Hey, folks, we're recording at chain Links Smart Cohn and joining me is Jillian Friedman, who is the chief operating officer at Symbiotic. Jillian, great to have.
You, Thank you for having me. Excited.
Yeah, excited to dive into Symbiotic. I would love to start with your background, because you have a very fascinating background. You were in TRADFI, you also ran a debt, so tell us a bit about yourself there.
Sure, I actually launched my career as a bitcoin lawyer back before there only was bitcoin, got to deal with all of those initial legal challenges around icos when Ethereum was launched in twenty fourteen. Sure kind of spent the first half of my career beating the crypto blockchain drum to the traditional finance world with varying degrees of success. And then as the I was the head of digital
asset strategy at one of Canada's big banks. But right before Symbiotic, I was the COO and CFO of one of the first digital asset treasury companies called ether Capital, before they were a thing, and so really got to experience firsthand staking, institutional staking and like what that frontier looks like.
That's incredible. You're an OG jillion, I'm old. Yeah, you I mean you're around when was just a bitcoin and then being early to dats as well is pretty cool.
Yes, and a lot of the challenges related to dats as well. Yeah, it's been really interesting seeing the evolution from the institutional perspective, and like, you know, there's that expression that people people overestimate how quickly technology will impact things, and they underestimate what the impact will be. Sure, kind of burgering it, but like I think that's true. Right, like ten years ago, we were kind of just using different words for the same thing, Like they weren't RWA's,
they were called something else. They weren't called stable coins, they were called something else. But it's really exciting now because you're seeing some of that stuff actually manifest So it's been really cool to watch.
Is it validating for you, you know, being an OG and seeing all the adoptions happening, I would tradify it seems everybody is looking to integrate blockchain in some way or some fashion.
It's definitely validating, And it's also I take things with a big grain of salt because I still believe that product market fit is a lot further away than people think for a lot of these different tech solutions. Sure, And what is exciting though, is seeing product market fit happen with, for example, stable coins, like we run almost our entire business on stable coin rails. Sure, that's really exciting.
But yeah, so it's validating and it also gives like some perspective of like, okay, yeah, like some of this stuff is happening with some of this stuff is further away than we realize. Not from a tech perspective, Okay, it's really from a product market fit.
And do you think the product market fit lag if you want to call it, that is related to lack of crypto legislation or clarity in addition to we're still in the trial and error phase for some of these things.
I think it's a mix, regulation being one of them, but not the only one. Sure, if you're talking about like retail for example, or just mass adoption, the on off apps and like the ease of access is critical.
If you're talking about capital markets, which is more I would say institutional adoption, and where I think, you know, like we could speak about symbiotic as well, and like what we're doing, there's there's missing, there's there's missing pieces that need to be built, but there's also like the need to and we're talking about this before, like communicate, communicate the opportunity and like switch things from very very technical to like speaking the language of whether it's capital
markets people or martial bankers or etc. And like making them understand opportunity and vice versa.
Yeah, it feels like some of that is happening, but it's not fully there yet.
Like I think some of it's happening, yeah, and it's yeah, like the floodgates are open. I think this is the most exciting time, yeah, to be in crypto, other than like maybe ten plus years ago, when it was like everything was like the first time stuff was happening right, but it was still so uncertain, like is e theory I'm going to be a thing like what's bitcoin? Bitcoin's
died like twenty times or something. Right to have to have the access that you have now and the political will that you have now and the regulatory clarity from like the world's biggest markets, absolutely can't like no better time to be in the space.
It's exciting. And here in the United States going to you're not based in the United States, Here in Canada, we're waiting on that Market Structure Clarity Act, and I can't wait to see the innovation and the economic boom that comes from that once everybody knows what the rules of the role are.
Yes, and I would qualify that with a with a butt, and I think this is happening. This is going to happen as well in Canada. There's actually a budget coming out today and it's very likely that there will be insight into how they plan to regulate stable coins and
just the crypto markets in general. And take for example, the issue of yield bearing stable coins and the fact that in like the US bills, it seems like it's still still like complicated and unclear how an entity could issue and launch a yield bearing stable cooin on how that could like circulate in the market.
Sure, and you.
Know it's clearly like the banks and many financial institutions make a lot of money keeping that yield for themselves. And so this is another like, yes, clarity is important, but also like what type of clarity and what kind of like openness it creates for innovation and competitiveness in the market.
Yeah, well, put, I think to your point, like the Genius Act was pastor in the United States, but there's still some pushback from some of the banks. There's still talks of how this will be implemented and executed and so forth. So it's still still some work to be done. Sure, I want to make sure we are able to talk about symbiotic. Yeah, what is symbiotic?
Okay, So symbiotic is universal staking framework. We built the rails to enable assets on chain that are not being utilized, to enable them to become productive by securing or underwriting risk on chain. And so think of like symbiotic as the progression of staking into the establishment of risk transfer markets on chain, which, like circling back to what we were talking about before, is really a critical piece for a capital markets ecosystem to thrive on chain, whether that's
DeFi or the next like iteration of DeFi. Sure, so like kind of v one of like the staking primitive was eth staking, like just proof.
Of steak right.
Version two restaking, which is what we are involved in, which is taking staked capital or even unstaked capital, but as it's on chain. Even now with bitcoin, we have a number of vaults that have wrapped bitcoin that are securing via staking, not just networks, but a whole range of on chain activities, whether it's like fast finality, interoperability, data availability, and then version three or what we're building towards is now additional like financial products.
And you mentioned wrap bitcoin, you mentioned e theorem. Are you supporting a variety of proof of steake blockchains like Solana and others.
So the great thing about our infrastructure is how modular it is and composable, like not to drop a bunch of buzzwords, but like it actually accurately describes the symbiotic stack. So it's really designed for any any chain, network or activity that requires some sort of economic security can leverage our plumbing to plug into economic security so long as there is capital willing to secure that activity.
Got it. So you're very much interoperable with many different block chains. You're kind of infrastructure for staking essentially and giving a broader reach for ye.
It's basically like proof of steak as a service in a way that's actually interoperable. Because we see the way that the space is evolving. Interoperability is super important. Projects are being built in an interoperable way. Sure you know you can stake once secure many chains. We're also we've announced I think last week or maybe it was this week, a new endeavor with chain Link and Solve. A couple
of weeks earlier was with chain Link and Lombard. And so are users that are utilizing like the c c IP interoperability can plug into symbiotics shared security two secure like the data that's being executed and moved around there.
Oh sure, and your your infrastructure that can be used by institutions globally if whether it be in a crypto exchange or a black rock or things like that.
Of course can be used by It can be used by anyone. And I think what's really interesting about having institutions be getting to the point that they can operate in the restaking or universe staking world is that they bring a certain flavor of expertise that will be very useful for the next generation of activities that are being secured or underwritten via staking. So imagine collateral guarantees of
credit facilities. That there's a credit facility, if there's a default on the credit, there's a guarantee or like some people call it insurance, but really a guarantee that is represented via a vault that has assets in it. And so those assets get paid out a yield as part of like the interest payments. But then if there's a default on the credit facility, then those assets would get like slashed or they wouldn't be burned, but they would
be like redistributed back to the original lender. This is the type of thing that traditional commercial lending markets have been engaging in for centuries, like having the concept of like guarantees on loans.
Sure, we're just.
Like optimizing it for DeFi and a permissionless market.
That's great. I know institutions and even look the average show all us in hunt for yield and had to get the most interest because banks they're not giving as much interests anymore. And I personally steak and I earn more interest than I do from my savings account. So that's really great. And are you able to say what type of institutions are using your service? Any names that you can drop, It's okay.
If not, so it's like yes and no. The reality is our service is permissionless. Okay, so we know through for example, one of our newer would I would to say products, but newer types of services that are infrastructure securing is called CAP and that's really we're underwriting stable coin yield strategies and a number of their partners are
like traditional financial institutions. I think Franklin Templeton is one of them, and so like we welcome any partner or whether it's traditional finance, a partner of traditional finance to come and build on Symbiotic. You know, right now most of the interactions are with more DeFi native, but we're starting to see that change, and like hopefully we'll have some announcements soon, but I can't really share.
Yeah, well, on a note, what are some of the things that are on your roadmap that we could potentially expect in twenty twenty six.
Yeah, so definitely some things to be excited about is the transition towards additional yield. A lot of a lot of projects that will be generating fees or like having tgs, which means that if you're staking or restaking to secure these networks, like the yield that you generate will become more interesting. Sure, we're also really excited about this expansion
of the use cases with our tech infrastructure. So like we started with restaking to secured networks and various like blockchain activity, now it's transitioning first with cap but soon with others to be announced to underwrite or secure financial activity. And so so we have the tech, we have the
infrastructure to do that. We have like proof of proof of concepts or like a great very successful product market fit there with underwriting these stable coins and so that's you know, an area that we're actively building building into.
This may seem like a silly question, but I'm very curious about it. So you mentioned like wrap bitcoin, stable coins and so forth, and outside of just regular proof of steak blockchains like Ethan Solona that where you can earn off the network. Is does this infrastructure allow to pretty much wrap anything like even tokenized assets and put it to work.
Yeah, I mean, like in short, the answer is yes. You know, we say, like you can stake almost any asset to secure almost any network without getting into like the technical components, which I can't I'm not the best person to speak to about that. But really the the the answer is more about demand and interest, like is there appetite or an interest to secure a network with like an RWA that represents ownership in a condo association? Is there? Like it's it's really more about like the tech,
the tech can do almost anything. Like that's that's not the the obstacle or the thing that we need to stop and think about. It's really about PMF and about finding the right like commercial sweet spot for for how to best utilize these assets. Like an easier example with that is even stable coins, stable coins proxy for the
US dollar. It's it's sort of it's a question of like cost of capital, like can you if you can generate whatever like money market yield is in an account through a money market account, or even like chain, what's the how does that compete with like the yield that you would get by restaking a stable coin. And up until recently, like that analysis has resulted in like stable there's not like a ton of stable coins and restaking
to get yield. Okay, I think that will change, sure, but you know, it's it's a question of economics as well.
Yeah, yeah, that makes sense. I'm excited for the future of staking. You know, at one point here in the United States that got shut off.
I know, it's crazy.
Yeah, it's been turned back on. Yeah, but what do you think the future of staking looks like? I know that's a very open ending question and very macro, but you know, what let's say twenty thirty twenty thirty five, with more people are coming on chain, how do you think they interact with steaking?
Okay, like this is one take, could you know, finger to the wind, crystal ball. I don't hold me to it, but I think like the definition of what staking means is evolving to like really just reference the concept of allocating something of value to a certain activity or to ensure underwrite a certain activity, and then in return for yield with the and the risk exposure is slashing. Like I find staking, the concept of staking, the concept of slashing.
The concepts of like rewards or like they have all versions in traditional markets and in like financial structures that have been around for a long time. So I think the future of staking is to absorb more of that that type of activity, and so could mean more than just securing a network and curing transactions and validating transactions. It could mean underwriting as I mentioned, like credit markets, it could mean ensuring a whole range of different types
of activities, whether it's on chain or off chain. Sure, and so that's how I see staking evolving. And then and of course with restaking to also secure networks and like the backbone of blockchain is economic security, so staking will always be there. It's like a question of like how much can we optimize it, Like vanilla steaking is like step one, right.
Yeah, yeah, I'm curious to see how it evolves, especially when institutions coming in and then having a more global or having more participants globally in the crypto asset class. So it's exciting, yeah, bullish, Yeah for sure, Jillian, Thank you so much, looking forward to the future updates around Symbiotic. Thank you so much for taking the time. Thank you for having me this episode. It is brought to you by Treasure. Treasure makes beautifully crafted hardware wallets that allow
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