Fireside chat with Luke Pierwienis | Marcin Kaźmierczak, Łukasz Pierwienis | ETHWarsaw [4]

Hey everyone, I hope you're still still have some energy to uh listen a bit more from uh no one else than Binance, the biggest exchange crypto exchange globally. Um I'm very happy to uh run this fireside. How do you feel today?

Yeah, thanks for having me. Hi everyone. Uh yeah, I you know look forward for like very great chitchat uh maybe a little bit insights from uh Binance. Uh for those who didn't try it yet, we have the ice cream giveaway. Natalia, I mentioned that you know publicly.

Uh so yeah, I kindly invite you guys to try it because it's very good and but yeah, looking forward for the cheat chat.

Awesome. Let's start with something simple. Can you tell us a few words about you yourself and as I'm aware you have not been in Binance since the very beginning since 2017?

Yeah. Can you tell us also a bit like how it is to enter such a global organization that is so well recognized?

Yeah, actually that's that's a funny story. Um so I I'm originally a lawyer uh by education. I also like I'm administered to the bar bar but uh I then moved to the trati and I was working in investment banks like Goldman Sachs credit Swiss and there's a funny story because I started the uh incubation I I took part in the incubation program in Goldman Sachs where I presented my idea for a startup and it was connected with web 3. I wanted to build basically what bridge is now doing for stripe. So I you know uh it's a pity that I didn't you know pursue that path but you know it lead me to actually to Binance because Binance was my liquidity provider.

there was some uh at at some point my main user base was in UK and then Binance had some problems with uh UK and at that point I just wrote very nasty email to Binance and I got very great response from Richard and that's how it started and uh so this is you know how I started at uh Binance actually so it lead me to that way um and I was just you know convinced uh by by the space when I explore it I you know interacted with the community and I really like the idea of uh democratization in finance because I saw all the flaws of the legacy infrastructure in the traditional system.

Awesome story. I mean for those that don't recognize Richard is the CEO of Binance.

I also had the pleasure to chat with him in Dubai and he's very humble and very nice guy. So

y

it's also uplifting. Okay. So you mentioned traditional finance and let's compare it with digital assets starting the first block. Can you tell us a bit more like how you as Binance and in general centralized exchanges help the big financial institutions and traditional finance to embrace and interact with digital assets?

Yeah. So uh basically I mean if we are talking a little bit about the digital finance it's not like you know the centralized finance per se. I mean for me you know like the c central exch ex exchanges uh are not really the resemblance of the pure uh decentralized finance because if we are looking at the decentralized finance we see that these are like you know financial services provided on decentralized blockchains and where the transactions are done through smart contracts facilitating lending trading asset management I mean it's uh if we're talking about decentralized finance essentially we need to talk about like the banking swap uh unis swap right uh these these players hyperlquid but with respect to uh central exchanges I see that actually what we are doing is that we are sort of the bridge between the traditional finance and the uh digital asset space. So what we are doing in Binance we are trying to basically encourage uh the financial institutions to get familiar with the space and we believe that you know by uh very simple mechanisms like you know asset management for instance we are we are trying to basically introduce them to the space so they feel comfortable but they also feel safe because it's not like the very complica complicated decentralized protocols but they have something famili familiar like the customer service like the interface so something that also like the re retail users really appreciates. So we actually see that the same is with the financial institutions.

They need to see something familiar, something that they can attach to and that actually we are speaking with the same language. Obviously there are some differences in uh how we speak because you know many different uh products has like you know we are speaking in our own uh web 3 language and this is like still very hard to follow for the traditional players and especially for the financial institutions but at some point we are able you know to bring them in and now when we see that actually the web 3 is uh maintained much more than before with the financial institutions uh we look forward you know to have that collaborations not only in uh you know maybe in Asia because this is like you know uh the very center of it but also in Europe and who knows maybe in Poland but this just depends uh where we will state with the law

I have to say that personally I also use Binance uh including the on-ramp uh experience so uh I can say that it's very widely adopted and uh the amount of training pers is really uh very much appre appreciated. I think it's $1,500 training pairs.

Yeah. Yeah. Yeah.

Yeah. So, it's very very deep. And in terms of volume, it's $217 billion daily volume by

Coin Market Cap. Yeah. This is very impressive numbers.

Um, and I do appreciate this UI of when you forget your password, you can restore your account, right? Because in DeFi comes as a double-edged sword. On one on one side, you're the owner of your keys, but on the other, you're the owner of your keys, right? So the moment you lose them, there's no Binance that you can call. Hey,

exactly. I mean, this is, you know, al like the the biggest difference, right, between like the centralized and centralized. I mean, it's just depends how much you trust yourself, you know, with the passwords. And uh, you know, for me personally, I often times tend to forget passwords. So that's a very good feature actually.

So

yeah, and I think this is where we are heading towards in this general, let's call it onchain finance to have the choice if you want to do it yourself like self- custody, go ahead. you want to go with a centralized exchange that's also living in like together. We are right now in the super cycle of stable coins. We see uh the existing stable coins growing very fast. But we also see new stable coins popping up on the market.

I also know that uh some time ago on Binance there was this switch from BUSD Binance USD to FDUSD versus digital USD. Can you tell me a bit more about the general perception from Binance on the stable coins and what plans you have ahead, what offering you have?

Yeah. Yeah, sure. Uh, so we are obviously like very bullish as it comes to the stable coin uh market. I mean personally also for me not only for banks but personally for me I mean I'm like a super fan of uh stable coins and you know this year but it has been you know basically declared by Goldman Sachs and Deoid in their reports like the year of the stable coins. So it's very rapidly growing.

I think that the the volume from like last 12 months was basically like 33 trillion of dollars something like that. The uh the general capitalization is above 280 billions of dollars and of course this is like two horse race between uh tetar and circle. Uh but what we see also in the stable coin space is that finally the infrastructure allows for the adoption by the traditional players. So we see this backward uh compatibility with the legacy systems and I think this is like super interesting because I mean most of the uh stable coins infrastructure is based on Ethereum uh level one and also there is a in one third there is throne and then we see uh arbitum Solana so and this is actually like very interesting and I'm like uh monitoring that one because it's like starting to grow its share but what is also very interesting I I think in terms of data is the fact that the the issuers of the stable coins of Tetar and Circle I mean these guys have like more than 100 billion of US debt because they need to have as an issuers uh and uh it seems that if they would create a country they would be like you know in a 20 top countries in the world holding the US debt I mean so they will be in front of the countries like Germany or South Korea. So that's actually very impressive and they did that in very relatively short of time.

So this is actually uh quite amazing when it comes to the space and uh at Binance how we try to approach and embrace this uh stable coin frenzy is basically we have very uh we have very interesting offerings when it comes to the stable coins. So first of all our users can uh subscribe the USDC in our simple earn. So basically the staking but with 12% APR and I mean if anyone at this uh stage can give me like you know better APR for the stable coin uh you know then we are offering here then you know we can raise your hand but if not I think this is you know quite a good offer when it comes to the stable coin.

I hope he would ask about the bat and then we could use poly market to sell it. But

uh and then the second one is also like very interesting product. It's like the RWUSD and this actually is very interesting. It's in collaboration with circle. So basically if you subscribe your uh stable coins you have the you are actually subscribing to the another token that is kind of like a fund that gives you an exposure to the US treasury bills. So you and you can actually by subscribing your USDC you have the exposure to the yield from the US treasury bills which is I think also like extremely uh beneficial for the users especially for those who are uh kind of like used to trading on like the traditional platforms and don't have this you know benefit to use this uh global platform and also try to benefit from the global yields.

So I think this is you know like uh great embrace of the uh stable coin uh crazy and we'll see what will happen next. But I'm also like I was born in April as a month and what was very interesting in the space of stable coins was the fact that in April this year all big guys like Visa, Mastercard, uh Stripe, PayPal at once like in April actually they all said that we embrace stable coins. We'll do this something something with the stable coins. So it's more of a statement I'd say. I'd say that I really strongly believe that actually stable coins will be the future and how the market will works.

I mean maybe from the user perspective we will not feel it but all the payment railways maybe settlement railways and who knows maybe clearing railways will be also based on stable coins. Five months late but happy birthday.

Thanks. Um all right so we are talking about global approach but uh we are sitting over here with Binance Poland representative right so specific from our country we're both polishes

and this is hi um speaking about the importance of Poland for Binance and the global crypto market. Can you tell us a bit more like how in example the global management of Binance looks at the Polish branch or how do they perceive our country the potential? Tell us a bit more about that.

Yeah. Yeah. So uh to be honest I was actually uh amazed uh with uh how the senior management approaches like Poland because I mean I know that uh couple of years ago I mean Poland was actually quite amazing and like the Polish B builders especially were quite amazing with what they did in Europe but also in in the entire globe with the projects with contribution to developing protocols. uh but uh when I joined Binance I was like okay big task big issue try to manage Poland probably I will not be in very favorable position comparing to my uh western uh neighbors and I was shocked that actually Poland was one of the most important market on the list and that Poland every time when there was a senior management calls and our seniors are working as a global exchange 24/7 so they have also lovely the Sunday calls when they discussing all the jurisdictions. I was never invited on the Sunday call but maybe at some point I will.

But they have this call and uh during the Sunday calls they the always Poland stands out because they see the growth they see the uh adoption and they see basically the openness of the uh of the users. Uh I mean the telegram community uh Polish Telegram community is one of the strongest uh uh in Binance and also we see the huge engagement and also projects. I mean Redstone for instance, right? I mean we were and we we also like listed you guys but also yesterday we had a chance to have a community meet up with other projects that we listed. So we see that actually this is like very vibrant space like Poland is a very vibrant space for Binance and I think that you know senior leaders really appreciate how open is the market and I think what also shows is that they took a big risk.

I mean from my perspective I would be like the senior leader and I will look at Europe as a map and I will try to think where I can register my VASP. I mean Poland is not the first country that you know comes to my mind, right? But they took that risk and actually for some time they were the I mean Binance was like the only big crypto exchange registered in Poland. I mean it was not like Coinbase, it was not crypto.com.

Uh so that was like pretty special but I think it now pays off because we also see that there are other exchanges like Kraken OKX by bit and they are now trying to come to Poland and trying to provide their offering after getting the Mika license basically. So we see that this uh bet definitely paid off and it shows also like the maturity but also a little bit risk approach in you know when building the strategy for Europe. I really believe that it pays off and I think that senior management are like extremely uh helpful all the way when we are trying to you know basically discuss Poland how we can grow the space how we can approach it and you know last year also I mean there was our CMO Rachel visiting here during the uh ETH Warso right so uh I think that they're extremely involved and who knows who knows what will happen maybe this year we will also be able to see someone from the senior management in Poland

fingers fingers crossed that they would come and it's fantastic.

I will let you guys know. I will let you guys know.

Fantastic to hear that there is such a good opinion about Poland like you know from the global leaders and they see huge potential. Uh yeah red as token from Redstone is also listed on Binance and we are very proud and happy uh from that fact. Um okay let's switch gears and go into a trend that everyone sees like a huge ocean like a huge tsunami which is AI artificial intelligence. I believe yesterday uh Antropic the um creator of Claude AI announced $13 billion round.

Y

uh which follows their previous round this year is it's crazy numbers. How will defi how will AI imple impact a defi? So defi and AI for sure will be converging as we go forward. How do you see that convergence and where do you see threats, opportunities and what users should remember about?

Yeah. Uh I mean it's crazy. I mean the amount like the amount that are gathered through the investment rounds. I mean we're only thinking that it's like crazy in crypto space but AI proves us wrong. Uh we we'll see how it goes.

uh when it comes to the AI adoption, decentralized finance, I mean there was this thing provided by uh Coinbase that we are no longer talking about the uh trati versus defi, but we are talking now about tat defi versus uh dfai, right? So that's that's basically the uh the the trend that's coming and it's just basically trying to merge decentralized finance with AI mostly through the AI agents. Uh and I see that there are a couple of places where actually this can be like extremely useful especially in very in when we're talking about pure decentralized finance. So for instance like for hyperl liquid uh because it can helps for instance with the integration uh no sorry not integration but interaction so it's very difficult actually to navigate the decentralized finance space. I mean for like the normal average user it's not very user friendly h it's very technical and you need to manage it very well actually you know to to have some benefits and actually what can what AI can can do is basically it can be like this bridge between the user and also the decentralized finance space so it can speak in the language of the decentralized finance speaking for instance with the smart contracts and the protocol but also providing us as a user the data that we understand and also the abilities that we know how we can use you know for our benefit.

So I think this is you know one of the benefits for implementing actually AI. The other one is the adaptability. I think this is like crucial because the protocols although automated I mean they still uh rely on preset of rules. So they do not change they do not adapt to the current market conditions. So I think this is like super crucial in terms of like actually leveraging the uh the power of AI and machine learning in in order for the protocols to actually adapt to the market conditions.

And I think this could be actually pretty pretty huge. Uh and then there is of course the efficiency. I mean if we have the AI agents then it will be like basically much easier for us to navigate the decentralized space. Uh so I think on that side I see you know the benefits. I see how it can impact the space and also I see how many projects are also like listed on Binance and also I see I I think that I saw uh yesterday that on Coin Gecko the capitalization of all AI projects was like around uh a little bit above $1 billion.

So I mean actually you know taking into account that they started to develop this year it's uh it's quite quite crazy and we'll see where where we go with them but we also see that there's an enormous interest from our users with these type of projects. Uh however there is also a bedside uh and the second side of this coin and uh my main issue is the question of uh governance. I mean uh how far the AI agent can be our digital representation in the decentralized finance world. I mean this is something that I think as human beings we would need to crack out crack down in the future. I mean sometimes I have this tendency to think about like very futuristic things that at some point we will be represented by AI agents that will resemble us in the digital space and they will make the decisions and you know then it's up to us how far they will go with their decisions and how far they will go for example with managing our asset portfolio or how far they will go with the trades right and then there's also like the question of responsibility whether we actually knew that this AI agents would you know trade in in line with our preferences or not.

So there are lots of issues like very personal ones uh in terms of governance that are quite tricky for the space but if you make the balance of the benefits and the risks I think that this is something uh very much worth exploring and hopefully at some point uh we will see more of these solutions. Actually, I was also speaking with the guys from Cookie, uh, one of the projects also listed on Binance and Phillip, the CEO of Cookie also mentioned that maybe they will try to explore AI a little bit more. Uh, and uh, maybe they will use it for the infoi that they are now creating, you know, the infrastructure for the information and I see also like very good use case for the AI there. Yeah, I mean like the utilization of AI is not a question. It's rather like the pace at which projects will be implementing.

We at Redstone also include AI technology mainly for detecting outliers and like information systems. it is pretty hard to leverage right now AI for taking decisions at least in terms of uh data and I think it's pretty similar to in terms of uh financial decisions because sometimes they hallucinate those AI models and the um damage that can be done with one bad update of an oracle is the same as one bad trade right like it invests in memecoins memecoin that from their perspective like the AI model perspective is legit and it turned out that the meme co is a scam and the moment it's invested it's grogged and then AI has literally nothing to do to protect against that. uh so I I do imagine it's going to be implemented more and more in a very specific use cases. In example, there's a startup called Almanac that is also uh developed by some pulse and they do implement AI for optimizing yield strategies that are a bit less risky. So you cannot lose everything but it can monitor plenty of them and then decide based on that.

Let's take a step back again to Poland because that's where you're sitting. So for those that don't know, we do not have uh euros in Poland. Neither we have uh USD, the the dollar. We still have Zlotis even though we are part of European Union.

Um as a user in Poland that goes into Binance and if I'm mistaken then correct me, but I have to go with my Zodis to Binance and then convert it into dollars to trade like with many pairs, right? Like there are not many pairs that are paired with PN

with PLN. Yeah, that's correct. That's correct. There are not many pairs.

Yeah. So you always have this exposure as well of the zlotted to dollar ratio which in the past years has been very volatile because of the war in Ukraine and many other factors like tariffs and many other uh places. Do you believe the importance of Zlott in the Binance game is going to grow or can we expect I don't know any sort of digital zlott or maybe digital z by binance I'm just thinking will it stay the status quo of that you have to convert into the dollar or there will be more and more integration of the zlott itself into the spectrum

yeah yeah that's that's very interesting I mean I can refer here to URI here because this was like I think this is a good example so We we actually allow for listing of the URI. It was issued by banking circle and the performance at the beginning of URI was like quite good but it didn't match the uh the range of the USDC or USDT. I mean this is mostly because of the liquidity issue because it's like limited to only European liquidity. So it's very hard to manage that and also like to manage the perspective if you have the players like Teter or Circle. So that's very difficult.

And when it comes to the uh polish loot, it's also the matter of the use case and the matter how the polls will be willing actually you know to explore the space. I heard from the data from the ministry of finance and I was shocked by that because I have like very careful calculation of how many PS actually are using crypto and have the exposure on the crypto space. My calculation was around 4 million. However, what I heard from the ministry of finance and that was like very interesting. I heard it on Tuesday is that the expo that there are 18% of our population that have exposure to the crypto assets which after like very quick math is like above 5 million.

So if actually you know there there will be a will and there will be a population that actually will be strongly committed to the polish zotic then who knows. I also know that there are several banks that are now trying very carefully to explore the space are much interested about the uh issuing of Polish zotic but we of course need to wait for the uh the proper legislation to be in place to do that. And of course we have one and only Polish EMI uh which is Billon and these guys also like probably will be interested to issue the uh the Polish lotic and you know I would be more than happy to list it on Binance. But you know time will tell whether there will be enough demand and enough of the use case to actually issue it. But you know fingers crossed for Poland and if Poland will go with the adoption as crazy as it's go as it goes now because in 2023 there was an report from the accenture saying that there are 3 million polls actually using crypto today we can say it's five or six so who knows what will happen in the future if there will be a huge demand and I don't see why we can't basically list the polish binance and that would be pretty epic I would say

yeah I mean like fingers crossed on that and then we are going to have also interesting problems of onchain effects Right. So right now if you want to exchange z to dollar that's a regular effects and then if you have a tokenization version of the ze and tokenization version of a dollar then you also have some market that is going to clear that

and what would be the parity right then between these two

exactly I do know that there is a team from Poland as well working on some of the solutions about the onchain effects. So glad to see more and more builders coming. H I will open a stage for questions from the floor before I will ask you one more. What is the craziest short story from Binance so far for you? What was the craziest one that you've experienced?

Craziest short

or interesting or something that was that amazed you. Uh something that amazed me is the fact that uh when we introduced Blick I I think you know it was like amazing for me because usually the uh in Asian culture the senior management is not like very keen to provide you like the uh the good word for your work. I mean this is like the part of the Asian culture and we need to be aware of that. But actually when we introduced Blick and it was like such a big thing that I was uh basically discussing with the senior management because they said that Blick is amazing and how it works and I was like explaining them okay Blick is working like this and this and this. I was like wow this is amazing why we don't have this in Singapore come on and I was like so uh this was like you know one of the craziest story because I actually get the attention of the uh global leaders and they were so uh appreciative actually of the blick.

So, you know, good job Poland.

Good job, Poland. All right, so uh round of applause for Rukash. And do we have time for questions from

Yeah, we do have um two minutes.

Yeah, two minutes. So, any questions from the audience?

If not, I have one.

Okay.

So, you mentioned Polish uh slot stable coin, and since I'm all about non-USD stable coins right now, um do you see a use case for non-USD stables? You mentioned that the main factor for adding a stable is the liquidity. So it's USDC USDT. And do you do you see other use cases for non-USD stables? Of course, euro is important, but let's say um or zott are just equally important to me to me right now.

Yeah, I I I I would say you know I see one use case but it also like depends how it will work out in the uh decentralized finance because currently when we have the derivatives or financial instruments and we have the clearing houses sometimes the clearing houses are clearing the transactions based on the uh local currency. So if for instance we will have you know this decentralized finance with the or with the decentralized financial instruments at some point the clearing houses can actually settle the transactions in local uh local currency or actually there will be a need to create the local pairs for uh clearing the transaction. So for instance, I would like to clear the transaction between US and Poland and then I I will not I don't want to do it only on USD basically but because I have the exposure on the Polish banks. Polish banks rely on PLN then I want to clear that transaction. So I would need the pair of PLN stable coin but also USD stable coin.

So I see the use case there. But who knows maybe the genius act would basically just you know uh completely dominate the decentralized finance and will be exposed only to USD. But with good time will tell but definitely I mean for me this is the potential use case there.

Sounds like a solid use case for chain effect.

Do we have any more questions?

Perfect. Thank you so much.

I have one more then.

Oh you have. Okay you already have

when edorso we didn't announce acquisition of credora which is the rating platform similar to S&P and Moody's. And in my view, a product such as Binance Earn could also like benefit from having rating over there because you can list products that are more risky but have higher yield over there.

Do you know if Binance plans to have any ratings over there to help navigate users like which strategies they could interact with and which are a bit more risky? Do you know anything? I mean if it come when it comes to the ratings I think that you know from the perspective of like the centralized exchange it's like very important actually for the uh for basically the the firm that is actually issuing this rating to be independent so uh that is like you know extremely crucial factor but uh I do not I mean but and the same has been in terms of like the custody for instance right I mean at some point of time the custody and providing like the and providing the services like the crypto exchange was like in within you know one uh object and then it has been separated due to the regulatory reasons but also for the proper governance. So I also think that in terms of ratings I would say that it should be managed uh outside and separately but uh again open for that and you know we can discuss it backstage if you have like you know the

we go for a coffee we go for coffee.

All right again one round of applause. Thank you very much.

Yep. Thank you very much guys.