LFGHO 2024 Summit - Potential of RWA Facilitators for GHO

[Music] for this panel I'd like to bring on Steve Assad David and rul and they'll be here having this amazing discussions on the feature here with integration with rwa and moderating this chat will be Steve so that Furs you let's welcome David Assad Dave Steve and Ro awesome thank you cartic and thank you everybody for um joining in and sticking with us uh super excited to chat today about um real world assets or tokenized assets depending on your preference uh I've got with I've got with me a couple of builders in this space so two of them coming at it from slightly different angles so Asad from centrifuge maybe coming from a little bit more of a defi background and having done some work with abidar in the past and Dave from hash Note coming from more of a trafi uh perspective and then we've got um r as well from chain link who helping the guys build um laying out the infrastructure to enable more rwa chain link have been building uh with ay in D5 since day one really so super excited to work with Jan L more in the rwa spaces that progresses so before we get stuck into it I'll just turn over to the guys to allow them to introduce themselves and tell you a little bit about what they're doing in the rwa space who wants to go first I can go first um so my name is Dave Shiro uh CTO and co-founder of hash note so we are an onchain first asset manager um and as it pertains to real world assets or asset back Securities like we we've launched a product in the space that uh tokenizes short duration yield from uh short-term treasuries and so um yeah we use that in a number of ways uh looking forward to exploring that awesome yeah nice to meet you all as well my name is R I work at chain Ling Labs um what I do there is two things one is I support the AO ecosystem in whatever way I technically can so that means uh you know aligning road maps making sure we're there where you need us uh and the second thing that I do is I'm the rwa lead so I basically manage the relationship with tokenized asset issuers and such across Europe and North America yeah awesome my name is Assad I do all things defi at centrifuge you know most people know centrifuge as having worked with stable coins in the past uh mainly maker Dow we've also done work with a and the real world asset market and we have a product called Central fuge Prime which is all about bringing real world assets decentralized organizations and yeah super excited for go I think one of the big opportunities and you know Go's had this kind of sense of light paper uh rear World assets is always a big potential here so it's a really exciting topic happy to be here awesome so I I heard at the end of the last panel there they explained the concept of facilitator so we don't really need to go into that at this point which is nice but I think one of the more commonly touted potential facilitators going forward is an rwa facilitator so going to be super interesting to talk about that but maybe given this is a hackathon and um given we have an audience of developers this one probably for Dave and Assad it'd be super interesting to hear about some of the design choices um that you guys considered when when and when yeah when you're building out your products essentially yeah I'm take a stab at it you know we we put out a kind of some thinking and perspective in the a forums earlier this year before go launched uh kind of sharing what we thought about what you need to do to think about like real world assets and from a stable coins perspective and I'm sure davee will agree the hard part is for developers is that a lot of the work gets done on the legal side and financial side of it right making decisions about balance sheet space how to invest and allocate but I think the biggest opportunity here and I'm sure this is where Dave actually agrees as well is that the biggest opportunity is building actually infrastructure to help improve the way these Ral assets move around um especially when you have a decentralized unit of account like go so being able to take data from ru assets and integrate that with the stable coin and react to that so you have kind of programmable balance sheet management the ability to then take you know um say uh assets that don't exist yet today you know in a more digital native form and integrate them directly with the stable coin I think is really exciting and then ultimately for all the you know traditional assets things that I think are really exciting is clearing and set how do you improve the facility for how you bring those assets on chain um to me that's that's com some of the design considerations you have to think about where there's a lot of opportunity I think for the space to continue developing especially with a stable coin like go yeah yeah it's a it's an interesting question to ask because it's pretty loaded there's a lot of ways you can take this um I think if we take a step back the thing that we what triggered us to get into the space was um there's still like even though come pretty pretty far away in terms of crypto for defi like a lot of Primitives don't really exist or they're um let's just say they're not yet in a really mature State and so when we came to this Market um and we do Structured Products uh mostly like option selling stuff like the basics of collateral at rest and like what happens in trafi Market where you're actually when you post collateral are earning interest and so um um we went out there and looked for building blocks that we could build on top of um at the time there wasn't very many token tokenized treasury products out in them I think uh uh what was it the Franklin Templeton was the only one but like that's just you can't really do anything with those tokens you could just hold them uh so that wasn't very helpful and so when we built our our product it was really with the intent of like building on top of um and I think that the design choice ches we made were back to what Assad mentioned like a lot of it is how you structure it legally because in many cases the low hanging fruit right now is Securities um there it's PL simple Securities like there's no getting around it and um and you have to have some kind of legal structure and so when you think about it from like a fund perspective um no one's really like it's pretty it's a pretty big Mis doer that people are tokenizing treasuries no one's tokenizing treasury they're tokenizing the funds that are then transacting in the treasuries and so when you're looking at it from a technical design space like what what are what is when you buy into a fund what are you receiving and those are shares essentially and like we already have Primitives that are really good for representing share ownership in something that's fungible right as long as you're getting at the right price um uh relative to people who entered the fund earlier than you did um ERC 20s are pretty like easy design Choice from a technical perspective um but if you were if you're going to go down the deep end of actually tokenizing the underlying product like you'd have to figure out if there is better specification for that right like if you're looking at 1155 ERC 1155 or I think there's even like EIP 325 3 3525 where it like mixes fungibility um with non fungibility like those are kind of the design choices you have to figure out when you're putting together a real world asset but when it comes to Securities I think you know Cent f is doing a lot of this similar work that we've had to do like it's all fungible funds right and their shares and so that's that's how we got to where we are yeah super interesting um rul as well did you want to contribute or no I think the the difference is like what are the design choices that you make as an issuer versus what are the design choices that you make as like a user or a consumer uh because in a way even like a right now isn't isn't so much User it's a platform where users come and might interact with their already tokenized assets um and I think for for the for the end user you're the person that ultimately actually holds the thing or actually puts them in a and does something with them or would do say so once they're accepted um for them all that matters but at some point they also just need to interact with something like they need to make sure that it's actually backed by something properly it's actually secure it's actually protected uh they can actually use it across defi so the the impact of what for example Dave and assada are doing on their side massively impacts what a user an end user can actually do on the Chain because different legal setups have different implications interesting yeah I'll just throw this one out there as well so like obviously it's quite a daunting space like more traditional assets absolutely massive inside size do you think do do you first try and identify the type of asset you're you're going to tokenize or do you first build out the infrastructure and then worry about the asset after what do you guys think I I think it's like a dual-sided Marketplace a little in a way right like the way we think about stable coins like go is you have to have balance sheet space to invest in real world assets and balance sheet space can come from a lot of different things and you know ultimately you have to have also this ability to get to Fiat and once you have those considerations kind of let's say you can do all that you can then choose to go into you know let's say your choice of the market but for a stable coin who wants to be really liquid and usable and kind of a transactional element for Traders probably means like very sticking to liquid and relatively safe assets right then you have to think about building infrastructure and like rul said earlier you know you can't just say I'll I'll buy this you know this tokenized treasury you know whatever it is and just work with that you do have to build infrastructure specific to all those legal foundations and whatever the asset is itself and then having Tech on that side is super important so you have to do both kind of hand inand yeah I think I think your spot on it is a two-sided Marketplace I think sometimes as developers we tend to chase shiny objects um and tokenize something for the sake of tokenizing it and if you do that great but like what's the use right like we can all we've all talked about tokenizing real estate but if you can't use it anywhere why have we done it right if it's not the if like for example depositing um into a markets is like you know you you can deposit collateral right to then be borrowed out like if you tokenize my house I can't deposit that anywhere right I can't use as collateral one day we may be able to but as like when you're looking at building out projects you have to figure out is there a market for it and I think that's why you've seen a lot of these tokenized products really start to take off it's low hanging fruit um it's something that people understand is that they're just getting negative carry by holding stable coins um and and there's a need for it right because like the interest rate's High people don't want to have to make a decision between keeping assets offchain versus keeping on assets on chain and so um you have that two-sided marketplace now you have to build out more utility for it to really grow it because let's be honest like rwa is still really really really small like as a market like we talk about it everyone Hypes it up but it is a really small Market still and so um if we start talking about real estate and all this other crazy stuff that sounds cool might not be really useful for another 10 years um we still have a lot of work to do to build out just even this easy stuff and then and build out that infrastructure to take it in and do something with it and also like debunk a lot of the um unknowns in the space right people think that you know by holding uh a security you're somehow in um your a regulator is going to come after you like holding Securities there's doesn't make you like turn you into a regulated entity right that holding security as an asset oras collateral there's nothing that says that you will then have you know the SEC will come after you but it's those kinds of information that has to be put out there so that the whole Space grows and that's I think it aide you're absolutely right it's a two-sided Marketplace and you need to have the users uh the people who want the thing you're tokenizing otherwise why are we doing it we're just taking up BL space yeah yeah I fully agreed I think it's also important there to delineate between um why you're tokenizing and what you're tokenizing like the whole crypto space is like what one or two trillion dollars in in uh in total market cap if you look outside of you know the blockchain it's like 95 trillion dollars or even more than that like in hundreds of of trillions of dollars um when that comes on chain as for example a lot of strategy Consultants are saying doesn't they're be on ethereum a lot of this is going to be on like private chains so that's going to be like banks in between themselves tokenizing their deposits or tokenizing shares and settling on a blockchain type system that might even be like a private L2 or something like like polygon's Nightfall but that's probably not going to be on ethereum and when you start for example me um putting a lot of um houses on chain for example like a lot of real estate when a government starts doing that they're probably not going to do it on ethereum and you're probably at least not in the beginning going to be able to put it into like defi or something so in that case you're not tokenizing something for me or for you or for anybody else you're tokenizing it to gain for example settlement benefits or like you know slight uh efficiencies here and there that's a very different use case we're going to see both types of tokenization happening at the same time but I think me the most interesting piece of tokenization and definitely the most interesting piece for a is where you really need that demand side you need people to say I want to be able to have this particular asset from The Real World in the blockchain to do something for with cool super interesting insights uh so thinking more specifically to go so go obviously at the minute is purely Crypt backed like what do you think are some of the advantages to diversifying the collateral base to rwa yeah we we've seen I think in the market now the way that other Crypton native stable coins have kind of integrated with real world asset markets right there's obviously maker do is a big standout and a big opportunity for them was to just take stable coins that were on the balance sheet and earn yield on that right but two I think that what that really did was actually you know give a lot of significant Revenue in a time when the market was down so diversification is a huge benefit and I think that's maybe like the first and primary benefit re World assets give compared to Crypton native assets but I also think it kind of provided an element of stability to die in the stable coin itself right and you know when you have safe and liquid collateral on the balance sheet and ultimately you know us treasur is harder to find safer and more liquid collateral than that you do get this element of you know being able to smooth out volatility and reduce kind of some risky nature of what's you know backing your stable coin which I think is a huge element of it right but there's there's a ton of you know design opportunities to start like extending into you know call it riskier collaterals but still safe and still liquid um you know you can see the things that frax has been doing for example uh you can look at other places in the ecosystem which are creating kind of like synthetic lending on top of real assets or even stable coins that are just you know passing back yield in different ways and kind of providing like intermediation opportunities for their users the these that's what I think is like really exciting about real assets ultimately it's a huge Market it's Diversified and you can kind of make of it what you will depending on like Ro said what your users are interested in and what they want to want to see from your stable coin yeah I think for for ghost specifically it's it's definitely an opportunity I know that you know at certain times you know you look at what what are the options for go like where do they put their stable coins they put it into their markets and start earning like pretty high interest rates um I think it's a diversification question but it's also like as s to your point treasuries are liquid but it also depends on how you structure your real world asset and if those things are actually liquid or and like how much of uh the the underlying instruments you're buying and what is the duration risk and do you have do you have the ability ility to actually get out of those positions in the event that you need to liquidate right and when you're a decentralized stable coin using crypto um you can get a bank run right and how do you how are you actually able to liquidate those positions and I think that's really important when any um when any native stable coin is looking at uh investing in real world assets are essentially taking it off chain and how quickly you can get those stable coins back on chain is is critical um because you know like what happens if there is a bank run nothing's there's no like gate there's there's no safety mechanisms U currently in place if everyone just at the same time decides to pull their money and most of these products are at best um you know T T1 uh we depending on how depending on when we find out we can honor t0 redemptions but that's like that's pretty unique to ours most others are T2 and like and when you have a bank run that's that's a problem even with us we're not instant [Music] right yeah interesting and talking about the um so like the liquidation piece so like obvious I mean obviously that's a vital part of Abby in general doing anything with Abby you need the ability to liquidate Collateral types so essentially what you're saying is we need more liquidity on secondary markets that that does seem like one of the real challenges what what do you guys think are one of the catalysts to make that happen I think it's happening slowly right you know there's like so many different pieces that are being brought onchain uh you know which which part of onchain equos you're talking about is really relevant here but there are many different people coming you know the more tokenized treasury bill providers you have that's like one aspect of it they know have more interest in customers I think ultimately what you need is like really like the marketplac to trade and exchange those assets it's really hard to do it on existing defi rails today not even just from a compliance kind of permissions perspective but also just not every kind of deck is actually well equipped to trade us treasury bills right it's kind tra it's kind of different like fixed income trading is a is a kind of unique Beast that I don't think we've seen an mans really solve very well that's that's one aspect that I'll say curious to hear what R and Dave have to say yeah yeah I think in general what we've seen with a lot of rwas is when they come on chain the volume is quite low uh especially when compared to for example market cap and such and I think that's a bit the nature of the asset like you don't want a crypto asset you specifically want something that's offchain that exists offchain and generally all the liquidity for that certainly is offchain so there is an argument to be made that obviously we want like liquidity on the secondary markets but if you think about it the actual liquidity on the secondary markets is there like it's out of the blockchain it's like the actual uh Securities exchanges for example so there's an argument to be made that rather than requiring a lot of liquidity in for example like a curve or Unis swap um you can instead basically have a guarantee that yes indeed you can swap this thing for the same thing in the real world and then be able to sell it there um if you look at other like as very well mentioned is that um you're not actually owning TS you're owning basically a wrapper around TS it's uh in a way it's a little bit similar to an ETF where you put a wrapper around the actual asset and ETFs also have massive requirements around you market makers to be able to take your ETF unrap it sell it and then give you back the money and the other way around and that basically keeps ETFs pretty much on bar and something like that on the blockchain would work basically just as well and allow you to tap into the liquidity offchain interesting yeah sorry Dave go on no I was gonna I was going to reiterate that I think that getting more parti IP ation from different venues um different uh OTC desks like at the end of the day I think that there's also a cultural shift that needs to happen with at least the stuff that's taking off these are securities requires kyc like the Deens and like people who are in the space aren't exactly super excited about that but I think it's just natural progression of of where things are going as things mature um there is a need to become a little bit more open about who you are and not and if you want to be you know completely pseudo Anonymous out there like it's not it's these are just not the right products for you um but as like dials get more serious and get more um you know get more serious about wanting to create sustainability this is a natural way of achieving some of that um but again it's just the market needs to get um get comfortable around it and then getting k and then getting permission because these tokens unless there's um a permissioned one permissionless one uh that really you know truly becomes easy to to transact in um it's going to be pretty hard and R you you you rais a good point there about this the um liquidity living like there is liquidity on secondary markets it's just not on chain like do do you think it matters whether um collateral types for go live on or offchain and like if the collateral types are offchain primarily do you think token holders currently have enough recourse if something was to go wrong and just open that up to everybody of course yeah I mean it's it's hard to make a sweeping statement there because this depends entirely on the project on the asset being tokenized how their structure is and all these things I mean um like can you redeem whenever you need to and how can you redeem whenever you need to like you need be kyc prob probably uh can you rely on Market participants and all these kinds of things I mean like the benefit of having crypto is it exists on the blockchain and you know for sure that it's good like they're good for the money because you know you can actually audit the code of you know ethereum itself you know that not going to be uh a massive exploit for example hopefully um well with an rwa inherently the issue where is allowed to Mint more of the asset for example and also is allowed to basically usually uh stock redemptions whenever they want to or when there's no liquidity or when there like t plus due time and they they just need more days to give you the money for example um and in those cases in those times it's critical for for example the AV da to know that even though they might have to wait a little longer the money is actually there and they're good for the money and that's gonna take one part just a lot of like Risk analysis like the Avida I think is actually very good in this and has shown that they have a really good team on this to make sure that yes you know legally everything is correct and you know everything is set up properly offchain and then secondarily I would say you need to know that the tokens that you hold are actually backed by something offchain and that's for something where for example the proof of Reserve can help and that way you can attest the assets actually living and being held in the offchain place and making sure that the issuer can't actually like massively start minting without having proper backing yeah I sorry just building on that rule like I think there's a big opportunity for like developers right to to hackathon talking about go to really take advantage of the data you get when Real World assets are brought on chain you know and really what I mean by that is you have structures that are being brought on chain you have tokenization kind of of assets and yes there's data offchain but there's also a real big opportunity to integrate that data onchain and make it more usable for go and I think that's actually where you'll find the biggest Edge and that's like really the biggest untapped opportunity for stable coins today is yes they're allocating to real assets but integrating them into how that stable coin actually operates and it's balance sheet mechanics is is a huge opportun if you can do that in an automated fashion I mean that's where I think the ceiling is unlimited for go and its ability to allocate to re assets and use it effectively as part of just growing and supporting the ecosystem and then you think about integrating other things on top of it like trading venues or supporting other kind of liquidity mechanisms even custom to go on chain for re with assets that's where I think it gets really exciting yeah I think you brought up a really interesting point R there's like there is the offchain piece of it how do you verify that you have it I think and I think you guys have a pretty good product in the market for something like that I think the problem um that most projects need to Grapple with is the incentives right like your product isn't free and who's paying for it right um and where and you guys are aligned as a as a service provider to somebody you um are in you know you're incentivized to uh make the person that's paying you you know feel like they're getting the value whereas I think in this space that's kind of contradictory you really want to have an adversarial um party that will um ensure that the value of what you're saying is actually there because it's not in their best interest um to they're not incentivized to like not have that happen right so um I think that's the that's that's something to really think through when you're putting together a project is hiring chain link to do the offchain reserves is interesting but from an incentives perspective it's a little bit weird right to think about it's like what happened with uh what is it the auditor um audit like audit firms when a company hires an audit firm to audit themselves it's like okay but they're working for you and they're going to make the numbers do what you want them to do but if you had uh another party that came in to audit you the incentives are to to make sure that everything super clean and so I think it's as the space matures like we'll see more of that um but it's interesting to Think Through yeah I think you kind of answer you kind of give the answer in your your message there which is uh you can obviously have the protocol itself for the project itself saying hey we want to basically attest to this uh you can also have the a dow saying we will only accept rwas that are tested according to a particular standard for example uh and in that case you know that is a possibility where for example the a DA pays for it and the actual client of the other station would not be you know whoever's paying us but rather the a DA for example exactly cool I didn't even know I was laying you up to talk about proof of Reserve there R but nice job thank you uh Dave you touched on um the minting Redemption side there would' be super interested to hear um um um just a quick run through as to how that process works same same story with usad like I think just super interesting to hear what goes on uh in the Sausage Factory essentially yeah happy to talk through it um so I guess it really depends on how you structure your product and what your token actually represents right so typically when a client comes when our invester CL comes to us and this is already someone who's kyc they've already been whitelisted they're they're able to hold um the token that represents share ownership in this fund um they can deposit through Fiat rails or they can go through crypto rails and you know crypto uh collateral that we take is um in the form of usdc um Pi USD and and a few others um but then also you know investors still use wires and Fiat and so that's also a way of doing it if you're doing things on chain there is there's transactions you can make with with our protocol that will basically buy into the fund at the current share price and so the share price gets updated on a daily basis based on the activities of the fund and so you can transact and and have an atomic basically swap where you deposit stable coin and receive um a token representing the assets um of the fund uh basically at struck at the nav of that date and then same on the redemptions depending on um what form you're taking if you're taking it in kind or if you're looking for um um to receive you know you you stable but you know you're you want to take it out in USD USD um that's something that can be arranged so it just depends on how it works but onchain again uh in a lot of these things there is liquidity like there's not a ton of liquidity on chain usually for these things um if there is then you can just automatically um redeem uh but if not then you know there's a process for liquidating the assets off chain uh converting that to crypto putting it in a position where you can then you know burn the shares that you have and in turn receive um the the your your investment back um and so it's it it all depends and as you build out a project you have to keep in mind like who is your target client like are they going to be comfortable with sending in wires or are they going to do it all on chain and depending on that you're going to have to have certain processes in place to start sending money to bank accounts what happens on liquidations you know these are um these things exist in different places right it's not like uh hash notes fund is just sitting in a bank account right there's Prime brokerages there's custodians involved there's a whole like trafi infrastructure that's that's sitting behind what this token represents and when you whenever you're jumping chains right trafi in a way is a chain just not one that's public um you it takes a little bit of time and so that's so how quickly can I go from having go in my wallet to um then minting your treasury token and then back because of course you support go so uh if during Market hours like because we are we are a a tra product there's there's wires involved here and so during Market hours usually on fed wire schedules you can get in um most of the day and then anything getting out uh in small size is within you can do it on chain immediately for I think up to like a million dollars um anything above that can be t0o if we find out early enough in the day again kind of depends on wire schedules if we can't get a wire out from bank accounts uh from Prime brokerages to bank accounts um in time then uh it'll have the BT but you find out it's t0 and then and then I think the important piece to figure out is how you're actually implementing it on the back end right like how much how much liquidity do you have are you actually buying long-term treasuries like those those things are do you have duration you so you may not be liquid on some of those things so it's it depends like in our in our case we we are you can redeem within T1 up to the full amount for every everyone could come to us uh during the day and say they want out and the next day everybody can get out but it all depends on how you structure your your product and not all products can live up to that yeah I mean it's it's hard to add to exhaust of answer like that really thorough right and ultimately at the end of the day a lot of these things are going to look similar kind of at the conceptual level and then today's point the differences are in just like the operational nature of how the fund manager and you know the fund is set up and things like that so so maybe I'll share like kind of two a couple different things here like on the Cent side you know we have centr Prime which has its own legal infrastructure and what we do there is we set up kind of an ability for a dow or decentralized organization to have kind of a a tool that it can use to kyc with certain Investments and then you can have the Investments and redemptions triggered kind of onchain in automated fashion um and then I think one of the opportunities again you know for Builders and just talking again about like really where I think there's some interesting like really Ela demand there right is actually building kind of better call it web two and a half rails so as Dave's point you know you're dealing with bank wires you're dealing with kind of traditional banking Payment Systems to do half the transaction then the other half the transaction is obviously on chain right usually going through like a Fiat stable coin and then into kind of the stable coin of choice for let's say users I think there's a lot to be built that kind of connects those two systems better together now you know building payment rounds is obviously a huge daunting process and it's big but like there's a lot of people in the space fch startups I mean you know you can imagine even plaid has a role to kind of play here if you could build an with it appropriately and like that that type of stuff I think really does meaningfully move the needle for how you can improve the way these things are done there will always be some operational limitations but you can the way manage those limitations and like have visibility into them and risk manage them and things like that as well uh and then the maybe the final statement too is I we talk about liquidity right for a stable coin there there's always going to be a buffer that needs to be kept and this is like really the work for like like the facilitator the way I believe it's structured and set up to manage is keeping some part of the stable coin and onchain stable representations and then managing the offchain representations and kind of appropriately ensuring the liquidity buffer so you can you know fulfill redemptions onchain and then go into your offchain the Holdings uh you know when you need to as well only like you know after that buffer has been eaten through and those type of things I think go a long way so it's like you know operational on the back end there kind of all the operational wiring that happens between the two kind of Worlds and then there's also all the operational stuff that's done on chain and that's what sets a a you know facilitators of ftim me is where there's a large part of design opportunities too Steve to go back to your first question cool and um just quickly R wanted to give you bring you back in from the sidelines super quick just to give you the opportunity to talk kind of more broadly about the data and interoperability side of things in rwa and then um we will need to wrap things up on maybe um do one quick um fire question after that but rather just quick question on the data and interoperability side sorry is is there question still coming or just how how did that interact with the uh the actualized assets my bad so to be super clear so just talking about talking more broadly about the role of data and interoperability in rwa like I know you I know you've already touched on proof of Reserve so don't necessarily need to get into how chain links um building out underlying infrastructure to enable go facilitators because I think that plays into things but um just broadly on on the data interrup ability side yeah that makes that makes sense I think um as as they've very well noticed like you're you're bringing something out the chain and it's basically a wrapped version of whatever exists off chain and if you really think about it it's just a super plain vanilla ec20 uh with added trust assumptions so what are you really going to use this thing for like it's an ec20 but but now somebody has the keys to be able to Mint something and that's a feature not a bug um so how do you Ure that it's safe how do you ensure that you can actually use it somewhere how do you can can can know that what is the actual price of the underlying asset what is the actual price of the assets on the secondary Market um because you know on the secondary Market on chain usually the volume is pretty low so how do you know what the actualice is you need to be able to use it in defi you need to be able to have price Fe each you need to be able to bring it across chains and use it all all across the ecosystem um if you're just issuing a tokenized asset and you're not bringing it with it basically all the plugins that you need uh then what you're doing is effectively just capturing possibly the slight benefits of like faster settlement and all these things which for a tokenized asset on a public chain is is is basically not there because you're not actually moving the security you're moving a wrapped version of the security so if you want this thing to be useful on permissionless blockchains you need to bring an ecosystem of data you need to tell us what is this thing what is the price where is it held what are these people doing how can I bring it across chain uh and all all these kinds of features because otherwise that's just a plain vanilla [Music] year20 cool that's super insightful um we will have to finish up um now but just maybe quickly uh quick fire going around the room any other words of advice for aspiring rwa Builders and then you can potentially um um give us an answer as to what an ideal split looks like between rwa and crypt based collateral as it relates to go Dave you kicked us off so why don't you start again and um we'll we'll we'll let everybody um um get home or finish up their weeks oh you're muted Dave um sorry about that I talked about this in the past I think that the thing that we have a really good opportunity to do is to come at it from a very cons like come at the space from really a considered legal structure right I think that a lot of times as a founder and I'm guilty of this myself is you want to build quickly and get to Market quickly and so you cut Corners um I think when you start doing that you build up a lot of legal uh and Regulatory debt that's very hard to pay back and so coming at this we have an opportunity to really I mean the whole goal is to create a better Financial environment um Financial ecosystem and so figuring out the structure that your rwaa should take is really really important and don't skimp on that because it will really hurt you in the end and I think that it really comes to light when we get blowups right and like we're in the space and blowups happen every more frequently than most but like it's not not so different from trafi either right like you just don't hear about those as much um and so the the legal structure that you take is really important and try and make it as as friendly to the holders of your um whatever you're issuing as you can right in the event that things blow up don't don't have a legal structure that makes it very murky as to what it is that your uh your shareholders are actually able to get to their assets with right like if you're a rapper of a rapper of a rapper like this is a problem it's not really clear what's going to happen when things blow up and I think that uh moving quickly you leads to situations where um when things blow up people lose money and so I think as we start to bridge trafi you know chain and and uh uh public blockchains like let's be extra careful about how we do it it's it's not time that you're going to be upset you spend um otherwise I don't know what the right answer to your second the second part of your question is I think it just depends on each da and like for a how you balance like what is the outcome that you're trying to achieve um I think it it there is a role to play but I don't think that there is a uh you know a straightup answer that uh makes sense and it might be a floating one right as time goes on like that number changes from you know being high or being low to being the opposite and so I don't think there's the right answer it's just understanding what the current state is and adjusting to it and having them you know mechanisms in place to quickly adjust in um you know when markets markets change which they inevitably do awesome Asad yeah um so answer your first question uh like I think things to consider is you know they picking up on ra said one of like the ethos of centrifuge is trying to bring as much onchain as possible about like the fund structure about the assets about the portfolio type and uh we're trying to serve as a platform for people to build on top of so if you're looking to build an AR b space my plea to you is to come to Cent viw you build us and you know let's bring an ecosystem of data to our partners and we hope a will be a partner one day on go uh and then for your last question maybe like you know yeah yeah look Dave's right but maybe my the fun answer is I think it should be at least as big as your Crypt native allocation right H you know there's always room for real assets there's always room for a slice of pizza there's always room for real assets it's my new thing nice nice I'll I'll split the difference on this one um I think you need you need to build a a Sandbox for developers that's both safe and fun like there needs to be enough features to the actual Tok and enough data you can do something useful with it but the core needs to be super secure and safe like you need to have your in order and you need to make sure that you can do something useful with it because as a developer you just want to take the token and do stuff you don't want to think about all the stuff you don't want to do you know five five weeks of due diligence that you have no idea how it works just take the token run with it use it as collateral use do whatever you like I think that's that's kind of the key and in terms of the split I I think it's way too early to answer that to be honest um honestly the amount of stable coins that we see is very limited compared to the amount of stable coins that I think we're g to see and a stable coin in a way is very similar to like a bank deposit and if you look at like I don't know the 10,000 trap five banks that exist they're backed by completely different types of collateral like if I if I take my money to One Bank versus another versus another they're going to invest it any any very different ways so I think we're going to see a lot of different uh let's say a thousand flowers bloom in that way I'm sure you were um messaging me 100% in the chat there R maybe um awesome well look thanks so much guys I hope that's been useful um if anybody has any other questions please let us know otherwise good luck to everybody participating in the hackathon thanks a lot thanks Steve thanks everybody Steve and thanks for moderating Steve that was an amazing discussion [Music]