Greg Di Prisco, M^0 Labs

Clips
More from Crypto Trailblazers

Greg Di Prisco

Co-Founder & Chief Architect

M^0 Labs

play_circle_outline Introduction to TheCUBE Studios and Crypto Trailblazer series

play_circle_outline Case study of Noble Dollar adoption and success

play_circle_outline Impact and potential future of stablecoins in the industry

Info
Transcript

Greg Di Prisco, M^0 Labs

Greg Di Prisco

Co-Founder & Chief Architect M^0 Labs

John Furrier hosts a conversation with Greg Di Prisco, Co-Founder and Lead Architect at M^0 Labs, from theCUBE Studios at the New York Stock Exchange as part of theCUBE + NYSE Wired Crypto Trailblazers event. 00:00 - Intro 00:02 - Exploring Innovation: Insights from TheCUBE Studios and the Crypto Trailblazer Series 03:08 - Innovative Approaches to Stablecoins: The M^0 Labs Model 05:55 - Greg's Noble Journey: A Case Study in Stablecoin Success 08:39 - The Role and Value of Stablecoins in Modern Finance 12:07 - M^0 Labs System Architecture 16:11 - Strategic V... Read more

explore Keep Exploring

What is the name of the speaker and where are they located? add

What is the partnership between Noble and the Cosmos ecosystem regarding the launch of the Noble Dollar stablecoin, USDN? add

What is the current trend in the stablecoin industry and how do you think it will evolve in the future? add

bolt Powered by CUBE AI

Greg Di Prisco, M^0 Labs

>> Hello, I'm John Furrier. We are here in TheCUBE Studios on the East Coast at the Wall Street, at New York Stock Exchange. It's our East Coast studio, of course we've got Palo Alto, TheCUBE's connecting technology and Wall Street Together, growing ecosystem where money and technology's fusing. This is our Crypto Trailblazer series in partnership with the NYSE Wired and Brian Baumann, who's the founder. An amazing community is developing, so check out all the content on theCUBE.net. It's all there. We've got all the players in, the pioneers, the trailblazers. Greg Di Prisco is here, M^0 Labs, co-founder and chief architect, M with a carrot sign to the zero... M to the zero power. Great to have you on.

>> I'm glad you noticed that, by the way.

>> I did notice it. We were just talking before we came on, it's kind of a nerdy thing. But explain why the logo? Because M to the zero power. How do you say that? Just say M Zero? Do I just say one?

>> We just say M Zero. We hope the math nerds like you see it, but we are a stablecoin company. So anything to the power of zero is one, and one is stable, so that's where we are.

>> Yeah, one is stable, and zero became a number at one point so you're in there with that. So, look, good. All right, so let's get into the stablecoins, it's one of the most hottest areas right now because you're starting to see the maturization of the sector. What I personally love about being in this community since 2012 is watching the pioneers, the grinding, the early adopters, all the community, it was all hardcore. Of course, the price of Bitcoin went skyrocket, Ethereum giving a great development platform, you got other chains coming on, you got a kind of a power law of activity and FTs come on the scene. Yeah, there's some stuff happened in every growing market, there's always an underbelly, things happen. But now you're seeing the maturization, the commercialization, the capitalism side of this market is exposing itself. You're starting to see growth and with decentralization it's transparent, so it's actually good capitalism because you can see everything.

>> It's pure capitalism.

>> It's pure capitalism at the most basic level. And so, what that means is you're starting to see integration, Greg, into other systems. So as an architect, this is a systems problem going on, but it's actually a good thing. So, I'm sure there's some touch points, there's some security things that are happening. We've seen some stuff, but at the end of the day, this is going to fit and it's going to fit. You're doing work in the area. Explain the importance of that and then why stablecoins are becoming so important in this new system.

>> Well, stablecoins are crypto's killer use case. I mean, this is now proven. Stablecoins are the 16th largest holder of US treasuries. That is a statistic that nobody would've believed if you said it to them 10 years ago. So, it's been very exciting to grow with the space. I think they're the killer use case because every other application depends on them. Applications in finance are not very useful without a currency, and a currency is not very useful if it's volatile. So, you need a stablecoin to run a crypto application.

>> Yeah, and what's cool, and I'm doing all these interviews, I love to hear the things that rhyme together. I hear words like payment rails. I hear words like a scale, throughput. So you're starting to see kind of the core mechanisms of how large scale things work.

>> That's the infrastructure, yeah.

>> Yeah, and so that's going to enable a lot of action. So take me through what you guys are doing, because the way I see it, stablecoin as a service model that you guys are doing is going to be beneficial, some people choose different paths. Explain the nuances or the landscape of stablecoins. What are people's choices? Why are they using it? Is it a natural progression? Is it native to their environment? Take us through the landscape.

>> So, we really see ourselves at the intersection of the next generation of blockchain adoption. So, the first generation were these very crypto native applications. They would use stable coins, but they'd use a third party stablecoin. And what we noticed along this process is that a lot of the times the person distributing the stablecoin that's bringing all the value to the stablecoin business, doesn't own the stablecoin. They're distributing somebody else's product and they're doing it for free. So the two juggernauts in the space today, Circle and Tether, they're benefiting from this ecosystem that's been built on other people's backs, and those other people are not keeping any of the economics themselves. So, what we do is we let those brands that are the actual distributors, the ones that deserve the money, we give it back to them. We give them control of their own stablecoin, we let them put their brand on it, but we abstract all of the complexity behind them. So we'll let them build their branded stablecoin, they'll control the contracts, they'll control the compliance, they'll control the yield, and everything from the reserving to the technology we will handle.

>> Are there trade-offs? What's the decision tree on this piece? Because obviously there's other alternatives. Do they sacrifice upside? Do they have to make certain things? Take us through that, I won't say disruption, but the integration of this.

>> The primary trade-off would be on network effects. So today, USDC and USDC, or USDT are broadly accepted in most of the crypto ecosystem. But that's another thing we do. So we make sure that our integrators have enough liquidity to service their use case where they don't have to worry if they adopt our product that they're going to be sacrificing those network effects. So from our perspective, we are just objectively better. We look at Circle and Tether as kind of the Nokia and Blackberry of stablecoins. We think we're the iPhone.

>> Yeah, and so you've got an ecosystem route. Talk about the brand value. So if I want to have my branded stablecoin, what am I getting for that?

>> Well, so you'll be getting a smart contract that you control the compliance on. So it'll have different functions like freeze, that whatever the government wants you to have in there. It'll have automated yield distribution, so all of the yield coming from our reserves, from our protocol will go to you and you decide what to do with it, because we think it's rightfully yours. We'll give you upgrade-ability paths. Basically, we're a very backend technical solution that lets you only do the things you want to do and give everything else to us in the backend.

>> Take me through a brand example that's adopted your stablecoin system. Take us through the use, can you talk about some of your customers?

>> Yeah, I'd love to.

>> Yeah, talk about some of the brands and what happened. How did that all play out?

>> So just I think three weeks ago now, we launched something called Noble Dollar with the Noble team. Noble is the primary stablecoin distributor in the Cosmos ecosystem, they're one of the major blockchain ecosystems. And so far, they've been distributing USDC to a bunch of different applications that operate in the Cosmos universe. So what we did was partnered with them, they built their own branded stablecoin called USDN, so called Noble Dollar and basically, we gave them everything I described to you. They control the contracts, they control the yield. And ever since they've launched three weeks ago, they've already accumulated $50 million in AUM, because people, they're giving a good program to help people adopt this, they're building liquidity. And then the next step is they go to all those integrators that are using USDC and they say, "Look, it's more beneficial to us if you use USDN, it's probably going to be more beneficial to you. Let's do this deal."

>> And so they have instant integration and access to other systems?

>> Well, that's who we , yeah.

>> That's your iPhone example.

>> We go for clients that have built in distribution, have a use case for a stablecoin, and are giving all of their economics to one of USDC or USDT today.

>> What's it been like to be in this wave? Because you said, stablecoin has changed, you gave some of the stats. I mean, it's a rapid change. I mean, what's it been like? What are some of the stories you can share? I mean, stories drive movement. So, tell us a story about what's it like being in there and just some observations around how fast this is moving, on the legitimacy side, how fast that's moving. Take us through some of the things you're seeing.

>> So, I've had a front row seat for most of this. I got into stablecoins full-time in 2017, but I was even involved before that through a company called MakerDAO. I used to run their business development team. And back in 2014, 2015, it was, people were arguing over what a stablecoin even meant. So, I think the first stablecoin was not Tether, it was NuBits, and NuBits was an algorithmic stablecoin, which like every other algorithmic stablecoin, collapsed on itself. So I mean, we've seen the definitions go all over the place. Even Maker, their original version was only crypto collateralized, so there was no stable collateral backing the asset. Basically now, what we've come to is this long progression of what works, what doesn't work. And what works is you want something that approximates cash. That's the thing that people really want to see again in their pockets. If you think about what happened over the last 50 years, you used to go to the store and pay with cash, right?

>> Yeah.

>> That cash had very different properties than what a bank deposit does. And now we've totally wholesale replaced your cash with bank deposits and they're not as good. They have counterparty risk, they don't pay you yield, even though they're taking the risk. They're not fungible because they have to clear with each other. There's a lot of trade-offs using bank deposits instead of cash. We're building digital cash, that's what stablecoins really are.

>> I love it, and it's a digital economy, you're starting to see the face-to-face digital first party relationship between the network effects. Obviously the apps are driving that, gaming's dominating a lot, you're starting to see mainstream applications. I want to ask you about some of the coin because there's a lot of FUD out there for the folks who aren't calling the balls and strikes and in as deep as you are inside the ropes, which is, all the coins that have been floating around that had no intrinsic value or utility. There's been some arbitrage, we've seen some of that stuff-

>> Still a lot of those floating around.

>> Still a lot those floating around. They'll get through the system because now transparency kicks in and now real money making, real money making is happening. What is the intrinsic value bar or utility? Is there one, on terms of having a stablecoin? How would you talk to the folks who are learning like, hey, I see stablecoin, I buy the logic, digital cash, digital assets. I mean, you don't have to be a rocket scientist to figure out that that's happening. Right? So people want to get in, they go, well what's a stablecoin? Do I need to have intrinsic value if I want to have my own coin? What do I have around me? Do I even qualify for it? And do I need intrinsic value? Do I need to have a long-term play? How would you talk to that person who's asking those questions?

>> Well, let's simply define a stablecoin as a digital dollar living on a blockchain that's backed by extremely secure and stable US dollar denominated assets. So, T-bills, right? We back all of our stablecoins with short-term T-bills, sub 180 days. It's the safest collateral in the universe. So, if you're holding one of our partner's stablecoins, you never have to worry that it's going to be under collateralized. Now, I've been selling stablecoins for a long time and I can do it in one sentence. Have you ever sent a wire transfer?

>> Of course.

>> Because if you've sent a wire transfer and then you use a stablecoin, you will never go back. It's like, I went to San Francisco recently, they've got these robot cars now. So, do you know this?

>> Yeah, of course.

>> You go to San Francisco, you push a button and you get in a robot car, it drives you around by itself. And you're thinking to yourself, how could we ever go back to human drivers after this happens? That's the same experience you'll have if you use a stablecoin to send an international payment instead of SWIFT. It is 100 times easier and better to do it.

>> What's going to be the impact to the industry, from your perspective? Obviously, this wave is coming fast, it's going to democratize, it's going to integrate with traditional systems, that will happen. What's the impact and your vision as stablecoins become, when people have that kind of iPhone experience or that ChatGPT experience? Oh, this is a no-brainer. I'm never going back. What is going to happen? What do you see unfolding?

>> I like to say that we are in the dotcom era of stablecoins. So if you remember back in the internet days, everybody's going, I am pets.com, right? Or I'm this.com, and they had to attach the.com to signify they're an internet business. So, the equivalent today is that every stablecoin thinks it needs its own ticker. So, this is what we do today. We build people, we put people's brands on the stablecoin, but the brand isn't necessarily the most important part. It's the control and who controls the funds and who has the compliance flow, etc. So, I think today what you're seeing is this very early generation of integrations, which is only being made possible because the regulators are finally getting on board and allowing real financial institutions to integrate this. But in 10 years, it's going to be so far in the backend that for you as a consumer, you'll see USD, you won't know who's stablecoin it is, but it will be somebody's, and hopefully they're using a technology like ours to enforce fungibility on the backend so that they don't have to worry about safety and security.

>> I mean, your point about abstracting complexity away is huge. Talk about the system you have. Can you share the architecture, what you guys are doing, how it works? Can you shed some insight into the offering?

>> Yeah, we're very unique in the industry in that capacity. So actually, truly every other stablecoin issuer is a monolith. They control the entire stack and even if they were to white label a token for you like we do, they're going to control everything upstream to the point where they have monopoly pricing power over your fees and your infrastructure. Whereas with us-

>> Give me an example of that. What would that look like?

>> So, let's say that Circle decided to open a white labeling business, right? And they let you white label one of their assets and they'll issue a branded stablecoin. Circle still controls everything that happens upstream. So, there's no competition for your fees, there's no competition for your business. You're locked in, it's like if you ever used-

>> Yeah, they can just raise the price, change the economics.

>> Exactly. If you've ever used complicated software where you start doing, you put all the inputs in and then you can't leave. That's what it's going to be like if you go with someone like Circle.

>> Yeah, and that's antithetical to the decentralized economy. I mean, even-

>> It's also just bad business. I mean, you as a consumer do not want monopolies forming. Today we have a duopoly of stablecoin issuers today. It's not sustainable. You can't issue the entire money supply of the planet from two private entities.

>> And nevermind the fact that you could be de-platformed.

>> Yeah, and they've done that before, yeah. So what we do is we built a protocol, a decentralized protocol that's immutable smart contracts, that sits in between a network of issuers and a network of distributors. So every distributor has their own brand, that's what we build people. But upstream on the other side of the protocol where all the reserving is handled, all the yield collection, etc, this is a competitive marketplace of issuers where they're competing for the business of the downstream distributors. And the only way they can do that is to compress fees and add liquidity. So instead of a monopoly, it's a competitive marketplace and they're all competing for your business.

>> So your first principles on it from a design standpoint is in line with the ethos of the culture, which is marketplaces, highly competitive, protocol, managed.

>> You might notice that we are not early to market, we're kind of late in the game, and that's because it took us almost two years to build this technology. We put a tremendous amount of resources into getting the fundamentals correct, so that now when we go out there and we make our pitch, it's credible.

>> First of all, how do you make money on this? You monetizing the long game, you picking the transaction? What's the monetization, what's the business model?

>> We are a scale business. So we want to have every stable coin building on our platform. And as I mentioned with the architecture, that's not antithetical to the ethos of crypto, nor is it antithetical to the business models of our consumers, because they will have this built in competitive landscape where they don't have to worry about us getting too big. Because of that, we think we can actually capture the entire market.

>> And your customers could be, you're chain agnostic then? Any customer could-

>> We're on a lot of chains, yeah.

>> You're in a lot of chains.

>> We will be on a lot of chains.

>> You'll be on a lot of chains, so your customers don't have dependencies with you, do they?

>> No, and we let them port their assets wherever they want. When they build an asset with us, they can say, "I want it to be on Ethereum, Solana, Sui, etc." They can pick and choose.

>> Greg, so you got a obviously a great background. I got to ask, what was the origination store? You guys, did you see the opportunity? Did you watch it for a while? Did you just jump in? Did you pivot? Did you navigate? Did you change directions? Take me through how the origination all happened.

>> So I mentioned I was working at MakerDAO, the third largest stablecoin. I was running their business development team and I left in 2021 because the protocol was truly decentralizing. It was handing things off to the community, and the team that I was working on was winding down so that it wouldn't interfere with that. I left there to go to be in the private sector, in crypto speak, where I was helping banks onboard into MakerDAO. So I was a contractor to commercial banks and I would help them formulate applications so they could get credit from Maker in the form of the stablecoin, Dai. Now when I was doing this, we realized that it just wasn't built in a scalable way for this kind of institutional finance. And I had met my co-founder, Luca at the time, in that process. He was on the other side of the deals. And we said, "Listen, we can just do this a lot better. We can build it. We can build a protocol that is custom fit for institutional finance and scale, and we can just sell it to everybody."

>> I mean, talk about the scale piece. Again, scale is huge, we're talking about big numbers here. You're starting to see that conversation come up a lot. What does that mean for success? Is there a bar level that you have to hurdle over? Security is obviously a huge concern. Talk about that bar you have to kind of cross to hit that scale or to make it work. Honestly, I get the volume scale. Of course, great business model, by the way, on volume. You're like a-

>> Well, that's for us, right? Our investors care that we scale. Our integrators don't need to care about that at all. Like I said, we built an immutable protocol, it could never change, no one can ever touch it. There's no overhead associated with operating it. So as far as they're concerned, once they integrate with us, they're going to have the same great experience they always have, as long as the Ethereum blockchain .

>> Was your scale about on the business model side or was it technology scale, or both?

>> It's on the business model side. Our technology's built, we're continually .

>> So you can deliver, you can fulfill all requirements.

>> We can do it today, yeah. We're ready.

>> All right. So, where are you in the progress of the venture? Obviously you got customers, what are you guys optimizing for? What's the key focus areas for you?

>> So we had originally raised money back in late 2022, early 2023. We did one of the largest seed rounds of that year, because that was right after FTX and it wasn't exactly a big crypto year, but we raised $22.5 million that year. And then a year later, we raised $35 million from Bain Capital, or Bain Capital Crypto. And so we have plenty of money, now we need to deploy it.

>> Got it.

>> And in this space, especially stablecoins, money is power. So we're always looking for more.

>> Put a plug in for what you're looking for, hiring, things you're looking to do. Put a quick plugin for maybe potential openings. What kind of people are you looking for?

>> Well, we're always hiring, but we only hire the top talent in the industry. And especially when it comes to engineers, we only hire the top engineers. I don't think we have any junior engineers in our team, they're all senior. They're all working on incredibly creative and innovative things and that's where we put our money in our efforts.

>> What's the secret sauce for your business?

>> Tech.

>> It's tech.

>> We got to have the best tech. I mean, if you don't have the automation, otherwise this turns into a commoditized business where, I mean, Circle can go and they can write you a check every month and say, "Hey, here's your yield," but we built all of this on chain and a sophisticated protocol in a way that's going to be very hard for a competitor to replicate.

>> It's like I always try to find metaphors. What jumps in my head is, first cloud, but now I'm thinking fab. If you're going to build chips, you need volume, TSMC, one of the biggest leaders. So you guys are essentially, that's your tech. Your tech is-

>> That's not a bad analogy, because they're going to go out there and the customers are going to use those chips in all different ways. But the back end of that business needs to be reliable and it needs to have the best technology of anybody in the space.

>> Yeah, it cannot fail.

>> Exactly.

>> All right. What's the coolest thing you've seen on stablecoin's evolution? Can you share-

>> Oh, just in stablecoins?

>> Or just in general, and now the mood's changed. It's a hostile environment, you kind of pointed out, I'll say it out loud, was a shit show under Biden, and then all the other stuff that happened. But now, there's huge energy right now. You're starting to see the capital markets recognizing it. You're starting to see people see that piece where you're starting to see maybe IPOs, you're starting to see more action in the main, as you would say, capitalism. Pure capitalism. What'd you say? It was the perfect capitalism storm. I mean, capital is not a bad word when you actually have transparency. So, that's another theme. So, that's all happening. What's the coolest thing you've seen in that world?

>> The coolest thing I see in general is a trend, which is that actual financial institutions, actual businesses are adopting this technology, and they're doing it in a way that's no longer little test runs here and there, they're adopting it into their core businesses. I mean, before we even started, we were talking about how Circle and ICE are working together now to clear markets in USDC. That's big for everybody, regardless of where you sit in the competitive landscape.

>> It's a rising tide.

>> Exactly.

>> Totally rising tide. Final question for the folks watching. I know folks that again, that are coming into the industry, certainly a lot of mainstream coming in. How do they know? I mean, obviously value purposes makes total sense. Have your own branded coin, you're backing up all the T-bills and all the systems you've built. How do I do it? Take me through, like, okay, do I call you up? Do I download?

>> No, no, no, no.

>> I'm just cutting.

>> This is the key difference between us and our competitors.

>> Take me through the onboarding and the integration. So, what happens? How do I get involved? Where do I go? What do I do?

>> So if you were one of our competitors, yeah, you'd have to call us. You'd have to sit down with your lawyers, we'd have to write up some agreements. Then maybe we'd send you yield once a month via transfer, right? We do everything on chain. We have abstracted 100% of the complexity to the protocol. So, if you want to launch your own stablecoin, you don't even need to ask our permission. You just use our technology, you find our libraries, you find our contracts, you deploy them yourself. And we can help you if you want, but at the end of the day, we are a completely agnostic layer, where anybody can launch a stablecoin in our platform and it will have the same security, interoperability, and effect as anyone else.

>> Scope the onboarding. Do I have to download libraries? Do I hit a console? Do I do a couple of clicks?

>> So you're just going to deploy contracts to the blockchain. So, we have our stock contracts, we've audited them ad nauseum, and we will let anybody use them.

>> So you turnkey the whole thing?

>> Yes, exactly.

>> On chain. So it's like as much involvement people might need, as much either need advisory, or-

>> We're there to hold your hand, but you don't need us.

>> Got it. So once they figure-

>> You never need our permission to launch a stablecoin contract.

>> So once they figure it out, which is probably quickly, then just off to the races.

>> And this is part of our business plan, where right now we're only handling large white glove clients where we're building it completely for them. But we're planning to open up a stablecoin studio kind of business as well, where anybody can come in, they can launch it themselves. So we hit them much earlier in their life cycle, as opposed to once they've had scale.

>> So if someone's got a good network environment going on that qualifies for stablecoin, you guys are it. All right, great. Thanks for coming.

>> And think of what that offers to the founders. It's so much less overhead in having to deal with all this nonsense.

>> Yeah, I mean, it's like in our business we're seeing on the media side people going direct. Why even deal with intermediaries? You go right direct and just push content out. You guys are basically pushing... I could push their stablecoin out if I have the need for it.

>> Yes, you could do it in five minutes.

>> And I'm not going to break the bank either, because you're playing in the long game.

>> That's right.

>> So I'm going to get the discount on the . You make money on the volume transactions.

>> Yes, exactly.

>> On the total float. Right?

>> We don't make any money unless you do.

>> Got it. Okay. Greg, thanks for coming on. Appreciate it.

>> Thank you for having me.

>> Greg's a trailblazer. Again, pioneers and trailblazers, that's the theme. And all that's rhyming with capitalism in the modern era decentralizes here. It's going mainstream, it's continuing to get on board. The environment's great, you're starting to see the mechanisms that actually run capitalism now transforming over to a new generation. Of course, TheCUBE has it covered, part of our Crypto Trailblazers. I'm John Furrier, your host of TheCUBE. Thanks for watching.