Why Tokenization Doesn't Guarantee Liquidity with Fission

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I think the moment tokenization wins is when you don't talk about it anymore.
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This will all be invisible to the user.
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And so I think that's really the end state of the vision, which is you get access to all these new products that you don't have today, and it works just like all your other stuff works, and you don't even know the technology is there.
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Welcome to Stateful, a Pantera podcast about building and investing in the future of money, markets, and machines.
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I'm your host, Franklin B, and today we have two amazing guests who are transforming private markets through tokenization, liquidity infrastructure, and AI native investment through their company Fission Labs.
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They also happen to be one of our newest portfolio companies at Pantera.
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So I'm excited for the world to learn more about them soon.
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Here we have John Schaefer, CEO of Fission Labs, and Steve Bendit, Chief Revenue Officer at Fission.
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Welcome to the podcast, guys.
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Great to be here.
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Thanks so much for having us, Franklin.
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I'd love to start first with just the origin story of Fission.
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Maybe John walk me through just first your story and journey, and then how you arrived at Fission.
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What did you see and how did it get started?
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Yeah, so I was a traditional finance guy for a number of years as an equity research analyst at Credit Suisse and went to business school and then was a long short investor of 0.72.
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And in the middle of my 0.72 career, kind of switched to private market investing, particularly around market infrastructure, market makers, and things of that nature.
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We got into the crypto space a little bit exploring it.
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And as I saw the new DeFi liquidity technology from Uniswap to the lending protocols, I'm like, this is phenomenally interesting.
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This is stuff that used to take a thousand people to do.
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Now you've got three engineers in a room running it.
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And so I thought that was like phenomenally interesting for really three pieces like global distribution, liquidity for assets, and then lending and borrowing, collateralizing those assets.
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I'm like, those are the material overhaul of how we do those things today versus a traditional traditional market.
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To me, what was cool at the time was no one was really thinking about this for private funds, right?
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And a passion of mine for a long time has been like, how do we actually create access for retail, accredited, broader distribution global markets for these products?
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And I think what always struck me is as huge as the private markets are, the venture markets, right?
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$18 trillion approximately today, they're still broadly fully paper-based markets, right?
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You sign subscription agreements and you want to transfer on paper.
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And it just seemed so funny to me that the most advanced GPs in the world from Blackstone to ARC, it struck me as an opportunity.
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What if we could enable these new liquidity and lending and global distribution technologies by not just tokenized, you know, seeing tokenization, which at the time was mostly Bitcoin and Ethereum and the other L1s and L2s, but what if we actually took that to real world assets?
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What if people could buy a Blackstone or an Apollo fund in a couple clicks, sell it when they want, borrow against it, lever it?
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And that's really how this all started.
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And Steve, I know you've had your own journey too through tokenization and other businesses as well.
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How did you experience that?
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And how did you end up connecting with John?
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Yeah, it's been a it's been a journey for sure.
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I think maybe five, six years ago, I found myself working at more of a traditional transfer agent and a registered ATS trading platform.
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And we were kind of going through the motions on democratization and access to financial assets, private financial assets.
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And I was looking at the back-end infrastructure of the transfer agent at the time, and it was a spreadsheet.
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This was very early on in digital assets and the big rise of crypto.
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And I kind of made a bet on the industry and I said, I think that if blockchain technology is going to take a foothold into traditional finance, it's going to be through the transfer agent.
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And that was really the inflection point that when I got connected with Carlos and Jamie at Securitize, and they had just acquired this big traditional transfer agent, a Pacific stock transfer, and really went over there to help build out what would become today is the infrastructure behind tokenization for these large institutional asset managers.
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That was about five years ago.
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And through my years at Securitize, the biggest realization that I made was really that tokenization doesn't create liquidity and it doesn't create distribution as much as as hard as you try, as much as you want.
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The on-chain distribution is really a function of liquidity, and liquidity in this market needs to be instantiated by a third party that's willing to underwrite that risk.
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And that's a concept that John and I connected on maybe two and a half years ago.
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And he and I first met through a relationship at Securitize.
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He was a client of ours, and we just spent a lot of time talking about the market and the evolution and where it could be in the future and how it gets there.
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And that was ultimately what led the two of us to link up here.
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Yeah, that's awesome.
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It's it's such a good insight that tokenizing and putting something on-chain oftentimes feels like the end goal for a lot of institutions because they obviously want to show that they're keeping up with the times and they want to show that blockchain is part of their strategy.
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But for folks like yourselves who have actually gone through it and helped others go through it, realizing that's only the beginning of the journey.
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And that if we're actually shaping this new set of financial markets, creating the liquidity environment around that is a whole new challenge, right?
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I mean, it's really putting us at the first moments of Wall Street actually coming together and realizing, oh, wait, we have to do that again.
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But this time, hopefully, with better tools and we'll eventually be better products at the end of the day.
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So, you know, today we're announcing the new fundraise for fission.
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And, you know, we're super excited to be leading that at Pintera.
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We'd love to hear for the audience just how did you think about that process?
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How did you think about choosing an investor?
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And what is that series A round going to do for you guys?
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What we were really looking for is investors who understand the crossover between the blockchain technology, but also have the experience in traditional financial markets to understand that this is really evolving into fit techniqueable business models.
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And I think from the very beginning, and as part of Pantera's thesis on this fund in particular, it's very much squarely in that zone.
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I think also just the ability to have the resourcing of your firm and the amount of services and the help that you guys have provided, even to this point, has been fantastic.
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Having real market experts who understand the founders in the space, the talent in the space, the operational requirements in the space is just really super helpful because today it's still a relatively small market, huge opportunity.
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But the number of people who really understand that intersection is a handful.
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And I think Pantera is really forward-thinking on that.
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So we're thrilled to have that.
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In terms of where we're going next, right, this is really about scaling up our activity, right?
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Today we're providing liquidity.
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We've done millions of dollars of transaction volume.
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But we think given the scale of this market, particularly in the semi-liquid alt space, this is a$500 billion market.
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The amount that's tokenized today is relatively small, but there's obviously big gains happening from a regulatory perspective there, notably with ARC.
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More recently, we just actually saw today, Hammond and Lane apply to have their tokenized funds having their 40F funds directly tokenized and then tradable, transferable as well.
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And so we think this is just the beginning of a mega trend of all the major asset managers taking their existing fully regulated US fund structures and tokenizing them, enabling liquidity, enabling leverage and borrow against them, collateralization, enabling global transfer, not just in the US.
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And so most of what we're working on today are the infrastructure requirements to get that to a billion-dollar market.
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As you can imagine, right, and as you well know, it's not just a matter of technical infrastructure, right?
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It's legal infrastructure.
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There's a complex if you want to do this the right way at institutional grade, which we has always been our mindset from the outset.
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There's a lot of regulatory licensing in both the US and non-US that we are pursuing directly or through partnerships.
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So that's a big piece.
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The technical infrastructure to actually serve customers with a user experience that's really good for them.
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Things like onboarding once, receiving block, you know, tokens back on the blockchain they sent from them from.
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So it's a very simple end-to-end process.
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That's a major piece we're investing in on the engineering side.
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And then as you can imagine as well, like the operational support for that, you know, starts to scale as as you're handling more and more issuer tokens.
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And so we're investing a lot in that operating infrastructure as well.
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We're super excited to be partnering with you guys too, because in some sense, it's a shared PTSD, I think, from just the years of talk about tokenization, attempts at securities tokens, seeing the headlines about institutions are coming and them never really actually getting there.
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So much of venture is about timing and having sort of been working on tokenization for 10 plus years now myself.
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It just feels like the right moment.
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Everything's converging from regulation to market players actually showing up, wanting to do real things with real customers.
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And obviously the technology's been there, right?
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But it's been there sort of waiting for all these other things to come together.
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Maybe that's another angle we can go into, which is we've heard multiple times that institutions are finally starting to adopt blockchain, starting to go through tokenization.
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But what are you all seeing that really convinces you that this is not just another set of experiments, another set of proof of concepts, but this is real adoption that's going to keep scaling?
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And I think it's important to note like we're definitely at an inflection point in the market.
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And it's not about the growth of the aggregate market because we're still really early in what that trajectory looks like and the types of assets and the scale at which they can come on chain.
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It's about the caliber of institutions and the products that are that we're seeing come on chain today versus the pilot projects of the last few years.
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We're seeing more real and realistic assets coming on chain with more broad distribution and different types of utility.
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Apollo and securitize, early movers in bringing private credit on chain, still very bullish on A-Cred as an asset and how it can develop into the on-chain economy.
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BlackRock and Ondo coming out with curated portfolio strategies, ArcVX, as John mentioned, opening the door for tokenized venture and private growth.
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And if you look at what's happening in public securities right now, the SEC is really clearing the way for these legacy firms like NICE and DTCC and NASDAQ to capitalize on the development of all the tokenized infrastructure that we've all been working on for the last couple of years.
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And I think that the direction of travel right now is clear.
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Financial asset unit, the financial asset universe is becoming digitally native.
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And we have an opportunity right now in our minds to really change how we think about private markets.
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Even Arc VX is, I think, a major step forward, right?
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That is a product that's up 70%, 80% year over year.
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It gives you exposure to OpenAI and SpaceX and these types of products.
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That's a true digital representation of that's retail accessible and is now like a global.
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That's a big deal.
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You've never been able to buy something that has a 50% plus returns threshold over a year like that in crypto before.
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And that's the last two weeks, right?
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So I think that's a good indicator of where we're moving, right?
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Which is up the yield curve, right?
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We're going into the more exotic assets, but these are also, particularly for blockchain-based investors and non-US blockchain-in-based investors, the stuff they want in on, right?
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They want in on that type of product.
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They want in on Blackstone and Apollo products.
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So I think that as to Steve's point, like a lot of the pilots may not have been exactly fit for purpose and really end user demand.
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I think a lot of what we're seeing next came from the learnings of those, but is now really starting to target what do people really want at scale and targeting really attractive products for the for the first time that a US investor would be happy to purchase as well.
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It's not just kind of like the afterthoughts anymore.
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These are like flagship products.
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Yeah, that's a really good point.
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It's it's something I'd love to get into, which is a lot of the momentum that we've seen around tokenization so far has been around public markets and public, publicly available assets.
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Everything from public equities to US treasuries, money market funds.
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So fission focusing on private markets is pretty contrarian or say opinionated about where we are in the sequence of what will be tokenized next.
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What made you think of private investment funds in particular and semi-liquid funds as well as sort of the most important opportunity for fission to focus on?
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So I think there's kind of two parts.
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One is like we are bullish and supportive of like the public market stuff, right?
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We think that's it's definitely expanding access, particularly globally.
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It's allowing some new things to happen with those tokens that can't happen in a non-tokenized format.
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So we think that's great.
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But at the end of the day, the way I kind of look at it is like, what does the chef have that's new?
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Right.
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And what's really new is alternatives.
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As we discussed, like they're not digitized, let alone tokenized, right?
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That makes their distribution much more manual and frankly problematic.
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And that asset class offers superior returns or in some cases superior risk adjusted returns with lower volatility that should be blended into a public market portfolio.
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The way I look at it is these are adjacencies that are complements.
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And today, most people, or at least in the US, pretty much everyone has access non-US to public equities.
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Non-US can be a little more challenging.
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And I think that's really where the use case is strongest for tokenized equities, just avoiding some of the broker dealer frictions.
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But ultimately, if you really want people to come at scale, I feel like you have to offer something new and attractive.
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And if I can tell you can build not just a portfolio that you could have already built in the US, but now you can build a differentiated portfolio where you own these GP products, again, like Blackstone, Apollo, Arc VX, which you simply couldn't buy before, I think that's much more differentiated than kind of a new iteration of public equities.
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And I think I'm spending a lot of time looking at the tokenization of public equities and being involved in a lot of the back-end infrastructure build-out of what that ultimately looks like.
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At the end of the day, and something that John and I talk about all the time is the public equity markets in the US are incredibly efficient.
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They're some of the most efficient markets in the world.
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Adding blockchain technology doesn't necessarily make them more efficient.
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You're looking at a distribution problem and you're looking at how to make them more accessible to non-US people.
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And what I'm excited about from the tokenization of public equities in the public equities markets is it will create a broader base of users that can be more comfortable with wallet adoption, with holding these types of assets that will then lead to broader distribution.
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And when you look at the private capital markets, when you apply blockchain to it and you condense the back office operations, you're actually making a new marketplace that operates more efficiently than its legacy counterpart.
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And you can tap into the distribution channels that we are naturally going to be creating by opening up some of these channels, opening up some of these doors.
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Yeah, totally.
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It makes me think of two things that we often talk about at Pantera, which is what is the thread of user behavior and user expectations changing?
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And you can almost follow the thread of what are kids doing these days, right?
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They're playing Minecraft and Roblox, and everything they use in terms of money is actually digital assets.
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And so they expect it to be able to process in real time.
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They expect it to be tradable, expect a marketplace to exist.
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And then as they evolve and grow and get their bank accounts and get their own investment portfolios, they're going to expect the same thing from their equities portfolio, right?
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And they're going to expect that all types of assets are going to be available in the same kind of marketplace with the same kind of capabilities.
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So if you just think about that future generation of investors, if assets don't exist in tokenized form, they will be pissed.
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They will have expectations of the kind of system that we are building.
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And so it just gives me more conviction that we're headed in the right direction.
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And then the other thing it makes me think about too is just the sequencing of all these things, right?
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At some level, when people experience the benefits of tokenization, of real-time settlement, of composability through the assets that they're familiar with, suddenly they become so much more open to other assets that they can now operate within and get access to.
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And so it makes total sense that if we're democratizing access to just financial assets more broadly, the biggest zero-to-one jump or sort of the leapfrog opportunity is actually for private markets.
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Totally.
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I mean, and frankly, I want to own that portfolio, right?
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I want to build my semi-liquid venture and PE and private credit exposure.
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I don't really have that broadly.
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And the reality is it's a pain in the ass to get it today.
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I don't want to sign all the forms.
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I don't want to, it's just the frictions from a user experience perspective are really high.
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And I think one of the things people forget is user experience matters a lot, right?
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The iPhone works for a reason.
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It's very simple to use.
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Financial markets, particularly alternatives markets, are not super simple to use today.
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So if we can put it more in a package that's easier to play with, I think the adoption rate's going to spike just as you saw with the app revolution.
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To me, this is the law story.
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And even when you talk to a lot of crypto firms, it's just like the user experience benefit of this is massive.
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It shrinks and compresses so much paper and onboarding and trans book paperwork and all this crazy stuff that no one wants to do.
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Even if you have the money and you're ready to do it, you're just like, oh, it's going to take me a month to do this.
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Forget it.
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Yeah, exactly.
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And to your point, Franklin, like I see this in the future.
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My analogy is always it's going to be like explaining to these kids, downloading music on LimeWire and burning a CD for us back in the 90s.
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It's just, it's going to be this concept that just makes no sense to them.
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Of course, this is the natural progression of how money is going to work and how markets are going to operate.
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Yeah, totally.
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All sounds amazing, but clearly it's not easy to do getting all these assets on chain and making them actually useful.
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One thing that we called out in our latest state of tokenization report, which is a piece of research that we do at Pantera, is this idea of just putting something on chain doesn't make it awesome.
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It's actually a huge challenge to make these assets liquid and actually make them into better, faster, cheaper products at the end of the day.
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Walk us through that.
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What are the actual problems to be solved around the post-tokenization phase for these assets?
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Where do we begin?
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I think one is cross-chain settlement and atomic settlement, right?
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A lot of these assets live on different chains.
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And people, we need unified liquidity infrastructure.
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It doesn't matter whether you're coming from Solana or Ethereum.
00:19:50.319 --> 00:19:57.519
So having an agnostic layer that if someone buys the Ethereum version and they want to receive it in Solana, it can be bridged in an automated way.
00:19:57.680 --> 00:20:00.000
The pricing is the same as if it was all in the same.
00:20:00.079 --> 00:20:07.119
So I think there's a pretty complex cross-chain settlement infrastructure problem that we've built a lot of custom infrastructure around.
00:20:07.440 --> 00:20:12.880
I think the second is actually how to model liquidity for these markets.
00:20:13.359 --> 00:20:20.240
These products, right broadly, these semi-liquid products, don't follow the same valuation methodologies.
00:20:20.480 --> 00:20:24.960
They don't, capital efficiency doesn't work the same way to supply liquidity as it does in equities markets, right?
00:20:25.039 --> 00:20:26.799
These are fundamentally different products.
00:20:27.039 --> 00:20:38.480
And so part of it is also an educational gap as it relates to liquidity providers, where right now there's plenty of for fundamental value, full liquidity, public equities markets, extraordinarily deep.
00:20:38.960 --> 00:20:52.000
For semi-liquid pricing around investment manager navs with gating and redemption cycles and financing, particularly given that was all paper and no one really got into that space.
00:20:52.240 --> 00:21:01.119
There's a gap there, even just about education valuation methodologies, how to price that's making it happening, right?
00:21:01.200 --> 00:21:06.319
And you're seeing a lot of interest from the market makers and lenders and such, but it's a there's a gap there, right?
00:21:06.400 --> 00:21:07.359
That has to be resolved.
00:21:07.519 --> 00:21:12.640
Part of what we do is we build these very complicated AI pricing models based off all kinds of fund data.
00:21:12.799 --> 00:21:16.000
But that's a process, and you really need to have an investment.
00:21:16.079 --> 00:21:17.839
It's not purely a technical process, right?
00:21:17.920 --> 00:21:24.720
You have to have an investment lens to understand how pricing and valuation methodologies and financing rates work for these types of markets.
00:21:24.799 --> 00:21:26.240
So I think there's a gap there.
00:21:26.559 --> 00:21:40.640
And I think one of the really important nuances of how this infrastructure is set up, and something that has been really appealing to a lot of the institutional partners that we've talked about, is we're not fundamentally repricing the underlying assets of these funds.
00:21:40.799 --> 00:21:51.920
We're not looking at a product issued by Apollo and saying we think that this is trading too high and this is the discount price that we're assuming the underlying asset, the underlying basket of assets is.
00:21:52.160 --> 00:21:59.759
We're pricing the duration risk that we as a firm are taking to hold that asset through the next regular redemption window in order.
00:22:00.160 --> 00:22:01.920
To provide an early exit for investors.
00:22:02.000 --> 00:22:08.400
And it's a different way of thinking about providing liquidity on assets that don't function traditionally as liquid assets.
00:22:08.720 --> 00:22:08.880
Right.
00:22:08.960 --> 00:22:12.240
Because like, I mean, you guys, you have your own marks, right?
00:22:12.319 --> 00:22:13.519
You have your own books, right?
00:22:13.680 --> 00:22:21.279
That it's very difficult in alts markets to actually look into a portfolio of 50 private assets.
00:22:21.440 --> 00:22:25.200
At the end of the day, you have to rely on the investment managers, navs.
00:22:25.440 --> 00:22:28.960
Now, that doesn't mean that you don't price risk, right?
00:22:29.119 --> 00:22:34.079
And that you don't price risk associated with nav, but you're not going to revalue their portfolios.
00:22:34.240 --> 00:22:41.680
And that's a fundamental change in thought of where in a public market you're constantly revaluing based on all the available, publicly available information.
00:22:41.839 --> 00:22:43.920
That is not how pricing works.
00:22:44.160 --> 00:22:52.960
It's much more like a receivable financing where the nav, the nav-based product is a future receivable with uncertain duration and maybe uncertain pricing.
00:22:53.200 --> 00:22:58.079
But that's really the game is how do you price that risk and duration risk?
00:22:58.240 --> 00:23:01.279
And that's really how liquidity is going to be created in these markets.
00:23:01.519 --> 00:23:04.400
And it's much more favorable to the investment managers as well, right?
00:23:04.559 --> 00:23:09.519
Because what we're saying is fundamentally, we're not controlling your nav, right?
00:23:10.000 --> 00:23:12.480
Like we are not the pricer of your book.
00:23:12.559 --> 00:23:14.000
You remain the pricer of your book.
00:23:14.160 --> 00:23:23.279
The question is, what does it take for me to hold that and bridge finance the gap so a user can exit until your next redemption cycle or next redemption cycles?
00:23:23.440 --> 00:23:26.160
And so I think that framing is really important.
00:23:26.240 --> 00:23:38.960
And what it really means is I would think of this more as a credit-based liquidity provisioning market than as a prop trading fundamental valuation equity style market.
00:23:39.039 --> 00:23:42.480
And that's another one of the changes in thinking that's really important.
00:23:42.640 --> 00:23:47.279
It benefits both the asset managers because they don't have challenge, challenge valuation marks.
00:23:47.440 --> 00:23:59.680
It also helps the liquidity providers because it actually brings, it's not just the traditional equities market makers, it actually brings AVS lenders and receivable financing lenders into the fray as able to finance this activity.
00:23:59.759 --> 00:24:04.319
So it actually broadens the potential breath of liquidity providers in the long run.
00:24:04.480 --> 00:24:08.000
But as we discussed, there's an education gap in just conceiving of how that works.
00:24:08.240 --> 00:24:08.960
Yeah, definitely.
00:24:09.119 --> 00:24:18.079
The way I think about it is for this asset class to actually go from semi-liquid to liquid, investors have to actually be able to trust two things, right?
00:24:18.160 --> 00:24:27.119
They have to be able to trust the investment manager as they always have had to underwrite the investment manager, but they also have to trust the market structure, right?
00:24:27.279 --> 00:24:32.400
And the market structure comes down to is price discovery working the way it's supposed to?
00:24:32.559 --> 00:24:44.480
Do we all agree on the methodology around duration and risk that we all need to for the market to come together and actually be able to communicate with each other in the same language?
00:24:44.720 --> 00:24:57.359
And that's ultimately what we're doing is everyone coming together from demand and supply side to have a conversation about who wants to buy and sell and if all the vocabulary there is lining up the same way.
00:24:57.680 --> 00:25:09.920
So that that takes me actually to the other really interesting part of the fission vision that we really loved, which was that you're developing your own marketplace, your own venue for private markets.
00:25:10.079 --> 00:25:15.279
I guess the first question a lot of people would have would be well, why do you need a new venue?
00:25:15.599 --> 00:25:15.920
Right?
00:25:16.079 --> 00:25:20.880
Why wouldn't the New York Stock Exchange or NASDAQ try to build this as well?
00:25:21.200 --> 00:25:22.400
How do you think about that?
00:25:22.640 --> 00:25:24.799
So, as we just kind of discussed, right?
00:25:25.039 --> 00:25:30.160
These products operate on different liquidity provisioning principles than the public markets do.
00:25:30.319 --> 00:25:41.119
And so the way they are structured from a, you know, from who is providing liquidity all the way to how they're settled and the cross-chain issues, none of that infrastructure exists in the public market.
00:25:41.279 --> 00:25:50.640
And so we really see this as a new piece of market infrastructure that doesn't really exist in this format today to serve these types of products, right?
00:25:50.799 --> 00:25:56.640
And so it's really about matching the exchange infrastructure to the tokenized fund products it supports.
00:25:56.960 --> 00:25:58.000
Broadly, the U.S.
00:25:58.079 --> 00:26:04.640
equity marketing for single-name stocks or for baskets of funds constructed from publicly traded instruments.
00:26:04.880 --> 00:26:15.759
So they just don't have the systems, the valuation methodologies, the pricing models, the data, their data mode is completely different, the settlement infrastructure.
00:26:15.920 --> 00:26:19.279
It's really a completely new product.
00:26:19.440 --> 00:26:23.920
And even though, as we discussed, the market makers who plug into it are a different breed of market making.
00:26:24.079 --> 00:26:27.359
It looks more like a lending product or an asset-based financing.
00:26:27.519 --> 00:26:33.200
It just really fundamentally changes the end-to-end how the market actually functions.
00:26:33.519 --> 00:26:34.960
And it really requires new stuff.
00:26:35.039 --> 00:26:36.799
It also has different rules, right?
00:26:36.880 --> 00:26:45.440
Like handling a tokenized bond actually has different exchange rules in the US and abroad than handling single stocks.
00:26:45.519 --> 00:26:50.160
It has different classifications for like ATS versus a national securities exchange in the US.
00:26:50.319 --> 00:26:55.119
So everything about it is really different, except for the user experience, right?
00:26:55.279 --> 00:27:04.319
Which is the user experience still looks as a buyer or seller, it still looks like hey, Robinhood, rather than being Apple and Facebook and all those, it's Apollo and Blackstone and Arc VX.
00:27:04.799 --> 00:27:10.799
But everything on the back end delivering that is basically end-to-end, mate.
00:27:11.519 --> 00:27:16.720
Yeah, it's an insane amount of plumbing that needs to get built right now.
00:27:16.880 --> 00:27:22.720
But you're right, at the end of the day, it all has to fit inside of a one-click button.
00:27:23.119 --> 00:27:23.359
Right.
00:27:23.599 --> 00:27:24.480
And that's the challenge.
00:27:25.680 --> 00:27:29.839
That's really what we think about every day, which is how do you simplify that to the one click?
00:27:29.920 --> 00:27:32.480
So from the user perspective, they don't see it.
00:27:32.640 --> 00:27:42.319
But on the back end, all these bridging and smart contract settlement, all these wallet connectivity, it's all happening and transfer agent register updates, but that's all abstracted away from them.
00:27:42.480 --> 00:27:52.400
And then taking that and mushing it into the existing regulatory framework around these exchanges and liquidity provider technologies, like that's really the hard work.
00:27:52.480 --> 00:27:53.519
And I joke all the time.
00:27:53.599 --> 00:27:56.319
I'm like, we're just digital plumbers at the end of the day, right?
00:27:56.480 --> 00:28:07.200
We're in the mines looking at the detailed stuff on settlement for these paper products, taking analogies to all that, digitizing it or integrating it with the digital solution.
00:28:07.359 --> 00:28:18.720
That's the work that's going to actually make this usable and not just kind of one-off onboardings and subscription agreements that it's just not scalable to do that 50 times to your point.
00:28:18.799 --> 00:28:21.200
You're used to Robin onboard once, click.
00:28:21.359 --> 00:28:23.599
So that's how it has to work.
00:28:24.079 --> 00:28:31.119
And that's largely where we are today and where we've been is there is no single unified place to come and buy and sell these assets.
00:28:31.279 --> 00:28:38.160
You have to, the the network is bifurcated amongst a handful of tokenization platforms and issuers.
00:28:38.319 --> 00:28:42.799
We're starting to see the movement of a lot of that compressing.
00:28:42.960 --> 00:28:46.400
What we've really figured out is new products require new markets.
00:28:46.559 --> 00:28:50.559
You have to do the painful work of building the infrastructure in order to support that.
00:28:50.720 --> 00:28:59.200
And especially when you're talking about securities, you have to be able to build the proper infrastructure to do it in a way that is aligned with US regulation.
00:28:59.680 --> 00:29:01.519
And like, even just like you give an example.
00:29:01.599 --> 00:29:05.039
Like for we had a customer who sold some ACRAD, right?
00:29:05.119 --> 00:29:07.200
They click, it's it was done in a minute.
00:29:07.359 --> 00:29:08.960
They were like, this is amazing, right?
00:29:09.039 --> 00:29:15.759
They're like, this is so much easier than if I were to try and sell this paper fund interest, it would have settled a month later.
00:29:16.000 --> 00:29:18.400
You would have paid lawyers, you would have paper.
00:29:18.799 --> 00:29:26.720
The efficiency gain, once you realize you can exit in that way, you're like, wow, that's really a step forward for this type of product.
00:29:26.960 --> 00:29:32.880
Yeah, we've heard the same thing too when we were really starting to roll up our sleeves learning about fission.
00:29:33.119 --> 00:29:38.240
We heard from so many users that the one button-click experience is live, right?
00:29:38.319 --> 00:29:39.599
This is not theoretical.
00:29:39.759 --> 00:29:47.440
You guys have been partnering with Apollo for quite a while, making their ACRED tokenized fund product accessible in this way.
00:29:47.599 --> 00:29:49.279
So the proof is there, right?
00:29:49.519 --> 00:29:55.839
Users have experienced it and they've said, look, this is zero to one change in what I can do in this market.
00:29:56.079 --> 00:30:03.440
Well, and I think we get to occupy like kind of a unique position where we get to sit in the middle between all the great GPs and work with them.
00:30:03.599 --> 00:30:06.319
We get to work with all the great tokenization firms.
00:30:06.559 --> 00:30:08.559
We get to work with the lending protocols, right?
00:30:08.720 --> 00:30:12.000
We didn't, we haven't talked about this in detail, but liquidity matters a lot for lenders, right?
00:30:12.079 --> 00:30:15.519
If you're going to extend credit against these products, you need to be able to sell them.
00:30:15.759 --> 00:30:16.319
They care.
00:30:16.480 --> 00:30:20.400
The vault operators who may be d-levering or exiting positions, right?
00:30:20.559 --> 00:30:22.799
Need to come back and sell in into our infrastructure.
00:30:22.960 --> 00:30:27.279
And so we kind of sit at this fun place in the middle where we get to work with everybody.
00:30:27.519 --> 00:30:36.319
And over time, we'll actually bring in, as we get to step more into the pure infrastructure layer, bring in additional liquidity providers and lenders to finance all of this.
00:30:36.480 --> 00:30:43.279
And so it's even though it's a dirty, it's a dirty plumbing job, it is a fun job in the sense that we get to plumb for great counterparties.
00:30:43.519 --> 00:30:50.559
So as hard as it is, I still want to jump deeper into it a bit and maybe talk about how fission works.
00:30:50.880 --> 00:31:07.680
So taking it from the perspective of an asset manager, what actually is involved in fission working with someone like an Apollo or Blackstone or Hamilton Lane about supporting a token, providing liquidity to it.
00:31:07.839 --> 00:31:10.559
What do you actually need to do to get started?
00:31:10.960 --> 00:31:12.559
I'll let Steve speak to this one.
00:31:12.640 --> 00:31:14.079
This is his domain.
00:31:14.480 --> 00:31:21.279
So I think I think following up on the point that John actually just made is where we sit in the ecosystem actually makes this really exciting.
00:31:21.359 --> 00:31:35.759
And the reality is for these asset managers that are looking at tokenization and looking at bringing assets on chain, we sit at this crossroad between them and the issuers and the broader DeFi ecosystem.
00:31:35.920 --> 00:31:42.559
In order for them to tap into liquidity, it's really just a function of us onboarding as a registered LP of the fund.
00:31:42.720 --> 00:31:47.519
And we do that through technical integrations and partnerships with all of the token issuers.
00:31:47.680 --> 00:32:04.400
But what gets really interesting through that process is when you can add liquidity and real-time liquidity into this product, it becomes a feature of the token and not just some add-on secondary function.
00:32:04.640 --> 00:32:14.640
And that's what ultimately where we see a lot of value in a lot of the conversations that we're having with the token issuers is starting to get involved in those conversations during the structuring process.
00:32:14.799 --> 00:32:38.960
So they don't necessarily need to know anything about fission, but at the end of the day, we're going to show up with the tokenization platform and we're going to explain the process of how we're pricing and how we're underwriting to provide atomic liquidity and off ramps that make the token have these added features and have added utility within lending markets to be able to be used as collateral, to be able to get additional leverage on.
00:32:39.680 --> 00:32:43.440
In lever ball in leverage, where people can have a lever position as well.
00:32:43.920 --> 00:32:50.160
And when you talk about the distribution of these tokens, that's where you tap into the on-chain economy.
00:32:50.319 --> 00:32:58.799
That's what allows capital allocators who deploy assets on-chain that are going to be interested in funneling AUM into these products.
00:32:58.960 --> 00:33:06.160
Because ultimately, that's what those guys expect of assets that they're going to hold in their wallets and they're going to hold as part of their treasury management systems.
00:33:06.319 --> 00:33:12.400
They need to be able to rebalance, they need to be able to liquidate, they need to be able to get leverage, they need to be able to borrow against.
00:33:12.559 --> 00:33:23.039
And you can't do those things without having this added layer of liquidity for assets that don't inherently trade on secondary marketplaces or have OTC liquidity built into them.
00:33:23.440 --> 00:33:30.559
And beyond that, it takes away the need for the asset manager to maintain those liquidity sleeves themselves, right?
00:33:30.640 --> 00:33:34.960
Because ultimately a liquidity sleeve is going to be deleterious to your return profile, right?
00:33:35.039 --> 00:33:40.559
If you have to hold more liquid assets in what's fundamentally a liquid portfolio, the trade-off is returns, right?
00:33:40.640 --> 00:33:42.000
You're going to bring your own returns down.
00:33:42.160 --> 00:33:46.000
And so the way we see this is it's a supplement to what they already offer, right?
00:33:46.079 --> 00:33:49.839
Most of them offer 5% quarterly, quarterly redemption as a percentage of their nav.
00:33:50.559 --> 00:33:52.319
And no one needs to use this, right?
00:33:52.400 --> 00:34:01.039
Like fundamentally, you're not forced to use it, but having exit optionality is extremely beneficial to the asset allocator, right?
00:34:01.200 --> 00:34:12.320
If I know I can exit, if I know I can borrow against my position and get liquidity in multiple ways, I'm much more inclined to come into this at scale, to scale up, to buy multiple assets.
00:34:12.480 --> 00:34:16.079
And so I think it's really a feature that matters a lot.
00:34:16.159 --> 00:34:20.880
And I've heard people say, like on the semi-liquid, the semi-liquid liquidity is a feature, not a bug.
00:34:21.119 --> 00:34:24.079
Fully agreed from the investment manager perspective, right?
00:34:24.159 --> 00:34:30.639
Because they need to maintain that return profile we talked about so they can maintain a balance of assets in their portfolio that's mostly weighted till liquid.
00:34:30.800 --> 00:34:36.559
That doesn't mean a third party shouldn't provide supplemental liquidity to exiting investors.
00:34:36.800 --> 00:34:38.559
Their product structure is fantastic.
00:34:38.719 --> 00:34:40.480
It should stay exactly as it is.
00:34:40.719 --> 00:34:48.800
We are an add-on to that, which creates more utility and more usability for the user that does not affect the investment manager's returns, that does not challenge them.
00:34:48.960 --> 00:34:55.840
I think that's really a critical point that it's an additional feature that just gives that just provides them flexibility.
00:34:56.239 --> 00:34:57.599
If they don't need it, they don't need it.
00:34:57.679 --> 00:34:58.000
Great.
00:34:58.239 --> 00:35:17.840
As a market right now, I think we've kind of boxed ourselves into this ceiling where we're at somewhere between six to seven percent yield, because that's really the highest that you can get on the yield curve with inherent baked-in inherent liquidity, it's treasuries, it's junk bonds or high yield bonds.
00:35:18.000 --> 00:35:26.960
Those are the assets that you can exit out of quickly and provide that level of liquidity in order for them to function the way that you can build that out in DeFi networks.
00:35:27.119 --> 00:35:39.840
But what we're talking about doing and implementing this kind of third-party network is being able to expand to new points on that yield curve and really attract this 30 to 90 day product that all of a sudden you can tap into double digit yields.
00:35:40.000 --> 00:35:54.320
And the return profile, even when you're paying a fee for that early exit, makes it a lot more appealing to on-chain allocators and makes it a lot more appealing to the DeFi community in terms of how they're actually buying and selling and holding and using these assets.
00:35:54.800 --> 00:35:58.960
Really, for the first time, we're talking about double digit returns with daily liquidity, right?
00:35:59.039 --> 00:36:06.079
That before you were either in mid to high, single digit or double digit, no minimal semi-liquid.
00:36:06.239 --> 00:36:15.519
But if we can get what which we're at, if we can scale double digit returns with daily liquidity, I think that's a winning profile across DeFi and traditional allocators.
00:36:15.679 --> 00:36:15.760
Yeah.
00:36:16.000 --> 00:36:18.159
That'll that'll be our next, that'll be our next podcast with you.
00:36:18.400 --> 00:36:20.159
Yeah, talking about how we're gonna do that.
00:36:20.559 --> 00:36:20.880
Yeah.
00:36:20.960 --> 00:36:28.079
I mean, that's been one of the, I would say, most exciting insights that we've had too in talking to some of these asset managers, right?
00:36:28.320 --> 00:36:37.760
Is I think if you went back a couple of years and had asked them why are you not tokenizing anything yet, they would have said, well, what's the point?
00:36:37.840 --> 00:36:38.079
Right.
00:36:38.159 --> 00:36:40.239
I'm just sort of cannibalizing my own business.
00:36:40.320 --> 00:36:44.400
I'm subjecting myself to faster velocity of redemptions.
00:36:44.559 --> 00:36:46.480
What's the actual benefit here?
00:36:46.800 --> 00:36:54.239
But now we've seen folks like Franklin Templeton come in with tokenized products and net new AUM, right?
00:36:54.320 --> 00:37:01.280
I mean, that is the magic of this, which is they are reaching customers they would never have been able to reach before.
00:37:01.519 --> 00:37:12.239
And their existing customers are giving them the feedback that wait a minute, if the product is becoming this much more efficient and this much more liquid, I'm willing to scale up with you guys.
00:37:12.400 --> 00:37:23.920
I'm willing to become a much bigger client with you all because this is going to be a fitting into a different part of my portfolio strategy if I can actually exit in a much earlier timeline if I need to.
00:37:24.400 --> 00:37:33.280
It is a great opportunity for American private capital markets to scale through digital global infrastructure.
00:37:33.440 --> 00:37:38.239
It's ultimately more dollars into US private fund managers.
00:37:38.480 --> 00:37:41.119
And they've been doing an exceptional job over.
00:37:41.360 --> 00:37:44.960
Obviously, we always have our hiccups, as all financial markets do.
00:37:45.119 --> 00:37:51.519
But if you really look at the US markets over the last 10 to 15 years as they've evolved, it's pretty much been up and to the right.
00:37:51.679 --> 00:37:57.199
I think that there is a large group of people who want in on this game, both domestically and non-US.
00:37:57.599 --> 00:38:04.800
And the more assets we can get to these managers to manage, as they've done with the institutional quality they have, phenomenal.
00:38:05.119 --> 00:38:09.119
They can just deploy more capital, grow more value, and they've really been doing a tremendous job.
00:38:09.360 --> 00:38:25.760
Now, I want to skip a little further into the future and talk about sort of the vision that we're all kind of converging on, that AI is going to play this really important role in how people invest, how capital markets infrastructure can work.
00:38:26.000 --> 00:38:30.000
How is AI fitting into Vision's roadmap today?
00:38:30.320 --> 00:38:39.519
So today, the most important role it plays is in the pricing models for our liquidity and for third-party liquidity providers or exchange technology, right?
00:38:39.599 --> 00:38:47.119
Which is when you're looking at things like duration risk and gating probabilities for these funds, this is a data problem, right?
00:38:47.199 --> 00:39:01.679
It's not something you intuit and you're like, oh, I have a fundamental view on it, it is a quantitative problem that spans hundreds of funds where you have to ingest many data points and then process those all together into actual functional estimates, right?
00:39:01.840 --> 00:39:03.840
With probability distributions, et cetera.
00:39:03.920 --> 00:39:07.519
So the pricing components of these things are really an AI problem today.
00:39:07.599 --> 00:39:09.760
They're no longer kind of a fundamental analysis problem.
00:39:09.840 --> 00:39:15.760
Now you might, from a fundamental perspective, have a sense of cost of capital, but those other features don't change, right?
00:39:15.920 --> 00:39:19.440
They layer on top of your expectations for gating and duration and net volatility.
00:39:19.519 --> 00:39:25.199
And those are things that, again, a fundamental analyst cannot intuit in the way they can evaluation for a public company.
00:39:25.440 --> 00:39:34.079
So one, I think having effectively AI-enable pricing engines attached directly to the exchange infrastructure is mission critical.
00:39:34.400 --> 00:39:39.679
I think the next phase of that, and where we're also applying this technology, is an AI portfolio construction, right?
00:39:39.760 --> 00:39:46.800
So we have a private equity fund of funds product in how we weight that portfolio, look at again, lots of data on these funds.
00:39:47.039 --> 00:39:50.719
There's a more of a qualitative aspect to that, but that's growing.
00:39:50.880 --> 00:40:14.480
I think what you're going to see ultimately is that type of portfolio construction technology, which you've even seen, like with Apollo's AI or allocation pro, it's not AI, but we're going to see AI-based portfolio construction where users are going to be able to come in and say, hey, I'm looking for a 13% annualized, a 12% plus annualized return with this maximum drawdown and this volatility profile.
00:40:14.800 --> 00:40:16.079
Build me a basket.
00:40:16.239 --> 00:40:27.679
And they will be able to build custom AI-enabled baskets of these tokenized and non-tokenized fund interests so that they can have an alt portfolio that's actually optimized for what they want.
00:40:27.840 --> 00:40:34.000
A lot of what we're seeing in the market today, even with the Zondo product, which is a good first step, is kind of building those baskets for people.
00:40:34.239 --> 00:40:39.119
Ultimately, allocators are going to construct their own based on their own risk and returns expectations.
00:40:39.519 --> 00:40:41.280
I think where this all plugs together, right?
00:40:41.360 --> 00:40:45.519
You've got the AI portfolio construction on the one side, you've got the AI powered exchange on the other.
00:40:45.679 --> 00:40:50.079
What becomes really sexy is AI agentic rebalancing of your portfolio.
00:40:50.239 --> 00:41:06.159
So as you add more capital, as your risk limits are exceeded, Agenic AI can actually monitor the portfolio, keep it in line with the AI dictated risk limits, liquidate to AI-powered pricing models.
00:41:06.239 --> 00:41:13.119
And so you have an end-to-end AI native alternative flow, which I think is really interesting.
00:41:13.280 --> 00:41:34.559
And I think it really opens the door for what we're talking about holistically, which is people not just having public equities portfolios, but having in their 401ks and their personal accounts, non-US alternatives portfolios, which can be managed in the same type of format and interface from their perspective, but have obviously these deeply technical workflows on the back end.
00:41:34.800 --> 00:41:36.559
It's something I'm excited about for sure.
00:41:36.800 --> 00:41:41.280
This whole idea of a context-aware portfolio.
00:41:41.599 --> 00:41:52.800
I sort of think of the example of if my personal agent knows that I've got a skydiving trip scheduled for this weekend, my portfolio will go a bit risk-off to counterbalance that.
00:41:52.960 --> 00:41:55.599
And maybe that is something that we'll all want someday.
00:41:55.840 --> 00:41:57.760
What does it look like if everything goes right?
00:41:58.000 --> 00:42:10.880
If tokenization and the liquidity ecosystem around Vision is building, along with AI native markets, if that all comes together, what do you think the end state of this market looks like?
00:42:11.039 --> 00:42:13.519
And where does fission fit into that?
00:42:14.000 --> 00:42:42.480
I think every US and US accredited and even a lot of retail investors have their own diversified alts portfolio that is fully tokenized, fully rebalanced, that they can exit when they want, and they get to participate directly in the US private markets, which is fundamentally what we've been trying to do for the last five to 10 years at a policy level, but it really fundamentally changes wealth creation in the US.
00:42:42.639 --> 00:42:52.400
And what you're seeing is maybe 50% of institutional asset allocators are making these high excess returns on private market portfolios that regular people don't have access to.
00:42:52.559 --> 00:42:56.960
And it's frankly exacerbating the wealth gap in the country, right?
00:42:57.119 --> 00:43:00.400
It's directly a contributor to inflation, frankly.
00:43:00.559 --> 00:43:15.760
And so if we can offer the same spread of investment products, but with the added controls for retail users and the tooling like AI to help them build an institutional grade portfolio like an Apollo would, it radically changes the game.
00:43:15.840 --> 00:43:24.559
And it starts to look like investing is really twofold, both public equities and then your private fund positions in a format that looks very similar to a Robin Hood.
00:43:24.880 --> 00:43:27.679
I think more holistically, it stops looking like tokenization too.
00:43:27.760 --> 00:43:29.440
We're getting it's market infrastructure.
00:43:29.599 --> 00:43:34.639
These are these these assets are gonna be digitally native, they're gonna be programmable, and they're gonna be accessible.
00:43:34.960 --> 00:43:44.400
I remember during our precede round, like we were I was talking to one of our investors, and I was basically saying, I think the moment tokenization wins is when you don't talk about it anymore, right?
00:43:44.559 --> 00:43:47.519
You won't this will all be invisible to the user.
00:43:47.679 --> 00:43:54.079
They're not gonna say the wallet looks like an account, the tokenized, they're just sharing an updated share a version of shares.
00:43:54.559 --> 00:43:56.880
The UI looks like a normal UI.
00:43:57.039 --> 00:43:59.679
And so I think that's really the end state.
00:44:00.079 --> 00:44:10.719
The vision, which is you get access to all these new products that you don't have today, where you can get superior risk adjusted returns or at least blend into your portfolios a portion that should be in this.
00:44:10.880 --> 00:44:14.800
And it works just like all your other stuff works, and you don't even know the technology is there.
00:44:14.960 --> 00:44:16.159
And we're not that far away.
00:44:16.400 --> 00:44:20.159
We're, I think people overestimate how far we are within that.
00:44:20.239 --> 00:44:25.679
All of the existing components needed to build that user experience exist today, full stop.
00:44:26.159 --> 00:44:27.440
So it can be built.
00:44:27.679 --> 00:44:40.880
It's just a matter of getting the right people to go through the huge pain in the ass of structuring it regulatorily, getting the technology running, doing the customer discovery, putting it in a financial framework that makes actual return sense.
00:44:40.960 --> 00:44:45.199
And I think what you see in the market is there's experts who are good at one part of it.
00:44:45.360 --> 00:44:52.239
They might be good at the financial part, but they don't understand the technology, or they're good at the technology and they don't know how traditional financial markets work.
00:44:52.480 --> 00:44:56.400
And as that knowledge base, and it's happening rapidly, right?
00:44:56.559 --> 00:45:02.800
You're seeing many more traditional fund people coming to this and the crypto people learning more about the traditional fund space.
00:45:03.119 --> 00:45:10.239
I think that's going to accelerate this transition because it's really a knowledge gap as much as it is a will gap.
00:45:10.400 --> 00:45:22.000
And that in conjunction with regulatory clarity, right, which is helping massively, like particularly in this ARC stuff, and you're going to see all these 40 act funds have a very clear set of rules like what's going to stop it.
00:45:22.239 --> 00:45:23.280
I don't think it's going to stop.
00:45:23.360 --> 00:45:26.239
It's just a question of does it take a little longer or not?
00:45:26.320 --> 00:45:27.119
But it's inevitable.
00:45:27.360 --> 00:45:33.840
And I think something John and I talk about is our hot take on this is clarity failing in Congress is probably the best thing that could have happened for tokenization.
00:45:33.920 --> 00:45:38.559
And too because we're going to you're getting the changes that we've been looking for by SEC rulemaking.
00:45:38.639 --> 00:45:40.800
And that's ultimately what moves the needle here.
00:45:40.960 --> 00:45:42.480
And Franklin, you said this before.
00:45:42.559 --> 00:45:45.599
It's like we the promise has always been better, cheaper, faster.
00:45:45.760 --> 00:45:51.280
What market participants ultimately got was like more expensive, structurally more complicated, and harder to access products.
00:45:51.519 --> 00:46:07.039
So with the new changes that the SEC are coming out with, we're actually starting to realize the benefits of the infrastructure through native tokenization because they're allowing broader distribution and access at the fund level instead of taking this stuff offshore and creating these esoteric products.
00:46:07.199 --> 00:46:08.960
And that's where we're going to see a big shift.
00:46:09.199 --> 00:46:13.679
Well, and I think Atkins, the chairman of the SEC, said something super interesting.
00:46:13.920 --> 00:46:19.039
He said part of the debate was like, how do we handle securities versus what isn't a security?
00:46:19.119 --> 00:46:20.719
And like Clarity dealt a lot on that.
00:46:20.880 --> 00:46:23.119
All the stuff we're talking about, these are clearly securities, right?
00:46:23.199 --> 00:46:27.920
So there's no debate about whether a private fund or a tokenized 40 fund is a security.
00:46:28.000 --> 00:46:28.639
It's a security.
00:46:28.880 --> 00:46:31.280
His point was that shouldn't be a scarlet letter.
00:46:31.679 --> 00:46:33.440
Being a security is a fine thing.
00:46:33.599 --> 00:46:38.880
We just need to create a very clear sense of what do you need to do to be able to offer a digitally native security.
00:46:38.960 --> 00:46:41.599
And that's exactly what they're pushing towards right now.
00:46:41.679 --> 00:46:41.840
Right.
00:46:41.920 --> 00:46:43.440
And you've seen that with the 40x.
00:46:43.679 --> 00:46:47.360
You're seeing them evaluate non-custodial holding of these pro, right?
00:46:47.440 --> 00:46:49.519
So, like it's not a problem that it's a securities.
00:46:49.760 --> 00:46:51.840
There's just rules you're going to have to follow, fine.
00:46:52.079 --> 00:46:55.360
And there's technology you're going to have to implement to and to ensure it's done the right way.
00:46:55.440 --> 00:46:56.960
But that's great for the user, right?
00:46:57.039 --> 00:46:58.639
It shouldn't be the wild west.
00:46:58.800 --> 00:47:00.000
And what are these assets?
00:47:00.159 --> 00:47:05.440
You want clear legal ownership, clear economic return profile, and a clear set of rules as to how they should be done.
00:47:05.519 --> 00:47:06.719
So we think it's a fantastic thing.
00:47:06.800 --> 00:47:10.480
The more regulatory clarity, the better, the bigger and faster this market's going to go.
00:47:10.639 --> 00:47:16.239
And it enables the GPs to stand back and say, hey, I don't need to go build some crazy offshore infrastructure.
00:47:16.320 --> 00:47:23.599
I'm just going to tokenize my thing that already exists and I pay millions of dollars for a year to lawyers to make sure it works right and we've managed it the right way.
00:47:23.760 --> 00:47:27.679
So I think it just allows everyone to move faster.
00:47:28.000 --> 00:47:28.320
Yeah.
00:47:28.480 --> 00:47:33.679
I mean that's a beautiful vision for the post-tokenization, post-AI world.
00:47:33.920 --> 00:47:38.719
And one thing that really resonates is I spent a lot of time talking to financial institutions.
00:47:38.880 --> 00:47:47.920
And I would say the two biggest things that they're thinking about right now are just how do we become AI native, ready for AI?
00:47:48.239 --> 00:47:51.440
And how do we how do we approach tokenization?
00:47:51.760 --> 00:47:55.199
And I think the answer is actually those are the same questions.
00:47:56.159 --> 00:48:08.159
Because when you tokenize your sort of operating system and you tokenize your workflows and the assets that come out of that, you're becoming legible to AI agents, finally, right?
00:48:08.400 --> 00:48:15.519
And I would also tie it back to the idea of AI is making everybody a coder, making everybody a builder.
00:48:19.360 --> 00:48:27.599
Finally, everybody is adapting to the fact that they can be a maker when we've all been takers for a very long time, right?
00:48:27.760 --> 00:48:37.280
We just take whatever software, whatever a user experience, whatever tools or products are available to us in public and public capital markets.
00:48:37.840 --> 00:48:46.079
But with tokenizing of public and private markets, with all of that being available through agentic workflows, we can be makers.
00:48:46.239 --> 00:48:47.119
We can go to the market.
00:48:47.360 --> 00:48:47.679
Absolutely.
00:48:48.000 --> 00:48:48.880
This is what we want.
00:48:49.119 --> 00:48:50.159
Go make it for me.
00:48:50.320 --> 00:48:51.840
And it can actually happen.
00:48:52.079 --> 00:48:53.199
So I think that's awesome.
00:48:53.280 --> 00:48:55.679
I think it's an amazing future to be building for.
00:48:55.920 --> 00:48:59.840
So super excited to be working with you all and to be investors in fission.
00:49:00.079 --> 00:49:07.599
A couple of bonus questions I'd love to end with for to show our appreciation for all the folks and make it to the end.
00:49:07.920 --> 00:49:13.119
First question: if you weren't working on fission, what would you be working on?
00:49:13.360 --> 00:49:14.239
I'm a dork.
00:49:14.559 --> 00:49:15.599
I love robots.
00:49:15.760 --> 00:49:19.199
I'd probably be doing some physical automate, physical AI.
00:49:19.360 --> 00:49:19.920
Very cool.
00:49:20.159 --> 00:49:21.440
Steve, what about you?
00:49:21.760 --> 00:49:28.000
Uh it's hard for me to think about doing anything other than this right now, but I love startups and I've and I have a high tolerance for pain.
00:49:28.079 --> 00:49:36.000
So I like to think I'd be knocking on your door for money to build some other esoteric problem that no one's going to care about for the next three to five years.
00:49:36.320 --> 00:49:36.960
Amazing.
00:49:37.119 --> 00:49:37.519
Amazing.
00:49:37.679 --> 00:49:41.840
And then finally, we love investing in highly opinionated founders.
00:49:42.079 --> 00:49:46.960
So, John, I know you have some opinions about the best burgers in New York City.
00:49:47.199 --> 00:49:47.920
What are they?
00:49:48.079 --> 00:49:49.280
What are your best picks?
00:49:49.440 --> 00:49:54.239
This is a very controversial and it's one of the most controversial answers I'll put out there.
00:49:54.400 --> 00:50:07.360
But I have to say, if you like a classic thick steakhouse burger, even though everyone says Red Hook Tavern, and I do love a Red Hook Tavern burger, I'm gonna go with the traditional and say Peter Luger's still got the best in the business.
00:50:07.840 --> 00:50:14.800
On the thin side, if you like the thinner patty world, again, consensus answer, but I'd have to say four Charles.
00:50:15.280 --> 00:50:16.639
All right, those are good picks.
00:50:16.880 --> 00:50:18.239
Not Grammarcy Tavern.
00:50:18.400 --> 00:50:19.119
Is that anywhere on your list?
00:50:19.760 --> 00:50:21.039
I love a Grammarcy Tavern.
00:50:21.119 --> 00:50:24.880
I mean, my going to the bar at Grammarcy Tavern is maybe my favorite experience in New York.
00:50:25.599 --> 00:50:31.199
I'd put that tab would be like two or it's top three for sure in the thick burger, no question.
00:50:31.360 --> 00:50:33.760
John John lives in Brooklyn now, though, so he has to go with the city.
00:50:33.840 --> 00:50:36.079
Yeah, I've got a bias now that got it.
00:50:36.159 --> 00:50:37.679
That it that explains the red hook.
00:50:37.840 --> 00:50:38.079
Yeah.
00:50:38.639 --> 00:50:38.880
Okay.
00:50:39.039 --> 00:50:53.440
I have not been there actually, but uh one of my favorite pitch meetings from a founder was when I actually got stood up by a founder for a burger meal at Gramercy Tavern, and I just sat there by myself enjoying that burger.
00:50:53.679 --> 00:50:54.239
You know what?
00:50:54.320 --> 00:50:56.239
Sometimes those are the best meals by yourself.
00:50:56.400 --> 00:50:57.440
Every people ate them.
00:50:57.519 --> 00:50:58.320
I'm like, it's great.
00:50:58.400 --> 00:50:59.119
You get to enjoy it.
00:50:59.199 --> 00:51:00.320
You don't have to talk to anybody.
00:51:00.559 --> 00:51:06.880
Thank you both for uh joining us, and uh yeah, looking forward to uh all the progress and the momentum you guys are making.
00:51:07.039 --> 00:51:11.679
Uh, I'd love to come come back with an update for everyone uh very soon.
00:51:11.840 --> 00:51:14.400
Uh, but thanks again for uh making the time.
00:51:14.480 --> 00:51:14.880
Yeah, of course.
00:51:15.119 --> 00:51:16.800
Thanks for having so much for having us.