Hey, folks.
We are recording at stable Coin Summit NYC, co hosted by PayPal and Borderless XYZ. And joining me is Ezra Solomon, who is the strategy lead blockchain and DeFi at Fireblocks. Ezra, great to have you.
Very excited to be here. Thank you, Ezra.
I've covered Fireblocks over the years as far as news items on the podcast, and I'm really excited to speak with you to hear about all the cool things you guys have been doing and what you're building and so forth. So tell us a bit about your background and how do you end up at Fireblocks.
Yeah, absolutely so. I've been at fireblox for four years now. What I do now is focus on our blockchain and DeFi strategy. So what that entails is a, you know, thinking about what do we need to prioritize next, what blockchains do we need to integrate based on what our customers are asking for and which DeFi protocols do they need to connect to.
You know, B is actually.
Working with these partners to go to market, and then C is actually working with the customers themselves and whether it's for a blockchain helping them to deploy, or for a DeFi protocol, helping them to build new products.
And give an overview of fireblocks and the services you offer, you know, things along the lines of infrastructure and so on and so forth.
Yeah, absolutely, I mean I think it's super interesting because Firebox is one of those companies that it's like one of the larger companies in the space that very few people know about, and you know, I think that's a testament to the fact that we've done a great job
providing infrastructure for many of the participants in crypto. So really, the way I think about fireblos is what we do really well is first and foremost security, right, But when you think about the use cases in crypto, there's key
management and then there's asset orchestration. Right. So key management, the use cases for that include just custody, which is you know, the most obvious one, but then there's smart contract deployment management, and that's sort of what represents tokenization when you think about managing smart contracts.
We're very good at that type of thing.
And the orchestration is more about how do you plug in all the different APIs for all the venues you use and facilitate the movement of stable coins. So I think those are the two areas that we've done very well. And I think because of that, we've been able to work with many of the largest FinTechs in the space, the market makers, O DC desks, and many other types of participants in order to sort of underpin their infrastructure.
You know, Ultimately, the mission of Fireblocks is to provide the safest and easiest way to interact to digital currencies and uh yeah, and that's what we do.
And that's so critical to the growth and maturation of the asset class. You know, you mentioned to FinTechs and these institutions, many of them they can't you know, go through the process of building all these things that they need a solution like yours and so on that note, have you seen over the past year a lot of adoption. It seems like a lot of traffic companies crypto is a high priority.
Now, yeah, I mean, we definitely have.
And the way I think about it is, at the end of the day, we want our customers to excel in what they do best, which is build their business. And I think in the early days, and you know, we were talking before this about how we've both been in the space for a long time. I remember in twenty seventeen, everyone would be talking about how the best way to secure your crypto would be to just stick it on a ledger in a vault under a Swiss mountain.
That was like the whole thing, right, and our founders sort of said, well, people are going to be using these assets, right, Like, what we need to do is build a solution for digital assets in motion, and that's sort of what the base is for most of the
use cases that we power. So and now when you think about today, all these different institutions and enterprises that want to get into the space, they want to use their assets, they want to do things with them, and I think that's again like that's what we excel at. But they don't want to hire teams to build out infrastructure. I mean, first of all, it would take them years. Second of all, we've seen that happen before, and it's not very secure.
In many cases.
Some companies have done a very good job at it.
It's not impossible.
But what companies want to do is they want to purchase secure software that's been battle tested and then build products on top of that. So as we've seen the acceleration of stable coins and I think one of the exciting and interesting stats that we've put out lately is Fireblocks is helping to facilitate fifteen percent of total stable
coin volume. So as you see players want to get more into this space, we've been a natural step for them in order to do that securely and safely, but also importantly is quickly.
Yeah. Absolutely, And stable coins I've heard is set being said over the years that it's the killer app of blockchain. It kind of was the first example of tokenization, right putting fiat currency on chain. Now these institutions are tokenizing gold and money market funds and much more so. Are you seeing a lot of demand for stable coin services, Yeah.
And I think the way we think about it too well.
First of all, I think the reason why stable points are picking up is because A the value is clear, right, I think you can very easily see where you can plug stable coins into your business and get immediate value. But b now there's some sort of structure around it with Genius, and we now have a better sense of what you need to do in order to be a participant in the stable cooin an ecosystem.
But what we're really.
Excited about is you can almost think of a of stable coins as a trojan horse to get infrastructure into some of these banks, because for anyone in sales that's worked with banks, it will take you years to get through a sales process or procurement process and eventually to work with some of these participants. And in order to do that, you need stakeholders that think that what you're
providing adds value to the business. And now that you have stable coins where all these you know, banks and institutional participants want to get started, you can now give them the infrastructure that they need in order to start tokenizing assets and distributing them. So I think, you know, especially once we get the Market Structure Bill passed, we're going to start to see more and more of these
use cases flush. But again, like the first step for these banks is they need infrastructure in order to participate, because without infrastructure, there's not really anything you can do. Stable coins will be first, and then I think we're going to start to see an uptick in tokenized stocks, token ized treasuries, and all sorts of other interesting assets.
Yeah, the tokenization race is heating up. I mean, it seems almost every Wall Street firm or bank is now looking to tokenize something and they're using different blockchains, you know, a multichain world. So how are you supporting the different blockchains into your system because there's so many And obviously you can go down the market gap and say okay, here to top five, but there are other chains further down the list that are doing unique things as well.
Yeah, So I think where we hyper focus is what our customers need in order to be successful. So you know, any any emerging chain, for example, there are a couple, there's some that we're announcing soon. By the way, that as you start to see, especially in the areas that we find are to be like strategically important, whether it's like banking or payments, some of these chains have significant traction. And for us, it's really important to integrate these blockchains
so our customers have access to them. And I'll go back to the point of us providing infrastructure to make it easier for our customers to launch products. Another issue with holding the infrastructure yourself is you have to think about all these blockchains right.
Like you're seeing now.
I think one of the biggest trends, which I'm very excited about, is privacy, right because there's so many use cases that require privacy, and you know, some of these some of these banks, for example, are not going to launch payments applications where everyone can see all the transactions.
It's just not realistic, right Like I think, I think the transparency of blockchain is great, but we also have to meet some of these participants where they are, so you know, we we listen to what our customers need and ultimately make sure that we integrate these things so that when it gets time for them to launch these products, we have the solution set for them.
You mentioned privacy. Another component of that is security, So tell us a bit about fireblocks and how your approach security to make sure all this is working well and assets are protected and so forth.
Yeah, I mean it's it's a really tricky question. We think about it as like a multi layer security solution because there are different layers of the stack where you can have attackers target you, and we need to make sure that every single part of that stack is secure. The base layer is key manage and that's where we have our MPC technology. You have segregated keys and that helps to keep the keys secure where there's no single
key at any point that can be compromised. But then on top of that there's policy engines and governance layers and the ability to whitelist certain addresses and smart contracts. We have the Fireblocks network, which almost builds this closed environment where you know, all of your participants and the folks in your organization are not going to be able to send assets to an asset to an address that's
not approved. And then on top of that too, if you think about user management, I mean, these are like very basic things that large institutions and enterprises need that they're accustomed to with like their aws. Instance for example, is who's able to even get into this system? And then what are the roles of each of these folks that can access the system. If you're on the finance team and you just need it for accounting purposes, you
should be a viewer. You shouldn't have keys, right, So we think about all of that in order to make sure that regardless of who you are in the organization, you have the right level of access. And then your access is in like a reapproved environment.
That's really great, and you know, as it relates to private permission blockchain that some of these institutions have in house, and then they're looking to bridge it to public chains. Are you facilitating any of that? Does your service is a conducive to that type of thing?
Yeah, I think so, And I think the way I think about it is we provide connectivity to all those different blockchains. So what we do with our customers has helped them think through. Okay, first let's look at the use case, right, what are the requirements for this use case? If you're building a pilot and you have a closed environment and you want to do something on like hyper
ledger Basu, great, we can help you with that. If you do it in an EVM standard and you can sort of poort those smart contracts over to a public EVM blockchain, great we can help you with that too. So it really depends case by case, But the answer
is yes. And again, like I think where it's really important to focus is is taking the business requirements of some of these banks and saying, you know, there's tons of options out there and it can get super confusing, and especially now a stable coins there's specifically there's stable coin chains. Yeah, and it's like which one do you use? Right?
Like, that's the question that we get all the time.
And I think the reason why they're so many is because they're all building different solutions, right, Like Tempo, for example, is building the ability to use any stable coin as gas, right and like that is theoretically really interesting, or to have gasless transfers. So it's all about mapping those requirements
over to blockchains. And I think one of the nice things too about a lot of these blockchains being EVM compatible is that you're not locked in forever, right, Like there's I mean, there is a switching costs associated of course, but if you build all your smart contracts with the EVM standard and you decide, okay, I want to pour it over somewhere else, you.
Can do that. So we do help our customers with that.
Yeah, yeah, I mean interopability, it's so important in a multichain world. And somebody's stable coins and you mentioned they exist on different blockchains, Well maybe this month, I want to use this chain versus the other, and you got to be able to facilitate that.
Yeah, that's exactly right.
And there's tons of really interesting solutions out out there, Layer zero, chain Link, they're all doing an incredible job of building introperability as well. And our perspective is just let's connect to as much as possible. And I think
where I hyper focus looking at blockchain and DeFi is accessibility. Right, So there's some stuff we build natively and then other stuff there's access to via like DAP connectivity the same way you'd think about MetaMask, and we just want our customers to be able to do what they need to do.
Yeah.
Absolutely, Yeah, I mean what you guys are doing is such a core component for adoption, and this year we're expecting a lot of adoption. We're at the cusp of getting crypto marcrostructure pass. It seems like it might happen sometimes as quarter. What do you think is going to be the impact of that legislation being put into place?
Look, I mean, I think the big gap that we've had is legislation. I think in order for especially for institutions and banks to get involved and get comfortable, they need a framework that they can follow.
So I think what.
You've seen historically is a lot of the FinTechs that are a bit more comfortable taking the existing laws and then building their products in a way that they think best represents the law.
They're comfortable to launch that.
But the banks that are saying no, we need very
specific laws in order to get comfortable doing this. So the interesting competitive dynamic that I think we're going to see is is once we do have market structure passed and you have banks come in, you're gonna actually start to see a lot of these FinTechs and banks compete directly because if you can offer similar products, if you can offer a wallet for stable point deposits, and then you can offer an integration to a lending protocol or yield in some capacity, and then you can integrate in
a debit card for spending, a lot of these capabilities are similar.
So then that begs the.
Question of you know, what are they going to do to compete? But you know, right now we're only seeing the more innovative, smaller companies that are comfortable building without clear regulation launching these products.
Right it seems like there's a bit of a tension between the crypto native firms which have been ahead of the curve and the institution's coming in now. But eventually I'll pan out where everything will work out once the legislation's in place.
Yeah, yeah, absolutely.
Finally, what's on your roadmap for this year? What do you as much as you can share.
Yeah, I mean I think what I would want to emphasize is Coinbase has done an incredible job building out this trade everything stack. You know, they're thinking about token ised stocks and borrow lend and all sorts of interesting things there. I think FinTechs globally are seeing that and saying, we can replicate this and give it our own you know, spin, or we can focus on the products that are most
relevant to us in our region. And ultimately what we want to do, especially now that we've recently acquired Dynamic and Trust, so we have a different style of WALT that we can provide to our customers. We have a really nice reporting technology we can provide. We want to help those customers launch all these products. Right, So when we think about integrations to DeFi protocols, we're looking at, Okay, what do our customers need. These fintech customers in exchange
is what do they need? Because what are their end users asking for and where's the threat where if another competitor, if there's launches these products, their users might leave. So they all want to launch these products as quick as possible, you know, as long as they can go through the
regulatory process and get approval for it. So I think one thing I'll say, and this sort of like dovetails into our roadmap, is I think what we can expect over the next couple of quarters is many of these global FinTechs are going to start launching token is, stocks and borrow end and all sorts.
Of interesting things.
And I think the end users in many of these countries, especially in places like Brazil and Argentina, are going to get a much richer diversity of products and access and our goals to support all of that.
That's amazing, and it's incredible at the pace at which it's moving. I mean just the other day we heard in New York Stock Exchange you're going to go twenty four to seven. It's a brave new world.
Yeah DDCC as well, they're thinking about bringing stocks on chain. It's really incredible, you know, being in the space for you know, as long as we have some of these things. This is back when you know, someone at Blackrock mentioning bitcoin with send bitcoin up twenty percent. Yeah, and you know, now we're seeing you know, the all of the trad fi institutions in uh, you know the world really is starting to actually build production implementations of digital assets.
It's really incredible.
It's like something changed in the air, and all the stock exchanges, the banks, the fintech firms around the world, now they have a crypto strategy. Here's what we're doing. Is there. We're going to roll out this service and YadA YadA. It's amazing, Ezra, thank you so much, Thank.
You for having me. Happy to be here.
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