# Tokenized Stocks and the Neo-Brokerage Era

**Podcast:** The Milk Road Show
**Published:** 2026-11-09

## Transcript

So this is the token super cycle that we're in the early innings of.
And it's really all about bringing the entire stock market on chain.
Last Monday, $657 million worth of tokenized stocks traded on Solana.
And about 90% of that was on Backpack.
Fidelity says that at one point, Solana traded more stocks than the New York Stock Exchange.
And yet Solana's price action is still struggling in the $85 range.
What is going on here?
What do investors need to know about this?
What is Backpack?
And when does all of this tokenization on Wall Street mean crypto?
goes to the moon.
Hello and welcome to Milk Road Crypto, the show that knows that when your bags get heavy, it's a good idea to have a backpack.
I'm your host, John Gillen.
Today is Monday, November 9th, and today we are joined for the first time by Armani Ferrante, co-founder and CEO of Backpack.
Armani was early at Alameda Research after FTX blew up.
He bought FTX's European business and turned Backpack into one of the biggest names in tokenized stocks.
He's going to break down where Solana is today, what Backpack is, and what you need to know about all of this.
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And as a reminder, our podcast today is free and that would not be possible without our partners at Alumni Ventures, giving accredited investors access to private market investment opportunities alongside leading VC firms and Nexo, the digital asset platform that lets you trade, earn and borrow all in one place, all from one account.
So keep an ear out for more information about both of our sponsors later in the show.
But for now, welcome to Milk Road Crypto, the man of the hour, Armani.
Sir, how are you?
I'm doing great, John.
Thank you so much for having me.
I am so excited to talk to you, man.
You have built an absolutely ripping business.
Backpack added more than 200,000 new tokenized stockholders in the last month.
People are flocking to come trade tokenized stocks on Backpack.
Can you just tell me what's driving that demand?
Why are so many investors choosing Backpack?
Yeah, so I mean, I think you have this incredible transformation to the entire financial industry that we're really in the first innings of, right?
If you ask yourself the question, what's been happening in crypto over the past decade, it's really been incubating these new financial rails all around the world.
And you see all these booms and bust cycles, speculation, different metas, everything from altcoins to NFTs to meme coins.
And now we are on the precipice of probably the most important change to the industry or the most important evolution really is it's maturing from this test bed.
of speculative financial activity to taking out rails that are proven to work and then finally bringing the entire real world economy on chain.
And you asked the question, you know, what's the source of...
productive income generating assets to kind of, you know, build a productive economy on.
Obviously, it's, you know, publicly traded security.
So this is the token super cycle that we're in the early innings of.
And it's really all about bringing kind of, you know, the entire stock market on chain.
And so, you know, we're seeing it every day.
We've got about 88 symbols listed on Solana right now.
Every day we're listing more.
We're going to go from 88 to 100 to 1000 to everything.
pretty soon.
And I think that's what's driving all the demand.
Okay.
For those who aren't familiar, break down what's different about this product from other places, because there's X stocks, there's Coinbase, Robinhood chain, Ando.
It seems like everybody is bringing some kind of tokenized equity product to market.
What is the differentiator between those products and what Backpack is offering?
And what am I actually getting if I buy a stock on Backpack?
Yeah, so the short answer is that it's the one and only tokenized stock product in the world where you can buy share in DeFi and transfer it to your interactive brokers account in TradFi.
And so the way to think about this is, you know, there's this spectrum of what you would consider a quote unquote real stock where on one side of the spectrum, you have probably the most pure.
sense of a stock, right?
You have things like the transfer agent model, folks like bullish who recently acquired a Quinity, they're like, you know, the transfer agent of something like 20% or some incredibly large number of the entire stock market.
You have super states, you have some great companies that are leading the way there.
You have folks like DTC that are tokenizing their entire ledger.
Obviously folks know them as, you know.
the commonsensical common definition of the term, what it means to own a stock is really being on DTC's ledger.
It's like trillions of dollars in the entire US stock market basically.
And that's on one side of the spectrum.
And the issue with these models is not like a fundamental issue.
It's really just a historical issue.
It's that they don't fit into the form factor of DeFi as it exists today.
But they are the most real sense of owning the stock.
They're these closed loop systems.
You know, you go in, you KYC your wallet and you kind of interact with the closed set of parties.
But then if you go on to the other side of the spectrum, you have everything from derivatives, CFDs, and like what people call these debt securities.
So instead of actually having a stock that...
you know, redeems into the real thing, it gives you a cash settled instrument.
So you get the price exposure, roughly trades in line.
But when you actually go to, you know, you know redeem your stock you're basically redeeming poker chips uh for for cash or something if you want to use that metaphor um and so what we did was we took but but the benefits of that is that it does work in defy right it does work in this stablecoin economy that's been built on solana and other networks all around the world and so what we did is we tried to take a point in the middle of that spectrum where you know users can you know from a a functionality perspective kind of have the best of both worlds.
So you can have a token that freely flows in DeFi, you can use it on DEXs, you could use it in a self-custodial wallet, and it all kind of just works out of the box in the same way as stablecoin works.
But that actually can freely flow to and from the traditional systems.
And there's a ton of second order effects of that one seemingly simple.
redemption concept.
And so this is the big reason why you see so much liquidity and so much trading volume on these symbols.
You see folks doing everything from buying and selling stocks on these crazy DeFi experiments that are happening right now, everything from meme coins paired against stocks to user-generated baskets.
to kind of decomposing revenue streams into the constituent components, right?
You can imagine not buying SpaceX stock, but, you know, people are doing crazy stuff like decomposing SpaceX stock into like the Starlink revenue or, you know, in the future, maybe orbital data centers and things like this.
So there's tons of just like natural experimentation happening.
But then there's also a ton of stuff happening at the microstructural level in DeFi because of this redemption concept.
So a big one that we're seeing every day is just people are being back and forth to and from TradFi and DeFi to keep prices in line in the AMM pools, right?
So AMMs, you know, they don't exist in a vacuum.
They exist as a function of flows.
People buy and selling to keep the prices in line.
And the beauty of this product is that you can actually have, you know, any type of market maker, any type of trader, you know, whether they're large funds or boutique firms, freely go back and forth to actually keep the prices in line.
So it's not like...
this whitelisted set of authorized participants, which you might see in like an ETF or some of these other products where you can only, you know, do that redemption process if you're, you know, a part of, you know, some whitelisted set of groups.
And so you see a ton of this activity happening, not just for the bigger stocks, but also for the medium and micro cap stocks as well.
And it's all kind of facilitated because of this platform that we built for anybody to basically bring their brokerage accounts.
on-chain.
And so, you know, the second order effects of this are pretty clear in the numbers, right?
You see everything from upwards towards 20x.
40X, more liquidity, better price execution on given symbols, right?
If you compare backpack securities on Solana versus something like, you know, the Robinhood socks on Robinhood chain, the liquidity and the price you get as a user is just far superior as a direct consequence of this feature.
But then you also see our ability to actually list like assets, like for example, the most surprising one, perhaps of recent note was like Power USA.
This is like, you know, 50 to 100 million dollar market cap company that we listed on Solana.
And then in the first 24 hours, it does more volume than Nasdaq does in a day.
And so, you know, it's, you know, started as this really small thing, but we're seeing kind of it grow brick by brick every single day.
And it really all comes down to that one redemption concept where you can buy stock on Solana, transfer it into your brokerage account.
put a buy stock in your brokerage account and transfer it into Solana.
And we were really the first in the world to do that.
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.
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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.
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Okay, I think this is getting towards this idea.
By the way, thank you for that explanation.
That was really helpful.
This is getting towards this idea of a Neo brokerage, right?
And I think that this is something we, in Web3 and crypto, we hear about Neo banks and Neo this and Neo that.
What is a Neo brokerage and how does Backpack fit into that?
Is that what you're trying to become?
And, you know, what does that look like as a concept in actual practice?
Yeah, just talk to me a little bit about what a Neo brokerage actually is.
Yeah, so you can think about Backpack as, you know, a brokerage of sorts.
of it as this neo brokerage but what a neo brokerage really is is you can imagine any app with nothing but an internet connection and you know cryptographic key pair having access to all of Wall Street so you know whether you're you know a backpack uh interactive brokers or you know these new kind of uh i would call them new fintech you know wallet defy products like a phantom a fomo um an axiom whatever it might be um you can access anything that you can access in robin hood without actually having to build robin hood itself.
So Backpack is not just a brokerage or neo brokerage, it's actually a platform for other neo brokerages to plug into and to build upon.
And I think this is part of a much larger story that we're seeing kind of in finance right now, where you're in the middle of this second huge digital transformation of all finance, right?
In the 70s, you went from paper trading and trading and bear stock certificates into digital trading, namely with the rise of DTCC and the large stock exchanges and the intermediated financial system that we see today.
But now we're in the middle of a second large transformation from not just the intermediated digital trading, but moving that trading onto blockchain rails itself, where you go from 24.5 to 24.7.
And so this is all about removing friction.
It's all about asset flows.
It's all about getting capital inflows into stocks in every part of the world and not just in kind of the world's largest economies.
And it's not just an access problem.
It's also a form factor generational change that we're seeing as well, where you can imagine if you're five guys sitting in a dorm room, how do you build Robinhood?
Right.
You know, at this point, it's going to take you tons of years, millions of dollars, tons of industry specific experience to build up all that infrastructure.
And now anybody can do it in the same way that they code up like a hackathon project.
And so I think the second order effects of this is just going to be an enormous boom of of fintech startups that get created where you have this explosion of new brokerages where it's really any app with an access to.
an internet connection can then get access to anything that trades on a brokerage.
And so I think that's the story of the NIO broker.
You first saw it with the stablecoin economy, and that's boomed over the past two, three years.
And now we're entering the era of the NIO brokerage.
Okay, that's very helpful.
I want to talk about what it actually takes to build this and the infrastructure you mentioned is a big piece of this.
You want to go from dozens or hundreds of tokenized stocks to...
thousands.
You partnered with SK Securities to bring Korean stocks on chains recently, and you've laid out a plan to try to get all these regulated global exchanges all trading in one pool of liquidity.
What does it take to actually get to that future state that you're working towards?
What's the progress on that roadmap like?
Just like talk me through how we get from where we are today, where we're still only tokenizing the first few of these tokenized stocks towards that future where we have thousands of tokenized assets that all have a single pool of liquidity backing them.
What's that progress like?
Yeah, so I mean, I think there's the infrastructure and technology perspective, but then there's also the legal and regulatory perspective, and they both go hand in hand and really have to think about them kind of together.
I think, you know, people tend to think about these crypto exchanges, whether it's like Coinbase, Kraken.
Gemini, Binance, whatever, as these like monolithic trading platforms.
But they're actually like these very rich financial services providers that have all these constituent components.
And so like the base level, right, you have like a custodian connected all the blockchains, you have clearing matching settlements for trading.
You obviously have the crypto assets, you have the fiat rails and really kind of the next thing that we've seen happen over the past really year.
is the integration of brokerages onto these rails.
And the big thing that we work towards is being able to build a modern brokerage account built on stablecoin rails.
And so you have this great iceberg of the traditional crypto exchange of all these different layers built on top of it, where tokenization is really just the tip of the iceberg, where you're bringing assets in and out of the exchange ledger to and from the token form factor.
And so you're seeing this kind of being done in various different ways.
You see DTC itself, which is kind of this, you know, ledger for, you know, who owns all the stocks in the world, but it's also paired with this clearing system that all the brokerages plug into to actually settle their buys and sells on stocks.
And so kind of the way you can think of it from the infrastructure layers, a similar such system.
built on top of brokerages or built on top of DTCC that actually facilitates the minting and redeeming of these stocks purely by virtue of a deposit and withdrawal.
So the user experience is quite lovely, right?
You literally just buy Apple stock and in the same way you withdraw your USDC from Coinbase to, you know, your MetaMask wallet, you can do the exact same thing, but withdraw your Apple stock to your self-custodial wallet.
And it goes in both directions.
So it's really kind of this story of...
building on top of these layers to actually bring these assets on chain, but then actually get the setup to be able to do it in every region around the world.
So obviously we started with the US stock market, really kind of the big jumps to go from 88 symbols to everything on Robinhood.
But we're also working on Hong Kong, we're working on Japan.
As you mentioned, we're working on Korea.
So getting the entire world's economy running on the crypto rails is really step one.
And then, you know, Paired with that is the whole kind of legal and regulatory conversation, which we've seen a ton of incredible work being done by the agencies in particular in the US, really seeing this as the future of finance and doing the groundwork to actually be able to facilitate this in a coherent way.
So you have kind of the first starting example of this where you have TSVs, these tokenized security venues, and you have kind of the rules of the road being laid out there.
That's really the first initial.
I'd call it like test bed, right?
The agency itself calls it a sandbox.
We're really, it's kind of this, let's put our toes in the water, get our feet wet, see what this actually might look like.
And I think we're still a couple kind of, you know, either exemptions or rulemaking away to really kind of, you know, get to the state that we want to get at.
So we're really like in the very early in the endings here, we're still all about kind of building the technology.
prove this demand, prove it works, and then the regulatory pieces, which are shortly following thereafter.
So, you know, this is not something that's going to happen overnight.
Like we're seeing a ton of growth on Solana right now, but this is really going to be a story that unfolds over the next year or next year is probably over the next decade.
And it's really going to be this kind of generational overhaul of the way capital markets work all around the world.
Okay.
I really appreciate the perspective and how all these different pieces fit together and sort of the timeline on some of that.
Not everybody is excited about, as you said, dipping their toes in the water.
There was a full-page ad in the Wall Street Journal kind of – saying that people should not participate in tokenization.
And I think it was like 50 companies, SpaceX, Amazon, Tesla, many others, blocked having their stocks tokenized on OKX ICE, which is a partnership between OKX and the New York Stock Exchange.
So it seems like there's still some resistance and hesitation about some of these tokenized products coming to market.
What is your reaction to this?
And what are your thoughts on this?
And does this affect Backpack at all?
Or does this not really relate to what you guys are building?
I mean, I think on the one hand, it's totally fair to be skeptical of new things.
On the other hand, it's, I would say, entirely expected.
You know, people said the exact same thing about stablecoins, right?
Everybody was skeptical about stablecoins.
The banks were skeptical about stablecoins.
Genius itself was hotly debated.
Even up until this day, there's debates about stablecoins and what they should be allowed to do.
Should they be a lender and interest?
Are these banks?
Are these not banks?
And so, you know, I think fundamentally change is obviously just hard.
And you see it not just in crypto, you see it in AI.
Should we be building all these data centers?
Should the AI's be regulated?
Should they even exist at all?
You see some parts of the world basically saying, dragging their feet, kicking and screaming, saying like, no AI here, whatever.
People say this about every big change and crypto is no different than any other large transformational technology that affects the entire world.
If you ask yourself the question, right, well, suppose I go to sleep and I wake up five years from now, are all stocks trading 24-7?
Is it global?
Is it, you know, running on crypto rails?
The answer is like almost certainly yes.
Right.
Tokenization more or less at this point is given.
I think everybody kind of more or less agrees on that, whether you're talking to crypto people or whether you're talking to institutions on Wall Street.
I mean, it's really a question of how things get tokenized.
and the exact kind of the rules of the road for how that plays out.
So I think, you know, these are very important conversations.
It's absolutely going to happen.
And it's just really a question of when and how.
So I think that's kind of going to be a story that unfolds over the next several years.
And I think they're great conversations to have, but the trains kind of, you know, left the station and it's really not stopping at this point.
This pullback on Bitcoin is scaring a lot of people and I am not one of them.
So if you want to see what I'm not selling and why, what's on my watch list and when I'm going to be deploying more capital into these markets, you can join Milk Row Pro today.
It's just a dollar.
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I'll see you there.
Gotcha.
Okay.
So I want to talk about the competition from Wall Street because it looks like the NASDAQ is moving towards round-the-clock trading on weekdays at least.
And they're trying to start this as soon as next month.
Is this a sign that Wall Street is trying to catch up, that they're trying to compete with some of these things?
And are you kind of worried about some of these legacy institutions and exchanges trying to compete with what's being built in the tokenized world, in the Web3 world?
And how do you see that competition, that dynamic playing out?
Yeah, I mean, without a doubt, folks are trying to catch up.
I think that is clear.
You see it with every partnership, whether it's large scale investments, you know, products actually manifesting itself.
You mentioned the OKX ICE TSV venue.
Am I worried about competition?
And how do I think about that?
Absolutely not.
I don't think it's a zero sum game.
I think whenever you have these large transformations, it's always a story of evolution.
And I think.
I don't know if this might sound a bit surprising, but I think we need the traditional institutions.
They're not going anywhere.
Those are the backbones of the global economy.
And I view kind of the rising crypto protocols and crypto companies as really being kind of complementary new pillars that will live side by side and go hand by hand with.
all the traditional players.
And so we're looking to not necessarily compete against them, although there's certainly an element of competing, right?
Everybody in finance kind of offers a similar set of services, but it's really a question of how do we actually work with the incumbents to do things that they can't do to kind of usher in this new era.
So I think it's a, it might sound a bit corny, but I genuinely believe that the story of rising tides raises all boats.
And we're already in conversations with a lot of these folks today.
Well, that's at least a positive outlook on that.
So thank you for that perspective.
I want to talk about some of the competition because there are a lot of ways, as we said, to get exposure to tokenized products.
There's a lot of people innovating on different products here.
But then there's also perpetual futures contracts, things like Hyperliquid and LiDAR, which don't settle.
in spot and don't, you know, a lot of demand for those products are for people from people who want to trade tokenized equities, but don't want to own or custody or like actually hold the spot that's underlying them.
Do you see these products as competing with each other?
Are there's, is there going to be a need for spot markets, like global spot markets?
If we have access to global perpetual markets, like how do you think about these two?
And is it another case of a rising tide lifts all boats or is there some tension here?
Oh, I mean, at tension, absolutely not.
They're two totally different.
products for two totally different use cases, right?
Futures, perpetual futures are an evolution of futures, right?
They are hedging instruments to facilitate risk transfer.
That is about making markets function globally, 24 seven in the sole in really like the sole venue for price discovery, namely when it comes to crypto, right?
Perpetual futures, you know, that's, that is the source of like the price of Bitcoin on any given second on any, any given day.
And so I think the importance of, of the perp, is really to kind of usher in kind of the weekend markets in a new form factor that is really, I would describe it as the most important generational change of derivatives markets in our lifetime.
And so it's certainly the case where one fuels the other.
You know, you have perps, namely the rise of RWAs, commodities, equities, even things like pre IPO perps really explode over the past year.
And, you know, you see it on on Backpack itself, right?
We have Spot, we have stocks, we have crypto, but we also have perps.
And every time we list a perp.
We also facilitate using or unlock the use of the underlying as collateral.
And the reason why we could do that is because now you have a hedging instrument where market makers can hedge their delta exposure if they get filled on a stock or they eat a liquidation or want to be able to take over somebody's collateral position.
And so these are different tools that are used for different parts of the market that will all kind of rise and grow side by side.
So you really can't talk about tokenization without talking about perps.
You can't talk about kind of 24-7 markets without both of these things kind of going hand in hand.
So I think they're both of paramount importance.
And, you know, I think it's all part of the same underlying story.
Gotcha.
Okay, I think that's helpful, too.
And I appreciate the perspective on that.
All this stuff is still getting figured out.
So I think, you know, we'll see what plays out there.
I want to ask your thoughts on the Solana ecosystem and on Sol here, because, you know, you're building one of the most exciting and dynamic projects in the Solana ecosystem right now.
And our audience are big fans of Solana and Sol.
I think in January, you said that Solana's next phase is going to be less about NFTs and games and memes, and much more about finance.
I would like to hear you expand on that.
Alpenglow, that big upgrade is live.
Stock trading is really booming on Solana.
The Sol price keeps struggling a little bit here.
Just tell me your updated thoughts on the Solana ecosystem, Sol in general, and just what you're seeing for this next phase of Solana's growth as an ecosystem.
So the way I think about the Solana product is, you know, it's, you know, there's Sol the asset, but that's not the product.
There's, you know, the computing platform itself and the underlying virtual machine and the smart contracts that run on it, which is a product for developers, but it's not, you know, the, it's kind of like an implementation detail.
There is the assets and the capital and liquidity that is natively on Solana, which again is, I would say, is a paramount importance, but also maybe a bit of an implementation detail.
Kind of the way I think about Solana is like an API for all of finance.
You can imagine anybody being able to access any part of Wall Street with nothing but an internet connection, right?
This goes back to the Neo brokerage conversation that we were having earlier, where you can access any crypto asset.
any fiat currency, any on and off ramp, any single name stock, any ETF, any derivative, any swap, all through a single global settlement layer.
And I think that is the network effect that is being built from the ground up and has been built over the past decade in the entire crypto industry.
And so I think this is kind of...
you know, the product that is being, you know, built upon for kind of this, you know, Silicon Valley of finance, if you want to call Solana that for all these companies and startups all around the world.
And so I think one of the most exciting things over the next, you know, couple years is going to be what that unlocks from, you know, a startup perspective.
And I think you've already started seeing like several of these like incredible companies grow on natively on Solana over the past couple years.
You know, you have everybody from PumpFun, which built this you know incredible business off of this huge speculative meme porn mania you have FOMO which you know another incredible business phantom another credible business if you actually look at these products right um they're all stories of rising layers of abstraction where you know what What can you do when you don't have to actually build a custodian, when you don't have to build the on and off ramp, so you don't have to build the blockchain or the backend systems, right?
You don't have to build an exchange, right?
You don't have to necessarily go out and get a bunch of licenses to run a bunch of regulatory infrastructure yourself.
But if you are just at this product layer, whether you're a startup or whether you're an agent, like what can you build on top of all of these things when all of Wall Street becomes an API?
And I think that...
is a story that follows the patterns of all of the history of computing, right?
You had Microsoft and Apple come out, you build an operating system, but then developers can build a whole app store and ecosystem on top of the phones and top of the operating system.
So you don't have to worry about...
making sys calls and understanding how CPUs work and all this stuff, right?
And you're even seeing it in AI right now, right?
Where people went from prompting to agents to...
loops to graphs, that's like the big story that's unfurling in the developer community in AI right now.
And in crypto, it's the exact same thing, right?
You no longer, you don't have to think about all these different things.
You don't think about building a custodian, a clearing layer, a settlement layer, a matching layer, a brokerage layer.
You can just have access to everything in this very high level of abstraction, which is what facilitates kind of all these creative degrees of freedom.
And so I think to me, that's like, you know, the...
the arc of history generally, but also kind of the arc of Solana.
And I think that's going to be the thing that I'm most excited about.
So, you know, my view is like over the next like several years, you're just going to continue to see an explosion of finance startups, whether it's trading apps, you know, investing apps, saving apps, agents getting onto these rails.
And it really kind of is all unlocked the moment you have all of this capital and all these primitives on chain.
And it's all happening on Solana.
Gotcha.
Okay.
So you see Solana as an API for finance and you expect many founders and startups to be building on this foundation that they're building here.
That makes a lot of sense.
I want to talk about what you're building on Solana, which is Backpack and a little bit of how you've designed this and like, just tell us a bit about some of those decisions because you came out of Elimator Research.
You learned a lot from FTX, but I also think, you know, when you were building Backpack, you gave no tokens to the team or to investors and the team only gets paid if Backpack goes public.
Just walk me through a little bit of some of the...
the decisions you made about how you've built Backpack on Solana, how you've designed it to be aligned with the token, and just a little bit more detail around that.
Yeah, so I mean, there's the product itself, and then there's the token conversation, two separate things.
So from the product perspective, it's very multidimensional.
So you have Backpack, the retail product, and then you have Backpack, the...
I would say the platform.
So on the retail product side of things, you know, obviously we have the self-custodial wallet, you know, you have nothing but a, you know, cryptographic key pair, your hardware wallet, your seed phrase, your passkey, whatever.
And you get access to, you know, with backpack is a gateway to the entire ecosystem, right?
So anything that's happening on chain, you can access it through your backpack wallet.
And then the next kind of big thing we built was this full stack, you know, you can call it a modern crypto exchange.
You call it modern neo brokerage.
There's many names, but it's really this rich set of financial services and primitives that really kind of use the underlying blockchain as the settlement rails.
And so what we really are positioning the exchange for is really as this regulated backbone for the network.
And you're going to see this manifest itself in many different ways over the coming years.
The first very obvious product that we came out with which really told this story was really backpack securities, right?
Where, you know, if you want to build a stock product, you can't obviously do it as this.
decentralized, permissionless protocol, you really have to go into the financial plumbing and figure out how do you actually get access to a brokerage?
How do you get access to DCTC clearing, right?
You have to KYC your users, set up all that plumbing and also build all of the technology into actually to bring those assets on chain.
And so that was like the first really big step that we took from the perspective of Backpack, not just as a wallet, not just as a retail exchange, but also as a platform to be able to use our very unique, I think, position to be able to actually facilitate and grow the entire ecosystem.
Right.
There's not that many companies that can that can do stuff like this.
Right.
You have Coinbase, you have Kraken, but the list is very short.
And so we're going to continue doing this, not just for stocks, but for basically all of traditional finance, right?
Because it's my view that you're not going to have, you know, traditional finance is one system, DeFi is another system, you know, isn't limited, all converges into one and you just have finance.
So the other perspective is really the geographical conversation.
So we've been, you know, setting up offices and teams and...
working on licensing and regulatory work all around the world, right?
Everywhere from Dubai and the UAE to Cyprus, Latvia to get access to the entire European Union to the US and importantly, Tokyo, right?
I moved to Tokyo or Japan really four years ago, really with the sole purpose of being able to build in that market to give access to this incredible kind of ecosystem that everybody's been building.
But something as simple as like, if you're sitting in Japan and you have yen, how do you get it on the Solana?
Right?
That's like a really, it sounds so simple.
And so it's like almost silly kind of to say out loud, but that is an unsolved problem.
right?
And so, you know, who's going to go move to Japan for four years just to be able to get a Japanese bank account so that you can actually unlock that market to be able to grow Japan itself, but also to be able to grow Solana.
And so I think that is going to be another really important story that plays out as this global licensing strategy that we embarked on, you know, three, four years ago, finally starts bearing fruit over the next several months and over the coming year.
So I think that's going to be another really important piece.
And then I think the third really important piece, which is also geographical, but also relates to specific products is really kind of the on shoring of a lot of this market structure in the States.
So I think a really good example of this is the way the derivatives markets are playing out, right?
We saw it play out with prediction markets.
Now it's playing out with perpetual futures and really all the derivatives where, you know, if you want to be able to bring these products on shore, you really need to.
build within kind of the regulatory frameworks that exist onshore.
It's going to be true for derivatives.
It's going to be true for securities.
And so we really are positioning ourselves to play that very unique role where again, you know, There's what, maybe three CFTC regulated clearinghouses in the US, maybe four if you include Bitstamp, although I think they're FBotting it over.
It's not even natively in the US that can actually clear margin on perps, right?
And so this is going to become like a really important story for the entire industry, really as it grows through this inflection point of this incredible hotbed for...
frontier innovation to taking all of that innovation and actually bringing it on onshore um and so i think that's like the third lens to view kind of a lot of what we're doing through um uh and uh yeah we couldn't be more excited about it that's really helpful and i do agree with you that taking this sort of like long-term view and trying to get global regulatory compliance is a really great strategy and i'm you know curious to see how this plays out in the long term because i think you guys have definitely prioritized that um i'd love to hear some more thoughts around the the token the backpack token and you know and then just also relate that back to solana because you know like seoul has reduced their issuance by 50 and they're you know trying to increase the the i guess appeal of the tokenomics from the supply side what's the relationship between the backpack token solana token is there one do they is there tension there um just talk to me a little bit more about that Yeah, yeah, it's a great question.
So I think, I mean, firstly, they absolutely don't compete with each other.
I mean, I would argue for any L1, having natively issued assets, whether they're tokens, new securities, single name stocks, ETFs, whatever, is of paramount importance, right?
That's really the lifeblood of L1 blockchains.
It's what are the assets that are available that I can uniquely trade on this platform?
And right, and every asset is a different part of the economy.
Right.
You don't say, oh, well, is Apple competitive with NVIDIA?
Right.
It's like, you know, or, you know, is, you know, Apple competitive with, you know, you know, SpaceX stock or whatever.
It's like they hit different notes, different businesses, different protocols that all collectively come together to create kind of this vibrant, you know, economic ecosystem.
So, yeah, first and foremost, absolutely not competitive.
Right.
Solana needs.
to have a regulated interface in the traditional markets, right?
And whether that's Coinbase, Kraken, Backpack, whatever it might be, right?
That's a fundamentally different category of things.
And so I think the way that story is going to play out, it's really kind of, again, like DeFi is like, crypto and DeFi is like such a unique industry in the sense that so much of it is collaborative.
right it's really uh unlike any other industry where like okay you build a startup you you know focus on on your own users and and uh uh you know building a cash flow generating business and and that's kind of your laser focus uh in crypto right it's kind of like this YC kind of ecosystem, if you want to call it that, of like all these startups working with each other to build different parts of the stack, to be able to actually build this new economy.
And so I think that's like the moral lens that we view it through.
And I mean, I view Solana as like a second home on the internet for me, like, you know, a backpack will probably wouldn't even exist without, you know.
you know, the history of Solana.
And so that's like very deeply ingrained into the culture.
And I think that's true for all of crypto, right?
You know, Solana, even though it's competitive with Ethereum, there's always been like that evolution and an arc of history there.
And so I think kind of everybody's marching towards this same goal and people are hitting different parts of it.
And I think it's kind of as simple as that.
What is the bull case here?
Because I hear a lot of people talking about like this.
total addressable markets in the hundreds of trillions, and everybody has a different perspective in this.
In your mind, how big can this Solana ecosystem grow?
How big can the backpack roll get?
What is your view of the potential upside in terms of addressable market and market share that is actually up for grabs here?
I mean, the addressable market is the entire economy.
And it's really as simple as that.
If you take a look at what's actually happening, you have not a meme coin economy, not an NFT economy, not an altcoin economy, right?
You had stable coins, which was the first really big, really hard problem to solve.
Like how do you actually get dollars, like real dollars sitting on chain?
How do you make it ubiquitous for the entire world to use?
Not just for...
people maybe you know sitting offshore maybe in in less developed company or countries without access to usd banking rails but now you're seeing it go into all of the world's largest economies and you know financial institutions, right?
Everybody from J.B.
Morgan is now thinking about tokenizations.
Okay, maybe they're not using stable coins, they're using deposit tokens, slightly different concept, similar idea.
You have some of the largest fintechs in the world, like Stripe, going really deep into building out their crypto stack, right?
Everything from Privy to Tempo, Stripe itself.
You have obviously kind of all of the onshore traditional exchanges and intermediaries in the financial system, whether it's DTC, ICE itself.
But then you also have the traditional tech companies as well.
You have X now with the cash tags showing Solana symbols natively inside of the platform.
You have Samsung.
recently announced a Solana wallet and they're working with the folks at Bastion on the custody side of things to be able to bring a crypto wallet into every single Samsung device in the world.
And are people going to know that's crypto?
Probably not.
It's really kind of a story of this entire economic framework that the entire world is built on being upgraded over really a generation.
And the thing is, is that once you kind of get stable coins, okay, that was really hard.
You now have like a feasible path to getting stocks.
And I think everybody kind of more or less agrees that stocks will be tokenized and they will be running in some way, shape or form on top of blockchains and crypto rails.
There's a bunch of details to figure out.
And this is really the frontier of where we're at like today, but it's clearly going to happen.
But then the thing is, is that once you concede that stocks is going to happen, it's a very small jump to go to everything else, right?
You can start talking about different parts of, you know, capital markets, right?
You can start talking about options.
You can start talking about fixed income.
But then you can start talking about kind of crazy, seemingly unrealistic ideas like real estate, right?
But that is going to happen.
Because the moment you get stocks, you basically get everything else.
It's not going to happen overnight, but you can very clearly see the path from like A to B to C, where eventually you wake up one day and it's really kind of every piece of value kind of settling on top of blockchain rails because it just genuinely is the future of every financial system.
all around the world.
And it's not just going to be one country, right?
Crypto is inherently global.
So it's not just like the US, you know, a stock market.
It's not just like the US economy.
It's every economy everywhere around the world.
And so I think that's kind of the way I think about the addressable market.
And it's hard to imagine a larger opportunity than that.
And yeah, that's kind of like, you know, it's kind of as simple as that to me.
Armani, thank you so much for being on MillCode Crypto and sharing your insights and your wisdom and just your thoughts from the frontier that you're describing as all these things happen.
I agree with you and I really appreciate that bullish outlook, especially the time when sentiment and price action are in fear territory.
It's nice to be reminded of how big the goal is we're moving towards here.
So thank you so much for being on MillCode Crypto.
Where can we send people to find more of you and your work online?
Yeah, I mean, you can check out my Twitter handle at Armani Ferrante.
You can check out Backpack at Backpack.
dot exchange it's on apple and google play app source and uh yeah that's uh uh pretty much summarizes it thank you so much john it's great being here yeah absolutely i hope we can catch up again later on in the bull market once you've taken over the world of finance but uh in the meantime take care of yourself and thanks so much for being on milk or crypto thank you so much 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 or crypto thanks for being here everyone bye Thanks for listening to Milk Road.
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