Another Day, Another RWA Chain Feat. Nico Pantelis - Security Token Show: Episode 296

Speaker A: Foreign. Uh, What's going on, everybody? And happy Friday. It's that time of the week. It's time for another episode of the Security Token show, episode 296. We're approaching 3, 300 episodes of bringing you all of the latest real world asset tokenization news every single week. Unfortunately, this week Kyle couldn't make it and we had a bit of a scheduling snafu, so we're gonna have to just give you a shortened episode. But we fortunately got Nico Pantellos from Blue Bay Ventures this week. So we're going to get into the hottest and latest news. And with that, hope to catch you again next week. And happy tokenizing.

Speaker B: Foreign

Speaker A: this week, I'm glad to say we've got Nico Pantelis, partner at Blue Bay Ventures, one of the leading RWA venture funds out there. Been in the game quite some time now. Always love the insights and pulse you bring to our conversation. So glad to have you back. I see instead of Dubai, you're in the Netherlands. How are you, Nico?

Speaker B: In the. The hot and summery Dubai in the Netherlands? Yes, it's, uh, kind of hot around here nowadays. But that's okay. I'm used to Dubai, so.

Speaker A: Exactly. You can't escape the heat. Well, you know, we've had some fun weeks without you here, uh, with Kyle, who as you know, has not been able to make it this week. But, uh, we've been talking a lot about stablecoin activity. So much stablecoin, you know, awesome news, especially since the genius act. But dare I say, the tone is shifting in the market. Stable coins will remain hot, but it seems like something might be hotter right now, which is the underlying blockchains behind them. So it seems like stripe, uh, you know, just came out with one. Ark just came out with one. We're going to get into these different blockchains. Uh, Denari's launching one. You know, Ripple's really trying to position itself in the game. Uh, but yeah, I guess, uh, let's start there. Uh, there's an onslaught of new, what I call RWA chains. Whether they're payments, stable coins, or even settlement, uh, infrastructure. Right. It seems to be something that I guess the, these new incumbents don't think there's a useful enough solution out there today. Or is it just a money grab? What do you think, Nico?

Speaker B: It's a, it's a margin money grab. Uh, from. From their view, I think at first. And that's the way you see it. And they, um, they got cleared through the genius act. They think they're good to go, you know, and they're also good to go with their stable coins. And now they're, they say hey let's, let's also immediately pony up an L1 like we've been doing in the past in the crypto community, uh, phoning up L ones. Uh, but yeah, I think this is an evolution in how things evolve in the technology sphere and sectors. Um, but um, history has learned that this in essence will not work because these companies are financial operations. They sell financial products. They don't run decentralized L. Uh1s. That's not their core business. Their core business is to sell product financial products. And that's in essence what they want they need to do also and not be a distributed decentralized network. Because in essence it's not that and it resonates with uh, as you know I'm an old guy, I come from the web one uh, uh time uh, when, when Microsoft and the likes try to do these Internets and all this, this, this funny stuff because the, the bad big Internet wouldn't work. Well I have some news for all these uh, players. The only thing where you can get network effects is in a distributed uh, system really distributed, you know, and not centralized and controlled by one party. So that's my opinion. We'll see how it works out.

Speaker A: It seems to be that that is the touting feature set they're coming to market with. Right? They're saying look, we are the big corporation that everyone can trust and we're going to make sure it's you know, centralized to the, the node providers and, and the things that we have our controls, let's say in place. Because the big bad decentralized wolf is going to bite you down the road is I think maybe part of their narrative right now.

Speaker B: It's the same story as with the Internet in the beginning days in the 90s it was the same same, it's the same I, you get the same kind of quotes. Uh,

Speaker A: I mean I, I could certainly see this as sort of many of them saying uh, it could be maybe like an a AWS moment for like, like Amazon. Right. They really were, you know, just focused on E commerce and said hey, let's get into, to cloud, cloud servers, right? Um, maybe in this case, um, you know, some of these companies are saying let's maybe go beyond our core payments, let's go into more infrastructure. I don't know. Um, makes me think that Visa or MasterCard or maybe even PayPal could soon be to follow with their own chains as well. I don't know. May not stop here. Right?

Speaker B: No, no. And in essence what, what these guys are building is they're building the banks of the future on a blockchain, you know, but they will be centralized banks still, you know, in their network and you can pay in their networks. But the world is bigger than the, than the Stripe L, uh one or the Circle L one or the, the Metamask wallet, uh uh, Stable coin. It's all, it's all the same thing but I guess it's, it's part of the evolution. It's the same thing how the Internet uh, evolved uh, back in the, in the early days and yeah, uh, that's, that's how it goes. You know we have to go through a few cycle that everybody gets, gets the, the, the, the light bulb going on and saying hey we should be going to Ethereum L1 with our system. We should go to Solana One or maybe another one at that, at that point in time, you know that's probably how it will evolve.

Speaker A: Yeah, you know it's um, it's, it's great to see that we're going to have many more companies on the front trying to bring adoption to this technology. Right. And we know there's an emphasis on interoperability. Seems like those providers are really currently really good position based on this onslaught of new chain activity. Right.

Speaker B: Um, but to get awareness. Yeah, yeah it's good to get awareness for, for our whole industry at large. You know that, that players who were shown to, to move to blockchains in the past because it was for criminals and you know all this, this uh, mumbo jumbo that these mostly government uh guys have been talking about. Which it's not of course uh, it's, it's getting awareness to big institutions and that's a good thing in the end. Yes, indeed.

Speaker A: Is there such a thing as chains buying up other chains and eventually we

Speaker B: one day see a roll up their companies.

Speaker A: Right, exactly. So maybe that is something that uh, that, that will.

Speaker B: But there already you can sense the difference between uh. Now one from, from for instance circle or stripe or let's say Solana. Could you imagine that Solana is buying up near. Or any other. You know it's and that's you already and but, but you can see that indeed stripe will buy up circle differences as, as also with an L1. It's, it's.

Speaker A: Yeah it's fascinating. Um, we did also see in the past we also saw sort of not really the same thing but you know nft collections start to get acquired and aggregate.

Speaker B: Yeah, same thing.

Speaker A: Assets, right? Yeah, exactly. It's gonna happen, folks. It's. It's exciting. And, and frankly, what we're saying is what none other than crypto mom. This is a funny, uh, you know, nickname that. That people use for a commissioner of the sec. I'm talking about Commissioner Hester Purse. Uh, she has come out once again sort of in a positive tone for the industry, hence her nickname, saying that the market will sort itself out when it comes to tokenization. Uh, and I actually think this is a really great statement because, um, this is very different from an SEC that we used to see that sort of had their stance of this is how we view and we're going to enforce it this way. Whereas actually, Hester Purce is saying, hey, uh, we're actually open to different structures. We are. You know, as long as we follow securities laws, we're here to work with innovators and builders. Um, which I think is kind of like a green light to the tone of, you know, we. We do endorse this kind of concept of tokenization. Again, the. The chairman Paul Atkins of the SEC keeps saying, you know, tokenization is an innovation. It's the future capital markets. Now he's saying, uh, that we need to make the crypto capital of the world, America as well. Right. So, uh, this is just exciting to me because this is encouraging innovation in America. Um, and I, uh, think many people are. We're still. And are still rightfully so, a little concerned about all this. So this is great to see. Just a very active, vocal, positive SEC encouraging tokenization, in my opinion here.

Speaker B: Yeah. This is also how our capital markets, uh, should work. In essence, they have to sort it out themselves. You know, and if they make mistakes, you know, they, uh, they. They correct their mistakes and move on and make better products and new products. And in essence, that's also what. What the development of the whole industry, the. The. The blockchain industry has been. Has been confronted in the. In the past years on the last, uh, you know, regime, uh, in. In the US that people were afraid to develop new stuff and think about new concepts. You know, it all stop. Peace in essence, and, And. And nothing came after that. And that's. That's. That's a pity. But let's, you know, let's see. It's a, uh, good stuff from, uh, from Mrs. Pierce, uh, purse Pierce. I don't know how to explain say it hurts for. For most people, um, it's. It's. It's good Stuff, it's, it's how markets should operate and they have to have like a, like a, ah, a top down view. And of course if there's really bad action going on they should, should uh, take, take that on. But in essence these guys are coders and they just want to develop new stuff and, and make, make a better uh, better world for all of us, you know, and that's, that's what has to, has to blossom at large.

Speaker A: And I think there's, you know, you got to be really deep in one segment of crypto not to wake up and see that rwas that finance is the main story narrative of crypto today. Right. Just look at every major crypto company moving into RWA some way somehow either they have a blockchain supporting it or they are now uh, creating you know, tokenized stocks, marketplaces and other things. Metamask, uh, or stable coins. Right. Like we see with Metamask. So uh, it's, it's pretty exciting. But also we, we know the story time and time again we're going to see people who make maybe naively, uh, you know, ignorantly, not on, purposely, you know, mischievously try to um, violate securities laws.

Speaker B: Right.

Speaker A: They're going to still end up creating tokens that they say, hey, anybody can buy this and do that and they're not going to necessarily follow certain rules like KYC or other things, uh, that are required still. Right. Let's be clear that I support this message and I think she's very much not saying, hey, go out and do whatever you want. You know, we still have to follow the rules. There are still very clear rules. But um, you know, they're open to working with these new structures and concepts that tokenization bring to the table. Of course, uh, just as long as we do it the right way. Uh, but it's going to happen. It's going to be inevitable folks. You got to do your research, you got to watch out, you know, especially if you're buying some tokens from projects, make sure that they are still following and working with legal counsel to make sure whatever they're doing in the tokenization space or uh, is legitimate and compliant.

Speaker B: Yeah, finance is truly becoming digitized at the moment and tokenization is, is the key in, in this, in this whole transition. And that's what uh, the big Larry Fink has seen. Good thing.

Speaker A: Yeah, well, we'll see. Maybe one day everyone will be racing to tokenize their house. Uh, you know, that's what everything will be tokenized.

Speaker B: Everything in our lives that has any kind of value will be tokenized in the future.

Speaker A: When that's happening, I'm going to be very excited and we've hit the mainstream. But ah, with that Nico, I think that's all we've got this week. I don't know if there's any big uh, updates from any of the, the portfolio companies or from Blue Bay Ventures itself that you want to share before we head off.

Speaker B: Um, nothing specific in my opinion. It's uh, it's some adult runs also in the, in the port, in the portfolio. So no, it's um, I think everything is moving along. Um, maybe some market vibes and commentary. Uh, you know, there's, there's a new bull market going on. Uh, everybody can sense that. But it's still in my opinion early days because everybody is like holding back and, and doubtful still. And, and my, and my experience being in over uh, 10 years in, in blockchains is that this is only you know, first, second, maybe third inning uh, of the, of the, of the, the game.

Speaker A: So treasury companies, treasury companies definitely seem to be part of this latest push. I think. Uh, I don't know if you think that that is the, the ultimate, not that negative.

Speaker B: Um, but everybody's quite negative about which, which is, which is uh, which is a thing that when you are experienced in markets, when everybody is negative about something, this will be not the thing that uh, you know, torments the complete bull market. That's, it will be another thing. Uh, it's not this thing. And also from a structure from these, these dots or how they are called the 80s and everybody forgets that these are traditional finance guys piling in not for a quick buck, but they're just, you know, yeah, uh, shoving in little, little slices of their large portfolios in these companies and it's not for a quick, quick gain or it's for a long term investment mostly. So they're not leaving jumping ship anytime soon. That's probably, you know, in my opinion the, the troubles will be in the crypto markets again future when, when things start to uh, you know, get, get really excited and really poppish and really bullish, then probably things will collapse in the crypto markets again and not in the traditional markets, in my opinion.

Speaker A: I agree with you. I, I, you know, I think they would have to become, become dramatically, dramatically larger to really be, you know, part of the, the actual downfall or the cause. Uh, I think they're going to be a nice extension, a booster, a steroid, whatever you want to look at it. You know, they're going tokens. But, uh, I agree with you. I don't think they're gonna be any cause for any kind of, uh, bear market in the future. Uh, and in fact, it certainly seems to be the case that it's pushing a lot of bull sentiment in this case today.

Speaker B: Sure. It's. It's a structural buying from these, um. From these entities. The only thing that. That can ruin this is if these. If these debts become the next meme. Stocks on Robinhood, for instance. And everybody starts, you know, ponying up these, uh, these option structures to. To. To blast these things to. To Valhalla. And then we have a big problem structurally. But I'm not. I'm not sensing that at this moment. Maybe next year or something like that. We'll see.

Speaker A: But.

Speaker B: But in my opinion, the problems will come from another part of the market and not the. Not the. Not the typical equity, uh, markets.

Speaker A: I think that will eventually be a thing, no doubt. But I. It doesn't.

Speaker B: Because maybe systemic, massive problem.

Speaker A: Uh, fortunately, we got smart people like you that can help us call it out. You know, you guys, uh, you know, again, thanks for your time, Nico. We always appreciate your insight. And, uh, have a great weekend. We'll get you next weekend. We'll keep this show.

Speaker B: Sam, um.