Why Apollo Created Their Onchain Credit Fund | Christine Moy, Carlos Domingo & Tarun Chitra

I'm excited about more, more traditional assets on-chain, but I'm more excited about what are the experiences we can develop. In a future world, like, I could have a portfolio designed just for me, like, just to my risk profile, just to my spending profile, that says every penny of my earnings is yielding up until the moment that I use it. And that is absolutely a 10x experience compared to, like, what exists today. I think it's really interesting that we're here, you know, sort of building the foundational pieces to actually, like, what will be 10x financial financial services in the future. At least that's what I'm building towards.

This episode is brought to you by ZKSync. Join the Elastic Network today at zk-sync.io/empire. Thanks to ZKSync for making today's episode possible. I wanted to take a moment to tell you about Focal by FalconX, the AI-powered insights engine built for institutional crypto. By leveraging AI, Focal empowers institutional investors to streamline research, anticipate market shifts, and make sharper investment decisions. You'll hear more about Focal later in the show. Hey guys, Jason Yanowitz here. Just to let you know, we have Permissionless 4 coming up in June from the 24th to the 26th at Industry City in Brooklyn. This is a conference for the developers and builders where we'll be focusing on the DeFi Renaissance, applications, token design, and much more. Click the link in the show notes to grab your ticket today and use code EMPIRE10 10% off. All right, everyone, welcome back to Empire. We have a very special episode, one that I have been trying to— some of these folks have been trying to get to do an Empire episode for years, and we finally made it happen. We have, uh, Christine Moy, who is the partner, head of digital assets, data, and AI strategy at Apollo. We have Carlos, uh, the founder and CEO of Securitize. We also have Tarun, who needs no introduction, founder and CEO of Gauntlet. So welcome to the show, folks.

Thanks for coming up.

Really excited to be here.

Finally, finally, Christine, been trying to do this for years now. I'm very excited about this.

I was just waiting for this moment. Just waiting.

This is the moment. This is a big moment in time, actually. And so what we're going to be talking about— I sent out this tweet the other day. It was about private credit is coming on-chain. I got more DMs saying like, what does that actually mean? What— like, say more about private credit on-chain. A couple of days later, the three of you and some other great partners launched Acred. Um, which is bringing credit on chain. So I thought this would be a perfect opportunity to talk about this. Um, Christine, I think I'll pick on you to actually just give us a primer on private credit. And the reason I'll pick on you is hopefully some Empire listeners are familiar with Apollo. Um, but if you're not, it's a, uh, give or take $750 billion fund, the 800-pound gorilla in this space. Um, and so I'd love for you to maybe give us, just give us the primer on before even on-chain private credit. Just tell us about private credit.

Yeah, sure. Um, you know, private credit means many different things to different people, so I'll just start by saying that private credit is any type of lending that happens outside of the public bond markets. So we're talking about mortgages, business loans, asset-backed financing. Uh, it's, it's actually how companies, real estate developers, and borrowers of all types get access to capital without going through traditional banks or issuing public debt. Lending of this type of private credit lending was once dominated by banks, but over the last decade and a half, especially after the financial crises, firms like Apollo have stepped in to meet that demand, probably with more efficiency and more flexibility than what banks can typically offer. And so, you know, for Apollo, as you mentioned, we are a $750 billion asset manager with businesses not only in credit, but also equities, real assets, and retirement services. In the context of private credit, we're not just a buyer of credit, we're actually one of the world's largest originators of private credit, actively creating loans and financing solutions across the entire economy. So like Apollo, we have 16 distinct originations platforms that we've either incubated and created or invested in or acquired, and we touch every part of the credit markets, like from corporate lending to consumer lending, aircraft leasing, uh, real estate, uh, mortgage financing, insurance, the whole, like, the whole spectrum of credit risk across many different industries. And so, you know, for our part at Apollo, um, you know, through this credit, we help drive the financial system forward because we're providing essential credit to companies, uh, for, for companies and, uh, you know, basically entities to thrive. And then, you know, I guess the distinctive Apollo thing is that we capture excess spread. We generate more return per unit of risk than others by sourcing our credit deals directly through these proprietary originations channels rather than just buying credit on the market like other asset managers do. So that's like kind of one of the really distinct things about Apollo as a business that we have proprietary originations, we have it at scale across industries. For our part, many companies have been working with us to develop creative financing solutions because like, you know, we essentially have like the whole toolkit and we're, you know, quite flexible in sort of how we can build solutions for companies and to help grow their businesses. And then the other significant thing is, you know, for our part, especially as investors and for those that invest with Apollo, we have significant alignment. And this is a differentiation with asset managers as well. In that, you know, we definitely can't guarantee returns of, you know, the things that we're investing in, but we can guarantee that we are investing alongside the investors who invest in Apollo, as in our actual balance sheet capital is being allocated to the same investments, to the same, uh, credits that we're allocating to our funds. And, and, and that's really differentiated. So, you know, our philosophy in investing is purchase price matters, like we're, we are historically value investors. Structure matters, And alignment matters. And so, you know, basically, you know, we're not, we're not chasing yield blindly. Like, we're really focused on how we structure our deals and how we, you know, basically structure those deals with significant downside protection for ourselves and then also for investors.

Let's, let's get into this product. I'm going to read— I'm on Securitize's website right now. I'm going to read the press release because it's a mouthful. And then I'm going to need one of you guys to explain what this product actually is. So, uh, Securitize and Gauntlet have launched a levered RWA strategy powered by Morpho using Acred on Polygon, the tokenized version of an Apollo-managed multi-asset credit fund, and Securitize's S-token vault technology. So while crypto folks might know what that is, tell me in layman's terms Maybe Carlos, I'd pass it to you. What did you guys just launch? What is this product?

All right, let's break it into pieces first. The first piece is that we have a high-quality credit product from Apollo. That's the word. The second piece is that we've put this on-chain through tokenization, and that's the role we did. And the third piece is that we need to be able to figure out how to borrow on-chain using a DeFi protocol like Morpho against a tokenized private credit fund, which naturally, it's a permission token because it represents a security while the DeFi protocols are permissionless and anonymous. And then the fourth piece is somebody needs to manage the process, the liquidity, et cetera, which is where Tarun and his team come into. So this is kind of like the stimulus. So we have a private credit, we put it on-chain, Then this whole sToken thing that we mentioned on the press release is basically a mechanism that we have to basically be able to mint a permissionless token that can interact with DeFi out of a permission asset like the Accredit fund. This token basically tells you that the asset exists. So the investor has actually purchased the tokenized fund, and the tokenized fund is basically locked into a vault for as long as this sToken thing is sitting on the DeFi protocol. So you're not going to be able to rehypothecate get it and lend against twice. And in case you need to liquidate it, you know where to go to liquidate it. Because also, in DeFi, you need to have a liquidation mechanism. And then the final portion, and maybe Tarun can go into more detail, is how do you recursively iterate this loop? So I have 100 units of private credit that yields 10%, then I borrow USDC against 80% of it at 6%. Interest rate. So now I have 80 units and I earn 10%, but I owe 6%. Then you go and purchase more of the other one. And then you kind of keep recursively iterating and creating like a leverage position that gives you a much higher yield than the original asset. So that's the summary of what we have. The 4 players, if you want, which is Apollo, us, Gauntlet, and Morpho have brought together on top of the Polygon blockchain.

So Christine, maybe I'd actually throw it to you to just, you know, we've known each other for a while. You used to, before Apollo, you were running crypto and blockchain at JPMorgan. Why does this, and I think since DeFi Summer, you started to get pretty excited about moving some of this stuff on-chain. Why does this matter?

Yeah, I mean, I would say tokenization of real-world assets has been my life's work at this point. I've been working at it for a decade, as mentioned, been at Apollo here for 3 years, but previously spent almost a decade at JPMorgan building out their blockchain program, um, and like quite proud of the work that I did there. Tokenized treasuries, tokenized dollars. I think to date, some of the systems that I've created, like Intraday Repo, have tokenized over $2 trillion on permissioned Ethereum blockchain networks. Um, and so, you know, I've spent a lot of time, you know, kind of thinking about the intersection of CeFi and DeFi, if you will. Um, I think the case for tokenization is rooted in like how we fundamentally modernize the creation, the distribution, and the management of assets. You know, I think, you know, overall, like the way that it started in 2016, 2017 was that, you know, tokenization most obviously would bring automation and, you know, the reduction of reconciliation and the reduction of cost to the administration of assets. Like that was sort of the starting point for how like a lot of the TradFi institutions, you know, justified like their journey in blockchain, if you will.

Will.

But I think over time, what we've learned in the past few years of, of doing tokenization is that the unlock is so much more. It's so much more than the cost savings. I mean, the cost savings, the automation, the reduction of the reconciliation, like it's table stakes, if you will. And, and by the way, it's important table stakes because, you know, what really what you're talking about is for an institution that adopts tokenization, you have the killer cost base. In that your cost base is like near zero scale compared to the operations of significant financial institutions that have thousands of people working in operations and finance, reconciliating, doing low-value tasks, if you will. However, overall, tokenization, I think, brings together really important things like multi-asset interoperability. And you started mentioning it when we were talking about sort of the beginnings of stablecoins and the broad adoption that we have there, sort of the drift towards like treasury tokens and money market tokens that, you know, pioneers like BlackRock and Securitize and others have driven. Um, now, you know, kind of adding another layer to the cake with Apollo's private credit fund, and, you know, we'll see what's next. But essentially what we're doing is that we are creating multi-asset interoperability, allowing different assets to be programmable, programmable together on the same operating system. And that's really powerful, right? Because especially as someone who spent like a decade in like sort of the trenches, like the underbelly of, of TradFi operations, what you learn is that different assets live in different siloed systems. They don't interact. Well, first of all, like on their own, they're on an overnight batch basis, like, and, you know, take multiple days to settle. They don't interact with each other. And so if you're exchanging one asset for another, like, that's like an operational nightmare unless you invest in bespoke technology to connect them. But in our case, like, here, uh, we're bringing all these assets. It doesn't matter if you're born on-chain or if you were, you know, tokenized on-chain from like a legacy system. You're all in the same operating system. Um, and basically, you know, you're able to program unique experiences. Like, you're able to essentially, like, you know, have the Lego blocks, if you will, of, you know, like, taking assets, taking waterfalls, and programming them at the scale that you can to build, like, software.

Um, and so, yeah, let me ask you one thing on this. So, like, okay, let's say I'm a 70-year-old manager of a private credit fund who's worked on Wall Street for 40 years, and I'm like, Lego blocks?

Like, interoperability?

The reason I asked this is because last week I was talking to a 70-year-old manager of a private credit fund, uh, and I was talking about kind of using the language I think that Christine is using, and he said, I have zero clue what you're talking about. He said, I've— he said, he said, you know what I want? I want more people investing in my fund.

Yeah, so I was just kind of talking through like why tokenization or what you get from tokenization, but why, uh, at Apollo we're tokenizing our funds. We're really focused on expanding access to private markets. As we mentioned, like, or I, as I mentioned, like, we're in the business of generating excess spread per unit of risk. This is alpha that we generate that for our investors that have historically just been the domain of large sovereign wealth funds and institutions. And now we're focused on expanding this alpha generation for a broader audience that are not necessarily sovereign wealth funds and pension funds, et cetera. And significantly, I'm focused on reaching the next generation of investors that very clearly is crypto native and wants to have a total diversified portfolio on-chain. Um, and so, you know, part of this also is like a discovery on, you know, like this— like anyone that you speak to that is like of this generation, they are, they are growing quickly, growing to become like the future leaders of the world. They will also inherit wealth as well, as well as create their own. The way they invest is not the same way as the way our parents invested or our grandparents invested. Their first investment was probably Bitcoin and like, you know, some NFT and like some altcoin, right? I'm not going to use any profane language, right? So like, they have no pro— like preconceived notions of what are the markets. And in fact, they, you know, are drawn to the crypto market. So, you know, like to net it, I would say that like the reason why tokenization is compelling is We're learning about the next generation of investors. We're modifying and, um, you know, evolving our products to, you know, kind of accommodate that. And then more significantly, expanding people's ability to access alpha generation.

Mm-hmm.

Uh, Giano, uh, one thing I will add to, you could say to a 70-year-old asset manager that wants to increase their AUM is that one way you could increase your AUM is if you could produce higher returns, right? It's pretty obvious. So, if you have a credit fund and your credit fund is returning 8% to 10%, and there is a mechanism that investors can access the credit fund and then lever it to go to 15%, 20%, they will actually generate more AUM for you because levered means you're going to borrow money to invest more in your fund. And you could actually see it with the first strategy we deployed. We have X amount of millions of dollars in the Acreit fund, and that went up by X percent because by leveraging, we have to purchase more of the same asset. That's how you actually increase the yield, right? So, that increases the AUM. Now, the question is, how do you actually do that efficiently and safely, right? And if you were in traditional finance, it would be like a complete nightmare. So, you will have to go to this 70-year-old person, you will have to talk to the investment manager or somebody in the back office of their firm, You have to say, I want to subscribe to this fund. It will take you like 2 weeks to get the subscription process and settle the trade done. Then you got to find somebody that wants to lend you money against the asset. Then once you find that person, it's going to take another 2 weeks for them to send you the loan back with the loan papers and the cash in the bank. Then you have to go back to the same 70-year-old asset manager and say, I want to resubscribe to your fund for 80% of the previous amount because I got more dollars. And it's going to take another 2 weeks. Then you have to go back to the lender. Another 2 weeks, and then you have to figure out how to manage all these positions in a way that if you need to liquidate them, you can actually do it in an efficient way, which might not even be feasible because maybe the liquidity profile of the asset is not there, or you cannot unwind the loans quickly because they're all paper-based, they're not automated, etc. So, I think it's—

Oh, I was going to say, one day, I'm going to be a 70-year-old asset manager. Will you keep me current?

I shouldn't have said the 70-year-old part.

I'm regretting it already. To your point about is this for crypto natives? Is for everybody. Well, today is for crypto native because you have to be crypto native to interact. But the same way that we're taking crypto native stuff like Bitcoin and creating ETFs that anybody can access to, there is a world where you take these structured products that you can create with people like Gauntlet and Morpho and us, et cetera. And then you repackage it in a way that a tradfi person can just click a button and boom, invest and then be invested on that particular strategy that somebody else is managing for them. And then you don't need to understand crypto because I think if what we're building in crypto is only for crypto natives that have known how to use wallets and smart contracts and stuff like that, it's not going to scale, right? So you need to use the technology, but then you need to repackage it in a way that you abstract out the complexity of the technology.

Yeah. The only thing I would say is, if I were talking to the 70-year-old, I would say two things. One is, how hard is it for you to get LP and GP loans? How hard is it for your LPs to borrow against their positions and finance themselves, maybe to commit to your next fund, maybe to invest in another investment. Generally speaking, LP and GP loans are kind of a pain in the ass. And Carlos kind of gave you the reason. A, there's a legal document at every step. B, there's sort of like a waiting time in between. It's not, oftentimes you can't subscribe whenever you want. There's not this kind of like continuous thing where it's like, hey, I want to give you another dollar. I want to redeem 50 cents. I want to give you another $10. You can't really do this kind of like back and forth. And then I think the third thing that's really important is that credit quality and credit standards are very different in traditional finance versus on-chain. I think in general, lending against LP stakes is a, a very established business in traditional finance, but it's kind of one where Generally speaking, I think the risk premium is extremely high because you're forcing the lender to take this kind of very high duration risk. And usually it's a single lender. So usually you can't pool together many lenders. And I think one really important thing about the crypto aspect here is in crypto, you basically, you know, when you think about, uh, the, the kind of vehicles for doing this, and maybe I'm front running your questions, like vaults. They're effectively creating SPVs for a particular strategy. And, and, and I think like in some ways that makes it a lot easier than in traditional finance where it's like, oh, I have to figure out like what legal entity has to own this thing in order for me to borrow against it. And oh, does that legal entity exist somewhere where I have to think about the tax considerations more efficiently? And like, I think there's a lot of stuff that these kind of on-chain kind of vehicles actually do a lot better that people are probably not thinking about.

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Yeah, for sure. So imagine you are a subscriber to Acred on-chain. So let's just start with like, hey, there's a smart contract that Securitize has made that allows you to mint shares in Acred.

And I should have said this, ACRD is Apollo Diversified Credit Securitized Fund token, right?

Correct.

So we, we have taken, we have created a tokenized version of the actual Apollo fund that contains the same underlying of the TradFi fund. And that, as Tarun said, you can subscribe on-chain to mint the token that represents the LP interest in the fund, depending on how much money you've put in.

Yeah.

All right. Back to you, Tarun.

So you have, you have this RWA, you know, the RWA every quarter, let's say pays you a 5% coupon. I'm making up the numbers just so we keep examples simple. Now you say, hey, I would love to get 10%. I would love to get 2x leverage. I want to borrow against my RWA position, uh, borrow some cash and maybe I would reinvest it in, in the RWA. And so this is where I was talking about sort of this this notion of LPGP loans, which is what I would tell the 70-year-old, like, you have definitely done that as a fund manager who's survived that long. And so the question is like, how hard has it been for you? And so the idea is you can, you can take your RWA and just like a crypto asset, you can deposit it into the vault. And when you deposit into a vault, all the people on Morpho who are supplying USDC, to, uh, earn yield can actually now lend to you. And the role of the curator and the vault manager is to say, hey, this is how much USDC we want. This is sort of the loan-to-value. Like, you know, if you have $100 of the RWA, are we going to let you borrow $50 against it? Are we going to let you borrow $80 against it? That sort of loan-to-value ratio is an important feature of, you know, how much leverage you can get. And so what you can do after that is you, you know, you deposit your RWA collateral, you borrow, say, $50 against your $100 of RWA. You take that $50 and you mint more RWA shares. And now you notionally have $150 of RWA, but you're also obviously paying a carry cost in that you're paying borrow. Um, and the main thing is that in that process, you have had to create new RWA shares. And to crypto-native people, that sounds like, who cares? That's calling a mint function, or that's like calling, you know, like, that's like, I staked and I got new tokens, right? It's not— it seems like such an obvious thing. In traditional finance, that process is extremely slow and annoying and like, you know, not fun. And the idea that you can kind of do that repeatedly to do this type of leverage without you know, to Carlos's point earlier, each time you want to get leverage, you probably have to have this like back and forth, get another legal agreement. You know, the fund manager might be like, hey, show me who your lender is before I let you mint. And let me do some diligence on them. I think like in general, the fact that crypto lending is overcollateralized makes this a lot easier. Obviously, you have to manage liquidity and know how much leverage makes sense. But the other thing I think that's actually really important to think about the DeFi/TradFi interface is that things in TradFi tend to be these kind of discrete time things, right? Like the private credit fund will usually offer you liquidity on some regular time interval. It'll also pay you dividends or, or kind of yield on a regular time interval. So for instance, you might get a payment every month. Crypto people have been, and just generally the internet has been born off people having demand deposits whenever they want. And this is not just in crypto, this is in fintech too, right? Like arguably most fintech companies are effectively a wrapper for the end user that handles this continuous time to discrete time payoff, right? Like I can go to my bank account online. And, or I can go to say Square or Venmo and I can send someone money immediately, right? But in reality, what is Venmo getting paid for, right? They're getting paid for holding their duration risk of like, oh, I'm going to hold this amount of money, wait till the bank opens, submit the transaction, kind of, uh, and then handle it for the user. But to the user, they make it look like that settlement process already happened immediately. And in some ways, I think the, the crypto to TradFi interface is also going to have the same kind of duration matching problem, right? Of you have these funds that are offering you a lot of yield, but they're not paying you yield continuously, like staking yield. They're not paying you yield continuously, like a lending protocol, where you can just deposit immediately or withdraw immediately. And so I think the original DeFi protocols of 2019, 2020 were so focused on pooling everyone together, pooling all the loans together, pooling all the borrowers together, that you couldn't do this kind of duration matching as easily. Right? You couldn't, you couldn't say like, hey, Apollo has a loan that pays me monthly. Someone else has a loan that pays me every 3 months. Uh, well, we're just going to put them all together and, you know, the credit quality is the same. Obviously that's not, that's just not going to end up being a great deal for either the borrower or the lender. And in general, I think what, how DeFi has evolved is it's figured out how to isolate things. And now you can kind of do this. you know, tradfi, discrete time, fixed duration type of product matching with crypto continuous whenever you want to deposit or withdraw.

Let me ask something on that turn, because I think I'm following you. Okay. So here, let me, let me repeat it back. I just want to make sure I'm following. So you've got Acred, Acred is collateral. Acred gets tokenized into sAcred via Securitize. sAcred is deposited into a Gauntlet-curated vault. The vault then borrows USDC via Morpho. The USDC is then used to buy more Acred and you repeat basically within Gauntlet's risk framework. So my two questions, um, there, and these might be really dumb questions, would— one, one is like, this is just a levered up strategy. So how do you think about the risk management there? And then the second, and you're talking about duration, um, like traditional credit funds settle, I don't know, monthly or quarterly. But a vault, I would guess, reprices collateral on a block-by-block basis. So how do you reconcile that duration and liquidity mismatch in Gauntlet's models?

Yes. Can I—

oh, yes, go ahead.

I just want to add something to that because before the vault comes into play, which is what Tarun is doing, there is another complexity which Tarun mentioned, which is the TradFi funds, whether it's Accret or you know, a money market fund or something like that, are not 24/7 instant mintable and they don't have a real-time NAV. That's not how they are. But crypto protocols assume that you can mint things instantly or with as much higher frequency and that you have real-time NAV information, etc. So when people talk about tokenization, they think, oh, this is just like issuing a token that represents something. And there's actually like a complete misunderstanding of the complexity involved. In basically bridging this gap, operational gap between assets that are on-chain that are, for the most part, instant, 24/7 available, et cetera, and the underlying, which is not like that. And there's this gap you have to cover it. And some of the way you cover the gap is technical. Some of the cover— the COVID the gap is not just technical, it's things like transfer agency. What do you think when you issue shares and you the share of the underlying is not available yet. How do you account for that? This is fund admin. This is why we purchased a fund admin business, because fund admin is a huge component of, you know, the tokenized version is not 100% going to replicate the NAV of the underlying because there's a mismatch in terms of issuance of each asset and how money gets deposited here and gets invested there, etc. So that bridging that gap to try to take TradFi into crypto and make the tokenized assets crypto-friendly, it's a— there's a huge complexity involved that most people don't understand, which is why, by the way, solving for those things actually allows people like Tarun to be able to create this vault and use it. And it doesn't necessarily work for first generation of tokenized assets that we were doing, which were basically replicating the same TradFi processes and not having crypto-friendly, you know, processes.

Yeah, I mean, I think maybe a trite way of putting it is the first versions of RWAs were a lot closer to NFTs and the second version were a lot closer to meme coins in the sense of they had more liquidity. They kind of, it's like a lot easier to deal with composability-wise and you don't have to build a whole separate stack. You know, like I think, you know, NFTs had to build their own total separate stack and then once people stopped using them, like that, that stack also kind of fell. And so I think being able to have this kind of liquidity aspect to RWAs, I think was just not there. I mean, Christine probably can speak to that.

Christine's like, I love this meme coin comparison to what we're doing. This is great for my compliance team.

Yeah, exactly. Not exactly the same.

I will say that this is the difference is because we went from Christine said at the beginning, there are tokenized assets bring two advantages. One, one is pure efficiency or we're using a better ledger. And therefore, because this ledger is better, then we have less reconciliation issues. We have a single source of truth. We reduce some operational manual work that can be automated, et cetera. That's more like an efficiency play. This new generation of RWAs, at least from our side, we're focusing on how the tokenized asset is better. And that's something that the non-tokenized asset doesn't do, which creates new products like the products we're doing here with Tarun and his team. This is a new product. Basically, the vault that Gauntlet manages, you can see that as a different product, as a structured product that happens to use Acreed behind the scenes, but it's a different product. You could just subscribe for that. You don't have to forget about Acreed. Behind the scenes, there is a buying of Acreed, but in reality, you should think of it as I'm buying a new structured product that is a leveraged Apollo Credit Fund, the same way that there is 10x ETFs and these normal ETFs, right? Then you have an ETF and you have a 10x ETF and you pick the one you want depending on your appetite for risk. And then in innovation, innovations that create new products versus innovations that provide efficiency for existing products are— innovation that creates new products are 100 times better. And they go really, really, really big because it's a much more important process because you basically expand the, the, you know, what the products do as opposed to make them the same product, but just better. So yeah.

And also, if I might add, like, and I think this is Tarun's point as well, like the fact that we are making traditional assets interoperable with open architecture is the key point. Um, in that we don't, like, I think as Tarun said, uh, and as Carlo sort of built on the early generations of RWA tokenization, you know, my work included, were, you know, kind of like bespoke systems that, you know, were behind walled gardens. I think the power of building something and enabling assets on an open architecture is that the speed, the velocity of innovation is incredible, right? So like if you, if you think about it, like, you know, when, when you think about innovation at a large financial services, at a large bank, you have like one team and they have like one set of ideas and they have like a waterfall process, takes like a while for it to get tech, to get prioritized from a budget perspective. It takes at least a year to build, um, let alone like kind of get production right. I mean, the velocity of innovation in the crypto space is, is significant because what you have is open source code, open architecture that's well understood, um, you have smart contract libraries that have already been audited and are composable. And this is the Lego blocks part that maybe the 70-year-old doesn't understand. But like, you can put together things that have already been battle-tested and usable in new ways. And then you have teams that have a diversity of experience and background coming together with a common mission of building the future of finance. And so like, you know, this is at least like what we've experienced in launching this. Are watching Tarun and Carlos launch this and that, seeing Gauntlet, Securitize, Morpho, Polygon all come together and very professionally and single-mindedly mission-focused to come together and develop something new that, like I said, all of us TradFi people in tokenization have been dreaming about for the entirety of the time that we've been building. If we weren't focused on building traditional assets on open architecture, then we might as well have just been building Web2 software or we might as well have just been, you know, kind of doing like the things that we're doing conventionally. So I feel like we're really at the, at the edge of like where, you know, this all of my life's work will accelerate.

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So, Tarun, maybe Tarun needs to address the risk management portion of your question because we digress from that. I think it's an important component here.

I would say one way of thinking about, again, I want kind of compare the traditional finance risk management to on-chain risk management in that traditional finance for these types of products thinks in terms of a fixed duration. They think in terms of payback periods. They think in terms of subscription times. They think in terms of withdrawal requirement. Like, you know, you can't redeem whenever you want. And on-chain, everyone thinks in terms of continuous time, right? They're like, I have a perp, I'm paying a fee, I'm earning a fee, I have, I'm paying a fee, right? No one thinks in terms of these like fixed durations, like discrete times, like, oh, I have a 1-month expiry type of product, right? I think the failure of options to some extent in crypto is related to this. But one reason this is important is the risk management actually boils down to figuring out how to do this kind of continuous time, like crypto on-chain thing. Versus discrete time, I'm paying you quarterly type of thing. And you can think of how you think about RWA lending is, hey, on day 0, you know, you subscribe on day 30, you get, you know, a yield coupon, you get 5% or something. On day 60, maybe you get 2%. On day 90, you get 8%, right? Like whether it's explicitly paid or whether it's burned by dividends, let's ignore kind of the complexity, but You can intuitively think about it as like, I own this asset on a certain frequency. I either get direct payments or I get, um, kind of, you know, the, the supply changes. Now, when you're borrowing or lending against this, you basically have to think about people who are suppliers in the market. They are getting a continuous interest rate, right? So if you go deposit on Morpho right now as a supplier, you might see 3% interest and then, you know, in 2 minutes you might see 3.7% interest and 2 minutes later you might see 1.5% interest, right? Like there's a variable interest. And one important thing is you should really be thinking about lending against these kinds of fixed rate products using these variable rate products as almost like selling an interest rate swap. You're, you're trading this kind of like variable rate product for this fixed rate product. And you need, just like in the normal interest rate swap market, you need to account for the liquidity of the fixed rate product, right? Like if the fixed rate product has no liquidity, then you have to be very careful about how you think about how much of the variable rate product you're willing to allocate against it. And so a lot of the way we think about the risk for RWAs is how reliable is the fixed rate product? You know, how, how much can you trust that you get this particular dividend stream? And then based on that, how do you split that dividend stream across the continuous time so that the, the depositors, they're able to be like, okay, I can deposit and withdraw kind of freely. Um, you know, I'm not totally locked in, you know, my capital didn't get so locked into this discrete time thing that I have to wait. You know, if say there's $100 that is available to be lent, and all $100 was lent against Acred, then, you know, depositors who are like, I put in money to earn some yield, suddenly couldn't withdraw, right? It's already locked into this loan. So you have to think about these liquidity constraints. And I think in a lot of ways, the RWA to DeFi problem is a lot like interest rate swaps. And that's really the first order model you should have for the risk of this is is this variable-to-fix transformation? Because I think fundamentally, that's the hardest part. Obviously, you have a ton of risk in terms of issuer risk in general, right? Like, the issuer could rug you. They could not pay, dot, dot, dot. Obviously, in the Apollo case, I think no one's really worried about that. But I think there's a long tail of issuers. And in many cases, you do not want to do this. But if you have confidence in the dividend stream, the fixed rate portion, then you can start thinking about the risk and liquidity profile of your users in terms of how frequently are people depositing and withdrawing? What does the interest rate curve look like so that it's attractive to lever? But then also, how do you make sure that the depositors aren't locked in for too long and that they can withdraw? And this boils down to looking like an interest rate swap.

Tarun, how do you think about liquidation cascading? And like who actually sells the underlying credit and like how are redemption gates and kind of like the smart contract liquidations coordinated? Like, tell me about the— because leverage good on the way up, leverage maybe we've seen it be bad in crypto on the way down. How does that liquidation cascade?

Yeah, so I think one important thing to understand about RWAs is they're not like your traditional DeFi liquidation. Well, it's funny to call it traditional, but they're not like your traditional— I was just thinking that.

I was like, I was like mocking.

There's DeFi liquidation.

I was like, Aave liquidations have become the norm in my head. And then there's— yeah.

Yeah. So, so basically, A, first off, you need whitelisted liquidators, right? You need someone who's actually able to redeem the S token. And Carlos can talk a little bit about the redemption process from S tokens.

We'll talk about that next.

Yeah. Yeah. Uh, but, but you need someone who's able to redeem for the underlying and willing to hold to maturity. So they have to basically redeem, you know, someone's loan defaults, there's a bunch of S token, they redeem it, then they have to hold until the next redemption period. And so the liquidator actually does hold duration risk, right? There's no flash loan for liquidating an RWA effectively. And generally speaking, again, this boils down to credit quality, like how much does the liquidator trust that they're going to get the fixed payments? How much do they trust the issuer? And The other thing that's actually kind of important to note is that basically you have to— there's no like immediate price for this, to Carlos's earlier point, like, right? You have this kind of infrequent nav oracle that is maybe it's daily even, but it's not— it might not be like, you know, the most— you might not want to actually use it as the correct liquidation price. You may want to use a trailing 30-day average. You may want to use a TWAP of it, because it's kind of this thing where it doesn't move and then it jumps depending on credit quality, depending on the quality of the asset. And so the liquidator is also taking this kind of, that type of risk, right? It's not an asset whose price is spot priced in the last block. It really is kind of this kind of slow thing. So the liquidators are taking credit risk, right? They are They're a credit risk lender, but arguably they are doing it for an asset that has a real yield, right? Like versus an asset that doesn't, and the cascade is actually much worse because in these kind of on-chain things, there is actually a much tighter loop between the price of the asset and the thing being liquidated. And that causes the cascade very quickly, right? Like I buy, I buy the collateral from the lending protocol. I immediately send it, sell it in the DEX. Maybe it pushes the DEX price down 10%, and then that causes some other loans to go down. You don't have that immediate feedback loop. So from a liquidator standpoint, it's actually more attractive if you're willing to trust the credit quality of the, uh, asset. And so, yeah, Carlos probably should, should probably mention the redemption process.

Yeah, there is a lot of, uh, things here to touch, but, um, yes. So one of the challenges we've had. To try to figure out how to integrate RWAs with DeFi is that first, the RWAs themselves are not necessarily, you know, real-time pricing, real-time minting, real-time liquidation, etc., as DeFi is. So that's— you have to bridge for that. And then the second one, the DeFi protocols themselves are supposed to be, you know, permissionless, where anybody can become a liquidator and liquidator goes and sells the asset because the asset is fully liquid on-chain, etc. And this is not the case for RWAs. So, this sToken construct is a way to kind of try to bridge for that, where, you know, what you're liquidating basically is the sToken, and there's a number of ways we can liquidate for that. We can just mint, you know, the USD, which is liquid, and then they hold the asset as collateral, et cetera. But the liquidators need to be trusted partners, if you want, and trusted sources. And then ultimately, we can liquidate against Apollo. Is it a monthly basis for your fund? So Apollo, the entire— quarterly. The entire fund has a quarterly 5% redemption. And so far, because the tokenized portion is a smaller portion of the total, we fit within that 5%. But that ultimately has to be a holder of Apollo that triggers a liquidation with us that we trigger back with Apollo. And that has to be a whitelisted participant. So there is a number of complexities involved in making this happen, as opposed to pure permissionless liquid assets in crypto that you can use as collateral. I think that what's interesting of this product is that this is the first time that anybody, as far as I know, can actually solve for all these different problems. How to curate the vaults, how to have some mechanism for liquidation that is acceptable, how to integrate the RWAs with the with the vaults, how they leverage the existing USDC pools there to pull liquidity to be able to lend against the asset, et cetera. So this is why this is more— it's a lot. I know you said at the beginning, Jano, that the press release was a mouthful, but there's a lot of complexity in making this happen with multiple components that have been developed over time by different entities that now come together. But yes, liquidation. It's an important thing. And then I will finally say one thing, which was also mentioned here. This is not going to work unless you have reputable issuers, because to some extent, you're taking some risk against the issuer, right? Whether it's duration risk, whether it's the credit risk, whether it's the liquidation risk, et cetera. So, we at Securitize only work with tier 1 asset managers, whether it's Apollo for credit, we also work with Hamilton Lane, we work obviously with BlackRock and other people like that. And then I think that the reason we have more partners that want to use those assets and take some degree of risk of using them as collateral for lending and things like that is because of the quality of the issuers that we work with. There's a lot of private credit in crypto, a lot, that has a lot of defaults very regularly, that they are doing loans to— I remember one, like, a few months ago, one that defaulted was like a loan to Malaysian motorcycle company that was buying motorcycles to create like an Uber for motorcycles in Malaysia. This is great, but those loans obviously pay a very, very high interest but have a very high probability of defaulting. And in the case of defaulting the loan, this is like a complete disaster for this type of projects. Liquidation is a different problem because you basically liquidate the asset and you always have a way to somebody take it, take the credit risk temporarily until they can actually liquidate with Apollo. And as far as Apollo doesn't default on their loans, We're safe in the entire process.

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It's accredited investors.

Accredited investors only.

It's a 2C1 fund for accredited investors in the US. Yeah.

So what kind of investors are buying Acred today? Is it crypto-native Acred investors? Is it crypto funds? Is it credit folks who are doing things on-chain? Like, who are the buyers of this today?

Is it crypto-native? As I mentioned at the beginning, to access these products and benefit from the advantages of, you know, more frequent issuance or more frequent dividend distribution or leverage products through the The Gauntlet Vaults, et cetera, you have to be crypto-native today. So we've gone from, in the past, if you ask me 3 or 4 years ago, we were trying to use tokenization as an efficient mechanism to democratize access to alternative assets, which I still believe ultimately is the goal, that anybody can actually access these products in a more efficient way that tokenization obviously brings you, to kind of like start focusing on crypto first. Because tokenization at the same time adds friction, token management, stablecoins, smart contract interactions and stuff like that, that the non-crypto native are not necessarily ready for. And then the other thing is that crypto now is really big. So it's a huge market, $3+ trillion. As Tarun said, there's $250 billion in stablecoins out there that are lending towards extremely risky volatile assets that could actually be getting a safer yield lending against this type of products, et cetera. So I think that the crypto economy, DeFi also is like $100 billion plus, and DeFi didn't exist at the beginning when we started with tokenization. So this was not even a thing. So I think today we're focusing for crypto. All the customers we have today for Acreit, for Scope, for BitGo, for anything, these are all crypto-native people that are accessing these products as a better way, safer way of generating returns as opposed to some much higher risk strategies that they can still do in crypto that involve dealing with other type of assets.

Is this—

yields that are not correlated to the crypto ecosystem? Um, and then, you know, separately, uh, you know, I think if you, as I mentioned, like the building blocks, it's like, you know, you started with stablecoins, you know, then, then there's, you know, some yielding treasuries and money market assets. And then this is higher yielding than that. So, you know, I think it's, it's about, you know, both corporate treasuries and retail or like accredited investor, semi-retail audiences diversifying, diversifying against crypto exposure and then building like a total portfolio on-chain, if you will.

Yeah, it's also crypto hedge funds that today they basically use DeFi as a way to generate yield, right? Right. And then this is a way that they can generate a pretty decent yield because the credit fund itself is like 8% to 10%. But then with the leverage strategy from GoldenLed, goes much higher. And then, and it's so much safer than generating yield through farming points in VeraChain or whatever, which you can generate yield as well. But, you know, obviously taking other type of risk.

I was talking to, I imagine one of the big users or buyers. I was talking to 3 people who really loved this product when you guys rolled it out. And I was telling them, that you guys were coming on the podcast and they all said that they plan on buying this in size. It's, it's basically 3 different founders who have been in the industry for a very long time, very high net worth individuals who typically get access to like products like this through, you know, they bank with either UBS or Morgan Stanley or JPMorgan, but they're extremely crypto native and either they run funds or they've been running companies in the space for several years and So, it'll be cool to see that start to happen.

Yeah. And by the way, what they will get from JP Morgan or from UBS will be the original Apollo fund, not the leveraged—

Yeah, exactly. Exactly.

Exactly. So, this website you're showing, by the way, these guys are great. We partner very closely with them and they try to track all our products closely and always have updated information. It's just missing Inc. We have also an integration of the Apollo fund with the Kraken website. Chain Inc., which is—

this is just saying this is missing Polygon too, no?

I think they're still working on it. Love the team. They're still working on it. But the overall AUM of the fund is about $100 million, which, which makes it— which is small in the larger scheme of asset management, but it makes it the largest private credit fund on-chain from a traditional asset manager right now.

How many holders make up the $100 million?

I don't remember offhand, but I think the really interesting part about the, the holdings is that you have holdings that are like, you know, in the $10 to $25 million range, but then you also have holdings that are like at the minimum, which is $50,000. Um, and so, you know, that also is super compelling, I think, because it speaks to the scalability of the product in that, like, you know, if you want to do like a $25 million clip, you want to do a $50 million clip, you want to do a $100 million clip, it's like the same process and the same operating costs as a $50,000 clip. And that, that speaks to like our ability to expand access to private markets, as we mentioned.

I think I can answer to that why this discrepancy, because we obviously, obviously I'm not going to disclose here who the holders are because this is confidential information, but we're the broker dealer of the fund. So we obviously see every single investor. We have kind of like two ends of the spectrum. We have individual investors that are accredited investors that are crypto native that actually are investing $50,000 here instead of putting it somewhere else. And then we have a foundation that wants to diversify their treasury management and maybe they already hold like $100 million on a tokenized—

That's what I was wondering.

Is it—

I imagine it's pretty close.

Yeah, yeah, yeah.

And here's the other thing. There's even like a segment of like fintechs that want that, right? Currently they're expanding access to US dollar assets to like, you know, their local region. So let's call it like Africa, Eastern Europe, like some parts of like Southeast Asia where you have like investors that are hungry for US dollar assets and they're already providing access to US dollar stablecoins. It's interesting in that not only is it a crypto diversifier for a broader audience, you know, it's basically like a an access point for, you know, higher yielding US dollar assets, which I like. That was surprising, like to kind of see that just—

well, I'm just checking when we released this. We released this at the end of January. So this has been in the market for slightly over 3 months.

So if I want to buy— if I want to buy that, let's say I get off this podcast, I'm sold.

I don't need to reach out to anybody. You go to our website, Securitas.io, you create your own account there. You have to pass KYC. You have to prove that you're an accredited investor. Similarly, like if you go and buy any other financial services product, this is a brokerage account.

And if I want to loop, like, let's say, does the looping happen? Do you have to KYC every time that loops?

No, no, no, no. This is the beauty. This is what Tarun mentioned. You don't have to resubscribe. You don't have to sign papers again. You don't have to KYC again. You don't have to do anything again. You do it once. You whitelist your wallet with us, and then you buy a crate. And then when you buy a crate, the looping thing It's not like automated on the website. You connect your wallet and click. This will come soon, but for the time being, you just have to reach out to us. And then we will basically send the money to the vault, the Gauntlet vault, to do the looping, and then you will get back all your holdings. But the whole registration process is all online. It's all automated. There's no manual intervention and nothing needs to be done again. You don't have to sign legal documents again. You don't have to KYC again, because otherwise it will get in the way of— you don't have to sign loan agreements because the loans are on-chain.

So what's the yield right now?

Apollo has 9.5%, I think.

And then what about once it— what about if it then—

Tarun, you probably know that better than me.

It's closer to like 16% right now. I mean, it depends on the current interest rate. So this is why I mentioned this like fixed versus variable trade-off. You are getting— when you take the leveraged strategy, You're taking a fixed rate product and you're getting a variable rate product. Why are you getting a variable rate product? You're paying a variable rate interest to DeFi protocol. And so you're— and so, but it's in the 16 to 16 plus percent.

That's cool.

One thing I would just add in terms of this, like crypto native versus not, is if you look at the history of crypto since say 2015-ish, at You kind of have this bull cycle, right? Where you have this huge asset accumulation and then kind of, you know, kind of something pops. And then usually there's always some innovation at the end of each cycle that like keeps people, some fraction of the people who came on chain to search for yield, they keep their assets on chain versus leaving. And, you know, after the ICO boom, you could argue it was sort of like stablecoins and Tether. After the DeFi summer, it was lending protocols. You know, after the NFT boom, maybe you could argue as L1s, but this time it really does feel like people are moving into RWAs, whether directly, like via subscribing to products like this, or whether it's indirectly via, say, buying, you know, things like Athena that hold a lot of Biddle, where they're wrappers around an RWA. And so, you know, I'm not, I'm not, I'm just saying that like from a, a trad fi standpoint, someone who doesn't want to know how Athena works, they may view it that way, right? They might just be like, hey, look, it's basically a wrapper. And I basically think if RWAs become attractive enough and high enough credit quality that it keeps people on chain after a cycle, they kind of serve as this natural baseline yield that people have been talking about in crypto and in general, I don't think has existed, right? Like there hasn't really been some baseline yield. You could tell your 70-year-old private credit fund guy that like, hey, like crypto, if you were willing to use stablecoins, you're guaranteed a 4% yield, just like outside crypto, except it's easier to use. You could never really say that before. And I think like that is sort of hopefully what this current cycle kind of brings.

But by the way, we're digressing, but the Athena comment you made is very relevant because that's exactly what they do with Biddle. They use Biddle to have a baseline yield that depending on where the funding rate is in crypto, they can just make a much higher return with the basis trade or default to the, the Biddle, which is the Fed rate. So, so that's the— so I agree with Tarun, like you're going to have I think money market funds or tokenized treasuries, which is a more accurate terminology, because they're not money market funds, they're private funds, and then private credit, they're kind of like two ends of the spectrum in terms of yield and liquidity for yield-bearing products. And then in between, there's a bunch of other things that we're also working now that are very interesting, because they have yields that are in between, but probably liquidity profiles that are closer to treasuries than credit, et cetera. And then I think What I want to see the next month is like a variety of products in this yield curve, uh, you know, liquidity spectrum, risk spectrum that fulfill all these different use cases as a base layer for people to leverage them to do all this stuff in crypto. That in the case of crypto rates not being where they need to be, they can always default to this set of products depending on your appetite for risk, liquidity, etc.

All right, maybe as we think about rounding out this conversation, guys, I'd love to think about the next like 3 to 5 years. Um, so we've got, right, BlackRock's Biddle kind of proved out treasuries. Um, uh, right, Franklin's done a lot with, uh, money market funds. Um, obviously Christine, you guys are owning this kind of private credit moving on-chain. I'm curious, I don't know who to kind of direct this question to, but curious what asset class is the next domino to fall.

I mean, realistically, if I think about who's having the biggest liquidity crunch right now, it's private equity. I mean, just look at the secondary sales and kind of activity there. Likely, I'm sure a lot of those LPs wish they had easier lending facilities than they do. And I think there's going to be just a— my kind of guess is like crypto is really good at like the zero-duration risk but high-fee market. And I think as you see with private credit, crypto is kind of pushing into the longer-duration risk, medium-fee market. And I kind of think it's going to move in that direction. It doesn't seem like it's going to go to— I don't know if I'm personally, at least, I don't know if I can get excited for the 10th time and 10 years about equities on the blockchain.

I was going to, I mean, can you pick up, can you pick that apart? Cause I've seen a couple of companies raise here. VanEck just did that deal. Like what, what do you think about this equities coming on chain idea?

So it depends on what equities you're talking about. So if you talk about public stocks, um, I think that could be pretty exciting. If so, let's, let me just say something else before. So what Tarun said about private equities having liquidity crunch and people want to borrow against or liquidate their LP stakes, et cetera. And maybe crypto and tokenization could play a role there. That has been the original narrative for tokenization that is particularly well suitable for illiquid assets that you can then provide fractional ownership and then make them more liquid. This is why people got excited about real estate back in the days or about tokenizing paints or like fine art.

But that thesis didn't play out.

It didn't pan out because tokenization doesn't make anything liquid by itself. So if the asset is inherently illiquid, The fact that you put it on a better ledger and you can move it around easily, which is what tokenization does, doesn't actually necessarily mean that this asset is going to become liquid magically overnight. So we've gone in the opposite side of the spectrum. The most successful tokenized asset is the dollar, which are stablecoins. The next most successful one are tokenized treasuries like Biddle, which is again, the next one is still tiny compared to stablecoins. So that has a lot of room to grow. And then we're coming down on the spectrum of yield liquidity, and this is why credit now is taking off, and I believe things in between credit and treasuries will take off. So if you think about what's the other highly liquid asset that exists in the world is public stocks, like US public stocks. Those are the most liquid assets after the dollar, after treasuries. So this is not about tokenizing the, you know, the cap table of securities. I always been told like, oh, why don't you tokenize securities? Sure, for what? Like, who's going to buy that? Like, what I'm going to do with it? It's not going to be liquid. So, does it make sense to do it just to have our cap table on a better ledger like a blockchain, or can I provide any, you know, additional utility and functionality to the token? So, with public stocks, there is a possibility that you can actually do things that you cannot do with today when you buy stocks from Robinhood, which are readily available. So, it's not an accessibility problem necessarily, It's more about, can you do something else? Can you maybe access it from different parts of the world? Can you borrow against them in a more efficient way because they're liquid? Or can you create derivative products that are difficult to create in TradFi, et cetera? So I do think that it ultimately will happen. It's a very challenging thing. I don't know if you guys follow the filings that people are doing to the Crypto Task Force, but there is a huge debate about what type of regulatory rules need to be modified for public stocks to be able to trade on-chain and settle on-chain separated from the national exchanges. So I think from a regulatory perspective, it's very tricky, but it could unlock a lot of new use cases.

I guess I would add one thing, which is like, I want to see centralized perps for equities before I believe that the tokenized things will have demand. Like, you kind of like, that's a much simpler thing to get around. And like, you don't need to ask permission to anybody to do that. Yeah, yeah, yeah. But it's taken forever, right? Like, like there is, it just feels like stuff like that. If you're, especially cause like, I do really think the current equities demand is just like, you do kind of have this like cold start problem with a lot of these on-chain products. And I think it's like really hard to get over the liquidity problems for equities unless you have kind of good redemption. Robinhood, the way you do. Hopefully, right? That's what I'm saying. I want to see that first.

Got to imagine that.

To me, that's the thing. Yeah, yeah, yeah.

I mean, like, I'm excited about more traditional assets on-chain, but I'm more excited about what are the experiences we can develop. So, you know, just a brief example, like today when Apollo pays me like my salary into my bank account, like nothing happens. Like I get like dollars into my account. I like kind of think about how much I have to pay for my credit card bill when I have like a dollar balance left. Nothing really happens to it unless I like take steps, 5 to 10 steps to move it into treasuries. Or, you know, if I was really entrepreneuring, like, I would move it into Apollo Investments. I don't because I'm busy working. Um, like, in a future world, like, I could have a portfolio designed just for me, like, just to my risk profile, just to my spending profile, that says Christine needs, like, 10% of her, you know, account to be stablecoins, 20% to be treasury tokens, 25% levered private credit, 25% like Athena. And then every time I get paid, like direct deposit, like converts into stablecoins, auto-deploys into that pie chart that's customized to my, you know, risk profile. And what that actually means is that every cent of my earnings is fully invested in yielding, like without me having to do anything. And then, you know, if I use like, you know, my crypto wallet connected debit card, I go to Nobu, I like buy sushi, like, you know, that's like an auto-convert from tokenized treasuries into USDC and then like off-ramp to pay the sushi company, then every penny of my earnings is yielding up until the moment that I use it. And that is absolutely a 10x experience compared to like what exists today. Um, and so like that applies to like people in first world countries, it applies to people who are unbanked and underbanked, uh, it applies to corporate treasuries, it applies to DAOs. Like, and so, you know, I think it's really interesting that we're here, you know, sort of building the foundational pieces to actually like what will be 10x financial services in the future. At least that's what I'm building towards.

It's a good vision. That's a good way to end it. Well, Christine, Carlos, Tarun, congrats on, uh, congrats on getting this done. This is such a— I feel like I've been talking to many of you, known many of you for years, and it's cool to finally see the three of you come together and make this happen. So big congrats.

Good. All right, thanks, Jenna.

Thank you so much for the opportunity.