Quadrillions: Unlocking Quadrillions | Don Wilson & Yuval Rooz

Everyone, welcome to Quadrillions, a miniseries brought to you by both Blockworks and Digital Asset, who is behind the Canton Network. I'm really, really excited about this. The backstory here is I got to know Yuval and Eric, two of the three co-founders of Digital Asset, over the last couple of months. Got really excited about what Canton is building. I think it's very clear that privacy is becoming not just a behind-the-scenes talking point, but really one of the main narratives going into 2026. Not only a narrative, it's— I think consensus is forming that the main blocker between, you know, crypto of the last 15 years and crypto of the next 15 years is privacy. And there are many, many, many, many attempts to build privacy in crypto, right? Many people have done this. I'm not going to name all the names, but many different attempts to do privacy. And I think what Canton's doing is really interesting. Canton, you'll hear a lot of hype about them in the next couple of days and weeks and months and probably years. The little-known story is that Digital Asset has been building Canton for the last several years. Many of the biggest names in finance have not only invested in Digital Asset and in the Canton network, but have actually made trades and participated on this privacy-first blockchain. So really excited to partner with Canton on this. The series is called Quadrillions because why stop at trillions? We're bringing quadrillions on chain and we've got 6 episodes. Very excited for them. We have amazing names, everyone from the CFTC Chairman Caroline Pham to CEO of BitGo, Mike Belshi, CTO of Tradeweb, Justin Peterson, Elie Ben Sasson, the co-founder of StarkWare and one of the founding scientists of Zcash. Some amazing names, 6-part series. So yeah, I hope you enjoy it. You will get it in the Empire feed. We've also got a website if you want to send it to people, quadrillions. Pod.com. That's quadrillionspod.com. So without further ado, I hope you guys enjoy Quadrillions. Quadrillions is a miniseries produced by Blockworks and is sponsored by Canton Network. Nothing on this show is a recommendation to buy or sell securities or tokens. It's for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in companies, funds, or projects discussed, including those related to Canton Network. All right, everyone, welcome to episode number 1 of Quadrillions. Very excited to be joined by two legends. We've got Don Wilson, founder and CEO of DRW and Cumberland. We've got Yuval Rooz, co-founder and CEO of Digital Asset, the creators of Canton, ex-Citadel, ex-DRW as well. So Don, clearly you all did something right. You're still, still stuck with him many years later. But yeah, Yuval, Don, welcome to the show, guys.

Thanks for having us.

Yeah. Yeah. Well, I wanted to bring you guys both on because obviously there's a lot of exciting stuff about Canton coming up. You guys have been working on this for a long time. But actually, Don, I called a couple— I want to start not, not with Canton, but I called a couple of your friends and said, what, what makes Don Don? And, um, they said, uh, look, most traders focus on the next deal or the next trade, and Don is one of the few traders who thinks 10 to 15 years into the future. I'd love to just hear how this came to be.

Yeah, I don't know how to explain it, but it's the way my brain works. Um, and, uh, you know, I'm usually way too early on things. Um, So yeah, I mean, I was convinced that, you know, I used to trade on the floor of the Chicago Mercantile Exchange, and I was convinced that if the Merc hadn't completely transitioned to an electronic market by the year 2000, that they would be out of business. And I was just so wrong. I mean, the trading floor perpetuated for many, many years after that. Um, but, um, yeah, it's just, uh, just kind of how I look at the world.

Yeah. Yeah. Maybe give us the scope and size and just a brief history of DRW and then getting into also just your guys' crypto story is pretty, pretty historic and getting into Cumberland.

Yeah. So, so I, uh, Started DRW in 1992. At the time, I was standing in the Eurodollar option pit, so that's 3-month LIBOR options, interest rate options. And, you know, my— I mean, I wrote all my own risk software, built my own option pricing models, you know, volatility surfaces, etc. And so I would stand in the pit during the day and then go home and write code, uh, at night. And so, you know, that was really, um, that was the edge that we had, was just that, that we could, you know, manage risk and provide liquidity while fiddling around with models and software to do it more efficiently than other people. Gradually over time, we expanded into more products. Today, DRW is just over 2,000 people. You know, I think of DRW not just as a trading firm, but but also as a markets innovation company. As far as the crypto journey, in 2012, some of the people who worked here were very excited about Bitcoin. You know, I really lean into intellectual curiosity, and so I have a lot of people who work for me who are intellectually curious, and Bitcoin is definitely in that category of things that attracted intellectually curious people. So we were having debates in 2012 about, you know, is this interesting and why is it interesting and You know, we decided that it was interesting, that there was some small chance that the world could agree that this was digital gold. But more importantly, or maybe as importantly, that if you could harness this technology to move, to transact traditional financial instruments, that that would be super interesting. So we did a few different things. We, we started Cumberland, uh, that was in 2014, which is our cryptocurrency arm where we provide liquidity in, in a bunch of different tokens. Um, we, um, and, and we also decided that it would make sense to start a company that would try to build a blockchain that could facilitate traditional financial markets. And so that's Digital Asset Holdings, and Yuval and Eris Sereniki both left TRW to start that company.

Yeah, Yuval, I'm trying to recall your story from when we had dinner. If I remember correctly, you're a senior trader back in like 2008 or 2009 at DRW. And then do you remember when the firm started pushing into crypto?

Yeah, so I think I joined it around '09, '10, and then in 2012, as Don said, Eric, who was a natural gas trader in New York, uh, is the guy together with another DRW partner who started Cumberland. They started doing, um, the trading, and at the same time I was involved with the start of DRW VC. And we started looking— so DRW VC looks into investments in areas that DRW conducts its business. So we started looking in the space. I remember we led, I think in 2013, or was it '14, we already led a company that was trying to enable credit card purchases of Bitcoin. Again, maybe too early. But yeah, we started looking into the space and, you know, together with Don met quite a lot of people and that really helped start shaping some of the thesis to what is needed. You know, I think early on Don and I were talking a lot about clearinghouse for crypto assets. Back then to make it more capital efficient. But it's really that idea that really started to help us think about, well, what are the fundamental blocks that are needed to even think about collateral or facilitate those type of activities on-chain, which led really to the birth of Digital Asset.

Yeah, maybe, guys, I'd love to hear the original— so you launched Digital Asset in 2014. What was the original idea? Was it that crypto and capital markets would converge, or what's the— lay out the big thesis for us.

I could take a step and Don can supplement. I mean, again, I think that early on, if you really think about what did it mean, and even for the most part, it still is today, probably slightly better, but still is. If you look at crypto compared to traditional markets, it's not as capital efficient. The way that you deploy capital across the different exchanges, there's no real prime brokerage. You know, everybody gets to see all of your activity. So I think the original thesis was to create a company that will create an infrastructure to make it more capital efficient to conduct business on-chain and really start from Bitcoin and then for other assets. And it's really through the first two years that we understood that there is no real underlying infrastructure that can help facilitate that. And that's why in 2016, we wrote the white paper for Canton. But, you know, I think the first year and a half, two years were really anchored around what does it mean to conduct, you know, trading and capital deployment on-chain, which was and probably still is not as efficient compared to capital markets.

Don, I'd love to hear your thoughts on this.

Yeah, I mean, the— I guess one of the things that I was thinking about in, uh, in 2014 was, um, the inefficiency. You know, there, there are inefficiencies in traditional finance, and there are also inefficiencies in crypto. And, you know, there are advantages in traditional finance, and then there are advantages in crypto. And so leveraging the best of both worlds to create more efficient market infrastructure is is a big opportunity. And I think that that's really where we came out of that initial exploration and that led to the white paper in 2016.

Yeah. If you go back to 2016 and the white paper, 'cause I remember founding Blockworks in 2017 and Digital Asset existed. I didn't know what Canton was, but I knew Digital Asset and I knew who Yuval was. And you guys had a brand of, yeah, I don't really know what they're doing on-chain, but like all of the big institutions work with digital asset when they want to do things in crypto. That was the brand. That was like the one-liner. That was the brand. How did you guys think about would TradFi and crypto converge or would crypto like eat TradFi? Were they competitive? Were they symbiotic? Like, how did you think about that relationship?

I mean, my, my belief was that, uh, so, so at the time there was this broad consensus that, um, TradFi would never engage with public blockchains, right?

Uh, JP Morgan had, um, whatever that was called, their private chain. Like, there's all the private chains.

Yeah, yeah, still, still do. Yeah. Um, and, and my view was that public chains, the resilience that you get from moving and the benefits of decentralization that you get from moving to public chains, that eventually traditional financial institutions would embrace that. That was obviously a very unpopular view at the time. So it doesn't entirely answer your question, but I guess that that, um, you know, I think it's more of a convergence, convergence thesis than a one-eats-the-other thesis.

Yeah, I, I, my view is that no different than in every other technology, any wave of new tech will always take out of business those that first of all resist it for the sake of resisting it, and second of all, if you're just in the business of saying doing something is really hard, that's why I'm in existence, tech will, will kind of take you out. Meaning, if you're saying, hey, I'm the only one who can bring investors to companies, eventually someone will find a better, more efficient mousetrap, and you will get out of business, right? So, so just saying connecting A to B is not necessarily a sustainable business model. And, and I don't think that here it's any new, right? So if you think about, like, for example, what Mike Cagney have done with Figure. He just said, look, I can actually fund HELOCs in a more efficient manner. If you look at what Broadridge did on Canton, they're saying we can mobilize collateral more efficient. You can— and we can keep on giving examples. At the end of the day, they're not necessarily taking out of business. They're just saying we can, we can operate a business model that we all know in a more efficient manner. And those that will not take advantage of the technology, they will be taken out of business. So to me, it was never either crypto is going to eat, you know, TradFi or vice versa. It's more the rails of crypto are going to become the new rails. And those that don't embrace them are just going to get out of business because they will not be able to be competitive.

Why did you guys decide to build your own rails? Like, at what point did you say, Let's go build our own rails instead of, you know, we could just use Ethereum or we could use— I mean, you guys were around in 2020, like there are all the chains like Avalanche and Solana, like, why not just use one of those chains?

My view is, and you know, on a recent panel I was asked like, if I could go back and change time, what would have been one of the changes that I would recommend to the industry? And it was what we wrote in 2016, which until like suddenly it's in the last few months it's became popular, is that, you know, if I think that what this industry have missed big time is that in order to make Bitcoin works, which is a censorship resistance that doesn't have a centralized issuer, you have pseudo-anonymous kind of privacy, meaning you get to see everyone's account balances, but you don't supposedly know who they are. In many cases, most people know most of the wallet addresses and who they belong to, but let's just assume that you don't. When you start thinking about real-world assets and how businesses conduct themselves, to us, privacy is like a must-have. And this is not just an institutional regulated thing. If you regulate it, you have legal requirements to protect your client information and activity. If you are a public company, you have fiduciary duties to kind of make sure you defend kind of your activities so people don't take advantage of that information. But I would also say that retail, like us individuals, would much rather having privacy rather than not. And therefore, you know, The reason to build it is because most publicly traded or public permissionless chains at their core do not have privacy as a core tenet. And our view was that you need to have that as a core of your offering in order to make institutional adoption natively on-chain a viable thing. The second thing is that, and this is not going to be very popular what I'm about to say, but one of the things that crypto likes to pitch to the world is that it's immutable. Like we all say, crypto is immutable. That's why you should use it. And I say it's true until the next hack happens. And then we convince a lot of validators to reverse that hack. And, you know, suddenly it's not immutable. And the reality is, again, if you're trying to bring businesses natively on-chain, I think that some of the building blocks of crypto haven't been designed to put real-world assets natively on-chain. In most cases that you will see today, most of the assets actually exist in the TradFi world. So what you end up happening when you're trading these tokens is you're really having to take a lot of trust on intermediaries rather than the issuer directly saying that this is your native asset on-chain. So there's, there's a few just core components in some of the architectures and designs of some of the public permissionless chains out there that we just believe were not going to be comparable compatible with bringing real-world activity natively on-chain.

Yeah, and, and I think, you know, one of the— not all use cases require privacy. Um, and so, you know, one of the things that people love about Polymarket is you can see, you know, who has what positions in, in which prediction market and who's making the most money. And, and, you know, even in equity trading, some people like that. They like this kind of gamification of like who's winning and who's losing, and let's watch it in real time and all this kind of stuff. Um, however, that's completely incompatible with institutional finance. Um, Institutions that hold large positions in equities that are maybe below the reporting requirement, or even if they're above the reporting requirement, right? That reporting only gets updated monthly. But for the most part, people are below the reporting thresholds. And if they had to broadcast to the world every time, you know, if they started selling a big position in an equity, you know, that would have— that would cause a lot of market impact, and that's just completely inconsistent with, you know, the best interests of the asset owners, of the investors. So, you know, having that privacy embedded as kind of a core piece of the of the blockchain was something that we viewed as essential to making it useful.

Yeah. Have you found that that's actually the case when talking to customers, Don? Like, are there clients or institutions who tell you, hey, look, Don, like, we get it, we get crypto, we get, you know, we want to move on-chain, we want to trade on-chain, but the number one reason we can't do it is privacy?

100%. Yeah. I mean, There's broad consensus from people in traditional finance that the last thing they would want to do is publish to the world trades they're doing in real time, or, you know, even their collateral and variation margin movement. Nobody, nobody wants to publicize that.

I'll take it one step further, uh, Jason. I mean, like, just think about, like, all these publicly traded companies that have analysts over and over trying to figure out what is their activity. Like, just imagine that now, like, everybody's so excited about stablecoins. Now imagine that they all, they all know kind of like all of the payments and which wallets they came from. And everybody just got to see all of your activity. It's just not, it's just not compatible with how these businesses conduct themselves and how they operate their business.

Yeah. Yuval, do you think the big major use case at the beginning is trading? For something, for like, for Canton specifically.

So I don't, I don't think that it's just trading, although I think that trading and maybe activities related to trading are just going to be much easier to onboard, mainly because a lot of those, uh, um, participants— and I'll let Don talk for himself, but like, I'll give you an example. Imagine that you could start moving assets that you want to trade on crypto exchanges just with privacy, or you could move stablecoins in and out with privacy, or you could now move from US Treasuries into stablecoins and extract the maximum amount of yield, uh, because when you sit on stablecoins right now, you don't necessarily get yield. I think all of those things are things that the current participants in the market would highly value. So the, the delta of convincing them to do that is much smaller. That being said, I can tell you that we operate in insurance, sports wagering, mortgages, commodities, and many other places where they are seeing the value. I just think that like the delta to understand the value of privacy and what you can do if you actually bring assets properly on-chain is going to be a small incremental delta for those that are already participating in the market.

Hmm.

Yeah, I'm curious maybe to dig deeper into privacy. Like, it seems like privacy is clearly a big problem. Maybe one could say the big problem in the industry today, but it's, it's unclear what the solution is, right? You have like privacy coins like Zcash are kind of ripping. You have, you know, ZK infra like Starknet and ZKSync and Sasynt and other people. You have encrypted computation like You know, some— Arseum is doing it, but then you also have like what you guys are doing. So I guess my question is like, I'm not smart enough to know who wins that game. Like, tell me why your approach to privacy is the best approach.

Sure. So I think that— and have a lot of respect for Zooko and what they've achieved with Zcash. I think that it's important to understand that to me, cash which is an extremely important asset class. The value of cash is if I carry it in my wallet, nobody knows that it's in my wallet. If I went on the street or in a private room and gave it to Don, nobody knows that that transfer have ever taken place. Right. And that's why still the biggest asset in the world for certain activity is cash. Right. It's not really traceable. I still think that as a human right, it's critical that we have that capability. So I think that to me, Zcash and assets like that are the equivalent of cash on-chain. And I'm not here to share necessarily a view whether it's a good thing or not, but just to understand that is not Like, if that is not compatible with how people think about electronic movements of money in today's regulation, whether we like it or not, if you are a bank, you need to, in order to comply with regulation, know exactly who sent to who under what conditions. There's a Bank Secrecy Act that says that above certain sizes, you have to report that to the regulator. Those are the laws as they are today. So to me, zero knowledge is more anonymity rather than privacy. To me, privacy is saying I can still comply with all of the rules, but if you are not a party to the transaction, you don't need to know about it. Meaning if I send money to Don, only Don, myself, and the issuer of the money need to know about that transaction. And if the issuer needs to comply with regulation, meaning I sent Don over $10,000, they can still do that because they get to know about that transaction. But Jason Yanowitz, you are not necessarily part of that transaction, so you wouldn't ever know that it's in existence. So I think the privacy for us, the definition of privacy is the ability to share information on a need-to-know basis, where in many cases people will call things privacy, but really what they're talking about is anonymity, meaning nobody gets to see what is happening inside the transaction.

Huh. So what you're talking about is the ability to toggle on and off if you need to?

It's the ability to determine who are the people that can see what's in the transaction. The other thing is, and I think that a lot of people will recognize it happen multiple times already, but I give this example. The inability to really see the inputs of a transaction to me is not a good thing in financial services, meaning if I have an, um, an outcome that is dependent on the inputs being correct, as a market participant, I would want to see these inputs myself. I don't want to trust an algorithm to tell me, don't worry, the inputs are fine. And sometimes I give this example. Imagine you had a black box for zero knowledge that said, we can all provide collateral in there, and the black box says the collateral is there, it's fine. And we call that algorithm Sam Bankman-Fried. Said, yeah, the collateral is just there. The day suddenly that the market melts down and suddenly you need to call in the collateral and you find out that there was a bug, and people could have minted collateral out of thin air. You know, that's a possibility that have happened already in some ZK implementations. And that's why to us, privacy is the ability for everyone to see that what is claimed to be there is actually there, rather than to trust some kind of a black box to tell you that it's fine.

I'd love to get a little deeper into the Canton story. And maybe here, one of the big questions that I hear asked about Canton is why did it take so long to launch or what have they been doing for the last 8 years? Right. So the white paper was 2016. It's now coming up on the end of 2025. Maybe, Don, I'd throw this one to you. Like, how did you think about— I mean, there's— so you guys are a trading firm, right? So you're the thing that you value, like you look at your bottom line and how much money you're making. You probably could have made a lot of money by launching a coin in 2020. Done some market making on it, number goes up a lot in 2021. Like, why didn't you do that?

Yeah, I mean, the goal here was to create a blockchain that would actually be used by large financial institutions. And so there are two things that you need to achieve that. One is the technology needs to have the right characteristics. And so we've been talking about that. The other is that you need to approach it in a very thoughtful, conservative, compliant manner. And, um, and so we decided that we needed to launch this as a private permission chain and wait until the market was ready to, uh, and, and by market I mean large institutions were ready to transact on public chains. And so, uh, you know, I, I think that we could have— we definitely could have, uh, you know, made a lot of money, you know, selling a token in, in 2020, um, and we would have immediately lost, uh, every single institution that was doing stuff on the chain. Um, and so, so we were just— we just said, you know, the, the goal here is to— is to— we're driving for the end outcome. End outcome, the goal is for Canton to be the kind of go-to, uh, the go-to chain for traditional finance. And, um, so one, we were super patient, um, uh, and, you know, we didn't— it didn't become a public chain until last summer, uh, and two You know, there was no pre-mine. Um, we, uh, you know, launched it with zero tokens outstanding and, and, you know, the validators on the network started to earn, earn tokens. And, uh, I, I still, you know, even though we could have made a lot of money in 2020 and 2021, I think that this absolutely was the right way to go about it.

Yeah, I think that Don talks a lot about kind of the market participants that we wanted to engage. I actually will bring another element to it, which is once you launch a network, there's no going back and it's actually really hard to change the fundamentals. And I think that, and just the name Canton, the idea of Canton is really a network of networks. And the nice thing about what Don said is it didn't prevent from us going after the long-term value, which is really like all of these implementations that to date were private now can upgrade to the current version of Canton and still be fully interoperable, right? Fully interoperable with all of the other players that are playing on public Canton. And the nice thing is it allowed us to really think about What does privacy look like? How do you build applications in a network of networks? Like the current architecture of Canton is probably like second or third generation. And once you launch a public chain, it's really hard to go back. I really don't envy public permissionless chains that do have a substantial amount of developers and applications really thinking of how to introduce privacy right now. Without a wholesale change of architecture, which in my opinion will kill the chain by itself. So I think that—

What will kill the chain, Yuval?

Asking effectively everybody who built to rethink their entire application stack, having to rebuild everything from the ground up. Right. And the nice thing is that we actually were able to have customers build applications in their own silos. Um, like I said, insurance, mortgages, commodities, sports wagering. And now if they upgrade to the current version of Canton, which they're all doing for the most part, now they can actually— if let's say tomorrow there was a stablecoin, which there are now, there's, you know, there are multiple stablecoins— but if tomorrow there was also some banks that provided payments through Canton, they can all benefit from that. So, you know, I think that Don came from the very practical of the type of organizations that we wanted to engage, but it also allows you to have a lot of flexibility on really learning and seeing what works and what doesn't work. I'll give you an example. Tokenomics, I think, have been one of the biggest challenges for chains out there that, you know, if you're an application that became successful on a very large chain, there's really no economic incentives for you, given the compatibility of wallets and all the DeFi protocols, not to just launch your own L1 or L2, however you call it, right? And gather all of the fees to yourself. Like, why would you send all of your fees to someone else if you're doing the hard work? So there have been actually quite a lot of benefits sitting on the sideline and seeing what else is going out there.

So can I ask the inverse of that question, which is, after all of these years, how do you pick, you know, Q4 of 2025 to launch? Why is now the right time?

Interesting. You know, I keep on telling people we actually launched Canton in the previous administration. So a lot of times people think like, oh, Donald Trump got elected and that's what made us launch. We actually launched before, but we're super happy that we have the current administration. So for us, we launched Canton when we felt that it was right. We launched it, like I said, under the previous administration, and our view was we've done everything right. We've gotten the technology to a maturity level that we were confident was in a way that can hold itself without having to rely on any specific company to continue the development. We showed that it works in production for quite some time. We thought about the tokenomics. We thought we can do a fair launch without having to sell any tokens to everyone. So we went through the checklist and it was just the right time to launch it. So we did. The other thing, and again, I'm not going to talk about necessarily listing dates, but again, the other thing is a community for us launching a chain. With, again, a promise of what you will deliver in the future was not something that we were interested in doing. So the focus after launching the public chain was to actually build and bring utility to the chain. Only when you get to a certain amount of scale, also infrastructure support, custodians, you know, bridges, all kinds of other DEXs, different types of complements to the network. When that is going to get to the right level of maturity, we will actually engage with exchanges in terms of listing.

Can I ask you guys about the fundraise? So you guys raised $135 million. You guys have had many fundraisers, obviously, but there was a June fundraise, I think it was $135 million and then— $145 million.

$145 million. It was $135 million and then a $10 couple of weeks after.

Oh, there you go. Okay. So, you know, DRW led, but I think it was— I think Tradeweb co-led. There was— I mean, there's some crazy names. There's like BNP, DTCC, Goldman, Liberty, Virtu, Citadel, just, you know, a lot of crypto-native names as well. Paxos, Polychain, Circle Ventures, folks like that. For the tradfi names, many of those are names that I've never seen invest in a crypto company. How did that actually— Don, is that you picking up the phone and telling your buddy at DTCC, hey, you got to do this thing, or is this— how does a fundraise like that come together?

Well, I mean, I mean, some of these names were already on the cap table, right? DTCC, Goldman, to name a couple, were already on the cap table. And, and, you know, Goldman had already built their digital asset issuance platform on top of Canton. And so this was just, you know, a kind of reaffirmation that yes, we want to lean in, um, you know, what you guys have accomplished so far makes sense, and, and we're excited about the next leg of the journey. But, but to your point, I, I mean, the thing that actually was most exciting to me was that we got that, you know, I mean, like Citadel was a new name on the cap table. And, you know, so we got this mix of very important TradFi institutions along with some very important crypto-native organizations. And to have that group of people come together in the same, you know, in the same round, in the same initiative is obviously extremely rare.

Yeah, yeah.

And if I, if I can add, Jason, I mean, to me, um, I can tell you that at least the, the, at least the surprise— and, and I'm not trying to speak on their behalf— but when we started listing the, the number of projects that are happening on Canton to some of the new names, they were pretty surprised that they've never heard of those projects or of that type of activity on Canton. And then suddenly when they saw and had conversations with those companies that, you know, reaffirmed those projects, I think it was extremely exciting that there are people that are actually running real-world businesses on top of a network. And that actually also led— I mean, a few, a couple of months ago, we made the first native US Treasury on-chain transaction, a lot of those names have participated or will be participating in said activity. And therefore, I think that when you actually understand how markets work and what are the considerations that those type of firms think about, it's a much easier conversation than going and saying, we're just going to reinvent capital markets. At that level, right?

Yeah.

Or we're going to put Wall Street on-chain. I mean, to me, I think that it sounds good, but actually understanding what's the next layer below that is more critical.

I mean, let's go there. Let's talk about the scope and the scale here. Don, I saw there's a quote that someone had sent me that said, I think you had said it, said in the next 5 years, I think tokenization will become the rule, not the exception. And You know, for people listening, hopefully people listening know DTCC, but for those who don't, the DTC provides settlement services for basically all broker-to-broker equity and listed corporate and debt transactions in the US, like all institutional trades, money market instruments, equities, etc. settle via the DTCC. And you guys can correct me if I'm wrong there, but I mean, it's a massive—

Yeah, you're short—

you're shortchanging them. They do much more than that.

Okay.

They also clear all the equities market and they also are the central—

They were the original blockchain. It all clears everything. So yeah.

And they're also the central security deposit for all of those assets. And that's an important component.

Don, talk to me about the scope and the scale that you're going after here and what you think is realistic in the next couple of years.

Yeah. So I think that, that, um, if you could move stuff, move tokenized, you know, if you can move on-chain treasuries, equities, munis, corporate bonds, um, instantaneously, 24/7, and you can, uh, do financing transactions instantaneously versus, you know, tokenized dollars, whatever form those wind up taking, um, that the efficiencies that that unlocks, as well as the additional resilience that that lends to traditional financial markets, is just so compelling that as soon as you can get the kinks worked out, I think that there will be a rush towards that. And that's what we're going for. And I do believe— I mean, I spoke on a panel at the at the Washington Fed last week. And, and what I said there was, I think that most instruments that are frequently traded will be traded on-chain within the next 5 years. And that's what I think this technology facilitates. And that's, you know, DTCC's involvement in this is is a precursor, you know, a prerequisite to, to moving towards that.

Don, do you think it's just a stepping— do you think, uh, almost replicating these assets or tokenizing them is just a stepping stone to the eventual end goal of issuing these assets directly on chains?

So, um, uh, you know, maybe. Um, I, I think that there are two ways that this can go. You can You can keep DTCC in the mix and you can go through the regular issuance platform. And obviously there are competitors to DTCC. And so you can do that. And then those organizations, DTCC can put them on-chain and then they're freely traded or individual companies could issue their stock directly on-chain. I do worry about a lack of fungibility and a proliferation of CUSIPs. If you have kind of, you know, 5 different flavors of the same name that aren't readily collapsible, uh, that maybe are traded in different ways, that could be super disruptive. So I, I'm not sure exactly how this is how this is going to evolve.

I'll bring an interesting example from an issuance we had in the fixed income space a while back where we reached out to one of the prominent asset managers and they were fine putting $50 million into the issuance. And then we said, great, you can have your own wallet, connect to the platform. They're like, what do you mean connect? To the platform directly through a wallet? And we're like, yeah, you could just have a wallet. And they're like, no, no, no, no, no, we, we use X custodian to manage our assets. I like, well, that's the nice thing, now you don't need X custodian. And they're like, dude, we run, manage X trillions of dollars of assets, so do you want us to have all these pipes and all of these reports and all of these audit reports and regulatory reports and all of these things that we need to do for the X trillions of dollars that we need to manage. And then we're going to have a wallet for this $50 million. And I think that the reason why I bring this example is, yes, I am certain that new issuance will come directly into these things. But that will happen at scale. And maybe the critical word is at scale, is once you have proved the pipes for the big players that they can participate without disrupting their business, right? Because again, if you start thinking about the DTCC, I think if I remember correctly, it's like $80 trillion worth of assets that sits on their books right now. So what, we're like What is like the most successful IPO recently? Circle, $30-something billion. So we're going to have the $80 trillion and then $33 billion like differently. It's just not realistic. So I think that the reason why we're very excited about what we've done with the DTCC, it actually allows you to start showing that you can use better settlement and management pipes under the hood. But also try to have not as much disruption on the front end of how those large traditional asset managers interact with these digital assets.

Yuval, what do you think is the— it seems like TradFi and crypto are kind of converging here, right? You have like, you know, stocks trading on Hyperliquid and Galaxy tokenizing their equity. You have also the inverse, which is like Nasdaq saying maybe one day you can trade, you know, tokens on their exchange. Like, what is the end state of this, do you think?

Well, I would say that stocks do not trade on those platforms yet. Uh, exposures to those stocks may be traded on those platforms, no different than you could trade, uh, exposure like leverage single name ETFs. These are not the securities. And I think that that's an important thing, is because to me the true convergence is when you'll actually be able to trade Apple the actual Apple share on those platforms that you are actually, if you hold the token, you are entitled to all the rights as an investor of Apple. I'll give you an example. You know, like how, I don't know if you remember, but like it was always like this, like you would own one Berkshire Hathaway stock. So you get invited to their annual conference because all investors would have. Well, currently these tokens, you wouldn't be invited because you're not the investor. So the goal is really to say, well, if I own one token of BURQ, I do get invited to that conference because I am entitled to the same rights. I think that when that happens is when you're going to see massive influx of both institutional and retail to this space, because you could enumerate on more than just two hands the benefits, both at the retail level and the institutional level, of being able to move these assets 24/7 in real time. And we probably don't have enough time. So to me, the true convergence will happen when you could actually manage and hold legal tender natively on-chain.

Hmm.

Don, do you think your crypto business could ever get bigger than your traditional business?

Well, I, I think the question is, what, what is crypto, right? Where do you draw the line? If, if equities are tokenized, do you now call that crypto? Like, I don't think so. I, I think that— I think it's just on-chain equities.

Huh. Um, and so who makes markets for the on-chain equities, Cumberland or DRW?

On-chain equities are— that, that liquidity is provided by, uh, by a DRW team.

Yeah.

And, and we did have that internal discussion of where should that belong.

Yeah, yeah, that's an, that's an interesting chat. Where else, I mean, how else are you thinking about just your business developing as this, as this space grows?

Well, here, I, I mean, I mean, one of the big questions is going to be what does that, what, what does this do to, uh, equity market structure? And, you know, you, you mentioned equities trading on hyper liquid. I mean, I think it's mostly single stock perpetual futures, which are obviously a derivative. There are some, you know, kind of what I describe as tokenized IOUs that represent different names that are trading on some venues. But, you know, right now there's this market structure legislation that's floating around. And if you look at the you know, how it proposes to treat DeFi protocols for equity trading. There's a— right now, I think the current language has a big carve-out. So, you know, if that goes through as is, then that's going to really change how the equity business behaves. Well, we're going to have to rethink a lot of things. So, um, you know, but there's going to be convergence in many different ways. I mean, obviously the, uh, the launch of the Bitcoin ETF was, uh, you know, a huge boon to our ETF trading business. Um, and that's something that, you know, where the ETF business was able to collaborate with the, with the crypto team. And, and, um, there's just going to be more and more of that type of of kind of cross, uh, cross-area collaboration that's needed as these things converge.

Yeah. Yeah. Maybe tying this whole conversation back together and getting back into Canton a little bit, Yuval, I'd love to just hear about the progress so far. So, um, I'm looking at a PolyMarket that says like pretty likely that a token launches the relatively near future. I'm looking at a— I think this is—

where is it trading?

Let's see. Yeah, I guess you're not allowed to trade on that market. 95% chance you guys launch a token in 2025. Let's see. I think this is from the TIE, which shows like 550 validators. Maybe is that what it's showing? You've got a bunch of different, like 20 to 30 apps, maybe it looks like. So Maybe just give me like a State of the Union on what's going on in Canton right now.

Yeah, so the biggest focus for me, and I would think for Don as well, I mean, listen, like I said, I'm not going to talk about listing. I think that for us, whether listing were to take place or not, pre and post listing, the focus is going to be how do we bring real-world utility on-chain. So whether it's stablecoin payments with privacy, whether it's collateral mobility for trading activity, so I can move collateral 24/7 with privacy. And then it's continuing to add as many more high-quality real-world assets as raw material for those builders to be able to interact with. So whether it's treasuries, equities, uh, um, private equity, private credit, insurance, All of those things, I think, are going to be really good assets that will allow you to really build that crypto user experience for assets that are not just crypto native. That's just going to continue being the focus. We've had— I would say that we are extremely ahead of schedule. I would tell you that if I were to look at the projections of where we were hoping to be right now, in terms of transactions per second, in terms from an activity perspective, number of validators, we're probably 5 to 10x range ahead of schedule. And to me, that's just really exciting. I think that the tokenomics going towards those that build and participate in the network have been a huge boost for the organic growth. And that's, that's just kind of where we're going to continue to focus on. I am extremely excited that on the foundation level, I mean, there are people in probably north of 40 people every week that talk about how to make Canton better. And that is growing. We're going to have more committees in the, in the foundation. The newest one that is being created is around collateral management. There's a few other use cases that will come, and it's really about creating standards and then starting to build and bring more builders to the chain.

On the builder side, Yuval, are you looking for existing apps? Like, do you want Aave and Fantom to come deploy, or do you want new builders, new founders to come?

Yeah, listen, I think that existing builders like Stani have built an incredible platform with Aave, and we would love for Aave to offer their services on Canton. There are similar services that will become available on Canton, but the nice thing with things that exist is they have a brand and reputation that they know what they're doing and they are credible. But we're also working, you know, very, very happy to see that, like I said, a lot of the new builders have been actually able to even fund some of their development by joining Canton early on and participating in the tokenomics. So it's also exciting to see that new businesses are popping out as a result of participating in Canton early on. For example, there's multiple DEXs that launched exclusively on Canton on day one. And, you know, I think you're going to see some very interesting innovation there of actually being able to provide, you know, DEXs with privacy. On-chain.

Yeah. Don, this might be a stretch of a question here, but I just read this Ribbit Capital piece that kind of tied together like LLM tokens, like, you know, compute tokens with crypto tokens. And I don't know if you've read it yet, but I can send it to you. It's quite a good piece. So this is on my mind and I, yeah, I saw one of your— I think it was a tweet or an article or something that you were quoted in that said compute will become the world's biggest commodity. In the next 5 years. And I'm curious if you thought about how that thesis of compute becoming the world's biggest commodity ties in with crypto tokens and what you're building with Canton. And, or, or are these two separate worlds and you don't think about the convergence?

No, listen, I, I thought that the Ribbit piece was great, and, and I think that they make a very compelling, you know, it's a very compelling narrative of why there are these things are, uh, really, there's a ton of overlap. And so, yeah, what I said, I think it was on the Odd Lots podcast a couple of weeks ago, I said that our thesis is that compute will be the largest commodity within 10 years. And, you know, and so, you know, we launched two sister companies. One is Compute Exchange and one is Silicon Data. Which is focused on any and all data associated with compute and aims to create viable indices to launch derivatives on compute. And so, yeah, I think that thinking about tokens in terms of, you know, that interaction between information content and, um, and, you know, compute and crypto tokens. I do think that there's just a broad convergence there and, and, um, a lot of really interesting, uh, interplay that, that is happening and will continue to happen.

Yeah. Yeah, it's interesting. I'm not entirely sure how it comes together, but, um, yeah, I'm excited for it. Yuval, have you thought about this much?

Not necessarily compute, but I think that there is going to be— and talking about the market structure disruptions, I think that, um, I think we're going to see a lot of new financial instruments being created on-chain with agents behind them managing kind of like portfolio construction and those type of things. So I actually see quite a lot of opportunity to innovate. And then another thing that where we see AI intersect is that, you know, we kind of accept that, you know, the value of blockchain is that it's, you know, a single source of truth. And I always say to people, well, there's risks to that, you know. If your single source of truth is not really good, uh, you have just blindly trust that bad data is kind of the source of truth. Um, so we're seeing a lot of cases where people that build on Canton use AI to kind of like bring much more confidence into the data that goes into the ledger.

Yeah.

Hey, one thing I'd love to get your take on is, uh, Don, I saw you had a market structure tweet after the, you know, big liquidations of a couple weeks ago. Uh, one, one thing my co-founder and I were talking about is, um, implementing like a circuit breaker basically. And what is a circuit breaker in crypto? A, a good idea or a bad idea, and B, is it even feasible? And I'd love to get your thought on that.

Yeah, listen, I think that circuit breakers in any market are a terrible idea.

Terrible idea in any market.

Terrible idea in any market. I mean, it just prevents price discovery. It prevents risk management. Now, something that the CME has done that I think is, is, uh, you know, can be appropriate at times is this kind of these very brief pauses that can be for seconds that let the order book just kind of collect itself. But obviously, I mean, crypto trades across numerous venues and they're not, you know, there isn't a common global crypto regulator. And of course, a lot of this stuff is in the DeFi space. And so you're not— we have to just agree that there isn't going to be one rule that's imposed across all of these platforms. Now, I do think— I mean, some of the things that I pointed out in that tweet is that platforms should avoid having obvious conflicts of interest. And one of the things that they should be thoughtful about is How do they make sure that customers, you know, leveraged market participants are able to effectively move collateral around when necessary? And how do they make sure that oracles are reliable, that liquidations are done in a fair manner? You know, all those things are very important for the development of the market. Ultimately, I think that the platforms that innovate the best in those areas are going to be the ones that become the most trusted and will win. So I don't think that this is something that where we need the, I don't know, IMF to start globally regulating crypto platforms or something crazy. I do believe that the market will solve these problems.

Yeah. Don, are you swept up in the prediction market craze?

Uh, swept up. So I was excited about prediction markets before anybody cared about prediction markets. And, and there was a platform that had some, you know, some, some prediction markets on it that we were providing liquidity in and nobody cared. I mean, nobody cared. And, and so, And then when Augur launched, I was like, oh, this is really cool. I love prediction markets. Maybe this is going to be the thing that causes prediction markets to take off. And obviously nobody cared. And it really wasn't until Polymarket came along and made the whole thing more user-friendly that people started to care. And I think we're in early innings. In the development of prediction markets. So yeah, I'm— I— and like right now, you know, no institution wants to— again, I mean, to this privacy point— wants to go on Polymarket and make some big, you know, transparent, uh, you know, trades, uh, about, you know, what they think. At least most people don't want to. Some people like to go and put on big positions and then tweet about it, but but most don't. And, and certainly most don't want to broadcast to the market when they're accumulating a position. And so, so I do think, you know, there's a, a use case for some of these things to be totally transparent. I think it brings along like this kind of gamification that a lot of people love. But some of these markets are going to be traded in a more institutional manner and They're so useful. Yeah.

Yeah. I was thinking about prediction markets in light of just learning about Canton because there are many funds I think that would love to play in prediction markets right now, but probably can't.

Yeah. I mean, I think somebody, whoever launches a prediction market on Canton first is probably going to attract some institutional use. Yeah. Yeah.

You've all done, this has been great. Anything that we should have talked about that we didn't talk about? About?

Why we call this quadrillions?

Tell me.

What?

Tell me.

Well, I think that it's time for the crypto industry to kind of embrace, and you know, we've had interesting interaction with some of the platforms. I don't know if you saw the exchange between Cagney and DeFi Llama about the size of the opportunity is so big. That we are still in like the very, very first part of the first inning. And really, we need to start measuring things, not in the billions, but in the trillions. So originally, we wanted to call it trillions. But, you know, I think, I think that it's really just to kind of explain that there is a much bigger world out there. And like, we're going to capture it.

Yeah, yeah. Quadrillions is 15 zeros, folks, in case you haven't been paying attention.

So yeah, I think that after the mistaken mint of $300 trillion of a stablecoin, we figured trillions wasn't big enough.

Not big enough. Exactly.

We need to step it up. Yeah.

Well, Don, Yuval, congrats on everything. Don, you built an awesome firm and it's been cool to see you guys grow in crypto. And Yuval, congrats on Canton. And I think a lot of people are rooting for you guys right now. And yeah, I hope everyone enjoyed episode 1 of Quadrillions. We got 5 more of these bad boys. So we got some really good episodes lined up and yeah, keep listening. Thanks, folks.

Awesome. Thank you. Thanks. Nice talking to you.