Transcription Episode 50

Hi everyone and welcome to another episode of Living on Blockchain. Today we are going to be speaking to Anuj. He’s the VP of Blockchain at Zebpay, one of the oldest exchanges in India.

This was a very interesting conversation talking about centralized and decentralized forces in the Web3 space and just the future plans of Zebpay in general. Anuj has had quite a wonderful journey from Web2 to Web3. I feel that there is a lot of value to be derived from his experience.

So let’s deep dive right in. Hi Anuj, how are you? Hey Tarusha, I am good. Thank you so much.

Thank you so much Anuj for making out the time to speak to us today. Just for our listeners, would you like to start with a bit of an intro? Can you tell us a little about yourself, how you got into Web3? Yeah, sure, absolutely. So, you know, my name is Anuj Garg.

I’m based out of Delhi, basically a computer science graduate and over, you know, 22 years of experience in IT industry. I have done multiple roles in the area of technology, starting with telecommunications, VLSI, application management, mobile application management and various other things. So, you know, last few years of my journey includes various leadership roles.

During one of the leadership role, you know, so I had a typical journey that a software engineer normally lives. It starts with senior engineer, lead manager, senior manager, leader. So, you know, during one of my leadership position, I was leading a big team and I was reading about a new technology related to digital money, where you don’t need banks, where you don’t need intermediaries to manage your money.

It sounds pretty interesting to me. It was almost 70 years back, you know, I started reading more about it, you know, and because, you know, I was more interested in doing things which are related to data structures where, you know, you see a linked list or, you know, these kind of things. So, this technology basically relates to a core technology issue where, you know, we can digitalize money and we can eliminate various intermediaries.

So, I found it really, really interesting. I started reading books and then I thought that, you know, I can perhaps share some of my knowledge that I’ve gained. So, I started teaching at various online platforms.

In fact, for the online platforms that you see blockchain courses, you know, I have been involved in some capacity or other with almost each one of them. And, you know, that’s how this journey started. And, you know, eventually I switched even my role to a more blockchain oriented leadership roles, started working on various product developments.

I got an opportunity to file several patents, doing some research work and so on, you know. So, it has been a very enriching journey for me, both in terms of career enrichment, as well as, you know, my professional growth, personal growth, and I’m really enjoying it. Awesome.

So, you know, how did you come in touch with the Zebpay folks? Like Zebpay is one of the oldest exchanges of India. How did you get into the core team there? Yeah. So, you know, before Zebpay, I was working with IBM.

IBM is one of the largest IT organizations across the globe. And I was working in a leadership role, you know, touching upon blockchain automation and various other technologies. I got an email one day saying that a leading crypto exchange requires a person who can sleep, eat, breath, blockchain technology.

So that kind of sounds really interesting to me, because, you know, that’s where I wanted to see myself. So, I was not actively looking for a job, or I was not looking for an opportunity actively, but you know, that email somehow incited interest inside me. And, you know, I thought, you know, let’s try for it.

And that’s how I got into the Zebpay as a vice president blockchain. And again, you know, it has been a very excellent journey for me, I got an opportunity to learn many things. It’s a brilliant team that I work with.

Yeah. Awesome. So what, you know, you kind of traverse the entire journey, had quite a journey in terms of like being an IT and, you know, being a conventional engineer, and, you know, working in a conventional space, and then in one of the biggest MNCs for tech, and then moving into something so different, perhaps, which is still, you know, an issue, which is not really accepted by everybody, into WebME, that is.

So what was like the initial response of people around you, your family, and, you know, your peers, your colleagues? I think it was a mixed kind of a response. Obviously, the family said, why are you moving from such a big organization to crypto exchange, where, you know, people ask a lot of questions about crypto exchange, you know, this is really the world where which is still not very highly regulated in India. And from a such a large organization, to a much smaller organization.

So a lot of people suggested me to think about this move. However, you know, some of my friends who are like, you know, my childhood friends, and some of my mentors, who might take regular advice, guided me to get into this journey. There is a certain amount of risk that you have to take at any point of time in your career.

And I’m happy I took it. You know, I’m, I’m completely deep dive into the blockchain technology, you know, once after joining Zebpay. And it has been an excellent journey for me.

Awesome. So tell me a little about Zebpay. And you know, what are the future plans for Zebpay? Is there any bigger milestone or any, any kind of a new release that you guys are looking forward to? Yeah, absolutely.

So, you know, Zebpay, as you mentioned earlier, it is the first crypto exchange that came to India. And it was the only one for a substantial amount of time. And then, you know, due to some RBI guidelines, you know, Zebpay started, Zebpay stopped operations in India for a period of time and eventually bounced back after the Supreme Court verdict on crypto exchange legalities.

In that particular point of time, you know, Zebpay lost a certain amount of market share, which we are looking to regain now and our aim is to again, became number one crypto exchange in India. So in order to do that, what we are doing is we are making our technology stack much more modern, much more user friendly. We are trying to introduce features where people not only see it as a trading platform, but see it more as a financial advisory platform, where you can tell based on each person’s appetite, risk appetite, and also how much he is willing to invest, you know, it can guide individuals on how their overall portfolio should look like.

So many, many, many features, which relate to how people approach towards investing, you will be seeing will eventually become the part of the Zebpay platform. And we are also focusing on become the first exchange that becomes completely compliant with the government guidelines. As you know, government has come up with the PMLA guidelines to be implemented for crypto exchanges.

So which is a wonderful step in terms of regulating, you know, this, the crypto world in India. So I think we are working very aggressively to meet all those guidelines, and make sure that we operate in a much more regulated environment. So that’s how Zebpay is currently positioned.

Apart from the exchange stuff, you know, we also have built some houses like, you know, we call them Ethereum house, Bitcoin house, you know, bat house, where we try to come up with new ideas on web3 domains, primarily into the, you know, Bitcoin, Ethereum, bat domain, and try to develop some new and innovative products around it. So a lot of exciting stuff going on. And hopefully, we will regain the stature in the times to come.

Right. Now, this is something very exciting. So tell me a little more about these, you know, ecosystem houses that you’ve built.

Are these virtual? Or are these like hacker houses that you’ve built across India? No, no. So these are like, currently, these are the houses within the Zebpay, where each one, each of the member needs to join one of these houses. It’s like, you know, the houses that you have in school.

In school. Right. Wow.

No, that’s wonderful. Okay. Yeah.

So within each house, you know, there are regular meets, it can be a physical meet or a virtual meet where they decide that, you know, how, what are the initiatives or what are the products we can develop within that house. So each of those work essentially as a DAO, which is Decentralized Autonomous Organizations, where you can submit a proposal based on the vote of the other house members, if your proposal is accepted, you start working on that initiative or a product, and you develop that product out of that house, and basically give it to a wider community. So that’s how, you know, these houses typically operate.

And with the help of these houses, you know, we are closely connected to Ethereum community, Bitcoin community. In fact, we are hosting several events, Bitcoin Pizza Day, etc. via these houses as well.

So yeah, it’s a wonderful initiative that the organization has taken. Eventually, we will, we will invite individuals across industries to join these houses and make them, you know, much more bigger. Awesome.

Sounds like a wonderful way to keep the company culture alive and kicking. You know, in terms of the team size, how big is the team at Zebpay right now? Yeah, we are a lean team, but we are a high performance team. So, you know, the objective is to have a high performance individual, not very big in terms of size.

So I think, currently, we are 160 plus individuals in Zebpay. Quite a big team. It’s quite big in number, like these Web3 startups that they’re doing and creating products with just very, very small teams.

But I think, you know, you guys have been around for such a long time, have such a big user base, you need at least that kind of manpower. Yes, yes. I think in order to manage the exchange and, you know, the daily operations, the team is split into a tech team, finance team, trade team, you know, human resource, etc.

So we are currently 160 plus, you know, we might actually expand a bit based on, you know, the future roadmap that we have. But again, as I said, you know, we want to create a leaner team, which is high performing. So that’s how we are positioned.

Awesome. So is like Zebpay available in other countries other than India? So at this point of time, Zebpay is also available in Australia. We are looking to expand more in Dubai, Singapore and various other countries.

But our primary focus remains in India. And because Indian market itself is so big, and segment is becoming one of the primary segment, you know, we have crores of investors who are looking to do something in crypto. So even if we are able to capture substantial Indian market, I think we have the potential to become a unicorn.

Absolutely. Wonderful. So tell me a little more, give me some insights about the Indian demographic and how, you know, their trading activity.

So what is like the gender issue that you have on the exchange? And what is usually the kind of ticket size that a usual trader, you know, trades in? And especially after this entire TDS that has been introduced, has like the number of regular daily trades done by a trader? Have you seen a decrease in them? Yes, you know, so last year, 2022, multiple things happened. One, the government introduced various taxes, TDS being one of them. And also, you know, the crypto industry as such also see a lot of bearish sentiment because of various events that happened last year, you know, there were major, major exchanges like FTX that got crashed.

So, you know, this impacted every exchange in the world, including Zebpay. So while, you know, in 2021, we at one point of time, we even saw one day trade worth 100 million, you know, it got to less than a million per day in 2022. So, yes, there was a major impact because of the taxes.

A lot of people started thinking that, you know, if they invest outside Indian exchanges, they might not pay the taxes. But eventually, I think people are also realizing as government is becoming more and more restrictive. Even if you try to invest outside, you will eventually get caught.

So people are now returning back to the Indian exchanges, the exchanges are getting regulated with the government guidelines. So we are seeing a trend back where, you know, the trade volumes are increasing substantially now. The bull market, it’s not a bull market still, but, you know, at least, you know, 2023, it was also expected that the market will continue to have a downfall.

But that’s not, you know, the market has recovered significantly Bitcoin, again, touched 30k dollars. So while, you know, it was some people were saying it will go down up to 8k or 12k or whatever. So I think things are on the recovery path.

When, you know, when I talk about crypto, the good part about Zebpay is that, you know, it has, it stayed strong, even during the tough times. Unlike other exchanges, we never had any kind of a systematic layoff or anything like that. Our teams have been committed, we believe in this ecosystem, we believe that, you know, we can win this space.

And that’s how, you know, we are. So currently, if you see the trade volumes, you know, it has improved over the last quarter significantly, with more features coming up with more people returning back to the Indian exchanges, and the segment becoming more regulated, I think we expect more and more trade, you know, the increased trading volumes in our platform. Okay, yeah, I think the outlook has been even for me, my take has been that it’s very hopeful, especially, you know, even in India, I think that, you know, the trade sentiment and the trader sentiment had gotten a little bit of a setback with the these taxes, but I do feel that largely people are hopeful that you know, once there is taxation coming in, then there might be some kind of policy that will come in as well.

But it will just help and benefit the end user. Do you think that these policies, does this affect the ease of doing business in India, like as an Indian company, you know, with these policies and these taxes that are coming in? Do you think that it has a negative impact on the team in terms of motivation? Not in terms of motivation of the team, because I think the team is extremely motivated, you know, our CEO and you know, our mentors are such that they keep the team motivated. But yeah, these regulations and these taxes, of course, you know, basically slows down the industry.

Right. So I would not say they are bad, because, you know, ultimately, this segment needs to become regulated in order to mainstream adoption. Absolutely.

Cryptos, you know, and I think the current government is making a lot of attempt working with G20 nations to form the firm guidelines around the entire crypto industry, which is actually really, really good. Although, you know, some people might feel that, you know, the government is putting a lot of resistance. And, you know, you cannot have free flow transactions across from one place to another, you will have to inform certain government regulatory bodies at some point of time, you might, you will come into the tax gambits and might need to pay certain taxes.

But even after all that happening, if you see the kind of returns that crypto industry can generate, if you see the kind of value that you know, you can have becoming a crypto investor and a trader, I think it’s much, much ahead and better than, you know, your conventional financial rewards. So we see a lot of hope, you know, with this becoming more regulated, and more acceptable form of money. And that’s how we perceive it.

Right. I think, you know, you and I are on the same page regarding this, I do feel that for mainstream adoption policy must come through and some sort of standardization must come into play. Talking about, you know, standardization and policy, that kind of takes me to the elephant in the room, basically, how you know, people have started preferring decentralized exchanges, over centralized exchanges due to security reasons.

What is your take on that? And how is Zebpay, you know, tackling security? And do you guys also have like a DEX in the offing? Are you planning to work in the decentralized space as well? No, so we don’t have any decentralized exchange offering as such. But yes, we have a very strong security footprint around the customer funds that we keep. So, you know, we have the complete framework of security around the wallets that we have, where we keep the customer funds.

So most of our wallets, where we keep our funds are like cold wallets, where you know, which are not exposed directly on the internet. And we have a workflow through which we track the funds of the users, we ensure that the user funds are secured in our wallets, and are not invested anywhere where, you know, we can have some sort of a risk for the user. So it has never happened with Zebpay that, you know, we have put a hold or, you know, we have basically delayed any kind of a user funds payments.

So we make sure that the funds are secure in our platform with a state of our security protocols that we use. So security, parametric security is one of the key things that Zebpay ensures. And as far as the decentralized exchange is concerned, yes, people are moving towards decentralized exchange.

But you know, in order to use a decentralized exchange, you will eventually need to have some sort of a crypto because decentralized exchange directly do not work on fiat currency. So you eventually need a on-ramp off-ramp solution via some sort of a crypto exchange to purchase USDT in order to go to the DEX. And what government is doing is in if you do any transactions from USDT or any stable coin or any cryptocurrency to a decentralized exchange, it will immediately be flagged to the government.

So the government is basically keeping an eye of which person is trading through decentralized exchange. Even if you are trading through decentralized exchange, you are bound to pay taxes and the liabilities in your crypto. So I think there are ways and mechanisms by which government is tracking the use of centralized exchange, decentralized exchange, which wallets you are transferring money, whether they follow the FATF guidelines or not.

All these things are properly tracked. So yes, people are inclined more towards decentralized exchange, but with decentralized exchange, another key problem is that you need to have your own wallets and you need to know how to manage your wallets. So most of the people who are not tech savvy are not able to use decentralized exchange because in case you are using wallets that are susceptible to attacks, you can eventually lose your money while it cannot happen with a centralized exchange.

Right. Yeah, I think you’ve made some fair points here. In terms of the demographic use and the gender ratio, what is the male to female ratio on your platform? I’m not exactly really sure of what is a male to female ratio in our platform, but all I can tell you is that the female participation or the number of users of female users are increasing day by day.

So that I can tell from the KYC records that we see on a day to day basis. I think initially, it might be 80-20, which is now getting close to 60-40. We might eventually see almost equal participation from male to female.

And most of it is younger generation that are actively involved. That is very heartening to hear. I think as a fellow entrepreneur in the Web3 space, it’s always good to hear these stats because it does make you feel more motivated, I think, for what you’re building and for the future that is in the younger generation.

So pro-Web3, it’s very heartening to see. Absolutely. Absolutely.

Yes. So moving to taxation, coming back to taxation, actually, does Zebpay also help users in filing taxation in any way? Or is that something that you have in the offing? Yes. So Zebpay has integrated with a solution called as TaxNodes.

TaxNode is a solution which helps you to manage your portfolio and calculate taxes automatically. So wherever you keep your funds, it will ask you the details of the sources, it will automatically calculate your taxes. And then you can actually file those taxes to the government during your tax filing.

So I think it’s an integrated solution that comes with Zebpay now. And yeah, so it becomes very, very easy to manage your taxes. Awesome.

Awesome. I think that this really aids the ease of use for the end user. And that’s wonderful to know that you’re trying to, as you said, that Zebpay is probably the most compliant exchange in India.

So that is wonderful to know that the user has, I think that does help in creating trust within the user. And if they want to at least venture into crypto, they’re doing so in a safe environment. Yeah.

Yeah, absolutely. Absolutely. And in fact, if you see the government committee, which is driving these regulations, I think Zebpay represents one of the top spot there, where we are drafting all these regulations along with the government bodies that needs to be followed.

And I think the government officials see us as a bright spot. In fact, we recently visited National Police Academy in Hyderabad, which is the only police academy for IPS officers across India, where we discussed with all the senior major IPS officers about what kind of crimes can they encounter and you know, what are some of the possible ways to tackle those crypto related crimes. In fact, this is something which is very, very new for the police department as well.

So we are trying to help the police and the law abiding bodies to have some proper knowledge about what potential crimes can happen, how can you track, how can you catch. So all these kind of things Zebpay is involved. Awesome.

This is like really wonderful to know that you know, Zebpay is really proving its metal in this space. Now moving on from Zebpay, you know, let’s talk a little about your personal opinion about the trend in this space, like and in the market in general. Right now, obviously, as you mentioned earlier, the market has recovered, but not, you know, so much.

When do you foresee the bull market hitting again? Are you the one for predicting markets? And what is your take? And what do you think is going to perhaps pull the market out of this bear space? Okay, so basically, you know, this question can be addressed in two parts. One is how the blockchain technology is trending. Another is how the crypto is trending.

Okay. So blockchain technology as is moving at a very fast pace. You know, if you see the market share, if you see the market penetration, it is increasing 80% year on year, despite bull market or bear market or you know, any kind of crypto related sentiments.

So, you know, and the blockchain technology is not restricted only to the cryptocurrencies. Stream adoption of technology across India, we are seeing in agritech space, healthcare space, supply chain, finance. So that is something which is growing at a very fast pace, irrespective of how you know, the crypto market is.

So that’s number one. Number two, what’s happening in the crypto market is, you know, I’m not someone who can actually predict when the bull market will come, it is bound to come for sure. But most of the bad actors, you know, which were there in the crypto industry, have been eliminated in the last year, or you know, some part of this year.

So I think and as this space is getting regulated, only those coins or those companies will remain relevant where which will have some actual use case for the people or for the industry. So therefore, you know, I think the growth from here onwards will be a genuine growth. And what all cryptos will be able to shine and will be able to provide the real world use cases for the users will actually see the massive growth from here onwards.

So I am really bullish about the recovery of the crypto world, especially, you know, I think from last quarter of this year or 2024 first quarter, it is anticipated that you know, we will start seeing the major bull run in the crypto world. But I personally feel that, you know, the specific cryptocurrencies, which have a strong user base and which have, which will drive the real world applications for the users will see massive growth. Absolutely.

I think it’s the real builders that will actually bring the bull market back. And I think, you know, users, you utilizing those platforms that are actually solving, you know, their pertinent issues, that is what is going to lead to bigger adoption and better perhaps, candles in the market. Yeah, yeah, sure.

Absolutely. I agree. So in terms of, you know, just like generally in Web3, what are the kind of niches that you feel really bullish about? Well, Web3 technology is a very broad spectrum, right? You know, it’s a new age of internet that comes along with Web3.

So, you know, some of the very key things from the India perspective that we are seeing in terms of blockchain space or Web3 space, and where the government is also putting a lot of energy, by the way, the government of India is having a center of excellence of blockchain in Delhi and only in Gurgaon, where we are trying to build some of the Web3 applications for the new generation of India, like for example, in agriculture space, if you hear, you know, this year’s budget, a lot of emphasis was given on building agritech solutions, which can help to generate more output for the farmers, which can increase the salaries for the farmers, etc. So blockchain is one of the key enabling technology for that. Like, you know, if you manage supply chains via blockchain, if you have the traceability of the crops, if you have the traceability of the agri loans, so this becomes enabling technology for the farmers to get rich, for the people to have, you know, better vegetables, fruits that they eat, and the supply chains become much more smoother.

Similarly, there is also a increasing emphasis on using blockchains for storing the documents securely, like, you know, currently, IIT Kanpur is working for keeping Aadhaars on blockchain, Aadhaar card on blockchain. There are a lot of state governments which are working on creating land records on blockchain so that, you know, we can have a clear traceability of land records and how we can securely store them. The legal bodies across India, the supreme courts, high courts are working towards using blockchain in keeping the legal records on blockchain.

Various universities, you know, some of the bigger names like, you know, IIMs, IITs, and various other universities across India are using blockchain technology for storing the digital credentials and certificates on blockchain. So, I think if you see the overall Web3 future and adoption in India, you know, it is going to be massive. We are even seeing the Web3 phones, you know, the blockchain enabled phones coming into the picture or decentralized applications built up directly on the phone.

So, more and more applications, you will start seeing that they are decentralized in nature, they have a direct connectivity over the blockchain, either through crypto or through the conventional methods. So, I really see this, you know, as a massive adoption this year and next year for blockchain technology in India. Yeah, I think you’re absolutely amen to that.

I think all good things are coming our way in India, especially with the kind of human resource capital that we have is going to really create big waves in Web3. So, Anuj, now that you know, we’re kind of running a little out of time, I would like to ask you quickly three more questions, perhaps before we wrap this up. Would you like to recommend any kind of book or thought leaders, you know, who you think our listeners should really listen to and that, you know, you follow as well, and that you would recommend? See, there are a lot of good books in the blockchain space.

Let me quickly tell you one name, which I generally do not read. Okay, so there is one called as Blockchain Revolution. Right.

Yeah. By Don Tapscott. I think this is one of them.

This is kind of an old book, but it’s still very, very relevant in telling, you know, what blockchain is and what value it brings to the world. So, when I started learning about blockchain, this was one of the first book that I read. And if you are actually starting this journey, I will recommend everyone to read this book.

There are a lot of other books based on your interest area that you can refer, you know, if you want to move into the development, you can start reading some of the books related to smart contract development. Or if you are into the business blockchains, you can start reading about how to write or design applications in Hyperledger Fabric and various other business blockchain space. If you want to become a financial expert in cryptos, I think there are relevant books to learn more about the crypto industry to learn more about how to adopt cryptos, what value it brings, what kind of DeFi applications.

So, a lot of books are available in DeFi space. Some of the very good YouTube channels are also available. Like, you know, if you, you know, from the India standpoint, if you want to know more about blockchain and Web3, I think there is a channel which has started by a Web3 community in India called as Bitinnings.

I will recommend, you know, a lot of people to subscribe and listen, you know, the, so that’s a very good channel to keep updated yourself about blockchain technology. And then there are individual channels if you really want to do some development or, you know, want to study more on blockchain technologies. So maybe what I’ll do is, you know, I’ll send you some list of channels that you can recommend separately, because I don’t have them handy at this point of time.

But yes, I do follow a lot of blockchain and Web3 related channels and also some websites where you can read on daily basis what’s happening in this industry and this space. Absolutely. I think that’d be great.

You can send us some recommendations and we’d link it up in the description of the podcast so that our listeners can, you know, subscribe to the same folks that you do. Now, you know, this is a question that I kind of ask everybody that comes for this particular podcast. If you have to give like advice to somebody who’s perhaps right now in the Web2 world, like you were, and, you know, looking to perhaps explore Web3, what would be your top three suggestions for them to start living on blockchain? Yeah, so first of all, you know, the person, depending on, you know, which age group he is, and you know, what kind of a career he’s pursuing.

First of all, I think he needs or she needs to realize the power of decentralization. So we are living in a centralized world, our internet is centralized, our financial systems are centralized. The first thing that we need to do is to break this shackles and become more decentralized, become more democratic.

So if you believe in democracy, I think you should also be, you could also relate this to becoming more and more decentralized. So study about decentralization, study about how can IT systems become more democratic, that the first thing that you need to do in order to adopt blockchain or in order to move from Web2 to Web3. Then also try to study a bit about security, how blockchain brings your, or makes your application more secure.

What are some of the properties of blockchain such as immutability? How does it incorporate cryptography to secure your records? How does a decentralization helps you to secure them even more so that even one copy gets corrupt, you still have a valid copy available with you. So, and the third thing is that how a conventional code can be converted into a smart contract. So when you write the conventional piece of code, you can write a logic into the code, but you don’t have the ability to transfer the real world assets or you don’t have the ability to enable the transactions of money using that code.

So how do you transform from writing a conventional Web2 code to a Web3 smart contract, where along with the business logic, you get this ability to do the transactions related to money or to do the transactions related to the assets that you can transfer from one place to another. I think if you start with these three small agendas, you will eventually realize that you are moving from Web2 to Web3. Absolutely.

I think that’s wonderful advice for our listeners. Thank you so much Anuj for taking out the time to speak to me, speak to our listeners. Is there anything else that you want to add, any parting thoughts before we wrap this up? No, it’s just that for all the listeners who are listening to this podcast, I think this is a very interesting area to be in.

And if you want to connect with me at any point of time for any advice or anything related to blockchain, any startups, any ideas, any research papers, or anything related to blockchain, I’m always available. I will share my LinkedIn. And please feel free to reach out to me.

Awesome. Thank you so much. I think that’s one wonderful thing about Web3.

It’s such a small ecosystem and everybody is just so open to lend a helping hand to people who are starting their journey in Web3. And I think that that is one of the main beautiful aspects of our ecosystem. Absolutely.

Absolutely. Yeah. So thank you so much for this opportunity and looking forward to talk much more in the next podcast.

Absolutely. Thank you so much. Thank you.

Thank you, Tarusha. Bye.

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