# Layer Zero Targets Trillion-Dollar On-Chain Capital Markets

**Podcast:** The Milk Road Show
**Published:** 2026-10-06

## Transcript

The question is, who needs 2 million transactions per second?
Because you don't need 2 million transactions per second to tokenize the bond or, you know, the real estate building on chain.
Layer 0 is known for connecting other blockchains, but now they are building their own and launching an exchange on top of it.
What does an interoperability company need its own Layer 1 for?
And what do investors need to know about all this?
Hello and welcome to Milk Road Crypto, the show that now runs its own five of five verifier setup on every joke, and they still don't land.
I'm your host, John Gillen.
Today is Simon.
Got that one.
That's good.
Today, we are joined by Simon Baxes, the chief business officer at Layer Zero, the protocol connecting more than 100 different blockchains and building a lot of things on top of it.
We're going to talk about a lot of really important things going on in the market today.
If that sounds good to you, make sure you like and subscribe.
Share this episode with somebody who needs to hear it.
And as a reminder, our podcast today is free, and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you trade, earn, and borrow all in one place, all in one account.
So keep an ear out.
for more information on them later in the episode.
But for now, welcome to Milk Road Crypto.
Simon, how are you, sir?
I am doing very well.
Thanks for having me, John.
Well, thank you for your patience with some of the technical issues we've had this morning.
I wanted to start this conversation just at a high level.
For those who don't know Layer Zero, just give us a 30-second overview of what you would describe the company as, what you're focused on, and what people should know about Layer Zero.
Yeah, absolutely.
So Layer Zero has been around since 2021, so roughly five to six years now.
And we were initially founded on sort of solving the problem that is blockchain interoperability, right?
How do you streamline communication across the different code bases and different ecosystems that exist?
We were very fortunate to raise a total of $280 million at a $3 billion valuation on the latest Series B in 2023.
all co-led by A16Z and Sequoia with participation from PayPal, from Franklin Templeton, from a variety of institutions, and most recently Citadel Securities, Tether, and Arc Invest.
And so fast forward to now, we're the market-leading interoperability provider with roughly 90% market share.
I'm sure we'll talk about that in a bit and really have become not just an interoperability company, I would say, but an on-chain technology company.
define our mission as infrastructure powering the global movement and exchange of value.
So talk to me about the interoperability piece of this, because, you know, for people who have been in crypto for a while, they know interoperability is important.
And they may have heard of, you know, Chainlink is an interoperability solution and Circle has their interoperability play as well.
And so do many other players in the market.
Layer Zero, you say, is the leader in this.
Talk to us about what the product is that you're offering for interoperability and why you think you're in such a leadership position in the market.
Yeah.
So interoperability is a big.
Buzzword.
You know, it depends how you define it.
And most people in, frankly, any industry, not just blockchain, would say interoperability is important.
Everyone wants things to work together.
That is natural.
Where we have spent most of our time and energy is on-chain, cross-chain interoperability, right?
So what that means is actually connecting one blockchain to another, standardizing that across.
the EVM world versus the non-EVM world, et cetera.
You mentioned a couple of the other folks in the industry.
We really have a first mover advantage since 2021.
We've been kind of living and breathing interoperability since the day we founded this company.
And what we built and what the Layer Zero protocol is, is really a messaging protocol, right?
So think of it as infrastructure that transfers packets of data from one application on one blockchain to another.
You can do a lot of different things with that, but sort of the largest use case and sort of product market fit, if you will, for interoperability has become value transfer.
So how do you take a tokenized asset, be that cash, be that an RWA, be that a bond or an equity, and transfer that natively without the need of wrapping of assets, which is kind of how originally people approached interoperability problem.
from one blockchain to another.
And so we've been building that business for over five years now.
We have the most performing technology.
We connect the most blockchains.
And we talk about a market leader position of, I think in September, 91.5% market share.
We measure that in two ways.
One is the amount of value transferred from one blockchain to another, or sorry, across public blockchains, if you will.
And then the second is cross-chain transactions or messages.
So on any given month, we do roughly $10 to $15 billion a month of cross-chain value transfer.
And we power exclusively some of the biggest asset issuers in the world, folks like PayPal's PYUSD, the Global Dollar Network, Paxos, all of Athena assets, all of EtherFi assets, Tether and USDT Zero, and a variety of others.
And so if you take sort of the combination of all public blockchain cross-chain volume, Layer 0 accounts for roughly 91% of that volume.
Okay, so there's obviously a huge need there, and you guys have been chosen by a lot of big players in the market for the solutions you're providing.
I want to ask about the KelpDAO situation, because a lot of people either first heard about Layer 0, or let's say, like, were reminded about Layer 0 back in April.
There was a $290 million...
attack, let's call it, where that much capital or value was drained.
Layer Zero was involved.
I think there's still a lawsuit going on about all of this.
But just from your perspective, Chief Business Officer, talk to me about the lessons learned here and how Layer Zero has moved forward from this incident.
And just talk me through where we are now after that happened.
Yeah, probably one of the very...
Few examples of any publicity is good publicity.
So that's certainly not how we would like to be known in market.
And I think we've done a stellar job over many, many years building up the reputation that we have.
Things like security incidents and sort of exploits, hacks, et cetera, have plagued this industry for a very long time.
What happened with Kelp is certainly not easy.
I think one of the, I'll call it, toxic traits of this industry is in moments like that, not to come together and sort of, you know, solve the problem, but almost kind of poke at it into your point, really, really put the public light on it.
So it's never easy.
You know, it hasn't been an easy year for us, but I think it taught a lot to the industry.
What matters to us most is that our partners and customers maintain the trust.
in our technology.
And if you look at sort of that incident in particular, it actually was nothing to do with the protocol that is layer zero.
It was nothing to do with compromise of keys, et cetera.
It was very isolated to one particular application that we did not have a contractual relationship with.
And I think one thing that is the paradox of this industry is you sort of want to have open permissionless technology and have everyone build the way that they think they should build, which is kind of how we've always built our technology.
But at the same time, from a security standpoint, you want to make sure that if something happens, you know, like whose reputation are we talking about?
Right.
And so in our case, it's ours, regardless of the sort of how it happened, why it happened, et cetera.
But I think since then, you know, it's it's been six plus months, six plus months.
Our market share has only increased.
Our trust with our customers and partners has only increased.
And we continue to work with everyone and I think have come back.
much harder and stronger, really with the aim to not only make our technology better, but also make this entire industry better together.
Just want to pause for a quick second to remind you all that the crypto bull market is back.
I have been deploying capital into altcoins that I think are going to do very well, this bull market.
Some of them are already up over 2x from where I entered.
So if you want to see what's in my portfolio, what's on my watch list and have access to me in Discord to ask questions 24 hours a day, join Milkroad Pro now.
The link is in the description.
It's just a dollar.
I'll see you there.
I appreciate the perspective on that.
And yeah, I think this is an important distinction.
I didn't call it a hack because it was more of an attack.
They fed bad data into the system and, you know, the system like.
Yeah, anyway, it's not quite the same thing as hacking or breaking the smart contract.
It's manipulating things and lying, basically.
And I want to kind of just like use this as a way into a larger conversation around artificial intelligence as like a security threat or as a means for defense against things like this or just in general going forward.
Because a lot of people right now in crypto are wondering, is AI a bigger risk for security or is it going to be something that helps us bolster our security?
And how do you think about that?
What's outlook from where you're sitting?
Yeah, I think that was, that kind of goes back to the point I was making in terms of making this entire industry better together, right?
So I think it was eye-opening for us of how AI is getting applied towards various incidents.
And if you look at the past six months, I mean, there's probably a security incident in the crypto industry almost every day, it feels like.
We have a large security team.
We monitor all these things.
We work with the entire industry.
We work with teams like CELO 9-11, et cetera.
And so we see a lot of this.
And so, you know, what we've been doing in the past six months is working with our customers, working with our partners, working with folks that even aren't customers to say, hey, like these are the precautions that you should take because this is more serious than ever.
And so, and working with companies like CrowdStrike and Mandi, it's sort of the leading, you know, cybersecurity firms in the world to really shed light on what is...
I think a big risk for this entire industry.
And so we take that very seriously.
And again, I think it's been an opportunity for us to work with the entire crypto industry and frankly, the financial services industry to really make sure that everyone knows what the risks are and what are the...
sort of proactive steps everyone should be taking every organization every developer etc to to combat that well i appreciate your leadership on this i want to talk about sort of the next steps for layer zero because the next thing that you're working on very actively is this new layer one zero layer layer zero is an interoperability company your whole pitch has been about connecting everyone else's blockchains why did you guys make the decision to build your own layer one and what should people know about that yeah it's it's interesting because i think a lot of folks think that building a blockchain for us is orthogonal to our business because we are interoperability and interoperability provider.
And it's actually quite the opposite if you kind of understand the landscape, which is, you know, one, we've spent our entire history as a company integrating every single blockchain technology under the sun, which means we think we are the subject matter expert.
We know we are the subject matter expert in what blockchain architecture is, was and should be.
And with that, The other point that is important is, you know, blockchains are actually not our customers, right?
Blockchains we work with very closely, but they are mostly distribution channels for us because the actual customer that we serve is the asset issuer.
So when I talk about powering folks like PayPal BYUSD or Paxos USDG or Athena or Tether or Ondo Finance and a lot of the financial institutions that we work with.
It is the asset issuer that we serve, right?
So those are two important things.
And so on the first point, since we have so much experience integrating different blockchains, we sort of unintentionally created new architectures, new designs and technologies that have resulted in incredible performance and technical advancements as far as blockchain architectures go.
And so what at first was a bit of a research project for us.
And we said, hey, maybe we'll just release these white papers to the world.
And we did.
There are quite a few of them that are embraced by some of the biggest companies in the digital asset space now.
Then it's kind of led us down the path of, wait, like if this is so good and we think we can actually make a design that is fundamentally better, because frankly, between you and I, everything.
in the space in the past five years has been a lot of kind of copy and pasting, right?
It becomes more about go to market rather than actual technical advancements.
And we said, if we have this opportunity, if we have the expertise, if we can create something better for this entire industry, why don't we just do it ourselves?
And so we took that with the combination of who actually cares.
about this level of performance.
Because some of the stats that we throw around are one to two million transactions per second, horizontally scalable, sort of an incredibly fast and decentralized technology that frankly no one else can meet.
And so the question is, who needs two million transactions per second?
Because you don't need two million transactions per second to tokenize a bond or a real estate building on chain.
But what we figured out is that capital markets absolutely needs that level of performance.
High frequency trading needs that level of performance.
And so if you measure that against, for example, the New York Stock Exchange, who does 2 million messages per second to support their entire trading system, or someone like NASDAQ does even more, 3 million transactions, or call it messages per second.
If you wanted to put those systems on chain before the technology that we invented, you actually couldn't.
And so we kind of went down this path of saying, who cares about that?
And it turns out a lot of folks did.
And so sort of, you know, the partners that we announced in February of this year, the Intercontinental Exchange, the parent company of NYSE, Citadel Securities, who also became a large investor, the DTCC, Tether, Google, all these companies that need a bit of a different level of scale.
They said we care and we said, OK, well, if you care, then we will go ahead and build this technology.
And so that was sort of the spawn of Xero, the layer one blockchain that we announced in February and that we are officially launching in the fall of this year.
Gotcha.
That's a very comprehensive answer.
You covered a couple of questions I had about this, but I want to drill down on this piece about Wall Street because, like you said, the 2 million transactions per second that Xero is going to bring to market is a very high throughput that makes it very competitive in that landscape.
Why is Wall Street so excited about Xero?
What made you attractive?
Some of these partners like ice or the DTCC or Citadel versus, you know, some of these high-performing other layer ones like sweet or Solana.
Talk to me about that.
What was the pitch that you think really resonated for them?
Yeah, I think that I think it's important to note that that performance is sort of not just a little bit faster, right?
It's not a little bit cheaper.
It's not a little bit more decentralized.
Like it is exponentially more, right?
So you mentioned.
you know, some of the other systems, sort of best case scenario, those systems, we're talking 50, 60, 70,000 transactions per second, maybe 100,000.
But that is still leaps and bounds under, you know, what zero is capable of.
And so I think that the reason why Wall Street got excited and the reason that all these folks are working with us and partnering with us is because it opened up new opportunities that they didn't actually even think about before.
Right.
So everyone, you know, can agree tokenization, stable coins, RWAs, absolutely product market fit.
That is what we've all been working on as an industry for a very long time.
Not as many folks have been thinking about high frequency trading on chain.
How do you take a whole How do you take sort of the performance and the fairness of the traditional financial capital markets and combine that with the best of what we all love about crypto, which is self-custody and verifiability?
Some of those things weren't actually possible.
If you look at what Dan Doni talks about, the CTO of the DTCC that we were.
with very closely in terms of what zero and this is this is public information in terms of what zero is capable of and sort of the the the things that it opened his eyes to in terms of like how much of their systems they can actually put on chain on zero versus what they thought was impossible before um it is sort of like a prime example of again just sort of new things that folks weren't even thinking were possible before Okay, well, let's talk a little bit about some of what's possible now.
And I think this is a good way to segue to this Atlas exchange, the headless exchange, as you guys are calling it.
This was announced in August.
Atlas stands for aggregated trading, liquidity, and settlement.
And you're calling it a headless exchange.
What is a headless exchange in plain English?
And why do you think it's so important for Layer Zero to bring this to market?
Yeah, well done on the abbreviation there.
Yeah, so I wrote it down so I'd get it right.
So one thing that I think is also important about Xero and how we're approaching the market with the launch of Xero is that what we did not want to do is launch a general purpose chain and launch a general purpose layer one because we do have a lot of those.
And even if the performance is much better, sort of the concept of, you know, lay the foundation for this kind of.
good technology primitive and they will come is hit or miss.
Sometimes they do come, but you have to make sure that they do.
And so the way that we're doing that is building sort of purpose-built use case driven applications on top of Xero.
So you can kind of think of Xero being this infrastructure primitive that is hyper-decentralized and performant.
And we're building what we call zones or applications on top.
And so the first application is called Atlas, exactly as you mentioned, which is an on-chain stack for risk, credit, matching engine, clearing, and settlement.
So sort of a full on-chain exchange system powered by this underlying.
layer that is zero.
And so what that really means when you say a headless exchange is that it has all the properties of an on-chain exchange, but without the trading platform or front end on top.
So the same way that we built the layer zero interoperability protocol, being sort of this credibly neutral infrastructure connecting across different blockchains.
We think of Atlas as sort of the same approach, credibly neutral exchange infrastructure, where we do not sort of prioritize our own front end application or our own trading platform for the benefit of layer zero.
We have other trading venues integrating Atlas.
So think of, you know, really any application with a retail user base or an institutional investor base.
And we can talk about how we think about sort of open Atlas versus institutional Atlas.
but other trading platforms integrating this exchange to distribute access to different asset classes across spots, across perps, across options, outcomes, et cetera, with commodities, with equities, with crypto, and really delivering sort of that best execution, best experience to the end user of the trading platform integrating Atlas.
Okay, so let's pick up on that last piece there.
You said that you've got different solutions for different users of Atlas.
There's OpenAtlas, which is for permissionless markets, and InstitutionalAtlas, which has KYC sort of built in.
Why the two different versions?
Which one do you think is going to get bigger here?
And just talk to me a little bit about why there are two different versions of Atlas already.
Yeah.
So I wish we had a whiteboard so I could draw this out because it gets more complicated as we go.
But sort of to reiterate, right, you have zero as the underlying infrastructure layer, Atlas built on top, and then it's sort of bifurcated into exactly what you said, which is open and institutional.
And across both open and institutional, again, you have spot, purpose, options, outcomes across commodities, equities.
crypto.
And sort of the difference is on the open side, which is, well, the industry has validated quite a bit of demand for, I would say, right?
Talking roughly $200 to $300 billion a month of perpetual volume today on sort of this permissionless infrastructure, right?
So open is available to anyone, anywhere, anytime, permissionless, self-custody, etc.
That is global by nature.
that tends to be more of the retail trader, maybe the sort of the whale trader, et cetera.
And I think there again, sort of the demand has been validated for that already.
The technology that we built is fundamentally sort of a leapfrog of what exists today to deliver that experience via other trading platforms.
On the institutional side, it is sort of combining the Best of both worlds where you're getting sort of the performance and the sort of the fairness of traditional finance combined with self-custody and verifiability and extending that to institutional investors.
So institutional capital can get access.
to those same assets on chain 24-7.
But the dynamic there is different, right?
It is not permissionless.
It is therefore permissioned.
It is KYC, it is AML, et cetera.
All the things that the regulatory environment will require in the US and other jurisdictions.
So we're kind of taking this technology, ultimately building one liquidity layer and bifurcating those markets based on kind of open and permissionless access versus institutional capital.
that is permissioned.
Okay.
So there's a bifurcation there for different purposes, different use cases.
I understand that.
The whole description of this is as a headless exchange.
Who puts the head on, right?
Like, is it just something that the New York Stock Exchange just plugs into?
Do they have to build on top of this?
Or like, you know, you said the open one is maybe for whale traders or whatever.
Does someone have to build something on top of that?
Who does that?
And just talk me through like how a head actually gets put on this product.
Yeah, absolutely.
So we're streamlining the integration, regardless of whether it's open or institutional.
So it'll be very simple for the trading platforms.
On the open side, you can imagine, you know, some of the largest self-custodial wallets in the world or folks that have large user bases.
I'm sort of being intentionally vague with because we haven't announced some of the some of the largest partners on the open side.
I'm trying to get you to spill the beans, Simon, but you're too smart for me.
But yeah, keep going.
The platforms that we have announced on sort of the first iteration of this, you know, folks like GT, Bullish, which I think a lot of folks are familiar with, True North, et cetera.
So those are folks with retail user bases.
Those are folks that can put the head on, as you mentioned, in a very simple and easy way for their end users.
On the institutional side, it will be more of the call to prime brokerage or folks that offer trading to an institutional.
user base that integration will look a little bit different right because we want to adapt to sort of what exists there today to make that very easy for the institutional investors to access but yeah it will be sort of platforms that extend the investment access.
to their institutional base.
Okay, I would like to ask you a question about the zero token, because the we don't have to talk about the price performance, I don't want to get you in trouble.
But the token has been ripping recently.
And there's a lot that's going on in terms of products you guys are bringing to markets.
Where does the zero token fit into this?
How does it capture value?
And why do you all need a token for this, the system and these products that you're building?
Yeah, so the zero token has been around since June of 2024.
It was brought to market initially as a governance token.
for the interoperability business.
And looking at the interoperability business today, there are plans from a governance perspective to turn on the fee switch on the interoperability business that gets voted every six months in a referendum.
And that fee switch will essentially attach a CRO-based fee to each and every single cross-chain transaction that we power that will then buy back and burn CRO.
That has been sort of the...
the plan on the interoperability side.
Now, of course, with the launch of Xero and with the launch of Atlas, it introduces an enormous amount of additional utility to Xero, right?
So not only governance for the layer one blockchain, but also Xero becomes the staking asset, the fee asset.
And so there's a lot more that's coming to it.
And you're right, the performance has been quite good.
I think, you know, seeing sort of the I think that the industry kind of going back to earlier in the year, sort of really putting us down immediately and saying, okay, like these guys are done.
I think what the industry has realized in the past few months of just like how much we are doing, how much we are building and how much value that is bringing now and in the future to ZRO as the asset.
So we're really excited about that.
And I think there will be an enormous amount more applicability to ZRO as a token.
Gotcha.
Okay.
So the market is sort of pivoting from the skepticism of the Kelp Dow days to starting to appreciate more what you're building now, and ZRO is going to be a big part of that.
Okay.
Let's talk about the changing regulatory landscape here because the Clarity Act did not go through in Congress, but the CFTC, the SEC have been very – let's say – forthcoming with regulatory frameworks to try to bring more digital asset products onshore into the United States.
I'm curious, has this changed anything for Layer Zero in terms of what you're building, what you're trying to bring to market, or what your strategy is here to have the U.S.
sort of opening the doors, regulatory speaking, to digital asset products?
And what's that been like for you guys?
Yeah, I think, you know, it's been exciting to see the administration really push the I'd say innovation frontier of crypto.
Even with the Clarity Act not passing, I think it's actually not the worst thing in the world.
I think there's a lot more to come.
And to your point, the CFTC and the SEC are pushing the boundaries there to make sure that, you know, sort of the innovation that is built, innovation like ours, for example, stays here in the United States, right?
And that the United States can take advantage of it.
So I think, you know, for us.
That matters quite a bit and largely on the Atlas side, right?
Because one of the wedges that I think we have as far as the Atlas technology goes is the institutional side and the institutional relationships and partners that we have and the things that we are building with them to bring to market in the very near term.
The friendlier that regulation is for investors, for trading, for capital markets, for perpetual futures, et cetera, in the US, I'd say the faster we get to.
those institutions driving very, very meaningful amounts of volume across this trading infrastructure.
So, you know, we're actively following, participating and helping push, I'd say, that innovation alongside the regulators.
You know, one of the weird things about crypto is that the longer you're in it, the more accounts you seem to end up with.
You buy in one place, trade somewhere else, earn yield somewhere else.
And if you actually need capital, you end up having to sell something that you probably wanted to keep.
That's why we at Milk Road are partnering with Nexo.
These guys keep the whole thing under one account.
You can buy, trade crypto, earn interest on what you already hold, and even borrow against your capital without having to sell it.
All in one spot, all in one account, all on Nexo.
So if you need liquidity, but you don't want to give up your position, or you're already holding crypto and you want to be able to do more with it, I think Nexo is worth your time.
We love working with them.
I think you will too.
Telemilk Road sent you.
Okay.
Some other people who are pushing innovation are Coinbase.
They have tokenized stocks on base.
Robinhood has its own chain.
They're doing tokenized products there.
I'm curious about who you see as your competition, right?
Like, do you see it as being some of these performant L1s?
Do you see it as being Wall Street and TradFi or some of these, like, let's say, crypto native incumbents?
Who do you see as the competition that Layer Zero is trying to disrupt?
Or is it all of these players?
And how do you think about the advantage that you have?
have over some of these other players who are also innovating in the market right now.
Yeah, I mean, I think there's still a lot that will shake out over the coming months and years.
I think when you talk about and there's like this fundamental distinction, I think that I think a lot of people miss in terms of, you know, what is actual on chain trading versus off chain trading, pretty important distinction, because a lot of like, I think about Coinbase Robinhood, etc, like centralized, like they're just off chain trading, just because we're, you know, trading digital assets doesn't mean that it's that it's trading on chain.
You know, what's happening with tokenized equities, what's happening with sort of Robinhood chain and tokenized equities there against sort of the meme coins, et cetera, are just like scratching the surface, I think, of what is possible and like how this industry will shake out.
And even the volumes that we're seeing today, they're large.
We're all, you know, sort of as an industry, we've come a long way, but they are still small in the context of traditional finance.
And so...
You know, when you say like, who is the competition, I think on sort of Atlas and trading side, I actually don't know exactly what that answer is.
You know, you could point to say, you know, maybe that's, you know, Hyperliquids, Lighters, the Robinhoods, kind of like the classic players in the space over the past 12 to 18 months.
But I think like that landscape changes significantly.
Our wedge has always been about going really, really deep.
with some of the biggest partners in the world.
And B, it's always been about a technological advantage.
Like we as a company are very engineering driven, have some really, really incredibly smart people on the team.
And where we shine is sort of the technology later is that it is the performance.
It is building better systems, which doesn't always.
come through clearly in this industry that is very noisy, right?
People read a headline, they pick something up and they just kind of move on and they're like, oh, these guys are winning, right?
But we build for the long term.
And I think, you know, usually building the right way, building the best technology in the long term will win.
And so we kind of view that as the main edge, I would say.
I want to talk a little bit more about the future outlook here and what is possible.
Because like you said, there's a big difference between off-chain and on-chain, and the world is just beginning to pioneer what is possible on-chain.
When you talked about Atlas, you said that this is just one zone of what's possible on Zero, the layer one that you guys are building.
What other zones might there be?
What does that vision look like for you once all these on-chain things are launched?
Talk to me about that broader outlook vision for what Layer Zero is trying to move towards.
Yeah.
So when we initially announced the architecture of Xero, we announced three zones or three applications.
And that still remains true in terms of what we're building.
We prioritized Atlas and the capital markets environment to ship first because we see such a large, unique opportunity there.
The second sort of application or zone was a general purpose environment.
So a bit maybe less exciting, but sort of necessary in terms of like, you know, you still want a...
kind of a general landing zone for the things that we all sort of love and expect in crypto, right?
That is DeFi, that is borrowing, that is lending, vaults, etc.
Like that won't exist on Atlas, but it will exist on Xero.
And that's kind of that general purpose in mind.
The third thing that is incredibly exciting to us, and it has maybe shifted just a little bit, but that's the third zone that we announced was payments.
We have a...
unique edge in payments, I would say, because of powering all these stable coins and assets on the interoperability side.
And so we view that sort of the payments landscape, on-chain payments, very, very interesting.
What has become more interesting, I think, since we announced Xero to now is agentic payments.
Because of sort of the rise of agents and AI, one thing that is, I think, very clear is that agents probably will not transact with each other with credit cards and fiat.
You know, they'll probably not going to be pulling nine cents out of your Chase bank account to pay for a micro transaction of unlocking a Wall Street Journal article.
But that is like all very possible.
We're paying another agent to do something else, et cetera.
And so that will be that will be digital assets.
Whether that's stable coin, whether that's Bitcoin, et cetera.
Like, let's see.
But there will be a need for millions, tens of millions of transactions per second for micropayments, for agentic transactions, etc.
And so that has become increasingly interesting to us.
And that is, again, yet another sort of novel application of Xero and the performance that we have.
This leads right into the next question, which is agentic finance and the rise of all of this stuff.
And I want to hear a little bit more about that because.
you know, the numbers you just quoted are higher transactions per second than what layer zero can, or the zero chain rather, can currently do.
How do you scale to that target?
And then do you have a dedicated strategy specifically around agentic finance AI agents and getting them to adopt this?
Because we talked a little bit about the strategy for retail and for institutions.
AI could be a little bit of a different animal.
And I'm curious what the strategy is focused on that specifically.
Yeah.
So one, you know, sort of the...
The benefit of having, let's call it a new gen blockchain architecture that we do is that we get to do a lot of things that other folks cannot.
And, you know, systems that have been around for a long time that are highly, you know, decentralized, et cetera.
The benefit of being newer to market from like a layer of watching perspective is that, you know, we can do so many other things, right?
And so like our systems are horizontally scalable.
We will be releasing some exciting announcements and white papers, et cetera, of like what that horizontal scale looks like very, very soon because of all this work that we've been doing on the energetic payment side.
So without sort of...
Spoiling that, right now I will say, yes, we have the ability to scale the system much, much further.
The from-for-a strategy for agentic finance, for agentic payments, etc.
Again, one that wasn't maybe as top of mind for us even five months ago is very, very top of mind for us now.
And so if you look at things, you know, public things, for example, like...
X402 and the work that Cloudflare is doing and like the scale that Matthew Prince talks about the CEO of Cloudflare that is necessary for agentic payments, right?
He's talking in the context of tens and hundreds of billions of transactions per second.
So, you know, if and when we reach that scale, we will be ready.
And that's sort of like the world that we're building towards.
I got to let you go because we're getting close to time, but I got to get you to say something that's wildly bullish here at the end.
I want to ask about what the addressable market is in your mind, because a lot of people think of Layer Zero still is just an interoperability solution, but it sounds like what you're playing for is much, much bigger, right?
Like payments and capital markets and like a whole lot of other things.
What is the addressable market that Layer Zero is going after?
How big do you think this can actually get?
Yeah, look, I mean, our ambition is very, very big.
Even when we announced zero, I think, right, like we said, Atlas, general purpose, payments, like kind of three of like the biggest things in, you know, in like all of digital assets.
And we are tackling all three of those problems.
And we have the interoperability business, which tackles kind of it from the other angle.
And so I think we're still so early, John.
I mean, if you look on the interoperability side.
You know, today we talk about 10 to 15 billion dollars a month that we do cross chain.
You have, you know, what, sub 40 billion dollars of RWAs on chain projections by 2030.
If we all believe in this world, in this industry, we're talking trillions, right?
Two to four trillion on chain.
So how does how does that shape the interoperability business, which correlates really to the amount of assets on chain to some extent?
Right.
That is exponential growth just for the interoperability side of the house as more and more asset issuers come to the market, as more institutions tokenize things on chain.
On the zero side, again, sort of very similarly, if we all believe that blockchain is fundamentally better from a infrastructure perspective for finance than the volumes that we're talking about today and the hundreds of billions a month compared to traditional finance.
we're talking trillions, right?
We kind of have this like little headline in most of our slide backs that says, you know, billions today, trillions tomorrow.
And I truly believe that.
I think this industry is poised for exponential growth.
Simon, you did great.
Billions today, trillions tomorrow is a great tagline.
We can go out on that.
Simon Baxes, Chief Business Officer at Layer Zero.
Where can we send people to find more of you and your work online?
Yeah, absolutely.
LayerZero.network is our website.
Our Twitter is always full of the latest and greatest.
So please follow us there, myself as well, that you see on the screen.
But yeah, thank you for having me, John.
It's been an absolute pleasure.
Thank you for being on Milk Road Crypto.
I learned a lot.
I know our audience is going to love this conversation.
I just want to say, I really appreciate what you're building and doubling down and the way you guys have come back from the Kelp Dow situation and stayed focused on what you're building.
It's really inspiring.
Really appreciate it.
So thanks for being on Milk Road Crypto.
I hope we can catch up again soon.
Thank you, John.
And thank you all for joining us.
I hope you all learned something today.
I know I did.
So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of Milk Road Crypto.
Thanks for being here, everyone.
Bye.
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