Inside Upshift - The Institutional Yield Layer on Morpho & Aave

Hiya. How's it going? Thanks for coming on. Guys. Thank you for having me. Anika's awesome, by the way. So Yeah. I think this was, like, the shortest email thread. She was like, do you wanna cover this? Yes. Does this time work? Boom. Yes. Let's do it.

There we go. There we go. Yesterday. Crypto. We're all we're all about last minutes, especially this week. So, yeah, happy we could make this happen and super excited to talk about the securitized announcement that we just launched. Yeah. Fun way to drums drop an announcement. We were just doing a brief background. Maybe we could just hear, like you said, the the story into

Fractal to August to building Upshift, and then we can start diving into more more of the the practical news. But we'd love just to to hear your story coming into the space. Yeah. Absolutely. High level, my background, part of the founding team of FalconX before the Pentara.

And so, actually, my journey in the startup world, I launched August initially, and so that was on chain prime. Smart contract focused on cross margin between CeFi, DeFi, OTC. And we had institutional clients ask us in 2024 if they could use the underlying infrastructure for Vault. And Vault was initially coined by Euron Finance and Morpho. And so we said, yeah. Sure. Why not? And launched our initial vaults in 2025, so last year, and those have really scaled. We launched those under the brand Upshift.

So we have our institutional brand August, which really focuses on cross margin consistently as an ancillary service, and then Upshift, which is our Vault product. And that's focused, historically, has been focused on protocol and ecosystem. Now we've kind of shifted into more enterprise. So I would say wallets, neobanks, exchanges, and then focused on, you know, securitized.

I would say the next asset issuers or curators, asset managers that are coming into the space are those that are publicly traded and, highly regulated, and so excited to be able to service those clients moving forward. So we've had a few conversations around this. We had Valve from, I think, x stocks, and he was really,

like I said, where the conversation was going great. We're getting these instruments. We're getting these tokenized equities on chain, and now there's kind of that now what? Now what do people want to do with them? Obviously, vaults, MorphoS had a a meteoric rise the past year or two. I think we have, like, vaultification as a narrative in some of our note in some Yeah. So so bring us some Here we go. Of, like, how are these assets living in these vaults?

What is the implication of securitize in this, you know, vault narrative?

And maybe if you can even bring some people into where vaults were and where you might think they're you think they're going. Yeah. Sure. So, you know, crypto loves nomenclature. We love we love labels. And so, you know, I would take a step back. What what is a vault? A vault is just a smart contract that allows for deposit withdrawal, and it calculates NAV in terms of share price of the receipt token. And so that is the high level. It can be it's relatively commoditized.

And what differentiates different vaults is really, as you said, what sits underneath. So once an asset is tokenized, what do you do with it? And so kind of taking a step back, you know, the initial birth of vaults, like I mentioned, DeFi blue chips like Yorin, it was an aggregation of strategies. So it was to say, alright.

It is, you know, much better to get a risk adjusted return, higher a higher rate, lower rate volatility if you're going to aggregate strategies across different protocols, different chains in one place versus if you were to go and manage it yourself. And so that's the initial way for, the birth of Vault. And if you think of when Vault really took off, it was under Morpho, and that was because they initially went with isolated lending markets and then launched these vaults on top to aggregate those different markets.

Because, again, from a user perspective, to go and pick, you know, all of these different markets, it's not always the best user experience. Not everyone is a risk manager and curator. And so are you comfortable paying a little bit more premium for someone else to be able to manage that risk for you? And so that is the kind of birth of vaults. And then in terms of, like, what is in the vault, I agree with you.

I think, you know, crypto historically has sometimes had a bit of a narrative issue where we're so excited about bringing assets on chain, but we don't really think about who are we selling these assets to, who wants those assets, and what do they wanna do with it. And so one of the things that we're super focused around is, one, duration, two, liquidity, and three, composability. So one, you know, what is the duration of the asset?

Is it, you know, payment financing where it's twenty four hours or weekend settlement? Is it something like private credit where it's ninety day duration? And then two, who wants those assets? So are these users who are buying these underlying assets looking for $24.07 liquidity? Are they comfortable with the six month lock? Are they comfortable with less? And then, you know, there's a price for everything. So what's the premium that they're paying or expected to pay given that duration mismatch?

And then the last is composability. Again, it's, for us, you know, I think crypto in general really is focused on always trying to bring users to DeFi, whereas we're really focused on how do we bring DeFi to users. So once we have twenty four seven tokenized assets on chain, how do we bring that to the next generation of users who want to trade those assets twenty four seven as well? And so one example I always talk about is, you know, the equities and commodities market.

And so Trump, for example, in The US loves to make announcements on Saturday because markets are closed. And so you see these wild swings in crypto on weekends. And that's because people wanna trade on that news. They don't wanna wait until Monday morning or the next business day. And so, you know, that's a use case where clearly people wanna do you know, trade in those markets over weekends. You've seen that level of volume across prediction markets, which obviously trade twenty four seven as well as perps.

So that's, you know, great use case to bring into and distribute. I wanna double click a bit into the relationship between August and Upshift to just kind of really clarify that. I'm really interested in both of these. They obviously seem very unique but related.

Give us a little bit of, like, you know, Upshift by August and maybe, like, the the, yeah, the intended relationship there and then how August might wanna work with other platforms like Upshift or partners like that if I'm kind of reading into it a little bit. Yeah. Sure. So, you know, August at its core, KYC, KYC, B institutional users, and so all borrowers go through a full underwriting process, KYC, KYC, A Mail checks. And so that is very helpful as it pertains to specific type of products.

There are certain products or trades, OTC trades, where, you know, only institutions at a certain size will be able to access as well as certain borrowers. And so that's really the focus of August is how do we create this almost twenty four seven prime support for institutional users that are trading in DeFi. And so that's the August focus. Now the underlying technology between August and Upshift has a lot of overlap.

And so as you mentioned, the underlying tech was built by the August team, and then Upshift is utilizing it for its different vault contracts. Now vaults are a little bit different in that, you know, users who are looking for twenty four seven markets for, you know, maybe deposit asset is average trade size of, call it, 50 versus 2 and a half million in size. They're looking for different features and function sets.

And so that's where Upshift has a bit of a differentiated feature set than August, but a lot of overlap between the two. I would say the beauty is, you know, a lot of these vaults are looking for initial cross margining and capital efficiency, and so the August ancillary services partner pretty well, with the vault side. I will also say that the team's background tends to come from pride prime and trading.

And so, you know, as it pertains to some of these RWA strategies, credit facilities, and PayFy payment financing, that's just the the background and nature of the team. And so I think we tend to lean towards more financial primitives

than, like, an ecosystem vault, for example. So I'm I'm looking at this quote right now from the Securitize announcement, and I hope I don't butcher this name. Mikhail from Securitize head of fund services says on chain vaults are increasingly being used like funds, but they've operated without independent reporting or standardized reconciliation. That's a blocker for institutional capital. Can you unpack that a bit? What how have all the vaults maybe been operated?

What needs to change so you can kind of reach that next level? Yeah. Absolutely. Look. I think, one of the things that's very core to our thesis is that we operate NAV internally.

And so, you know, some of our competitors in the market will do self reported NAV. And so you will have a curator who is reporting, you know, p and l and losses every single day. Now as you can imagine, the curator is negatively negatively incentivized to post a loss, and so because users will withdraw. Whereas, you know, a an independent third party is simply there to report profit and losses.

And so in the same way that in traditional finance, you wouldn't have a fund acting as also the fund admin that would never be accepted under any regulatory guidance. And so that is really what Mikael is leaning on. And something that's very core to us is that there has to be some level of separation between church and state around, you know, who is analyzing NAV. Now you can always, you know, come down into what oracles are you using. Are you using secondary pricing? Are you using direct redemption pricing?

Do you have access to directly redeem? What is a redemption window, etcetera? And that is definitely a science. And so there is a lot of back and forth there, but self reported NAV is something that we really don't believe in. We have not seen it go well historically. And the reason for it is it is really hard to do.

And so having that level of redundancy for something like that, especially with, you know, a company that does it for regulated entities, is very, very, very top of mind for that next institutional phase. Where have we seen, just on that point, where just given your background is so experienced in this specific world, like, where have you seen this go wrong? What are some of these, you know, instances where you have seen that be very notably incorrect?

I'm imagining there might be a few that come to mind that can help kind of bring that to life a little bit. I was gonna say how much do we have. You are our last guest. Are the last guest. Can take as much time as we need. No. I mean, the list is truly endless. Look, I think you've even seen it with Oracle providers. Right? Most commonly in DeFi. It is hard to get both Oracle redundancy, secondary price right, and then also redemption price right.

And there's instances where one is maybe accurate and the other isn't accurate. And so one example is, you know, sometimes you will take secondary price liquidity, but the redemption price liquidity is very, very different.

And so if you're taking a secondary price and there's a delta between those and you're levered looping a position 10 times, you know, something that might be very small delta initially once levered loop 10 x suddenly becomes a huge loss on the books if you're taking secondary price versus redemption. So it really depends on what the duration of the vault is.

If you need instant liquidity on a vault, you obviously need to take secondary liquidity because if you have a run on the bank, you need to be able to instantly sell. Now if you have a seven day redemption on the vault and you can, you know, wait through the queue of the redemption period, then you can take the redemption price direct the direct redemption price. And so it, again, really, really depends. We've seen mistakes in both. We've also stakes in just, you know, number of loops that people are looping.

And then, yeah, I would say the minute you start to get cross chain, it becomes really, really difficult. But this is quite literally where we spend most of our time. Again, we are cross chain. I believe we service 32 chains today. We're our cross protocol. We service almost a 100 protocols today, and it is you know, it's it's tough. And so we are excited to get that level of redundancy with different players, especially for I mean, these questions are very much the same on the RWA side.

If you take a look at, you know, equities, are you looking at the secondary equity price? Are you looking at the primary equity price? What is that liquidity for secondary? You know, is there an OTC provider who could sell it at discount? You know? And what is that price? And so, yeah, it's it's very, very interesting, but, you know, a lot of time and effort and resources goes into making these answers right. Because, again, like, we've seen this in DeFi play out most recently.

When that oracle is wrong, it has some pretty bad implications. And it not necessarily wrong, but perhaps it was mispriced. Yeah. And what okay. So earlier this week, I just wanna make sure we're hitting on the the news here, because we we kind of mentioned it. But so the the news was securitized. This is this is amazing. So just to click on this. So you reported DeFi is converging with traditional finance for asset managers to come on chain. Vaults must meet institutional reporting standards as we're talking about.

Yeah. What does the securitized partnership look like with securitized fund services? What is it delivering? Let's just dive into this because that's you announced this a couple days ago, or was this yes this was yesterday? All the days are blending together. So I know. It's been think it was yes I think it was yesterday. Look.

I will say, at the end of the day, the way that crypto is reported today, whether it's dBank or something else, that is not going to be accepted by the top four auditors, Deloitte, KPMG, and so forth.

And the players that we're speaking to are, for example, publicly traded companies, digital asset treasuries that are looking to run vaults themselves, but simply can't not only run the vault themselves or even deploy in a vault because the way that the reporting and auditing is done is just simply not up to par with what they need in order to, you know, maintain their requirements of being that publicly traded entity.

We are also seeing publicly traded companies becoming asset managers and curators for these vaults. And so very similarly, I think in order for us to to kind of meet the industry halfway, we just need to be able to get Deloitte and KPMG to accept the reports of these underlying assets. Another thing that we haven't talked about here that's very, very important is the way things are are labeled for tax purposes.

And so that is, you know, again, not always the sexiest topic per se, but one of the most important ones because sometimes the way that something is wrapped or looped can incur a tax loss or harvest. Again, I'm not an accountant, so I'm probably butchering some of this. But this is something that is incredibly important for these different entities because you have to report on it on a quarterly basis for earnings, and you don't wanna have to print a loss that maybe doesn't even exist because something was wrapped.

And so that all of these are very, very explicitly what we're trying to target with the partnership with Securitize.

They understand this intimately. You know, we've worked with a number of different auditors in the space for fund reporting, and DeFi's hard. It's really hard. And so, you know, we're really excited about the talent that they have in house, and they've been tremendous to work with so far. Can we dive into something these vaults really quick? So I I see I mean, one shout out to Agora, their their sponsor of the show. I see this is kind of the main spotlight vault, earn a USD on, I think, Monad.

But I was going through I see quite I see USDC. I see HLP. I see some e So you're saying this in the app? Yeah. Okay. Cool. I see Flare XRP and, obviously, very very DeFi native right now, but kinda talk to us about, like I said, what where your head is at on what assets go into these vaults, how influential maybe you are on deciding who is going to create a vault. Like, is this completely permissionless?

And then, also, I'm I wanna dive into that route of what do vaults look like now when we bring on, you know, tokenized equities and and RWAs into this conversation.

Yeah. So I agree with you a 100% in that, you know, our Genesys started in a very crypto native protocol ecosystem growth side of things. So, you know, for Erne USD as an example, it's very focused on deploying into different Monad protocols, which you'll see there, as well as maintaining liquidity for AUSD across both Monad and across the ecosystem for them, and so while maintaining yield. And so there's a number of different requirements there that will help both for liquidity, for yield, for TVL, etcetera.

One other thing, that I will mention is, you know, we're very much looking at how do you service these types of vaults now for the RWAs and then also for credit facilities. So RWAs today, some of them trade twenty four seven, some of them don't. And so one of the things that we're very excited to announce very soon is an instant redemption facility.

And so we're exploring what that looks like to allow for RWAs to get swapped instantly with premium, so you can make these RWAs now instantly redeemable, and that allows them for for them to be used as collateral for different lending markets. For example, put on Morpho because you can instantly redeem instead of having duration mismatch. And so that's something that's very, very top of mind.

To your point today, we service kind of across the gamut between different majors and stables, and it really just depends on distribution. Certain providers, wallets, exchanges, have a preference because they have idle float of just stables sitting with users in their wallets and accounts. Some of them are very heavy on Bitcoin, Solana, XRP. So, you know, very top of mind, Stellar. Very top of mind for us is, you know, making sure that we can build products for the users that wanna use them.

And so that's why you'll see kind of a wide range of different strategies on our book. We're not I would say we we tend to be the most diversified across the vault providers in terms of the assets we support today. And then your last question, I believe, was, who gets to build these vaults? And, look, we we might tend to be, I would say, pickier, than some of the other vault providers in terms of who we work with. You know, we knew the Stream, finance team back in, the summer of last year.

We didn't want to work with them directly. That ended up working well for us. We have partnered with folks in the past. I think for us, you know, we just wanna work with really good players in the space, institutional players. That just, by nature, comes with the background Yeah. Of the prime side, folks who are responsive. You can we've seen people make the claim that at the end of the day, you can fork, you know, the vault code.

And, again, a vault is really just a deposit and withdrawal flow, and so it is commoditized. But for us, when we think about what the underlying strategy is, we are still putting our brand name behind it and distributing it to users. And so we wanna make sure that we feel good about both the curator, the protocol, the strategy. Awesome. Yeah. So StableDash Live for us, we're always maybe by default maybe maybe this is a good and bad thing at times, but we like to think about things from a stablecoin lens.

And we talk with a lot of stablecoin issuers. Agora, specifically, has been, a company that we've really gotten to know closely lately. Can you speak a little bit more around, like, the relationship or interaction that you all have at Upshift with AUST or Agora and then how that might invite other issuers or other stablecoins like them into the fold? What how do those types of relationships come to be? What's the benefit to the issuer specifically?

It seems like the AgoraAUSD relationship is kind of a, like, a hero use case of sorts, so just wanted to double down on that. Yeah. Of course. So in terms of the relationship with Agora, it's been great. The team's fantastic. And so one of the things that we focus on is making sure we can service different deals in the AUSD and sourcing those deals from the institutional side.

So one of the things that we did was source institutional OTC borrowers for AUSD in order to be able to increase their liquidity both across Morpho and others. Another thing that we've done is work with them on payment financing for AUSD. And the last is making sure that we can, one, have sustainable yield across that vault. So I believe, like, around the, call it, six to 8% on stables.

So over the lending rate for stablecoins across lending markets, Aave, Morpho, and then also be able to bring that cross chain and distribute it into a number of different providers. So EarnAUSD is integrated into Tria. We have a number of other neobanks and wallets that we'll be working to distribute.

And, the work that we do there is really around the SDK, making sure that our SDK is neobank ready, and institutional grade ready so that we can offer those services to all of the retail or users that are looking to deploy into, that vault. And then lastly, just continuing on composability and distribution. They have the team working on a number of different strategies to integrate AUSD into. One of them is FX that we've been working with them on.

You know, I would say, a sounding board for all the different strategies that they'd like to get a AUSD deployed into, want to have risk underwrite written into, you know, that AUSD strategy, make sure it reads a hurdle rate where it's still very attractive and sticky across the market, and then get it cross chain so it's accessible and distribute distributable to everyone. Mouthful there. Yeah. I'd love to see a visual of this in terms of just the relationship between, like, who's doing what and who sits where.

I don't know if there's anywhere on Upshift or August where that lives, but or if you have any resources that you think about. Love that you you touched on the Trio one because that was gonna be my next question is are is this vaults end here, or is the vision this

embedded finance within? How do you spell that? What's the is that bank? Tria? Exactly. So, yeah, they've been they've been great. Look. I think at the end of the day, you're, you know, spot on in that we believe the end game is distribution. And, you know, the question is always, do you compete with some of these neobanks and wallets, to bring the user to you, or do you bring the products to them? And I think what we've what we've really doubled down on is we wanna bring those products to them.

And so we're in conversations with all of the large neo banks, card providers, exchanges, wallets, and so forth. And our goal is, you know, for each one, the use case is a little bit different. User base is different. Geo is different. FX might be, you know, something that's very, very top of mind.

And so it's how do we figure out exactly how to, one, give them a menu of options of different yield opportunities that help them address their idle float, And then two, give them very secure infrastructure and auditing, reporting, payouts, etcetera, that they need in order to service those retail clients at the end of the day. So, you know, I think people will often call it the DeFi mullet, just given what Coinbase did with Yeah. With Morpho.

It's very similar in that sense in that, you know, I don't even think users should know that it's DeFi on the back end. Right? And the value that it needs to provide is that, you know, there are assets that are going to become and are already 20 fourseven tradable. They need financial primitives in order to trade on chain in a 20 fourseven market. And so, you know, EARN is going to be financing that in different variations of risk. And so the user gets to choose what levels of risk they're comfortable with.

Everything's transparent. They can fully underwrite, and then they invest based off of that. Cool. What would you say is the biggest barrier to adoption right now with this? Like, maybe from a yeah. Like, I mean, I'm hearing all of this, and I want more of this to exist in the world in a safe, compliant, lucrative way.

And based on the twenty minutes of getting to know you, you seem like the exact type of founder that we want pushing that forward and seem, like, experienced and really opinionated in this lane, like someone that I wanna go I want to, like, see more people like you push this forward. What are you seeing as, yeah, just things that may may be delaying this or or not getting in the way of this becoming more mass adopted more more quickly? What are you feeling right now? Yeah. I mean, look.

The elephant in the room is the last month of hacks have been pretty tough on the industry by far. You know, JPMorgan, I think, came out with a piece on it this morning. And so, you know, it's definitely caught the attention of institutions who were very, very bullish on integrating and maybe risk teams that said, alright. Hold on. Let's reanalyze risk. Now I don't think it's unique to DeFi.

I think any tech company today can be socially engineered, and so it's a much broader question of what does security look like in the world of AI, and and the world of Claude and Mythos. And so that's a much broader question that I think risk is probably looking at across the board at any company today. I mean, we had a full security lockdown. I'm sure every other company did too.

And so, you know, it's a time to reflect, focus, and make sure that there are no gaps in any security, you know, functionalities internally across the team, especially considering that these things are all socially engineered. And so I would say that's probably the biggest one. The second I would say is, and and you both know this having been in the space for a while, yield doesn't always go up. And so I think, you know, even with T bills, everything carries some level of risk.

The question is, you know, what is that risk and how high is that risk, and are you getting compensated properly for long tail risk? But there is risk. And there's risk when you invest in T bills. There's risk when you invest in any sort of asset on the underlying and whether you will make money that month or not. Same thing with tokenized equities. Right? And so I will say, I think sometimes what you know, people don't realize is that it is okay for these assets not to always make money.

Sometimes there will be losses on these underlying assets. That is the same with publicly traded companies. It's the same with index funds, ETFs, etcetera. And so I think sometimes you will get a kind of pushback on why things aren't always up and to the right. Now I will say more broadly, a number of users recognize that these things are managed, and you're also exposed to DeFi long tail.

And so as long as you feel like you're properly getting compensated for that risk and you have all of the security measures in place and transparency, that you're underwriting that properly. But I would say that is the third the second. And then the third, is, honestly, it is the year of vaultifications. We have had so many conversations take off, and it's it's almost a resource conversation.

Are we able to maintain and, you know, keep up with all the conversations and folks who are looking to incorporate vaults internally? Everyone's looking for a different flavor of what a vault looks like. Again, like I said, it's just a deposit withdrawal flow for something that's $24.07, and so that can apply to quite literally every asset class.

And so it is incredibly interesting to see, the different things that, you know, institutional users are looking to put into that type of structure, the operational overhead that it removes. But, again, I will anchor on this one more time. It is much harder to calculate NAV for something that's twenty four seven than it is for to calculate NAV on something that has end of day of 4PM.

So, you know, it is it makes these tools even more important and something we're really excited again to be partnering with someone like Secure Tides on. So I guess kind of my last last question here. I think about back to we've talked to Ben Ben from Braille, and he's very much in the camp of, like, you know, rising tide lifts all boats. That, hey. There's gonna be multiple stablecoin issuers. I'm looking at this from a vault perspective,

you know, when we have these wide scale security breaches. How do you think we should approach this as an industry? How should you maybe work with other Vault providers to some degree to say, like, hey. When we all succeed, like, if one of us screws up, this is bad for all of us. How do we make sure that we're all working towards the the right direction, even if we are competitors, to make sure that vaults are here to stay and flourish? Look. I have survived the,

the heated competitive landscape of Prime in CeFi, and that was no joke. That was no joke. Look. The space is way too small. People who, you know, believe in competing head on, I just don't get it. Like, the goal here isn't to compete with the current market. The goal is to expand the market. And there's absolutely far too many use cases for all of us to do in just one or two companies, and it makes no sense. We will absolutely create a niche. All of the Yeah.

Traditional prime brokers today are avid avid clients of one another. And so, of course, in CeFi, you started to see that too. All of the CeFi primes, all of the exchanges, they have each other's back. When there was the unfortunate Bybit hack last, year, two of the other exchanges stepped in and helped with credit financing, to fill in the hole. That is exactly what I expect to happen. It does not make the space look good if we are chirping at each other on Twitter. We have to stop that.

And so, I mean, look, it's it's been something that the industry, unfortunately, has been doing for a really long time. It's probably, what, like, a 100 users who, are just really controlling that narrative, but that's not the narrative that institutions care about, and it doesn't make anyone look good. So Yeah. You know, hopefully, we get a bunch of large decision makers in a room together. We love to work with other Vault providers. We think that there are Vault providers out there that are absolutely crushing it.

And in every one of our conversations, we will absolutely give the shout out where it's due. Of course, mistakes happen. Those are learnings for the entire industry. I mean, what happened with Layer zero was the learning for the whole space. It could have happened to a lot of different companies. And so I think finger pointing is just really not the way forward. And, you know, don't we have seen far too many times that when you laugh at a competitor when they're down, you might get be the next one hacked. Right?

And so it's just it happened this last month. Right? And so just don't do it. It it doesn't make the space look good, and it doesn't make you look good if you happen to be the next one hacked. And so I think more broadly, we need to work together on comms. Need to work together on narratives. We need to work together on, you know, really building confidence. Instant settlement is a very hard thing to build. There's a reason why financial services historically are not instant settled.

It's incredibly difficult to build. And so, yeah, I really hope that we continue to be a bit nicer in the space. It would be it would be great, and that North Korea takes more vacations, because that would be nice too. Yeah. That would be nice. I don't think they will, but that would be nice. We can we can pray. We can pray. Yeah.

Last question from my end is is vaults specifically or vaultification, I think is a is a topic of conversation that we want to be having more on our show in a more serious, consistent manner. So one, would love your, like, support, help, thought lead thought partnership in making that good. If if we were to do something more formally and help direct us, like, what would be the key topics or key themes that you would take if you were to put together, like, a four part?

Or, like, what are these core focus areas that you would have if you were to go, like, build a vault segment or something like that? Because for me, if I'm being honest, when I when I hear this, this is like a newer emerging space for me in my own learning. It seems a bit, like, overwhelming to think about structuring understanding. How would you kind of simply bucket these different areas out to help us discover it more accurately? Yeah. So the first, I would say, the spicier topics, if you will, one is nav.

And do you self report nav? Do you let your curators report nav, or do you own nav as the vault manager or infrastructure provider? So I would say that's, you know, incredibly important. The second is, you know, whether whether something is fully on chain and you can edit the smart contract or if it isn't. And the reason I say this is as it pertains to oracles.

Because as we've seen in the past, if you include a certain oracle, but then that oracle doesn't get updated, markets don't get liquidated, and then you have both borrowers and lenders stuck in a position that doesn't necessarily reflect what's happening externally. And so I would say, you know, how how decentralized, or auditable are smart contracts underneath? That's kind of the second really interesting point that I would harp on. The third is what are the use cases of vaults? Right? There's credit.

There's PayFi. There's RWA. There's DeFi. There's lending. And then there's just enterprise, equities. The features for vaults will differ drastically based off of these, based off of the duration for each of these assets. An instant vault, instant withdrawal vault, a redeemable vault is very, very different than something that has a seven day queue, even the way NAV is calculated, oracles, etcetera. And so I would say that's a very interesting conversation.

What are the use cases today, and how do those vault infrastructures have to adjust based on those use cases? And then the last I would say is, multi chain, multi protocol. You know, some vaults are historically, like, very EVM focused or very main net focused. You know, they're not really going to expand to other chains like Solana. And so what does that actually mean?

We actually did an analysis on our side where we looked at USDC lending against Bitcoin and ETH across Morpho, Camino, Jupiter, and Aave and saw that you had a 2% higher yield and 40% lower rate volatility if you aggregate. Now you know this because that's just the definition of risk adjusted return. But what is the long tail risk? Right? You do take on additional risk when you're bridging. And so, you know, I would say another topic is multi chain, multi protocol. What are the pros and cons of that?

And there's no right or wrong answer. We're all servicing different, you know, users and customer bases. And, yeah, we found that there's definitely ways you know, we sometimes will partner and sell other Vault providers in in our top of funnel deals, and we're looking to do more of that. There are certain areas where certain feature sets are better than others, but it really just depends on who the users, are, who you're selling into, and what feature set they want on their side. The last is, you know yeah.

I would say that's it. I could probably ramble on and on and on, but I'll leave you with four. Yeah. It was in this is reminding me actually of our conversation Tuesday with Project Zero. Yeah. I don't know if you're familiar with them, but this kind of disparity of multi venue, DeFi, unified margin, giving access. Are you familiar with Project Zero? Have you seen what they're doing? Yes. Cross margin across the space.

I mean, that was what August initially set out to do, but, you know, it's predominantly more for the institutional subset, but it's a really tough thing to solve. It's all about NAV. It's all about risk and underwriting of different equity positions. But, yeah, I, you know, feel very passionate about cross margin in the space. Look. I think there are some users that are very, very married to a certain chain and things being native.

We have found that people do not wanna take bridge risk and completely understandable. I mean, we've seen what happened, you know, in the last week. It is a risk. Right? You have to get compensated for that. And then there are users who are very comfortable with bridge risk. And so I think it really just depends who are you selling into. You know, cross margin is very important for that. Right? Are you get it getting proper credit financing across the trains?

Because the minute you have positions across, you know, four chains, five venues, six venues, whatever it might be, I mean, you're managing risk, you're managing margin, you're managing credit, you have to, like, move things around, top up here and there. It's not instant. There's latency. You probably have to pull some loans. It's it's it's super funds. But look, like, at the end of the day, people are doing this in CeFi too. Right?

Like, you'll margin call a client in CeFi, and they're like, oh, I'm trying to get my money out of Binance. Can you give me twelve more hours? And you're like, no. No. I can't give you twelve hours. That's not how, you know, these markets work. I mean, same thing happens in TradFi. Right? You're trying to move your money around. You're like, oh, no. Trying to get my money out of Credit Suisse. They're like, oh, I hate to break it to you. It's going under. And it's like, well, where do I get my money out from?

You know, another desk. And so these are normal problems that we're just trying to solve in an instant way, and so it makes the problem very, very difficult. And, look, I think, all Vault providers are, you know, coming at it in similar and different ways, and so would make for a very interesting discussion, I'm sure. Also, like, let's have, like, a vault vault wars

valsification of No.

Vault group hug. Vault group wars. I know. I know. We love the wars. We love the wars. Yeah. I mean, look. Like, we have so much respect for the folks building the space. It's hard. It is really hard to build Anjing products, without a doubt. And so so much respect to all of our fellow partners who are also building vaults in the space that is not easy. It's easy to fork Anjing code. It's just hard to do. So, yeah, a lot of a lot of respect for folks, but, yeah, people feel very strongly in certain ways.

Let's just say that. So it could be fun. I was fighting the urge to go down the if this is a commoditized product, like, what is the mode? I mean, even if when you think about media, for example, we talk about that a lot where it's like, it's becoming easier than ever for companies to launch a podcast and to launch a series. And, you know, we're seeing this over and over again with TBPN, ETN, MTS. We're in the we're in the mix of, you know, doing a live show now. It's like, what are people's motes?

Maybe we'll save that for part two of of how you think about what Upshift's moat is. Consider you open invite to come on in the future. Perfect. We'll take it. I was gonna say that's a good cliffhanger to end end on, but definitely have opinions on that one. Yeah. It's gonna be a spicy year for Vault, you know, over the next twelve months. So I'm excited to see what happens. I'm sure acquisitions, partnerships, distribution, etcetera, because at the end of the day, your moat's your user.

So who owns the user at the end of the day? Well, think does who does own the user? Is it the neobank layer, or do you think that's maybe not the case? Yeah. So, look, I think I think one metaphor I'll use here is the Coinbase versus Robinhood, and you can call that war, if you will. Is it easier for Robinhood to service crypto, or is it harder for Coinbase to service equities? Yeah. They're both kind of in this interesting reaching to across the other side. I use both of those platforms, by the way, pretty Yeah.

Pretty hardcore. And it is interesting to see the attempts there, but that's a good way to think about it. We can pause there. I know we wanna keep going. We'll have Vaultification. We'll have a a Vaultification segment. You'll be our first first guest when we get back on. Aya, thank you for the time. This was really fun. I learned a ton. Congrats on everything with Securitize, and we will yeah. We mean that. We'd love to have you back. Thank you guys for having me.

This was such a blast, and looking forward to the the Vault Wars. Sounds good. Alright. Thanks, Aya. Have a good one. Thank you. You too.