Blockstream Talk #23 – SideSwap

Welcome back to block stream talk Today's conversations with Scott Miller Founder of sideswap sideswap is one of a Growing list of companies building out Financial and Capital Market Applications on top of Bitcoin the Platform offers a decentralized Peer-to-peer way to trade assets on the Liquid Network including security tokens Like the block stream mining note Sciencewap also makes it easy to pay in And Peg out of the liquid Network Meaning you can easily flip between Liquid Bitcoin and Bitcoin if you find The conversation useful don't forget to Like subscribe and share Thank you Scott welcome to the show and thanks for Taking the time thanks Jesse super happy To be here to start off maybe to set the Stage for today's conversation can you Give us a quick introduction to sideswap And what you guys do thanks Jesse sure So side swap is it's been on liquid for About two years it was built to create Basically Bitcoin based capsule markets Around Bitcoin since liquid is should I say the First site chain that offers multi-asset Issuance as well as the Pagan Peg out Process So we yeah looked at the protocol and Found it had all the building blocks That we're looking for in order to be

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Able to put together an offering And uh so yeah in short we have two Different components to the service one Is uh the Bitcoin or the the client Software which is the wallet and within The wallet we have integrated a number Of services that we support on the Server side so that we helped the users One peg in pig out between the two Different chains so it's seamless and Easy to them so they don't have to set Up their own nodes And we also offer The ability to have an instant swap Where we have a dealer that runs Continuous bids in stable coins and uh Thirdly we offer which is the project We're most excited about is uh basically The swap markets where we have public Limits Swap orders which we offer you know the Public so that anyone can post swap Offers and we have a public order book Where anyone can make swap proposals and Anyone can take them basically and Everything we build is around making This as easy and seamless as possible For users and just to you know give People the experience of being able to Swap assets directly between themselves Without having to rely on custodian Intermediaries so it sounds like you Guys wanted to build off of Bitcoin from The start did you ever consider using

Any other protocols or or was Liquid the Focus from day one I mean I've been Involved in Bitcoin I think since 2012. And initially we you know I've played Around a lot with Bitcoin and uh what we Actually tried to do the Securities Issuance on bitcoin But then as colored coins and then you Run into all the different issues like How do you issue the colored coins and How do you make it interoperable between The different wallets and uh And then you can trade it as coin joint Transactions on bitcoin but it becomes Very difficult to have any form of user Friendliness around it and then we Figured out very quickly that with Transaction fees and Creating the colored coins wasn't as Easy as we thought So so the way we did the coin Implementation was that each share or Each token was a dust amount of Of Bitcoins and uh yeah so if you issue A million shares you had to have three Bitcoins it's also the issuance became Very expensive to do So so someone yeah liquid came around it Was a very easy transition to make did You want to maybe mention what colored Coins are because I think that's Something that people used to talk quite A bit about you know I guess it's been Quite a while now

Um but you haven't heard us as much as Much of recently do you want to maybe Give a quick kind of overview on what The idea of color coins are sure so Bitcoin is one asset chain where the Only should we say utxo type is Bitcoin So how do you issue further assets on The Bitcoin blockchain or have Bitcoins Represent other different types of Assets and there's a number of different Colored coin type implementations but The one we went with was basically that Each Token was the minimum dust amount of uh Satoshi's which was with Native Segway Some you know 296 Um Satoshi's and when you issue a lot of Shares or other type of assets it just Became very difficult to work with and Also you need special wallets to be able To represent it Etc So so yeah It became unworkable but the uh text There and if you're meant to build Something that is should we say scalable And confused on lots of different other Products as well it becomes um Unmanageable so when liquid showed up And had the multi-asset issuance Together with the kyc on the issuance Layer it was A no-brainer to move over and especially

Since uh blockstream also offered the The swap tool So we could just go into the repo and Just build off the same open source Software that blockchain is Building Green off as well as Having the swap tool To start building off so all the code Was there it's open source fantastic to Work with everyone's super supportive And um I think block stream reading Wants this to succeed as well so we've Had fantastic support throughout and Yeah so it was easy for us to pick Liquid you you mentioned the the swap The atomic swap so you know do you want To maybe run us through what Atomic Swaps are and how that fits into what You guys are doing at its base Atomic Swaps are should we say a solution to The delivery versus payment uh problem Like how do you deliver an asset and Receive payment from it without having To um Trust and intermediary or delivery Versus payment also works with that's Why you have centralized exchanges Because you need someone to should we Say hold the two different assets for Should we say you and me to be able to Trust each other when we trade So how do you do something like that on Chain so do I send my assets first to You and then you send to me

Uh so there's all of these trust issues So with atomic swaps it's actually each Party makes utxo commitments or they say Which asset they want to sell or deliver And they add their change addresses as Well as the address that they want to Receive the counterparty's address to And instead of creating one ad or Transaction from your wallet you Actually create a joint transaction from Two different wallets so so your wallet And my wallet will together create a Transaction and then we jointly signed It sign it and we broadcast it to the Network and there's a You know zero counterparty risks or Risks of being cheated in the Transaction or anything else around it So allows two people who don't know each Other on the internet to basically Exchange assets without an intermediary So is it fair to characterize the swap Markets as completely peer-to-peer well Atomic swaps are Conceptually peers appear but in our Case we actually have a public swap Limit order book so that people can post Like swap offers which anyone can pick Up So settlement is peer-to-peer but in our Case with sites what we have a Centralized server which just holds the Swap offers in terms of the users being Able to create some transactions so so

That you know the question is what's Your definition of D5 yeah exactly right Yeah so I guess in decentralized finance Is kind of a spectrum and I guess on the Most decentralized part of the spectrum You get something like you know Bitcoin Right it's probably the most Decentralized thing in finance so where Do you guys think and and Defy is kind Of You know it's it's something that's it It a lot a lot of what was purported to Be decentralized Finance in hindsight Wasn't actually that decentralized so Where do you think this fits on the Spectrum Um of decentralization and decentralized Finance well what we offer is basically A wallet where you manage your own Keys We have no insight into that uh and from The wallet you can Publish Utx or swap offers basically and uh Anyone's free to pick it up and Settlement is directly peer-to-peer Between the two users so It's not 100 decentralized in terms of Uh having uh users you know Have them required to find each other so We just add an order book to concentrate Liquidity and make things easier on Users I think it's very difficult to get This going in a completely decentralized Manner so again I guess the focus you

Know going through your website is you Highlight three things right to the Support for self-custody Um build out peer-to-peer swap markets And develop Bitcoin based Capital Markets why why do you think those Things are important we really want to See Bitcoin grow and become like a Global settlement currency not just to People speculate with or that they use For payments or To store wealth with what we'd also like To see it be able to interact with Capital markets and uh Refuses to be able to yeah trade Peer-to-peer between different assets And If you look at the other chains I think The reason why ethereum has been able to Grow is because they have a multi-asset Chain on Um which they can issue many assets Where it's like a permissionless Issuance So with Bitcoin since it's a one asset Chain I think it needs side chains to Grow and to develop those Capital Markets and uh yeah I think liquid's Done a very good job in that regard I Think one important aspect to remember That most people don't think about is That the entire Financial system as it's Built right now is basically one of Ledger's every financial institution

What do they do at their core they Maintain a ledger that's it That's all they do they have a ledger Where they are the shall we say the Accounts operators of The Ledger and The Ledger isn't able to interact with any Other Ledger really Um so that's why you need all these Clearing Houses and Exchanges between all these ledgers with Bitcoin we have a and side chains we Have the opportunity to build a system Where you actually have ledgers where The user is in control of the asset as Opposed to the institution And uh well you can have swaps directly Peer-to-peer between users and yeah That's the type of vision that we see And that we're building towards and uh Um yeah I mean the whole premise of Bitcoin is that the user should be able To hold their own keys I I mean let's Build a system that also supports the Issuance of assets as well as the Trading of assets for those people who You know prefer that way you you must Feel that the events of the last 12 Months and the blow up of so many Centralized kind of businesses really Supports the first two parts of of that Mission statement the self-custody and The the peer-to-peer swap markets Very much so but I think the issue with The third party custodians has been

An ongoing one for the past 10 years or So I think in in previous Cycles we had More exchange kind of crises and Blow-ups Um and the the blow-ups in this cycle I Think came kind of late so you probably Had a whole generation of people that Are new to bitcoin and and maybe crypto More broadly that didn't really embrace The peer-to-peer kind of self-custody Aspect of it Um And and uh maybe this is a hard lesson For the market but I think there's in in Previous kind of Cycles it felt like There was more of a focus on Um self-custody and and not your keys Not your coins and I think that lesson Kind of came late to this cycle one of The big differences as well with this Like blow up cycle is uh previously it Was Scams or exit scams or coins being lost Or hacked or stolen I mean that hasn't Been the case this time around it's more Of a question of You know in a sense the Market's Maturing a bit more trying to build Capital markets but then you figure out The rehypothecation it is also like a Risk and how do you earn yield and when You land balances out So the crashes which happen now were More on the can you trust the issuer as

Opposed to coins being lost and what About Bitcoin based Capital markets why Do you feel that that's important Bitcoin based Capital markets will be Tremendously important to grow Bitcoin Remember if Bitcoin is the assessment Layer how does it become a like a useful Global Currency is it just going to be a Should we say peer's pure payments layer Or is it actually possible to build uh Capital markets on top of it like High-speed payments layers ET session to accomplish all of these Things I think we need to build layers On top of Bitcoin and where one of the Layers is obviously Securities issuance And these secondary layers And with that you'll be able to create Financial systems which are a lot more Open inclusive you don't need to access Should we say Capital markets via a Broker that has accounts with should we Say this and that stock exchange or It becomes Open Access and you can take Your Bitcoins and Trade any Capital Market or if you have An asset which is issued on liquid you Could um Go to any exchange which supports that Asset if that's bitfinex or the merge or If you want to trade P2P or it just Becomes a lot more flexible and whether User is in control of their own asset

Instead of the Securities being held With should we say a centralized Securities depository and we're only Financial institutions hold accounts Basically I just think it's a great way Of the the whole premise of Bitcoin Where the user holds their own assets to Be able to apply that to a capital Market infrastructure and to be able to Merge the two so where would you say we Are in the development of of these Bitcoin based Capital markets I kind of Feel like all the pieces of that puzzle Like I've typically characterized that As you know having technology like Platforms like sideswap or or bitfinex Securities or liquid where you can do Issuances and facilitate trading is one Piece and then a second piece would be Investable assets people things that People actually want to put money into And the third part is you know Regulatory oversight so I feel like Those three pieces are just finally Coming together after you years of People working on this stuff where do You feel like we're at an inflection Point now or close to an inflection Point because I think increasingly a lot Of people think or coming to see the Opportunity for the application of this Technology to Capital markets I mean Even people like Larry Fink and BlackRock even comments coming out of

The Fed so it seems like more people are Are coming to realize the opportunity But where do you think we are in the Evolution do you think we're close to an Inflection point where this technology Really starts to to get adopted and to Change things we're still super super Early uh you know I mean the technology Is in place it's maturing on say what Blockchain's built on liquid together With the transfer restricted assets it Is a fantastic tool for in terms of how To issue Securities which require which Require kyc and Uh yeah the issue were to approve the Transfers because when you walk into the Securities ecosystem it's very different From how all the bearer assets issued on Sure work so there's a lot of work that Needs to be done In terms of the regulatory side but in Terms of tech it's starting to fall into Place With the side chains such as liquid with Amp assets and uh I'm not sure how many how many people Are aware of how am passage actually Work and how the transfer restriction Um is constructed it's a should we see a Big piece of the puzzle puzzle in terms Of how how do we build I think we may need to go again on this Question but It's a very interesting one and it ties

Into regulatory aspect as well so you Mentioned Bearer assets do you think It's possible to issue Securities in 2023 as Bearer assets or do you think The functionalities from transfer Restricted assets where you have a kyc Kind of ecosystem established do you Think that's a requirement Or do you think it's possible to issue Securities as Bearer Securities without The limitations that transfer restricted Assets impose it will be very difficult To issue them as their assets I don't Know any jurisdiction that accepts Securities as Bearer uh and so you know I just don't see any demand for or any Regulatory Compliance or any way of Building any type of Should we say Securities system that's Based on Bearer assets because there's Basically zero jurisdictional support For it So so the only way forward is in terms Of transfer restricted assets and uh Yeah and also in that regard liquid is Far ahead of anyone else I don't know Anyone else who has Any form of protocol support for the Issuance of Assets which require the user to be Kyc'd and known and what do you think About the regulatory risk about issuing On top of protocols that may be in the Future deemed as unregistered Securities

That's something that we've talked about Previously on the show that's one of the Big considerations that we had uh when We actually selected liquid as the chain That we wanted to build on since it's You know it's neutral I mean yeah if you issue on Other chains and the chain itself turns Into a security but that you have issued A security yourself you may not be Impacted but but the question is how do You manage that security how do you on The different chains how do you ensure That only approved participants hold the Asset how do you know that you have kyc And everyone who is a holder Many times on these chains you will find That their assets even if Even if the protocol itself is Decentralized in some manner The assets themselves are very often Held with centralized exchanges and you Can't take them off the The Exchange or If you can they would have big Difficulties Following the kyc trail and everything Else around uh so even if the chain Itself is a security like how does this Security actually operate on the Chain Can the user hold it themselves do the Wallet supported can you actually look Into your wallet and see that you hold XYZ shares or bonds yeah I think their Ability to self-custody and to move

Assets off exchanges and to move them to Other exchanges for Arbitrage I think That's a key part of this value Proposition if you're just coming at it From the perspective of you know 24 7 365 trading and and real-time settlement And and all of those other benefits I Think that's a that's a separate part of It and it's not the whole picture I Don't think but I mean for real Tokenizations in terms of Securities Um I don't think there's that many Issuances that have actually been done I Mean we have Be a man we have uh yeah this side swap Equity we have a few other issuance as Well but in terms of other chains I I'm Not sure that there are any actual Securities having been issued that are Freely transferable between users that's Exactly right and I mean I think that's An interesting thing about the security Token business is that while people have Been talking about it for a number of Years when you start to dig into some of These assets that have reportedly been Issued or listed there's a lot of smoke And mirrors in it a lot of it is heavily Restricted and I think it's exactly Because of what you mentioned is the Lack of that transfer restricted asset Technology and the whitelist that Enables and then the ability to set up That ecosystem and then within that

Ecosystem to have all these benefits of You know really low friction usage Completely agree I mean um So with side swap we're we don't really Do kyc on the side swap side so if the Issuer of the asset has issued the asset As an as a bearer asset we allowed the Trading to take place as in swaps Directly peer-to-peer between the users Without any kyc but if the asset has Been issued as a transfer restricted Asset and they try to create a swap for It the swap will actually fail unless The counterparty has been whitelisted As a permitted recipient so how do you Guys screen between those two assets so If you have something like um you know Liquid usdt Uh that's not a transfer restricted Access asset and then you have something Like the block stream Mining Node do you Have to do a legal review or is there Some kind of assessment that this is or Is not a security before it's Um you know supported on the platform we Don't do any review on our side the the Reviews done on the issuer side so if The issuer is happy that the new Recipient of the assets is eligible I Mean we're just a swap limit order book Basically and uh So we don't interpose ourselves in that So if you create a swap offer to sell BMN and the buyer on the other side is

Also a permitted holder obvious The swap we'll go through but if the Counterparty isn't eligible They won't be able to buy the asset off You so I mean but is there any risk that Something that's deemed a security gets Issued without any wait list controls on It and traded on the platform we Wouldn't want to support trading in uh Should we say Securities which are Issued as Bearer but but this goes back To the discussion is it even possible to Issue Securities uh as Bearer assets I Don't know any jurisdiction which Supports it but what I'm kind of asking Is if there was an issuer that took that Risk upon themselves if I'm a widget Maker and I want to issue equity in my Company and I issue it as just a normal Liquid asset how do you prevent that From getting on the platform because That's something that's clearly a Security and it probably needs to be Issued through the amp platform and and With transfer restrictions how do you Prevent that from getting on the Platform the way the Market's been built Like any asset that has been registered In the block stream registry You can swap on the platform we want to Be agnostic to what's being offered and To have everything done at the issuer Level But but in terms of

Um the one aspect I would say is that we Would like to protect uh Anyone who comes onto the platform And uses it so in terms of The specific example that you cite there Is always the due diligence of having to Trust the issuer And if we set up dedicated order books In one of our swap markets we would want To do like extensive due diligence on The asset that we list where we create Dedicated order books so we can Concentrate liquidity but but we also Have something called the token Market Which is Slightly different from the swap market And in the token Market it's basically a Any asset can be offered for sale uh but You cannot bid for like random assets But any asset that you hold in your Water you're able to create swap offers For but we just don't have them in Dedicated order books so it would Potentially be possible to Offer these type of assets through the Token markets which is much more of a Should we say free for all so that Anyone can create a swap for any asset They hold in the Wallet as opposed to us creating Dedicated order books if we create Dedicated order books it will naturally Be uh we'll do all the due diligence in Terms of the issuer how do you view the

Centralized exchanges like how would you View somebody as bitfinex or bitfinex Securities do you think the centralized Exchanges are competitors how would you Kind of articulate the differences Between the two and and what do you Think are the advantages maybe to users And issuers I wouldn't say they're Competitors we all complement each other I mean if you Going forward an ideal Financial system Where users are able to hold their own Assets and deposit them with the Exchange of their choice they should Have the tools to be able to hold those Assets And then So if you hold BMN you should be able to Hold them yourself swap on the side swap Platform deposit with bitfinex Securities or I think digital the merge Exchange is also possible to trade them There it just becomes very flexible to The user and the question is um Where's the most liquidity concentrated And who do you trust the most So you know it becomes a question of User preference really Um but many of the The way the current exchanges work is That assets can't be deposited or taken Off And you must trade one token with an Exchange and then there's a question is

Is it really a Security issued on a blockchain or is a Token that resides on an exchange yeah Or is it just an Excel spreadsheet yeah From the user perspective they'd like to Have all the different type of tools and So side swap if nothing else will offer A wallet where you can hold these assets Even if you just want to deposit them With the different centralized exchanges Okay got it and so and what about I saw On your website uh private private swaps Is is are the private swaps like a Negotiated OTC transaction how would you Describe those private swaps are just Simply that you and I can create a swap Without the swap offer ending up in the Public limit order books okay so if we Wanted to you know swap any assets Between ourselves uh without those Offers going via the public markets we Could do so I just send you the swap Offer and you can accept directly in Your wallet and the swap takes place Peer-to-peer without any Should we say public information being Disseminated well that sounds to me like A yeah like an OTC negotiation right Where I send you a a price and we agree On it and then we go through it no Exactly so I mean if anyone else wanted To Should I say building Market as another Swap market around uh side swap I guess

It would be possible to just create These private swaps and Just take that swap offer and offer yeah Through another public order book what About pegx what is Peg X's role within Your ecosystem pegx is really a Registration agent it's a way of tying Kyc to an amp ID So that you can whitelist foreign assets And I mean the reason we did it was yeah We like to push boundaries so we decided We'd tokenize a certain percentage of Our own Cap table and we've done all the Homework in terms of the Securities regulation Etc so here in Sweden where I'm based Um we set up an SPV because in the Sweden private limited companies are Actually allowed to Maintain their own share registry you Don't need to know to be public for Anyone else there's no regulation in Terms of Who can hold who can hold shares or not So you just need to do basic qyc so that You can maintain the share registry There's no regulation in terms of The board of director being responsible For AML so if you were to sell shares to Some third-party as a director in the Company I wouldn't need to validate or ask Questions around not uh you know how how

Could you afford the payment for these Shares Etc So uh in terms of building on the liquid System Um you know it was just a case of Creating a proof of concept where we Issued our own equity Where users actually become Holders on the legal registry And where they need to whitelist so yeah I think our AGM we're going to send out An invite for the AGM sometime in April And hold the early May and during the AGM or all the big corporate decisions Will be taken so users can come in and Uh Should we say decide on you know any Potential Capital raise going forward or Who's on the board of directors or so so You have all the rights afforded to Regular shareholders and you get invited To shareholder meetings so it's an Actual Equity it's not some token with a Governance protocol where you yeah Uh so you have the full legal backing And you can go to Swedish courts Etc so it's it's being an actual Shareholder Insight swap registered here In Sweden oh that's interesting so just To finish up on pickaxe so pegx is the Kyc layer on that that works for all the Different assets that you have on the Platform the transfer restricted assets Uh only for our own Equity because

Obviously BMN goes to stalker and Uh digital will have other assets coming Out so it's just one more registration Agent so any any assets that are issued On the pla on your platform that aren't Done through stalker or Securities or Another platform that that'll be kind of Your ayc kycaml there yeah correct so Payex is very happy to help people Should say tokenize Yeah their Securities but obviously There's a lot of work that needs to go Into actually helping or assisting Anyone else issues Uh yeah so there's a quite a bit of work To get comfortable with so I think for The near term the the size swap Equity Will be the one that's focused on and if Anyone else wants to yeah Issue their Securities via pegx you know I mean we're a small organization and For us to do all the due diligence Etc Uh unless they use the exact same type Of um Procedure that we did with a private Limited company here in Sweden it will Be fairly difficult for us to support Okay well that's so I guess maybe I Mischaracterized that so it's not just a Kyca ml layer it's like a The Tokenization Advisory technology Advisory as well to help walk issuers Through that whole process is that right Correct so anyone should say who is a

Shareholder they can log in they see all Their shareholdings so they see a total Value of their portfolio if you're an Issuer you can log in you can download The entire CSV list of all your Shareholders all the details of the Shareholders And their Holdings So it just allows the issuer to have Full control over the Should we say the cap table basically Got it and you mentioned voting how does That work with liquid tokens that's That's really interesting well that's a Very good question and it's one we've Thought about a bit ahead of our Upcoming AGM So I think yeah we haven't done any Implementation yet but for the actual AGM that we're doing right now it will Just be should we say a video conference With everyone involved and then just uh Open out cry voting basically Or if anyone wants to object they'll Have to do so publicly And I I think going forward longer term If the board of director uh when they Call an AGM and they have lots of Different proposals For which there needs to be voting with The shareholders We can actually set up voting procedures Within pad X and we'll ask these Questions and the users can press yes or

No so that you incorporate the voting Procedure into agms and using the pegx Platform to do so okay that's Interesting and what about paying Dividends if you guys looked at that yet Have you know one of the things that's Always really interested me is the idea To pay dividends on a really granular Basis so rather than going annual or Quarterly you know if possible to stream Them on the the smallest time basis Possible like hours or minutes or or Something like that have you guys Thought about that at all yeah I mean We've put a lot of thought into it and I Mean number one we need to be profitable Enough to be able to actually have Dividends but if we remove that no Understood early days yeah but right now We're doing okay I mean we're cash flow Neutral slightly positive but it's not At a level where we're comfortable Paying dividends but effectively paying Dividends is a corporate decision that Needs to go through the AGM And if the AGM decides to pay a dividend On whatever schedule we'll just set that Up and but obviously paying dividends on It should we say on a continuous basis Or doing it a bit too often there's also A lot of bookkeeping work in the Background as well as filings with the Tax authorities and managing the Should we say the administrator that

Arises around that which may be Significant unless you have a team that Actually manages But we have set up all the Infrastructure so that it is possible For the issuer to actually pay dividends So you grab the list of the amp IDs the The list of shareholders they actually Don't need to do anything further since We already have their employees and then We could pay the dividends as As any token issue on the liquid Network We could issue as LBCC or Tether USD or more shares what is what Is the pipeline like at the moment do You think issuers are becoming more Receptive to this kind of idea are you Getting more inquiries from people Looking to tokenize shares or bonds well The inquiries we've had so far or mainly From say private individuals who have Some project or thought that they'd like To Uh implements and you know many times They're it's very difficult to Accommodate since for us it's very Difficult to do any due diligence or Um yeah many times I think they're Better served of um not having transfer Restricted assets So so in terms of issuing Securities and There you need to have your own team and You need to have done all your homework And all the regulatory work around it uh

And we'll be able to help you if You're comfortable managing everything On your own and if you're not I would Suggest speaking to either bitfinex Stalker or digital whereas they are much More engaged in helping you Set up the legal framework but but we're Very happy as Peg X to help you with the Actual just maintenance of the registry How do you guys handle the regulatory Side of facilitating trades and Securities or is the view that you know Maybe that's not applicable because it's A P2P market and not a central order Book Exchange we're not a custodian we Don't interpose ourselves in the trade It's just purely a broadcasting system For two users to find each other Basically Uh and with that you know we avoid much Of the regulation around Securities but Again it's important to remember that The security is issued on liquid many Times have a legal framework which is Permissive Uh for users to hold the assets Themselves and to trade and transfer Between themselves without Many of the regulatory overhang aspects Like in traditional financial markets You have Central Securities repositories which Hold the shares and to be able to hold The shares you hold them through brokers

Uh you have an account with the central Securities depository and you wouldn't Be able to transfer the shares very Easily from say Charles Schwab to Etoro You need to sell at one place and buy it The other basically and uh Yeah so Um and there's a lot more regulation Around that everything from How the Clearinghouse Works to how the Exchange Works to everything from Market Integrity to Uh but whereas the the regulation around The permissiveness with transfers from One user to another say if you father Passes away you can transfer the Securities without You can receive the Securities or if you Give them um so kind of falls under the Same Umbrella So you know with side swap for instance Here in Sweden it's possible to do the Transfers directly between users and the Board directors just updates the Registry there's no regulation on the Actual board of directors to Ensure that You know the markets are efficient or The AML side or anything else around it And I think that's something that all The assets so far issued on Deck would Have in common do you think that the

Side swap that your Equity your Tokenized Equity that might be the first Real tokenized Equity offering Um you know globally do you think do you Think that's true I am almost 100 sure That besides what managed the first Equity issuance On a blockchain where users who hold the Token or actual Equity holders of our Shares with all the legal rights Associated with it yeah that's really Interesting that's a that's a that's a Massive accomplishment well it's very Much under the radar I mean we try to um Even incentivize users to sign up and Yeah sure no I think I think this stuff Like I said I think it's just coming Into its own I think we're just hitting An inflection point and I think being in A bear market for the last 12 or you Know 18 months hasn't hasn't helped Um so I think this is just a nature of Of Um I think that's just human nature Right is it when the market starts to Heat up again people will be looking to Explore and a lot more of these kind of Uh you know kind of old old old Concepts But with new technologies applied to Them so I think we'll probably see a a Surge of new people looking at this Market and and more companies Um you know looking to do issuances in The next probably six months or a year

We hope so like one of them say Approaches that we've taken is that Anyone who wants to issue on liquid We're very happy to list their assets so If you do actually manage to issue Securities on liquid we'll set up order Books for you so that you can have Um your security traded on our platform Without with ease so I I think many Times when people Yeah decide on what where should I issue Uh they always try and you know approach Exchanges to make sure that they get Listed there they pay like high fees to Have them list the token Etc I mean for Us we're very happy to listen to any Security on the liquid chain for free It's just let us know and we'll set up The dedicated storybook And then as a Next Step you can you know Go to bitfinex Securities or merger Whoever else is integrating towards the Liquid you know Network yeah I think you Guys were the first Market to have the Block stream mining no doubt where I Think you were before both with bitfinex Securities and merge yeah correct a real A real Icebreaker you guys are doing a Lot of Firsts over there well there was A lot of work on the technical side to Integrate the swaps in relation to the Amp server Etc but I think we've managed All the major hurdles and uh yeah we Look forward to working you know on an

Educational Journey basically so that People Get their eyes up for the technology and What's possible to do and hopefully this Calls us or One part of it even if um it's a message That means repeating many times before People get comfortable with it Now I think you went I think you're Right I mean it's still very early days I think this is still a very you know Kind of a niche part of a niche market And I think it's only just kind of Coming into its own Um so yeah probably more technical more Education is required and and I think It'll all come in time I mean I think This is I think it's probably inevitable That markets just involve in the Direction of of better technology and a Better better user experience so yeah as We discussed earlier the technology is Just now coming into place so So so hopefully with a bit more Education and knowledge and what what's Possible here and if we get the message Out It should bring more liquidity as well As well as more issuance and Interest in the space and uh You know I mean most of the building Blocks are there one thing I'm very Um Should I say uh

Hopeful going forward is uh that we're Working with boxream to have swaps being Possible from the hardware wallets so That means that people don't need to Have the software wallets Online to be able to actually do swaps So that you can just create swap offers Directly from Hardware wallets my last Question here what what are you most Excited about what are you guys looking Forward to over the next say 12 months In in Bitcoin based Capital markets well Uh I think many of the building blocks For the actual Tech are starting to fall Into place Um but there's always a lot more to do But I think the building blocks are in Place For us to now start much more marketing Um As well as getting more issuers involved We're seeing more issuance issuances Coming online and I think the next 12 to 18 months should bring A number more into the ecosystem and With that when people start to issue You know more and more interest will Accrue to the network obviously yeah That's great well thanks a lot for Taking the time today Scott really Enjoyed the conversation thank you very Much me too and um yeah I have to be on Anytime again if you'll have me Thank you

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