Onchain to Bank Them All: Bringing Real Value to Consumers

Okay, while we still arrive, a brief anecdote. A couple of days, we went out for lunch on a Monday, not far from here, with some colleagues. And I was actually bragging about the title of this panel, which is, On Chain to Bank Them All. But then my colleague, Agastir, reminded me of the Lord of the Rings, and one ring to rule them all is actually the villain. And this is certainly not the story we want to tell here, that crypto is the villain to lock everyone in.

It's actually the opposite. And why is that? Well, first of all, there is no bank to bank them all globally. There's no global bank that has different jurisdictions, monetary systems, stuff like that, the infrastructure is not there, and so on. Also, that would be quite scary if we have a centralized system with all those data, with the possibility to basically unbank everyone in the world in one step of a finger.

However, the vision of banking on chain, on chain to bank them all, is quite interesting, because it is a robust infrastructure, it gives access to everyone, it has way more stability on the ground level, and we can have very, very diverse, different Legos on chain. And therefore, so what is not sufficient, certainly, is just to have the globalized settlement layer. So what we need is financial Legos, and those Legos are quite well represented here. And we have here Patrick, sorry, with you alone, let's go that round, from Cao, which is basically, theoretically, bringing trading to the billions. We have Patrick from Circle bringing money to the billions, and we have Theo from Morpho bringing lending to the billions.

And with these crucial Legos, financial Legos, on this globalized settlement layer called blockchain, we indeed can bank all without sacrificing the core values of crypto. And that's quite an interesting vision. I'm pretty passionate about that. And in this panel, we want to talk about growth of this ecosystem to finally reach this billion, to potentially bank all. What are the kind of thresholds for growth or hurdles we have to take?

Topics like monetization, extremely important. Obviously, I as head of revenue at SAFE am particularly interested in that, and other hurdles we can see. Obviously, with Patrick, we have a specialist on regulation. Certainly, you will get one or two questions on the beloved ECB and the EU Commission. Okay, let's kick it off.

Theo, let's start with a little bit of a provocative thought. So I read a blog post from Paul, founder of Morpho. And there you're talking about also opening up for KYC pools, maybe some permissions on Morpho. So is the path to grow, to kind of have black box banking now on the chain, silo up, have not this kind of money layers that plug into each other? Is this your vision of growth?

So I think the vision of KYC, like constraints on chain, can be seen at two levels. Either it has to be enforced on the blockchain itself, so the market, the liquidity, or it can be enforced at the platform level. So if you think about the Coinbase product we have with them, there's no notion of KYC liquidity. However, in order to use the products from the Coinbase main app, you need to KYC. So the question is, should the KYC happen at the platform level?

If so, there can be multiple KYC, we don't really care if the liquidity itself is permissionless, or do we need to KYC the liquidity? If we just do that, there's a couple of ways to do it. The first way is with Morpho's existing version, like V1. So Morpho is a learning protocol, there's a couple of versions to it. It was originally founded three years ago, as a layer on top of Avian Compound.

Then we branched out, built something fully orthogonal to this, where we externalized risk management away from the protocol. And now, last Thursday, we announced Morpho V2, which is a fixed rate, fixed time learning protocol, with an order book on top. And so answering the question of KYC also answers the question of the underlying protocol. In its current form, it's cumbersome to do KYC, this is why you have no permission or KYC liquidity on chain. I mean, very little.

And it doesn't scale because you need to bootstrap new markets and therefore fragment liquidity. In the context of Morpho V2, because you have an intent order book on top, you can commit the same liquidity that will respect various conditions. So you could say, I'm happy to lend my USDC against normal liquidity or against, let's say, KYC collateral. So by virtue of saying, I can lend against various options, I'm not fragmenting liquidity. I can allocate my liquidity to various profiles.

And we think that's a big unlock. Because the problem today is that you want to do KYC, you need to create net new liquidity that will respect these conditions. Well, if you have this OR function, it's much more scalable. And maybe another point to this, because I was just thinking, banks can be seen on Morpho as vaults. So they don't necessarily fragment liquidity.

They can use the same market. So you can just say, oh, I'm bank A, I'm going to tap into this market. I'm bank B, I'm going to tap into market A and market B. But they still share one market. So the notion of a bank is just more like a virtual layer on top of an existing liquidity network.

But the vault doesn't fragment liquidity. So the notion of silo might be also different if you see a global share liquidity layer. Okay, so you remain permissionless for the ones who want to do permissionless define. Yeah, I think maybe the market will evolve in these two pools of liquidity. So it might not be like every bank has a silo.

It's going to have a massive pool of permissionless, a massive pool of permissions. But every bank will tap into the same. And why? Because it's scalable. They can come and have yield immediately and they can tap into liquidity they want to borrow.

It was V2 to drill down a little bit. And later you get also some questions on fall asleep. Is V2 meant to cater to institutions that need for fixed term lending? Because that's quite – I don't know who took a house loan. I didn't.

But if you do, you have a fixed duration and a fixed – at least for 10, maybe up to 20 years, a fixed interest rate. Is V2 an answer to the requirements of TradFi? So V2 is much more general than V1. And so therefore, it can cater to anyone. To the same extent, you could do what you can do with V1, but better.

You could also do like OTC lending on-chain. So you could say, I'm Julian. I'm happy to lend to Galaxy. I set up the Galaxy wallet address in a whitelist when I'm borrowing. And I'm essentially doing like an OTC transaction.

It's just using like an on-chain infrastructure. So for instance, CV2 has a way to do whatever we can do right now, plus use cases which are bespoke. And to the same way, like an OTC transaction cannot be done with a lending pool because it's a bespoke transaction. You could do it with like another book. And is this over collateralized still?

You could also do – so part of the parameters of making an intent on this new lending protocol is like stipulating, I'm happy to borrow with X collateral and Y loan assets. You could leave the collateral parameter empty. Effectively, you would be doing under-collateralized, but you need to find someone who will lend to you against this. And I think Paul's article is called The Price of Trust, and that's very much what lending is. So you could do – under-collateralized means, oh, I'm lending against nothing, but you have to trust me.

And so finding a way to compute what this trust is or to verify it is, I think, something that we will have to work on or like work with other partners. I think maybe New World is a good example of this. Use your World ID to do things. I mean, I'm not sure, but there's going to be like primitives on chain. So Morpho is bringing Trust Me Bro on chain.

That's interesting. Sounds a little bit like RISC, but certainly interesting to discover. I mean, opening up Treadflight has some potential, I would say, for growth on chain. So, Adrian, let's talk about COW. Yesterday, on the same stage, there was a talk from Flashbots showing data from Dune that Flashbots is like – I don't know if it's the supermajority, but the biggest chunk of origination of retail flow is happening on COW.

That's crazy. I think like most people in the audience yesterday, I think we're underestimating that. I did, even though I'm a COW user. So that's really cool. But is on-chain retail enough?

And how do you see – what is your way to scale to the billions? We see that with Morpho. They have a distribution now with Coinbase. We see that with Circle. They are distributed by Sexes, centralized exchanges.

What's the path to grow to 1 billion users for COW? So today, I will not make that announcement that you may be waiting for yet. Okay. Though it's true that going to the path of working with this centralized interface and app is something that we are looking into it. Though what we are focusing on right now, it's really to provide the best layer for discovery.

As you mentioned on the talk yesterday, we have potentially the best liquidity finding in the market. And this is where we are going. Also, further than just these big actors, Coinbase, et cetera, we are part of the crypto ecosystem. And what we are doing also is to partner with our friends of the ecosystem, let's say. We have a partnership together.

And this is also how we look to find for retail. Onboarding the next billion will not be so easy because the next billion is not yet on Coinbase. What will happen to onboard the next billion? It's either going through this hybrid system where you have a DeFi layer and then potentially a centralized interface. Like GnosisPay, Zil?

Or the neobanks, Revolute, Robinhood, et cetera, et cetera. Because this is where users are today. Though in my very personal opinion, being in the DeFi ecosystem, we should at all costs avoid going there with these neobanks. And actually propose the same type of service that they are, knowing that in DeFi and crypto, we have this problem of user experience. Of what?

User experience, UX. And it's true that this is actually providing what is best on the market. I see. Patrick, you are in a decently successful multinational corporation. But in that you have a particularly interesting job.

And I think this perspective on regulation, I don't know, I looked it up again. It's a quite complex title. Let me see it. It's Senior Director, EU Strategy Policy at Circle. Everyone knows you from Twitter, I believe, at least during the years of Mika.

So there's a lot of buzz on Bloomberg and everyone in crypto and stablecoin in everyone's mouth. And I must say, I'm personally shocked that TradFi is shocked about crypto. Because for us, it's a little bit like a continuous growth. We see all this Legos coming together and we are already using crypto every day. At least I, via MosesPay.

And what is the situation in the ECB and the EU Commission now, seeing all this buzz, TradFi really waking up? And I remember the funny guys at the ECB constantly having these extremely funny blog posts. Among others, they said like Bitcoin's last stand when it kind of reached this time 70,000 or something like that. Now we are above 100. So what are these people doing now?

Do they get it now? Yes. I mean, first of all, thanks a lot for having me Julian. It's great to be back and share the stage with you. It's been a while.

So I would say the main difference, if you look at what happened in Europe, is that those discussions were mostly theoretical a few years ago. I mean, to some extent, they haven't evolved that much, those discussions. Because even back in the day, 2019, Libra white paper, we were discussing potentially billions of people coming online and use stable coins through WhatsApp and Facebook and others. And to some extent, the discussions are similar to those. But this time, let's say five or six years later, they are underpinned by data and by transactions that are happening in the real world.

And that at this stage, I think, are undeniable for anyone, for us as the industry, but also for the larger tradfi institutions, for regulators, etc. If you look at one example, corporate treasuries, SpaceX and others, so large publicly listed companies using stable coins for treasury operations. If you look at Visa MasterCard being able to integrate stable coins for settlement with merchants. If you look at large, you know, neobanks and others, like massive fintechs adopting stable coins like Nubank and Brazil and others. I think this is the stage where there's just, there's no way back, right?

The adoption path is clear. And this is what now those entities, also at the policy and the regulatory level, are confronted with. In Europe, I would say we have come up with the MECA framework that sets, you know, the broader context. There's good things in it. There's things that hopefully in the future will be addressed and adjusted.

But I think it gives us, and it gives also tradfi, the clarity they need to tap into the space. I mean, probably those actors aren't at Safecon or Dapcon today. But almost every major bank, including every major European bank, is currently sitting behind the scenes and discussing what their stable coin strategy is. That might be launching one. That might be partnering with stable coin issuers for the reserve bank part.

That might be orchestrating stable coin payments. So everyone is discussing how to get involved. And that's quite exciting. And I think there was yesterday the announcement of the JP Morgan deposit token launching on BASE, which is yet one of these news coming in, right? Yeah, I think it's hard to keep up with the news.

And to some extent, we'll have to just get used to more and more announcements every day. And I think what we or what I am mostly focusing on is beyond the announcement and the news and the headlines. It's just looking at the data. And if you look at Visa dashboards, if you look at new reports from Artemis, from Castle and Adventures, the thing that excites me most is that at this point, it's being used. It's not only being announced.

And, yeah, I can't wait to see 12 months from now where we'll be. Yeah. And what makes me most excited is the first use case. You can see it with Zeal. I don't know if we have Hannes today here.

He's definitely at Dapcon. That you've combined all those legos right now, right? You have a stable coin, and you can, with a click of a button, let your stable yield up to a certain amount to be liquid all the time when you pay. Or the other way around, you put up your rep-eath or rep-stake-eath, let that yield, and you lend against this position. And this is my vision for OpenFight.

This is my vision for the billion people coming on-chain because it's just so much better than what banking can do. So I think I'll not make the voice, but everyone knows the Moo, okay? Do you? I guess so, right? Okay, so it's the Moo from CowSwap, which is quite recognizable, I would say.

And since, Audran, you already touched on the topic of UX, being recognizable is probably not enough. When I look into, when I use CowSwap, which is obviously the go-to exchange DEX, as we yesterday learned, I see things like what solver solved my problem, my intent, okay? What is the refund? And I'm just wondering, is this the language new retail, it's not in crypto, it's not visiting Dapcon, will understand? And Kaveh, I think you know what I mean.

I think it's not. What is needed to bring in more people, make it as concrete as possible? Yeah, this is a really good point. You people have zero understanding of what's crypto, what's possible, what are the benefits, but also what are the pain points. And you're mentioning the refund, and the whole MEV situation on blockchain is something that does not exist otherwise.

And it's true that up to now, our value proposition was targeting crypto users. We're developing crypto products for crypto users. That's the little echo chamber. And this crypto user would clearly understand, and we have now the proof that they understood the point. So today, if we really want to onboard the rest of the world, is first to explain the benefits of crypto, what people can do with their crypto assets.

Then it's really about educating them on how it works, what are the dangers. And this is actually something that we are working on now. We are creating this whole educative content to actually get all these new people that are interested for whatever reason with crypto markets, DeFi products, for them to understand what's going on. And I do believe that here there's something missing for the whole ecosystem. And as I just said before, up to now, we are really developing a product for ourselves, because we made money in crypto, and we have to put this money at work.

But we cannot stay in this stage. We really need to educate, and this is the path we are taking now. Maybe reflecting to what Lukas said before this talk here, and what we in Safe Labs also need to master, is really take the people by the hand and guide them through this ecosystem of crypto. I mean, I guess most of you use also Safe Wallet, but who of you would guide your best friend who's not working in crypto to use Safe Wallet first, despite you being convinced it's the right product? So many of us look into the same problem, and we really need to solve this UX problem.

Theo, Morpho made a lot of noise, and you were also referring to the integration with Coinbase. I think it's on base, you put up CBBTC as collateral, you lend USDC, nice connection to Patrick again, against that. Is the path only via, like we just seek to be integrated in the big existing either fintechs, like Robinhood, or centralized crypto players? Is this the path to growth? It's difficult to say exactly what's going to happen in the next 10 years.

However, as you described, new users come to where it's easy, and where the UX is best, and when the rate is great. And so I think you have to just specialize as what you're best at. So, for instance, in the case of Morpho, we could have a front end which is incredibly beautiful, where you have one option for your USDC and one click down. But as we discussed many times, whenever you go to Morpho, you have 15 options. You have to understand what the collateral is, it's cumbersome.

And we're kind of just trying to think, okay, what's our role, and what do we want to achieve here? Are we going to be best at building a liquidity network with, like, steps and great rates? And we're going to let, like, fintechs, neobanks, just a wrapper on top of these products, do the distribution work for us? And frankly, I think we believe that the latter will bring the most growth over the medium term. And so I don't think it's about, like, oh, do we don't care about UX?

Like, who can do it better? And so our thesis is, you know, like, the mallet, which is DeFi in the back, fintech in the front. Why? Because they're just, as you said, they're better at us. And if you look at the way abstraction is going, I think we're getting to a path which is like a merge of the DeFi ethos, which is a Web3 wallet per user.

So on Coinbase, someone is on the main app, but what happens to them is like whenever they enter this product, a Coinbase Web3 wallet, a smart wallet will be spun out on their behalf, from which they have the private keys. And so I think we're kind of like sort of going to converge into like a hybrid model, which is going to be generally like back-end, on-chain, auditable, unstoppable, but like the product managers of Apple, Robinhood, like Coinbase, who actually are great at like creating user flows. And a testament of this is like, okay, this is theoretical. If we look at numbers, the Coinbase product, which is powered by Morpho, has I think $700 million as collateral, with $400 million USDC borrowed in like four months. You know, that's successful, like for an on-chain product.

So to me, there's the thesis of the theory, and it's like, okay, when we launch a product using this thesis, does it work? And the data, if we look at data, it's actually working like extremely well. So maybe, you know, it seems like that's the path that has the most impact. And I think that's what we care about, like impact. I think it's been in the media talked a lot about this distribution game and whether to look for distribution via these track-by or established players or the new ones.

There's a funny thing when you talk about this today, but maybe you remember that, Patrick. So we have this in Stuttgart, where Porsche is from, and among other big companies. And there's Börse Stuttgart, which is like a local exchange. They are 150 years old. And back then in 2018, 19, I think, they got their license for custody in crypto and trading crypto.

At the same time, Coinbase came into the German market or European market. And the question was, like, who's going to win the race of end customers for trading crypto in Germany or maybe even in Europe? What today sounds quite funny, I guess, like most of you have not heard about Börse Stuttgart exchange, is actually was really a debated question, because is the one who's with 150 years of experience, all the licenses better to adopt tech? Or is it easier if you have the tech like Coinbase to adopt license and distribution and stuff like that? The race is made, no question about that, Coinbase won that.

But so who won the new paradigm? When we look into a mobile banking, it was not the established banks or the established direct banks who were digital first banks, like in Germany, DKB, Comdirekt, something like that, who won the race for mobile. No, it was Revolut and 26, and Nubank and whatsoever. So I hope, this is my crypto heart, and I think at DEF CON you can say that, that the big, big winners of crypto and OpenFi will rather be the ZILs and BaseApps and Gnosis HQs than the already big established players. But maybe someone who's a little bit in the middle, because you're really neutral, Patrick, you're providing money to everyone, right?

You see a lot of adoption in centralized exchanges like Coinbase, but also in DeFi. USDC is basically the DeFi token. If you would have to bet your money on one of those buckets, where do you think over the next 10 years will you see more growth and more demand for USDC, established players or new players? I think it's hard to make that distinction to some extent, because as Theo mentioned with those words, to some extent, at least I think they will converge. And so, just to take one example, right, let's say the Morpho pool, you just, you know, collateralize your Bitcoin or your ETH and you take out a loan in, let's say, USDC, or maybe in the future, EURC, as we hear in Europe.

I'm pretty sure that in the future, the EURC or the USDC that you borrow, you might potentially use it to then, for example, buy a house over here in the real world, so to say. And that those kind of services will rather be provided by existing traditional financial market players, potentially banks and others. So, to some extent, I think it's hard to make the distinction and those two words will grow in parallel. For sure, what you mentioned with respect to distribution is that for the money layer itself, and we at Circle, we see ourselves as building the money layer, the money protocol for the internet, liquidity and network effects are incredibly strong. I mean, they have been strong already for traditional, let's say, e-money.

I think we all use PayPal over here in Germany because everyone uses it, right? It's by far the most successful e-money product over here. And to some extent, I think that's even stronger for the tokenized money layer and the internet because you have the money network effect building on a, let's say, platform or tech network effect. So, one network effect building on top of the other. And this is super important for how we think about who will use our stable coins.

What we try to serve and what we try to build is the most liquid, the most usable and the most regulated money layer on the internet. And then, be it DeFi, be it TradFi, companies, developers, that's, by the way, often times it's not known, but Circle also builds a ton of developer products. So, wallet products, smart contract services, et cetera, so I also encourage everyone here to check out, build on Circles or Discord, for example. But so, everyone can just tap into that money protocol and money lego and choose and pick whatever they want. And then, we believe those use cases will reinforce themselves.

As I said at the beginning, or a few questions before, I'm at SAFE, the head of revenue, and we all, or like many companies in Web3, need to figure out how to make money. The times of the Web3 Kumbaya, where you just live off your funds from the ICO, are over. It's also to be confident enough to make money with your product and demand money for your customers. Somewhat, this is maybe also another proof point of product market fit. But it may also be a little bit more difficult than in banking, where you lock people up and you get the card only when you pay and money is sticky and the account is sticky, so people will pay if you just collect the fee and they will do it.

But it is important, especially for Circle, since you are not kind of, yeah, maybe money is a use case, but I think more tangible use case is trading or lending, so you need those protocols on chain that create use cases, why people would then use their stable coins in those use cases, right? So what do you do at Circle, or is this relevant for you, that you see that your partners can also monetize? Because after all, you will have a more healthy P&L if more people can monetize with the usage of your services. Yeah, no, of course. I mean, what we try to do is really to build a powerful flywheel effect and to make developers use our product that then leads to liquidity on chain, that makes users use our product, that builds user demand, that then brings, for example, banks or fintechs to build services on top of that product because they see they are users.

And all these actors, they reinforce themselves. So developers, potentially try-try fintech players, users, and there's different angles to that. I mean, for sure, partnerships play a massive role, and I think everyone's well aware of Circle's distribution partnerships, of our massive amount of partners. We have the Circle Alliance partnership program, so to say, with hundreds, if not thousands at this stage, of partners out there with whom we work, but then it's also about how to make our products just the most usable and the most liquid. That's also part of the equation, and in that respect, we have our developer team that builds on developer relations, developer toolkits, and all that's needed on that front.

And I think you need to play all these different avenues if you want to be successful as the money layer of the internet because without distribution, you can't be the most regulated stablecoin in the world, or you can be the best product in terms of how the technical stablecoin is built, but not many people will use it. So you need all the different, I mean, I think regulation and compliance, you need to check the box, you need to be strong there, especially when it comes to internationalizing your operations, product and tech, make it as usable, as easy to plug in as possible, and then distribution, of course. Theo, we just launched the lending feature. Shout out to the SAFE team who worked on that. So in SAFE, you can now on the left panel, hit the earn button and earn money on your stables and many other assets like Repstate ETH.

We do that with the help of Kirin, who sponsored the widget, and in the background, there are Morpho Vaults by the curator Steakhouse. It's really cool, and like many people can earn here, right? Kirin does earn, we earn a cut on the performance fee, and it's also Steakhouse, but one protocol sitting now at four billion, which is Morpho, does not monetize. So like, how to make sure you still exist for 10 years? So we, are we sitting at seven, not four now?

Sorry? We're sitting at seven billion now, not four, but... Oh, okay. It's kind of important why I'm saying this, not being picky, but I think our business has a similar aspect to the one of Patrick, which is network effects. So Morpho will generate value as long as the network is big, and the bigger the network, the more network effects there is, and the more we can be eligible to take a fee at some point.

The past is, do we want to grow or do we want to make revenue? Right now, Morpho could make six million a year if we were to take like, something like a 10% fee on the yield. Some of our competitors choose to take a 20% fee and create a massive sprint with the borrow and lend side. We think that's more of like a shortened view. And so I think the path for us is like, let's grow the network to, I don't know, a hundred billion, not sure exactly what this metric is, but, and take a few basis points.

So that's much more similar to the business model of like, a payment network like Visa. I think Visa takes a few basis points per transaction for settlement. They don't take a 20%, you know, like, fee. And so our vision is let's have the best rate experience. We, like, privately funded and sell them.

And at some point when the network is going to be big enough, and kind of like unforkable, because the real thing for us is like, if we charge a too big fee, we create an incentive to people to fork the Morpho code, which is open source, and like, build a competing network. If the network is a hundred billion, it's anyone who's trying to build a DeFi protocol know that bringing a billion on-chain is difficult to a new venue. A hundred is almost impossible. So I think there's going to be a moment where, like, we reach a critical point where it's too hard to fork, or too expensive to fork, and therefore we can charge a fee. Okay.

So growth first, monetization later. Yeah. And as you said, right now, there's still people taking fees on Morpho, which is what makes us, what makes the Morpho design interesting, where the risk management, therefore, like, the value of managing liquidity is being charged by both creators. And both creators then have agency to do fee sharing the same way. So you could say how I want to work with Safe on this product.

I will share 50% of my fee with Safe. They put me as an exclusive creator. Like, they have their own business model. So you still have this logic of incentivizing the people building on top, but we as the network, for now, just don't take any care. Okay.

Okay. I see. So basically, you plant a tree in your garden. On this tree, there are fruits that attract people. You want to have people in your garden, but you will not eat their own food at the moment.

Exactly. We just plant more trees. Okay. So then let's go to Kao, because they also stand in gardens. What's your distribution, not with regards to, we had this session before, like, being integrated into a big company, but rather, like, the mechanics of distribution for Kao.

What's your plan to incentivize a distributor like the Wallet to integrate you? Are there things like monetization for your customers that you think of that will help you distribute? Yeah. Yeah. Of course, there's no doubt here.

We need to incentivize a partner. So how does it work? The protocol itself is making a fee. Now, Kao protocol is quite profitable. And a lot of partners that are not yet able to monetize their DeFi products are actually very happy to integrate a swap button or a more detailed interface on their own interface.

And here, the model is quite simple. As you were saying, it's about giving a cut, a share of the protocol fee to the partner. And this is really working well for us. And we can distribute our product quite well. So it's basic revenue sharing model.

Okay. I see. I would like to touch on, especially with you, Patrick, on this aspect of self-custody. You were very kind placing me next to Circle CEO Jeremy on a dinner in Berlin last autumn, I think. So I had the pleasure of sitting next to him for three hours.

Quite exciting. I gave him some tips for going public, and he did well. Jokes aside, Circle has the trust of Wall Street. And with that, I don't mean the IPO and stocks, but rather to be integrated with BlackRock, to be integrated with a publicly listed Coinbase. How much emphasis do you put on self-custody?

Because I think certainly we at SAVE and the KnowSys ecosystem, people here at DEF CON, we know the value of self-custody. But is this understood in the broader ecosystem of your enterprise partners? Or is this just like a nice international settlement layer? But for them, this value of self-custody can also be sacrificed. So, I mean, first of all, I would have preferred to say, you enjoy having dinner with me and sitting next to me.

But anyway, put that aside. No, totally. I mean, self-custody, I think, is one of the cornerstones of what we all do. Without it, we wouldn't be where we are. And so ultimately, I think it's about choice and it's about options.

We at Circle, we have our own products that allow companies, for example, to plug in and then to provide self-custody wallets to their users. It's called programmable wallets. It's one of those products that our tech services provide and that anyone can tap into. But even independent of that own product, if we look at our partners like Coinbase and others, self-custody plays a massive role. And I think, I don't have the latest numbers, but I would probably say, I think a year or two ago, 75%, something around that, was in smallish self-custody wallets.

So for us, it's a primary way to distribute our stable coins into parts of the world that benefit the most from that and are potentially not able to access traditional bank services. And now with just your phone in a pocket, you can download a self-custody wallet and not be banked in the traditional sense of onboarding with a bank, but you can access financial services. You can receive your CC. You can send it. You can spend it.

That's another layer that we see massive traction with all the credit cards being launched and being able to spend stable coins directly from them. So at this point, I think we are reaching soon a world where with a self-custody wallet in your pocket powered by stable coins, you're able to save, spend, send, receive, and also invest your money. And at this stage, I think we're coming closer to whatever vision or philosophy this entire space is trying to reach. The title says it, of essentially banking the billions and making sure that anyone can benefit from that opportunity to access financial services. Yeah.

So it's, I think, a little bit of a success to have this corporate guy here singing the song of self-custody. I appreciate it very much. Thank you. So one last question before we wrap up with a small round of teasing questions that you will have to answer with one word. I just want to ask Theo, if you now go into fixed-term lending, maybe you have this permission of deployment of wallets.

Basically, almost every collateral can be on Morpho. You may go into under-collateralized loans with this kind of slogan of, trust me, bro, in the blog post from your founder. Literally, it's written. I didn't hallucinate here. So do you think that there will be a major fuck-up, excuse my French, that invites the regulator because some integrators will funnel their users' money to the vault with the highest yield and the highest yield likely comes with the highest risk?

And what's the role? Do you think you have responsibility for protecting customers and maybe not giving everyone access to this permission, this pool of risk? First, I'll bite on your French. French is a beautiful language. I think we lost him on the mic.

I can just speak louder. No, no, it's okay. Thank you. I'm back. So I think that we are like a marketplace for, let's say, risk or risk-free.

I think the people that should distribute specific products should do their own risk assessment of which pool or which vault should be distributed and then compensate their user if anything happens. So if you think about the way Coinbase is their product, the market itself is encoded at 86% LTV. That means roughly you can borrow 7x your money. Coinbase was like, that might be too much. We were going to cut this at 5.

So what happens is that you have a primitive on-chain and you have someone on top that says, I'm just going to change this a little bit so that it suits my own risk requirement. But Morpho, again, Morpho is like a liquidity network, a parameter or a market or a vault that's been deployed by someone who's like a risk expert. These decisions and therefore competition is there, as you said, a measure for a cup. We think they should be taken care of at the layer above. And the fact of having a super simple primitive means on top you can build anything.

To the same extent, I think Coinbase is releasing self-liquidation. If the price of BTC drops massively, their users are going to be self-liquidated prior to the 86 I just mentioned. And the cost of this liquidation will be minus 10, almost nothing. So I think depending on what you're trying to protect for, you can just build a product that respects these requirements. That's very much also how we see things in self-custody.

Ultimately, there's a lot of responsibility on the user. So closing round with one, you're only allowed to answer with either a date or a yes, no. Patrick, for you, it's a yes, no. Kids born today, will they ever use non-crypto-based payments, yes or no? Yes.

Okay. Damn. Okay, Adrian. When will all EUR stocks trade on CAO? EUR stocks, so basically blue-chip stocks.

Moo. Moo rhymes with soon, so I guess we'll have it soon. Theo, when will people get a house loan, maybe under-collateralized on Morpho? Over-collateralized already. Under-collateralized, 12 months.

Okay, that's cool. All right, final remarks. We learned from three very important companies of our infrastructure, of our ecosystem, that the infrastructure is coming together. I think it's a great shock we get at banking with one system, really a billion of people, and we are coming closer to that day by day. We at Safe Wallet want to play a crucial role for that.

We want to establish ourselves as the global treasury account, giving basically USD access to basically everyone. Self-custody is extremely important for that. We call that OpenFi.