sometimes it's just a loan model and sometimes the the loan model to do your market making activities, and maybe you have to market make at three or five different avenues, so you need enough depth. And the other one is a subscription model, so you pay them in like a stable amount, like 10k a month or something, and then they borrow the tokens to market make a different avenues. Of course, the more avenues they have to do market making, the more tokens they will need to provide liquidity and depth for for all these places. But usually they do ask for quite a bit, especially those that is in the the buy the loan model, it can get quite predatory. So it's still necessary for bigger venues, but it's it's a bit predatory. The interesting stuff that I have heard, allegedly, let's let's put it that way, is that there are some exchanges that also have their own specific market makers.

Lisa JY Tan: 27:33

So to list on the exchange, there might not be fees or anything, you must use the extra market maker. Or you you don't have to pay to list, but you have to pay for all the services, say marketing and they have to do PR for you. But their PR that they do is really, really subpar. But you still have to pay them in tokens. And you know, whatever business operations aside, just having a lot of tokens in the hands of people who don't have an incentive to hold the tokens in the long run is very dangerous because it adds additional sale pressure for no good reason. If anything, you you've seen in the crash over the weekend, a lot of these low-cap tokens, there there's no trading volume except for speculation and market holders providing liquidity. So all these fair market prices and everything is kind of propped up by market makers or certain stakeholders in the game who wants to prop up the price. But if we look at true price discovery, there are a lot of assets with zero value. And people are just trading for the sake of trading. And that is that's a little bit uh worrisome, I guess.

Takatoshi Shibayama: 28:35

Yeah, I mean, obviously most of the tokens are probably listed in like a lot of the global exchanges, you'll have the same kind of charts where you could they list, they go up, get dumped, and then it just stays flat afterwards. And and market makers probably still have to keep making markets for those things.

Lisa JY Tan: 28:52

The other part that's quite new starting this year-ish, compared to listing the previous years, is that there is a futures and derivatives market now. So you might list on an exchange, but they also have the right to create derivative positions. And sometimes the positions might not be very favorable. Most of the times the positions are not very favorable to the project, especially especially if they're brand new. So for example, you see the standard chart, it goes up and then it drops down. So usually when the tokens list, you also have a good amount of people just shorting the token because it falls at some point. And that is that is a bit I understand that a lot of people are here to make money and you can make a lot of money that way. But for projects that are brand new and just listed, maybe there's no need to start the derivatives market so early. And maybe a little bit down the line where there is some level of attraction, because another reason for listing is to go get a bit more market adoption in in a wider audience than just the the current community that they have been working on. So having a predatory Attack agent that just tried to short the system might not be the best and might might not create a very healthy, dynamic, growing ecosystem.

Takatoshi Shibayama: 30:08

Yeah, I think I I agree to that. But at the same time also that these perk positions generally do not require any tokens at all. And generally they're traded with US dollar stables. So it doesn't really affect the whole token dynamics of the of the project itself. And and basically you can just leave the uh speculators to do like 100x on on those tokens if they want to. But in the in the traditional world, basically there are CFDs. Um so you're not really, you know, affecting the tokens of per se. I mean, it might it might affect the spot market in some way, but obviously, you know, it doesn't affect token supply. So maybe, maybe a workaround if they want to keep the token economics uh the way that you designed it is you know, have people trade the perks instead, because that's probably what they're uh interested in anyway, and then leave the spot market alone. And you know, just do maybe it could be like at low volume, uh and all the trades are driven towards the derivative side.

Takatoshi Shibayama: 31:06

Gracie, you mentioned about no privacy tokens, but this this year, uh I've definitely seen, especially at conferences as well, there's been a growing trend in uh stable coins and also privacy coins, especially I think for more institutional uh players like your cantons of the world where they want to um you know have a more of a permissioned or or permissionless, but uh more privacy uh blockchain. Um I've seen uh a lot a few others like that in the market as well. Um obviously they're not the same as Zcash or Monero. I mean, they these are for very institutional purposes. You know, what are what do you think about these chains and then how do you how does does OKX kind of view them um compared to like your man, as I said, Zcash and Monero's other world?

Gracie Lin: 31:53

I guess the the global platform may have a different view, and I and won't pretend to know how they think about it. From the Singapore exchange perspective, it's just it's just too much of a compliance risk from our perspective. Of course, we also take into consideration uh what our customers are looking for, and and there will be customers that are looking for it for the very reasons that you mentioned. Um but from our perspective, it's just something that at this point we're not comfortable taking on just because we we don't understand the risk enough. And for us, we we we don't have enough information, or maybe it will take too much uh too much resources to really dive into the nuances of each project to see which ones are are using uh privacy features for the right reasons and which ones are uh maybe less less so. And that judgment call is not something that we are comfortable taking at this point, which is why we've just decided for this moment we are not going to touch that segment. Stable coins, obviously, that's that's a big use case that are really that there's real-world utility we're seeing that really take off in the payments space. So that part we are very interested in.

Gracie Lin: 32:57

Also, we have a partnership with Paxos's um USDG stable is something that we listed recently. And we're providing yield to some of our users, and we are happy about that. We also have uh a collaboration with Straits Acts, the local stablecoin issuer, and Grab Pay, where we allow our users to use US dollar stablecoins to pay a Grab Pay merchant. So for us, that's kind of where we want to focus on, more on the stablecoin and less on the aspects of the market where there are risks that we don't yet understand and are not fully comfortable with managing yet.

Takatoshi Shibayama: 33:30

Yeah. Um stable coins was also a huge topic during the conference as well, or especially this year, with Circles, Arc, uh, you know, Google, you know, Stripe all coming up with their own blockchain and their stable coins. And then you have Plasma that had a really big TGE this year as well. Um, and I feel like in my view, like uh I think this year is gonna be a a starting point where every company can be become a stable coin issuer. You know, obviously, you know, they don't need to kind of issue it themselves, they can have like a white label solution like Paxos um potentially. But um in my view, like any centralized platform, whether it be Grab or Shopee or whatever they may be, can have their own stable coins because it's much a lot more capital efficient, uh, in my view. Um if you think about like Amazon, where they have to have uh you know kind of bank accounts everywhere to pay their merchants, um, there's a lot of uh float lying around everywhere around the world that could be completely solved by stable coins, uh, which they can do very quickly, and they could just have their own stable coins to do it. So all that uh flow that can remain you know in one place and then be pre-transacted from there. Um I I think uh OKX is also uh launching their own stablecoin as well in Singapore. Am I correct?

Gracie Lin: 34:47

No, I don't know.

Takatoshi Shibayama: 34:49

Oh, okay, all right, all right, all right, all right.

Gracie Lin: 34:51

Maybe you're absolutely right that every conversation we have now, uh somebody will bring up stablecoin. Not not internally, right, with external partners, with ecosystem players. Everyone is extremely excited to think about stablecoin, the potential of stablecoin, whether it makes sense for them to issue their own or to work with the partners to issue or to adopt stable coin in their in their payment flow and their in how they run their business. So, yes, you're absolutely right. Stablecoin is front and center of every conversation right now in this space. But I think what's becoming quite clear is also that it would not make sense for every player to consider issuing their own coin. And and with regulation coming down, every, I think every company is thinking very carefully about what they would be required to put in place in order to issue a stablecoin. And back to what uh Lisa was saying earlier, uh not every company or every player in this space will find value in issuing their own stable coin. But leveraging stable coin, some part of the infrastructure, definitely I think there's a lot of value to be untapped in that space.

Nikhil Joshi: 35:53

I don't think it will stop companies from trying. I think we're gonna see a flurry of uh stablecoin issuers. And I think that then we'll see that it's the organizations who are able to distribute who uh are the A-side, as it were. Uh and many of those issuers will um uh go back with their tail between their legs perhaps. Um Taka, I just wanted to touch on something you said a second ago, which is you know, you mentioned like Canton network and the privacy angle. I you know, for me, for the from the from the conferences of the last month or so, there were three kind of thematic points that came out stable coins, uh privacy and dare I say the three-letter acronym that, right? Um, which I think we've touched on before. But but um the point about privacy is that I think there's there's a bit of a turnover, and maybe it's this kind of this uh maturation and evolution around how people are thinking about blockchain, I think about crypto, that the the thematic mantra of yesteryear being transparency is everything is turning towards there is a need for for privacy, and it's not necessarily privacy for nefarious purposes, it's not about privacy because you just need some things to be private, right?

Nikhil Joshi: 37:13

And so even if you're an organization you're paying, you know, you're paying salamids with a stablecoin, for example, right? Suddenly, you know, two guys who sit next to each other can figure out how much the other one's getting paid. I don't think that's a cool thing that people necessarily want. Um and so uh privacy is not a dirty word. Um and I think it's increasingly becoming recognized that there does need to be an element of privacy not just for regulatory reasons, but for commercial sensitivities as well. So I think that's the I think the volume on that is gonna increase significantly over the coming year for sure, I think.

Takatoshi Shibayama: 37:51

No, I totally agree. I mean, if you look at any financial institutions that are doing in trades, whether it be, you know, not just trading, but like, you know, offering, you know, loans, et cetera, if they're all gonna be do using stable coins in the future. Obviously, not everybody wants to see all those transactions happening, and it has to have some element of privacy uh involved in it. So, you know, I think, you know, for more of the I think the private privacy tokens are more for the institutional side um to maintain what they're doing. I mean, you know, Goldman Sachs doesn't want to show what Morgan Stanley to Morgan Stanley or all the other banks what they're doing as well, right? So that's kind of quite normal to see that occurring. Whether they're gonna be using the same blockchain network is a different story. Um, you know, there's gonna be tons of different in-seat um focused privacy chain. Who's gonna use what is still unknown. Anyway, I think it's uh almost time for a wrap. Thank you very much, everybody, joining this time. Uh, thank you, Gracie, again, for blessing us with your presence in this podcast. Um, I hope uh we had an interesting conversation that uh and engaging for you.

Gracie Lin: 38:56

Thank you. It was super fun. Thanks for letting me crash your little party. I I know you guys have done podcasts before. It's uh it's it's great to be a part of this group now.

Takatoshi Shibayama: 39:05

Yeah, awesome. Yeah, you're welcome anytime, Dad. Thanks for listening. If you like what you hear, give Bloodcast a like and a subscribe on Spotify and Apple Podcasts. And for all your other juicy web3 news, keep updated on blockcat.com. Catch you all the next episode.