Lily Liu - Building Internet Capital Markets on Solana - TOKEN2049 Dubai 2025

what I wanted to talk to you about today. You might have heard of Salana before. Uh and a lot of people think that Salana is the memecoin chain. I hear that all the time. Uh and actually uh that is not my recollection in the four years I've been involved in Salana.

First the DeFi chain, then we're the NFT chain and then the gaming chain and the beat deepen chain and the stablecoin chain and the payments chain. More recently, uh, a lot of people have been paying attention to memecoins because that's been the thing of the cycle. Uh, but when I take a longerterm view as to what blockchain is about and what we're here trying to build with Salana, what is the point of uh, what is the point of these blockchains? What are we supposed to be doing? Uh, there's thousands of chains out there, hundreds that launch probably every year, app chains, modular L2s, L3s, L4s.

Uh and when I really think about what our industry is here to accomplish and what our broader mission is, uh it is about broadening capital markets access uh everything in crypto. There's the asset side of use cases and then there's the infrastructure side of use cases. Bitcoin is the asset. Everyone knows that everyone outside of Bitcoin is here to provide global financial infrastructure, unified uh uh infrastructure and therefore liquidity for 5 and a half billion people. And what we call that is internet capital markets.

Uh that's the core purpose of blockchains uh outside of being the digital gold assets provide global financial infrastructure. So let me talk about that and motivate this as to why this is important. Well, here's a fundamental observation to start off with. Today's capital markets don't work for everyone. Uh so you've probably heard of this company and this fellow Black Rockck.

They also launched their money market fund Bidd on Salana as an aside. Uh but uh you know here's here's what Larry Frink's uh observation is which is I hear from nearly every client, every leader, every person I talk to. They're more anxious about the economy than any time in recent memory. Uh I understand why. We've lived through moments like this.

We'll figure it out in the long run. But will we? Right? Why is it that we're told the economy is doing great, employment numbers, inflation is coming down, we should all be happy. Uh but in fact, people are more anxious.

It's harder even in some of the wealthiest states, if we look at America, for example, to keep up with living costs. So what's going on here? Another observation is 27% of Americans believe that the American dream right of the belief that hard work leads to success still holds true which is a huge decline from just a decade ago when that was about 50% who believed in that. So underlying all of this you know we can look at quarterly annual various macroeconomic metrics. uh but something's not lining up here because we're told everything's being is great but then the anxiety amongst regular people out there both uh businesses and also also individuals uh is going in the opposite direction.

So we take a long-term view on this uh what's happening here if you take you know 50-year view is your freedom is hyperinflating. What do we mean by that? 50 years ago, uh, it took 25 hours of work to buy one share of the S&P 500. And today, that's gone up 8x. Takes 195 hours, almost 200 hours of work to buy one share of the S&P 500.

What what this means is that the relative value of labor and capital in the economy today, and this is in America, uh, and this represents globally as well, uh, has that balance has changed very dramatically. And uh and this is not you know something that you can only see on charts. Even if you look at one of the biggest drivers of wealth creation of innovation um of kind of economic opportunity out there represented by Silicon Valley and tech uh and one of the foremost investors Bill Gley of Benchmark Capital uh well one of his observations is well one of the reasons is because capital markets um they stay private for longer and this has been you know well observed trend. Uh so uh one one thing he's been talking about is going public is great for companies raised to performance ambition uh more public accountability but more importantly gives everyday investors access to high growth companies. When IPOs are delayed until companies are already worth billions most of the upside is gone.

And who got that upside? that upside by the time it actually hits S&P 500 has been uh that appreciation has been felt by uh private investors uh that were able to participate in seed series ABCDE over the first 10 years and by that time uh those folks that have been accumulating capital largely through labor $20 an hour that access to capital markets and that upside has disappeared. Uh so you know again 8x this is the relative value of labor versus capital in the economy today. Uh and also takes $240 an hour to be able to uh buy one share of the S&P 500. uh and if you look at this you know from the two what happened also in 2008 which gave us Bitcoin is uh another way to think about what's happening here is the gains are being privatized as innovation and access to upside is increasingly stuck in private companies and meanwhile when you look at what happened in 2008 with uh with TARP well those losses were socialized over uh over the taxpayer base so this chart is going in the wrong production.

And what this ultimately means is your freedom, the you work, you exchange your time in the near term for capital that can appreciate and give you your time back in the future, that trade is no longer working for the vast majority of people in the largest most important economy. Uh and uh if you layer some government debt numbers on top of this as well, uh so the labor uh capital sort of input output functions no longer working. And meanwhile, if you talk about the socialization of losses, uh, well, that's also reflected accumulated over time in national debt. So, what you've got is a 837 time increase in national debt. Such a large number, you just kind of forget about it at some point.

Uh, and increase in interest over the cost of debt is also up hundreds of times. Uh, and this is uh, this is the trend on the socialization of losses while the gains are being privatized. Uh and of course this is not just charts but then at scale this is something that becomes broadly felt through all sorts of various social dynamics. Uh it's not just economics anymore. It becomes society becomes politics.

And I think there's so many ways that we observe that today. Uh and you know even within tech there's been attempts to try to convert labor into capital. Uh and you know if you've ever done business in the US it's extremely difficult to even do that. uh there's all sorts of uh rules around 701 compliance only natural persons so on and so forth uh so even if you just wanted to in the highest echelon of uh of jobs uh it's even then fairly restricted to convert labor into capital um okay so where does this put us well there's been a lot of discussion around universal basic income right that's a pretty popular popular narrative uh because as uh labor becomes so detached from the growth of capital markets what do you do well one proposal from many people on the left coast of America uh is that then you just provide un uh monthly payments, universal basic income to pursue your uh greatest uh pleasures and aspirations. Uh we propose a different route which is universal basic opportunity.

Uh and I think this is a core part of the principles of crypto from the very beginning which is that you empower communities um to uh to build grow those communities and you can uh appreciate uh you can participate in the appreciation of that upside uh and this is a a fork in the road in terms of how we want to proceed given this divergence over the last 50 years. Do we want to invest now in a welfare economy or instead do we want to invest in an ownership economy? And I think that is really uh the uh the bigger rally proposition of crypto and what these kind of global financial markets can give us. Uh okay. So let's talk about this more tangibly.

What this means in terms of broadening capital markets access for both the buy side and the sell side. Buy side for investors, sell side for issuers. So lowering barriers for investment for investors on the buy side. Well, I talked about this a bit. Private markets are increasingly private.

uh companies are uh staying private for 10 years or longer. And what that means is that as there is more capital coming uh that is being created for a certain certain part of society that is still going hugely into that basket of public market uh equities that are available and bonds I suppose as well. And so what you have is you have this concentration in dominance uh where when people talk about public equity these days NASDAQ uh people really focus on the Mac 7 and that is because of seven companies alone account for 35% of the S&P 500. Uh so there's demand for public market equities uh and also for alternative assets. So there's capital looking for more places to go, but in public markets and then also when you look at alternative assets, there's just not enough places for that capital to go and it bids up the price of existing assets which is acrewing value again to a certain class of capital holders.

Um however there is one exception that we're all familiar with uh which is the public markets which is onchain finance. uh and you know whatever you might think about the nature of the asset itself if we look at what has been happening is well 3.4 4 million tokens were created in the past six months. 80% of them on Salana I might I might add. Uh and uh what I think we can see in this is this is uh global uh publicly available financial infrastructure.

Anyone with an internet uh connection essentially has a bank account and can have direct access to investable assets. Uh and what you also see here is the uh is you know what crypto does is because it puts uh capital markets access at your fingertips in your browser. Even if you think that's not a great UI these days and it's got to be better. Uh that is way better than what you typically have to do which is welcome to your bank account. Uh and now uh please if you want to buy a T- bill and do that in a non-custodial fashion uh you can fill out weeks of forms.

you probably have to hire someone to manage this for you. Alternatively, once all of these assets are tokenized and we're as an industry rapidly moving in that direction, you can just buy them in your Phantom wallet. Uh and what that means is we actually have individual direct ownership uh in the digital age. And remember when you had bearer assets, I think in stocks still you can go claim a physical stock certificate. Uh and now you can do the equivalent natively online self-custody and that is a core value proposition of crypto.

Now let's talk about the sales side. Uh now why is it that companies are staying private for so long? Well, it's incredibly expensive directly and indirectly in order to do an IPO somewhere between 10 and $15 million in order to get through the pipe. And that's after 2 years of uh of doing all the things internally. So what that means is that uh you've got to be raising a pretty huge amount of money in order for all of this to be worth it.

Uh and there's quite a lot of competition regionally amongst exchanges for all this business. But what's that's what that's doing is still largely fragmenting uh liquidity which is primarily in the western world amongst various exchanges. Uh and it's even then pretty hard to get onto any of these exchanges. If you look at the best companies even you know for example in Chinese tech for them to be able to go public they still largely choose to go public on US exchanges. Uh why does that make sense?

uh and um and further if you look at the best companies globally and also even sort of small businesses smallmedium businesses in the biggest capital markets uh uh of the world in the US their access capital markets is very limited uh but there are rules that actually permit people to go public outside of doing an S1 uh it's just that the the market infrastructure the economics around enabling distribution at these uh at these levels of a fund raise do not exist today But that could change with blockchain. Uh, and we've seen sort of attempts to make this market more accessible and more efficient. And so we've seen this with some of the largest tech companies. Uh, and the reason they're able to do a direct listing, which is more cost-effective, uh, is because they already have distribution. They already have an audience.

And so their products have already marketed them to a distribution base for a long time. And they, so if you're at this level, yes, you can do direct listing, but what about everybody else? Uh okay. So what does Salana have to do with this? Uh what we're focused on 2025 is really becoming the best place for capital.

What that means is to have all the assets and all the ways to be using those assets. Uh and uh and what we've seen in crypto so far is a proliferation of assets that are all focused on assets that are more about price than value. And what people are very focused on right now with RWAS is well RWAs they have all this fundamental value but the issue is that they don't have price either because their permission to the hilt and they cannot trade or because just the nature of the asset is such that it's not really something that people really want to trade. Uh so you know imagine mortgage back securities people are not going to be trading that in day in and day out. It's more likely to function as collateral.

So uh so as open kind of uh global financial infrastructure you want to have the full range of assets. You want to have the assets everyone loves and also the assets that people find to be controversial and all of the stuff in between. Uh and so where we as Salana are moving is uh to bring all of those assets uh into blockchain onto Salana and where we're focusing focused particularly on is the middle of that spectrum. Hello the midcurve. first time ever uh interested in the mid-curve which is assets that have value and can also command price and I think the the the headline asset class for that is equities.

Uh now just pulling this back a bit uh why we're all here is because we want to provide this infrastructure that allows capital markets access for the 5 and a half billion people that have access to the internet where there's an internet connection there's a bank account. Uh to me that's always been the rallying cry of why any of this matters. uh and uh and what we've built Salana for from the very beginning is from an engineering perspective people think about it as a single state machine. What that means for capital markets is that we can provide unified liquidity. That's the most imp that's the most important feature of any financial market of any capital market.

Uh and that's what Salana has been architected for. That's what we're building towards bringing all the assets onchain. Uh, and so, uh, this will be the home of all of the assets from, uh, the blue trip stuff to whatever you might think about memecoins. Uh, and and all the ways to be using those assets. Uh, and going forward, what we're going to what we're going to see is, you know, capital markets are a feature.

Everyone's going to be a trader. Every app is going to be a finance app as we see stable coin integration into a wide range of fintech apps. That's just the start. And really, anything can be a financial asset. uh and there's going to be financial assets that we as an industry have already defined three to four trillion dollars worth and there will be more in the future.

Uh so the end state is that uh you know here's kind of a funny tweet around uh you know uh financial innovation is just YC safe. So want to be able to do all these things where I can have an asset collateralize it and then you know per trade it whatever you want to do. We call that composability. uh more fun way of characterizing that and that is what is already happening and that's what's going to happen in a much greater scale as uh as we bring so many more assets into crypto and the ways to be interacting with those assets. Uh so that's what we're up to next.

Internet capital markets being built on Salana.