Transcription Episode 69

Hi everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Klay. Klay is the CEO and co-founder of Stability Protocol.

Stability Solutions basically is the first tokenless public blockchain and just the concept is quite innovative. It’s a little similar to the way scale works and these guys are just gaining ground and getting their footing in this space. Their testnet is live.

Anybody can check out their website and perhaps sign up and become a node. So this was a very interesting conversation because this gives a new direction for I think many people who are working in the space. Also for people who are perhaps thinking about creating another chain for themselves and for their business basically without going in the token-first direction.

So I can’t wait for you guys to hear this. Let’s deep dive right in. Hi Klay, how are you doing today? Hi, good morning Tarusha, how are you? Good morning to you too.

Actually we are in different parts of the world so you know I hope you have a great day ahead. Here it’s pretty late in the evening but I’m so glad that you could take out the time to speak to me today. Happy to be here.

Excited for the conversation. Excellent. So Klay for our listeners, would you like to tell us a little about how you got into Web3 and then maybe talk a little about what Stability does and what you guys are building? Sure, yeah absolutely.

So great to be here. So yeah I’m Klay Nichol, co-founder and COO of Stability Protocol. We are the world’s first free tokenless public blockchain.

Prior to Stability I was at Galaxy Digital working for Mike Novogratz where I led the west coast for Galaxy Digital. My main remit there was onboarding the first crypto investment products to the bank platforms and so I onboarded the first products to several of the largest banks here in the United States, Morgan Stanley, PNC as example, Goldman Sachs. This was a watershed moment for the industry.

And it was a real personal milestone as well because I was in traditional finance before that. I was at JP Morgan for eight years. I was at Credit Suisse in London and I was actually a gold analyst at Credit Suisse in Toronto.

So I’ve kind of made the full circle from analog gold to digital gold and my hope was that I could impact our industry and the blockchain technology by bringing institutions into the space, which is why I left my prior career to dive into the blockchain movement. And I kind of got disenfranchised a little bit when I realized that although we were trying to bring in institutions, I thought that’d be the catalyst for this unlock of utility and really mass adoption. But it was then I kind of realized that there was some real design flaws in the design of public blockchains today that are limiting adoption.

And that was really when I reconnected with my co-founder who I’ve known for six years, Julian Braben, and he has been a visionary in the space and we were both trying to solve the same problem because a lot of us got into the space. I know you’ve been in the space a very long time and we wanted to get back to the main pillars of why we got into the space, which was privacy, security, self-sovereignty, a semantic web of the internet that could actually self-execute. And unfortunately, we just don’t have the tools today.

And so that’s why 14 months ago, we self-funded Stability. We’re a team of 13 veteran builders that have been building the last 14 months. And we just launched Stability testnet, which brings to life something that no one thought was possible, which is a free to use tokenless blockchain that doesn’t have a need of cryptocurrency dependency whatsoever.

Well, you’ve had quite a journey and I absolutely love the way you said it. You worked with actual gold and now you’re working with digital gold and it’s quite an arc. But I would really love to understand more about how you guys are building Stability.

You’ve mentioned that it doesn’t have any native token, right? It’s the first perhaps tokenless chain. So how does it really work? And you mentioned that the testnet is live. So can anybody sign up for it to deploy on your protocol? Yeah.

So we have our testnets live. Anyone could, individuals could run a node if they would want. That’s totally possible.

I, for the fear of going too deep into the technicals, because I think we can get lost a little bit there. I’ll give it like a higher level overview. And on our website, there’s technical documentation that people can read through if they really want to get, if they really want to dig in.

And our, our business I should have kind of highlighted is really focused on enterprises and business to business. Anyone can use it, but where we believe we’re going to be able to get mass adoption, just like we did when we had the transition from web one to web two is we need businesses to onboard their customers and their users to get to billions of users. And so the problem we have today is that we have 15 million, 1.5 million monthly active wallets across all relevant blockchains.

And that’s, that’s a data point that you can get from Andreessen Horowitz’s website. And that’s like probably a high number because they’re looking for the bias to the upside, not to the downside. But a lot of, we often talk about wallets and equate them to users in this space when we know that that’s not the case.

Yeah, that is not true. Yeah. I don’t, I don’t believe that either, you know, because that cannot be true.

Like, you know, as an individual, whenever you’re trying out a new application, people make new wallet address, you know, and they, they tried different wallet applications as well. Right. Exactly.

So what does that mean? That means that we’re, we’re probably, if it’s 15 million active wallets, we’re probably sub 10 million, probably closer to 5 million monthly active users in all of web three, which is a wildly small number, but a number that we have to look at not to feel bad about our industry, but to demonstrate that we can do better. And we need to make real changes if we’re going to grow this ecosystem. And so, so when we look at how our blockchain works, we’ve, we’ve removed, we’ve, we’ve completely from the ground up started building in mind with the removal of cryptocurrency dependencies.

And so we don’t, we don’t have, we can, we can, we can do a zero gas transaction where anyone, anyone who has an internet connection, we’ll be able to use our blockchain for free. Okay. We will be running, we will be running validators as a public good, which will take zero, zero gas transactions that are submitted from anyone.

And we’ll process those. Another validator that we’re, we’re onboarding this week is, is Google. Okay.

So one of our first validators is going to be Google because they want to be one click away from the world’s information in web two, and they want to enable one click away from web three for users. And so stability is the first truly permissionless public blockchain. And I say that because we think of Bitcoin or Ethereum or Polygon or pick your pick your chain as permissionless chains, right? But what are they permissioned by? They are, they are permissioned by cryptocurrency.

Absolutely. Yeah. That is a very high bar of permissioning.

Right. And what that does is that results in significant barriers for enterprises where you have regulatory risk, right? We’re here in the U S and so there’s significant regulatory risk, but regardless of jurisdiction, there’s not a lot of clarity on regulation and cryptocurrency. It causes significant barriers, just right there.

You lose a lot of, a lot of companies. The user experience is very challenging, right? Absolutely. It’s very tedious, right? To onboard a new user, somebody who’s coming from web two, perhaps into web three because of this, the same problem, right? Not everybody even knows what a or how to even acquire those tokens to utilize perhaps certain applications.

Yeah. Like to think about, to think about it, like Solana, for example, like the amount of money they’ve spent like $1.2 billion on, on drops and that type of thing. That’s really considered in their, from their perspective and speaking to some of their team members as user acquisition costs.

Right. And so you take that number, divide by the number of users and the, the cost per user acquisition is in the thousand, like highest number. Right.

And so the point is, is like, you probably couldn’t get your parents. It’d be really hard if you paid them five bucks, would they go through all of the steps? And if you look through the whole journey of, of getting someone onboarded to web three, they have to go through, they have to be banked. Number one, they have to have money, wire it to a centralized exchange, buy cryptocurrency, get a wallet, do a seed phrase, like on and on and on.

And there’s a lot of steps there, right? Which is why we have, we have the numbers that we just described. And so the next thing I would say is a challenge just to go through those is, is costs. The costs that even when you think about really small costs, right.

Cause like, Oh, these are, these are sub penny transactions. But like a million transactions on Polygon, for example, would cost you, you know, north of $30,000. Yeah.

And it gets more expensive, right? By the day. Yeah. And, and, and, and, and a million transactions is not a lot in web two.

Right. And, and so, especially when you start thinking about mainstream adoption, like let’s get out of our own little small nascent testing zone and start thinking about big brands and big companies or nations trying to use this tech that there’s going to be need to be billions. And there isn’t a blockchain, not only would there be, that would be, that would be cost efficient, but two that could even scale to the size to do that.

Right. There is no Ethereum, for example, right. Ethereum has 300,000 to 500,000 daily active wallets.

Right. Right. That is likely sub a hundred thousand daily active users.

Right. Yeah. This is the juggernaut in the space.

And we’re in a web two terms where equivalently at like zero. So, so, and, and the last part on that scale aspect is these blockchains today are optimized for what they’re optimized to drive value back to their cryptocurrency and their cryptocurrency is great. We’re steeped in the space here at stability in cryptocurrency and the web three space we’ve all been here.

And we believe cryptocurrency has a future, a bright future in the future, but today blockchain is ready to go. And there’s some amazing utility. And these blockchains are optimized to drive value back to their cryptocurrency.

How does, what, how do we know that? Well, think of like Ethereum as a great use case because we know it well. The block space is purposely congested so that there’s more tokens burned, which makes a deflationary economy. And the price of the token goes up and the price of the token is also tied to the security of the network.

So it is for interlinked. And so the amount of data that is processed on, on Ethereum is like 90 gigabytes a year. It’s not a lot of data.

It’s like one DVD or like 9,000 photos of data and users spent, you know, like $4 billion on gas fees. And the prior year spent 9 billion during the bull market on processing that small amount of data. Right.

So there is a new, a new path that we need to take. Absolutely. I think it’s very pertinent that, you know, something like this comes up and this is very interesting as well.

I would love to dive into your white paper and understand the technicalities of how this kind of works. But yeah, please do go on. Yeah.

Well, no, I think the, it’s, it’s a very novel approach there. The, the, the design of it is, is, is very, once you, once you kind of get into the white space of removing the token and you start looking at what is needed as components to build a blockchain, you start to arrive at a, at a solution. And so from a white paper perspective, we have these technical docs, but it’s funny.

We are often, I’m just going to point this out for, for, for the listeners is that the purpose of a white paper is actually to bring like a, a new brand new like concept or like most of these are economic concepts, right? Cause you have a new token economy, which is what the white paper is built around. Right. We don’t have, we don’t have a token.

And so, and we’re using yes, some novel technology but it’s not a, it’s not a new token economy. So we actually don’t even call it a white paper, believe it or not. Okay.

Awesome. So, you know, again, right, right. If you had to explain perhaps this tokenless approach to creating a blockchain to say, you know, somebody like, like a 10 year old, perhaps, how would you do it in a sentence or two? Okay.

Yeah. So we are as a business model, the first software as a service public blockchain that might help. And if you’re a business or a builder, but let’s start with a business.

You, you’re Nike and you want to issue an NFT of every sale of shoes to that user, right? Millions of transactions. That is something that they would just license our node software and they can run all of their transactions in their, on their own node. And we have a very distinct feature on stability is that we have something we call internally as a private men pool.

Most blockchains have public men pools where all the transactions are in there. That’s where you get MEV and there’s all that type of stuff going on. But more importantly, you don’t have privacy of because blockchains are inherently public, which is another challenge for enterprises.

So that Nike can run their own validator, their own private men pool have all of their own transactions. And we, we can then we can run those transactions for them now from a scale perspective, because we don’t have a token and we’re not congested, we can increase our block size. There is no limit.

So today our block size is roughly 300 million gas to put that in perspective for your audience. Ethereum is at 30 million gas per block. And so we’re a hundred X the throughput today of Ethereum.

We’re about 10 X the throughput of polygon. And that’s using the exact same node infrastructure that Ethereum uses a simple like thousand dollar a year AWS instance to, to run that type of that type of throughput. And the reason we can do that is because we’re using a consensus mechanism, like really at the end of the day, the real core question when he was like, how does it work? It comes down to consensus at the end of the day.

And we’re using a consensus mechanism that is highly robust in our world in web three, our research, our community, we often think of proof of work and proof of stake as being like the stalwart, you know, most tested consensus mechanisms, right? Yeah. In the world, in the, in the spectrum of consensus mechanisms, these are fringe. Like when you talk about mainstream consent, the area of academia of consensus is so large, it’s probably bigger than blockchain in general, right? We’ve been working on consensus mechanisms for thousands of years, right? Yeah.

So, so we’re using a consensus mechanism that’s similar to, to JP Morgan, to Google, these large data centers called raft are raft or something similar to Paxos, not the stablecoin, but the consensus mechanism. And these are highly, highly robust, highly efficient. And so this is how we can scale our network.

Really, there is no limitation on scale of our blockchain. Now, the really limitations end up being, it sounds funny, but it’s like the speed of light and distance, really, because any validator can just simply increase their node instance, their validator instance, to whatever level they need to run the amount of transactions. So they can run billions of transactions a month and that not be a very big cost.

And more importantly, there’s no volatility or variability, which is highly important for companies where they need predictability and costs. Right. Okay.

So tell me something, you know, for anybody to be running a node for your protocol, are there any prerequisites? So do you have like a checklist? Yeah. So we can, I can share with you, really what we’re looking for is partners that are differentiated, and we want a diverse validator set. So we’re going to have 100 validators at launch.

As I said, we just did testnet like a month ago. And we’re now looking at the various verticals where our market, I mean, that’s probably something we can dive into is like, what does a tokenless blockchain unlock? Right. And I know that you work on applications and utility applications.

So I think we can have a deep kind of conversation on what’s possible there. But so we’re looking at gaming, we’re looking at fintech, we’re looking at Web3 brand loyalty, we’re looking at Web3 ticketing. And we’re looking at bringing on validators in each one of those various areas, because at the end of the day, we want to have a very diversified both sector and geographic diversification of our validator set.

And I think that’s just like a really thoughtful way to do it. We’re really looking for partners who see and bringing on these partners, really more not looking for them, but like only willing to bring them on if they really see this vision, because this is another difference between us and every other validator in Web3, you have to flip the economics on their head. Most people will run a validator, assuming that they’re going to make money.

As I said earlier, you have to pay to be a validator of stability. And why would you do that? There’s two reasons. One, you’re an enterprise looking for a scalable blockchain solution.

Our monthly subscription is $5,000 for the largest corporate for a month. However, for individual users and builders today, it’s free. There is no cost.

You can just build applications today for free. And users can use those. So that’s a huge win for innovation and allowing people to just build.

So that kind of gives you a perspective of how that works. Yeah. So this is the one thing that comes to mind is obviously that you’re trying to be as inclusive as possible.

And that is wonderful. But this does lead me to two questions. One, kind of answer in part.

But tell me a little about how would you perhaps encourage developers to build on your protocol without a financial incentive? Because see, the problem right now, and this I think is a problem, by the way, I feel this is a problem in Web3 currently, that anybody who wants developers to build on their protocol or to become a part of the ecosystem, there’s always, even for just creating a community, there’s a lot of financial incentive involved in terms of airdrops and whatnot, which I think is not sustainable. So how do you intend to perhaps move past this challenge? I understand that you have an entirely enterprise arm, which is where you derive your revenue from. But how are you going to get more perhaps users? And are you even targeting to get more users? And how do you get developers to build on your protocol? Yeah.

So on the developer front, I would say that that’s often a question we get is like, how are you going to incentivize? You don’t have the token. And I would say, how well have the best chains done at attracting developers? And how has that worked on usership? We went through the numbers and I would say, and you kind of said, it’s not only not sustainable, I would argue that it doesn’t work, like full stop. And I would say that for us, we’re not really focused on attracting Web3 developers and trying to pull them away from other chains.

That’s not really what we’re focusing on. We are actually focused on attracting just developers in general, more Web2 developers, because we’re looking for Web2 utility, like Web3 enabled, but Web2, like developers who can come in and our SDK will be in languages, JavaScript, in very accessible languages, where they can build something that has real utility. And it’s not just building based on speculation.

So let me bring that to life for you. One of the reasons why Google was interested in onboarding, I said yes, from being one click away, like altruistic for Web3 and letting Web3 grow, but on stability as the first permissionless public blockchain. And I say that because just like the internet, you now have a public blockchain that is available to anyone, right? For free.

You, we can build a Google add-in, right? Where you can go to a Google suite, go open any document, create a document, go file, save, file, save to blockchain for free. That is how you onboard hundreds of millions of users very, very quickly. Because there’s a utility in that people need to authenticate their data, obviously with AI, where it’s going, you need that data provenance.

Is a way that you can mathematically prove that you created that document on that day, it belongs to you, like done. That’s a big utility. Now there’s going to be a lot of money in that.

And there’s going to be developers that are going to want to build for that. And there’s going to be a lot of white space. So I think that’s where you get into the applications.

The builders on our blockchain will be able to make money because they’re going to get a lot of users because look at your smartphone in front of you. How many web three applications do you have on that smartphone today? Zero. I have zero as well.

Like we’re not using these. There is no Uber app. That’s a web three version on your phone today that a ton of people are using.

Otherwise we would know about it. That’s the problem that we can solve by allowing that happen. So let me just talk for a second, how that’s even possible because so stability is the blockchain.

Partnerships are really important. So we’ve partnered with magic link, which is probably the best web three wallet onboarding experience where you can do a single sign on one click experience. They got investment from PayPal.

They raised 80 million bucks. They’re a really solid group. They’ve built a wonderful wallet, custom wallet for stability.

So you can click with any social login. You’re immediately at the application. That application will have, you’ll already have a brand new unfunded wallet associated with you based on your email.

And you can now transact immediately with that application. You could make an NFT. You could do anything, any transaction.

And that is a game changer. Absolutely. I do think that this is going to change the way people perceive blockchains as well, because as we were talking earlier, I think I’m also a huge proponent of creating perhaps interactive applications and creating applications in web three, which lead to greater adoption and not taking perhaps the token first approach, which is what a lot of people do.

And then that is an entirely different ball game. I think if you do have your own native token, then that is another full time job that you’re assigning yourself, just the management of that token and the economy. You’re so right.

And I think like, look at, I like to ask this question to folks because it’s a great mental exercise of how much money did, for example, Polygon make by bringing on Starbucks and their Odyssey loyalty program? The answer is zero dollars. What they make is their token goes up and they can sell that token and make money. They have a finite supply of that token, which makes that unsustainable business model.

When we get out of web three and go into web two, their number one focus is a totally different needs and priority list. Don’t get in trouble with regulators, need to have critical costs, compliance, performance, scale. These are the check marks that they have.

And having a tying your business to a blockchain that has a highly speculative, unsustainable business model in that sense. And I know that sounds like a very downtrodden on the space. I’m not doing that.

I think that like Ethereum and Bitcoin are going to exist and be exceptional web three, like currencies, because that’s what they are. And they’re not. And that’s what we have to also take a slight digression.

We all thought Ethereum back in the day was global compute. Ethereum doesn’t say that anymore. And they tell you to take your compute to another blockchain to run your transactions.

Just use Ethereum as the native gas, as the currency on that other blockchain, right on that L2. Yeah, that that is just adding. Yeah.

It’s unsustainable. It doesn’t seem like, you know, you’re there in for the long game. Like that is how I perceive it.

You know, it seems like very short term gains are being made out of these perspectives and something has to change for people to look at it differently and to use and interact with web three differently. Yeah, we need users. I think the easiest way to say is we need users.

Yeah. Versus speculators. And today, I’m not sure we have any web three users, even though we have numbers of people doing on chain transactions.

It’s largely about speculation. So here’s a really big differentiator that I haven’t touched on, is that stability is the first public blockchain that can do non financial transactions. And what do I mean by non financial transactions? And this goes back to my global compute perspective, where I think stability steps into that role for global compute is that all public blockchains require a gas fee must pay.

So therefore, whatever action you’re doing, has a hurdle of some number, some payment number, right? And it’s a financial transaction by definition, absolutely. stability allows zero gas, zero fee fee lists transactions. And now you can run non financial transactions, a Facebook like, is a transaction in a sense, right? And there’s but there’s like, what value does it have? It has value, because Facebook has a lot of value, right? But you need to be able to start tracking things and not have this, this threshold.

And the great way to look at this is in gaming, like web three gaming, we don’t have a lot of usership, because you’ve financialized the game. Every action has to have this hurdle, it must give you more value than the money you pay for it, right? And that that just removes so much opportunity, so much white space for implementation of a blockchain. Yeah, this is this is a very refreshing perspective.

You know, I talked to so many founders and people who are building in web three, and yours seems to be very aligned to you know, the way I kind of envision the future of web three and the way I see mass adoption being happening. Like I am a true believer, like the example that you gave that apps like Uber or, you know, apps that we use a lot in our day to day lives, none of those exist in web three right now. And they are due to some limits that are posed by the technology itself.

And also, because there has been too much noise around the speculation aspect, and very little, perhaps the correct kind of noise around user adoption and correct use cases. So and you know, as you said, non financial transactions, that that is, that is a beautiful way to put it, because mostly people look at it in terms of money and tokens. And that is a perspective that needs to change.

Yes, we need we need utility focused applications. That’s what we’re, we’re, we’re building like today, we’re partnering with magic, we’re building a, you know, a beaut like a very cool fintech app, where you can move stable coins without touching crypto. And so let me put that perspective of how big of an unlock that is stable coins.

USDC, for example, has like probably 30 to $40 billion in circulation. This is the best digital asset when I say best, I’m defining it by like, today for usership, like could get mass global adoption where enterprises and people all around the world could use this. What’s the barrier of them growing their business is that the only the their their total addressable market is like the less than 10 million people on planet earth that are doing an on chain transaction in a given month.

Because to move it, you must pay a gas fee. So the only way they grow their business is they onboard to another integrate with another blockchain. And that’s when you see like circles, website, you see onboarding to arbitrum, onboarding optimism, onboarding to base onboarding to these places, right.

And it’s the same, it’s the same market. And so what we what we offer is, how about you can have someone sign in to a web three application that totally unfunded, right? And someone send them stable coin if you want, that’s great. Or are they could buy stable coin and transact it but never having to have like to fill a gap like pay in ETH pay in all of these native currencies.

They’re being gatekept stable coins, just like blockchain are being gatekept by cryptocurrency. And so you can recreate the entire PayPal ecosystem with an on chain application that is permissionless and available to everyone, you know, very relatively easily, but you have to have a tokenless blockchain to unlock that. Yeah, no, this is a this is a beautiful perspective.

So you know, if if in one perhaps line, you had to define like what stability does, maybe you can call it like a high availability, decentralized database that you know, you can sort of build on and deploy without ever sort of touching tokens. Yeah, you hit it, right? Like you double double clicking on the database Yeah, that’s, that’s really what a blockchain is, right? And we were potentially I didn’t know we’d go here, but because it’s like a little bit more out there. But really, at the end of the day, we have a solution that can be like the web three cloud.

It’s like what cloud was early days. And now we have global compute, like we know data, you know, a database. So that that is exactly what you’re building.

Exactly. Yes. It’s just a matter of trying to make it come to life.

Yeah, for people, you usually have to come down a few steps to show the actual applications and specific use cases to bring it to life. But But to put it in perspective, I’m like another use case of like database, like that’s a big aspect of what we’re offering to go to, to these enterprise customers is you can have better security, better uptime, a global state and lower costs than your cloud server structure that you’re paying a lot for, which has less of all of the things I just mentioned. And but but but that’s going to take time, just like it took a decade for people to go from their bare metal machines in their office of servers to the cloud, it’s going to take more time for people to transition from the cloud to the blockchain.

But that that will happen in the future. Now that we can have an actual scalable system that’s non reliant on a token, which is mean like just optimize for a cryptocurrency, we just need to optimize for utility and then that should unlock. Yeah, this is wonderful.

So you know, now coming to perhaps the next big milestone for you guys, what would that be? And when are you expecting to hit it? Yeah, the next big milestone is, is mainnet. But there’s there’s some small milestones of bringing customers on board. We we today we have a handful of customers we brought on in the last month.

And we’ve been in we’ve been in a cave building for the last 14 months. And the last 30 days we’ve come out with with here’s what here’s what stability is and come use it that the we will switch on mainnet in the new year once we hit a mass quantity of customers. And I think that’s probably in the, you know, 15 to 20 customer range.

And yeah, so that if there’s, if there are companies or use cases for people who want to explore the potential of what they can build on stability, please reach out we’re we will happily work with you. It’s these early builders and these early validators and companies with use cases that we’re going to spend our most effort as a developer team making sure that they’re successful. Brilliant, brilliant.

So you know, I would encourage everybody who’s thinking of building in this space and Web3, especially, you know, to get in touch with Klay and his team, because what they’re building is, is truly groundbreaking. And it’s very different from any any of these other layers. And, you know, I’ve talked to so many founders of multiple layers that, you know, I haven’t heard a vision like this.

And I’m more part of you guys, like I’m really thoroughly impressed by this particular thing that you have. It’s very refreshing. Thank you.

Thank you. Well, I really appreciate the time that we’ve had to explore it. I look forward to coming back and continuing the conversation with you.

Absolutely. Thank you. Thank you for having me.

Yeah, no, but you know, before we wrap this up, I would I would love to ask you about, you know, any, any challenges that you might have faced while building this? And this will be my second to last question. I’ll come to the last question after you’ve answered this. Yeah, yeah, yeah.

Challenges. I think as it’s been for all of us, and for me, the many years trying to get the big institutions and banks involved, it’s it’s education. I would say we’re from a industry perspective, I’m a little bit disappointed in the in the venture space of like the venture capitalists.

There’s a real filter on really, really thoughtful companies like ours that’s coming into the space because we don’t have a token. And the venture capitalists there, I totally understand their perspective, is they can make a lot of money on a token, despite if whether regardless if the blockchain is successful, and we know most are not, and they know that. And so this is why we’re in kind of regulatory hot water in here in the US and then around the world is it becomes a very extractive process where the end user, the retail user is the one who loses because the the VCs get in early, and then it goes mainnet, which is equivalent of an initial public offering, and they can sell and move on.

So that I worry about for the whole space. It’s been a challenge for us. We’re one of the few that can have the resources to self fund ourselves.

And so we’ve willed this into in perspective, there’s not very many teams that can sustain a 13 person team for 14 months to build a vision like this. And that’s okay. I just I kind of disappointed that there’s probably a lot of really other like wonderful founders out there with really amazing utility focused ideas that might not be getting funded.

So that’s kind of a call out that venture needs to do their job. And their job as an apparatus in society is to fund innovation that that can be a paradigm shift. And they have a fiduciary responsibility, but to make good, like to make money.

And I get that. But these are these are big opportunities, like these are SaaS business models with large return profiles. So that would be the one challenge that I’ve noticed, but it’s one that we can easily overcome.

I just worry about the rest of my fellow builders. Absolutely. No, I think I totally agree with your perspective.

What happens with this entire space, you know, when you look for funding, and you have like, say, a zero to one product, a product that is very innovative in nature, and they haven’t seen it, they can be really, really risk averse as well. And as you said, even though you guys have a very solid revenue model, and even then, if they are still risk averse, because you don’t have perhaps a token, that is a little absurd, right? It’s about getting the best return on your buck. And funding innovation is going to get you there.

Not like funding another, you know, layer two, perhaps. Exactly, exactly. Yeah, yeah.

This is, yeah, this has been this is very eye opening. And I think, you know, you’ve been very honest, and I appreciate the candor. Absolutely.

And because, you know, we were already running out of time, but I really don’t want this conversation to end. So I managed to put in one more question. But now I think I’ll have to come to the last question, which I asked everybody who comes on the show.

You know, you have been in the space for some time. And before that you were in Web2. If you had to give some suggestions to builders or users who are perhaps peering in from the other side, what would be your top two suggestions for them to start living on blockchain? Yeah.

First, I would say, try to solve real problems that offer utility for everyone. You know, I think that’s the first step, because the revenue, the profit, the outcome, the financial outcome will, will occur. If you have like a solid vision and a long term perspective.

The second part is surround yourself with people who share your vision. At Stability, the, the culture and the ethos is so aligned, that everyone is so excited to come to work every day, because we’re building, and we’re going in that direction. And so I would say, recreating those two things, you will have, you’ll just significantly increase your odds of success in a startup land where, you know, 90, 95% of startups are unsuccessful.

I feel you lower that, that, you know, crash and burn rate significantly just with those two ingredients. Yeah, I think that’s very, very sound advice. You know, the first bit where you need to be solving a problem, you know, there are a lot of founders and a lot of builders.

And I think we will. So, you know, I have personally been also guilty of this, that, you know, I think of that, you know, of a problem, and I start building for a solution without ever realizing that perhaps it’s not a problem that actually users are facing. And, you know, that that product is not going to work, right? It’s, it has, it’ll only work when you are actually being able to add value in terms, either in, you know, being a painkiller or a vitamin for the user.

Otherwise, the complete uphill battle trying to convince a user of a problem that they, you know, they really cannot see in that time and age. Yeah, that’s totally right. I often, I often think it’s like, am I solving a real problem they’re facing? Or am I creating a solving an opportunity for them to take advantage of? Right.

And I think we’re doing a lot of the offering opportunities in Web3 today and not solving real problems. Absolutely. I totally agree.

I think that is, that is essentially how, you know, the next bull run is going to come, I think, you know, when there are real folks and a lot of adoption will come when there are real problems being solved. And there are platforms that are actually adding value on a day to day basis in their users lives. Absolutely.

This has been a very wonderful conversation, Klay. Thank you so much for making the time to speak to me. Before we wrap this up, any parting words? No, I think everyone, I think we are getting into a new bull market.

I think it’s starting. I think it’s a funny one for me because the numbers don’t really matter anymore because I’m not focused on them. I’m focused on utility.

And so I would say, utilize the bull market to get funding to build real products. That’s the goal, because there’s going to be a lot of noise like every bull market. And so that would be my parting words.

And reach out if I can be helpful to anyone in any way. This is a small community still, like we really are. And we all need to help each other out to make it better.

Absolutely. I think it’s a small community and, you know, we can only help each other become bigger and become greater. I truly believe that collaboration is key when you are, especially when you’re in an industry which is still in its infancy.

Absolutely. Thank you so much, Klay, for doing this. I’m very, very grateful.

Thank you, Tarusha.

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