Privacy Has Become Crypto's Most In-Demand Infrastructure

I know it took us a second. Great to see you today. Thanks, guys. Thanks for having me. So,

one, it was awesome seeing you in Miami last week. Feels like almost a lifetime ago now. How much so much was happening last week. How are you feeling after consensus, Accelerate? And and, yeah, I would love to kinda get the pulse from you before we

dive into what you're building. Yeah. Consensus was great, actually. So and Accelerate as well. So I think most of the venue was filled with stratified folks, which is a good sign that it's actually real economy, real money coming to crypto. Right? And crypto kind of merging with fintech, stablecoins leading the narrative. So yeah. So I think this consensus was very different from the previous ones because it was less, less crypto native, but more real. And, you know, it's exciting. Right?

Because it it means that the industry is actually growing and not dying, like, within the crypto, like, small pocket. Yeah. I think I saw a take from you, Georgie, that you said every fintech is adding staples. Every crypto is becoming a bank. Yes. Exactly. So I think I mean, that's, I think, the industry consensus now, right, that everyone is is believing actively.

So I can imagine as as someone building what you're building, privacy, something that we're excited to dive way more into with you guys over time. As institutions and more of the TradFi community enters this conversation, I can imagine that that priority is more felt and that that priority is something that is if you compare a, you know, a degen trader compared to an institutional CFO, privacy and some of these things probably are held to a standard that is way higher.

Maybe maybe two two part question here as we kick off this conversation. Like, one, give us the intro of of what you're building, and then also just this current moment that we're talking about of what you're seeing with that priority becoming more front and center for these companies. Yeah. Yeah. It's so exciting that it's finally happening because I started Hinka with my brother three and a half years ago right after the Natickash sanctions.

And back then, you know, institutional side of it was kind of picking up, but then FTX crash happened. Right? So every everything institutional

was kind of post. And I think that actually, you know, led to more, like, Definitive, like, crypto degen energy that actually, you know, kind of prevented us from earlier success, right, in terms of adoption institutional adoption. So it took another three years actually to get back to the same TradFi kind of institutional reality. And then, you know, basically, what we are building is privacy for, stablecoin payments. So it's an infrastructure for public chains and on public chains. Right?

But then for neobanks, for wallets, for PSPs, and custodians to enable privacy of a sender amount recipient on chains like Ethereum, Polygon, Solana, Tron. You know, we are also life on many other chains. But I think, like, our solution is the only solution in the market that allows you to have privacy of your wallet and the amounts on all the main public chains, right, in one go.

So this makes us you know, when we started Kingo, one of the, you know, major, you know, kind of thing that we had to figure out is what is the path for someone to use privacy. Right? And then, you know, there are a few directions. First is you build, you know, something that actually just plugs in current chains, current wallets, current stablecoins. Right? Another, like, harder path is you build your own custom m o two or l one. But then the cost actually for, like, for for someone to use it, it's super hard.

Right? Like, imagine bootstrapping ecosystem. Right? You have to bootstrap you have to, you know, launch stablecoin and then pay, right, to the major issuers to launch on your chain. You have to bring ecosystem. You have to make sure, you know, the enterprises trust this. There is a reason why all the enterprises, you know, trust public chains like Ethereum, Polygon, Solana, like, why USDT on Tron has so much volume. Right? And it just implies that it's like there's a trust.

There are security guarantees that they provide, and it's and that's what was was our bet. Right? That, okay. We will build the most seamless privacy that hides everything that needs to be hidden in the most compliant way and provides value, like, without actually requirement to transition anywhere else. Right? Use current stablecoins, use current chains, current custodians,

and just have privacy on top. What is what's the thing that people get wrong here or the the thing that you you find either from, like, market sentiment, prospects, or customers that you're talking with? What are what are some of these misconceptions of around confidentiality, privacy, and some of the things that you're often running into when you're bringing some of these businesses into this protocol that you're often, like I'm I'm imagining there's some, like, whack a mole that you're playing often.

What are some of these things that you're often kind of battling with or or having to explain when people are wrapping their heads around this? Yeah. I think there's just two huge misunderstanding,

right, and gap. And not only gap between, you know, us, like, more kind of crypto native people and enterprise, but more but even, like, if if you think about, you know, custodians, right, wallet providers, and people who build privacy. Right?

Because when you start explaining, okay, like, what hides amounts, what hides relationships, why you should hide relationships, and amount is not sufficient, why, you know, stand alone l two and l one is actually very hard to adopt for enterprise because they are already using, right, current existing chains. So there are so many questions, right, that should be explained in detail for people to understand what the fuck is privacy.

That's why so it just it takes a lot of time, right, to explain, you know, how it is achieved, right, and why, you know, ZK and source addresses is better solution than, let's say, FHE because FHE has full dependency, right, on some back end. So there's, you know, lots to be explained before we get to this. Okay. Like, that's what Hinkle does. But then, you know, you start talking in obstructions. Right? So think about you have your own wallet.

There's a public balance of this word, which is shown in your Firebox account. But think about there's a private door, right, that with the same key, you can see this, you know, private amount, and no one else can see. And then people start getting, okay. This can be simple. Right? And then the next step, okay, is, like, this enterprise is already interested because they don't want to reveal the data to the counterparties, right, when they make payroll or b two b payments. So now the next step is, okay.

How can we explain it and really guide the developers, right, of this organization to integrate privacy in the most simplest way so they understand

and trust the infrastructure? Zach, when you're hearing this for and you're trying to I love the banner. What the hell? What the f is privacy? Good. That's good. So you have you have amounts. Right? You have amounts of, you know, the amount of transactions and the the the value of those transactions that are being sent and received. That's obviously something that is very important to keep private for certain use cases. Zach, here is we have two Zachs on our team. Right?

Like, if I'm paying one Zach 10 times more than the other Zac, and they don't know that, and that's just publicly on chain, even, like, you know, even in a simple use case like that, like, that's something that's very I know we've talked about payroll is, like, a very obvious use case here. What are some of these so you have you have the mount and then the relationships, sounds it like are these two kind of key threads that you pull.

What are some of those case the the use cases that you see really, really coming to life here when you're thinking about how Henkel comes to market, resonates,

comes to life in terms of where it's valuable? Payroll is one of them. What are some of these other ones that you you find are really resonant right now in the market? Yeah. So the the second biggest bucket I mean, now we have like, the pipeline, right, that we have and finally having integration is just huge. Right? Because suddenly everyone realized that there's the need for privacy. Right?

So we just announced I don't know if you saw, like, Polygon deal, right, where they integrated us in the Polygon world, and it means that, you know, Polygon is one of the crypto native entities. They also have, like, super enterprise focused team. Right? So they acquired Coinme and Sequence, and now they are, you know, basically onboarding lots of web to companies to crypto with all this, you know, orchestration infrastructure and and embedded wallets. And, you know, they were one of the first realizing, okay.

Like, when we go to enterprises, we create these embedded wallets, right, for these enterprises. And, you know, for the sake of example, I would just say, think about Ramp. Right? You go to Ramp. You create all these embedded words. They are, segregated words. Right? So it's not a pooled account. So, like, each word, even if custody belongs to, you know, one entity, each wallet actually appears on chain. Each transaction is on chain transaction. Right?

And then when you make a payment, like, it's even b two b payment between two entities of the, you know, Rump's account, right, or, like, this is a on chain trace that basically recipient sees how much, what's the balance of the sender, sender sees what the balance of recipient. Right? And then they can also derive further relationships. Right? So they can see the rest of the graph. Okay. Like, you send this, then there is a salary payment, then there is a vendor payment, there is a margin. Right?

So so it's actually, like, a leak super sensitive info that should never appear on chain. And imagine this is a private I've been it's a private company. Right? But imagine public companies like DLOCOL. Right? So they just announced this, you know, Stablecoin deal. Right? And this is a direct compromise of all the public data. Right? Because someone before the announcement of quarterly results can just look at, okay. What are the volumes with stablecoins?

So more volumes more move to stablecoins, higher is the leakage of the data. Right? So the and this is, you know, finally, this is super crucial, like, very high realization and, you know, exciting time for this, But I think let me just dive deep on the use cases. Right? So this use case is one. Right? So everyone now goes to this embedded wallets and just increase the life cycle of the yield of the company. Right?

So if it's a payroll company, you know, they were losing yield whenever they were paying contractor because money was going to the bank account. Right? So that's it. The yield is gone. But now with the stablecoin cards, right, so they actually is is increased.

And this is this is the SDK, right, you're talking about? The SDK specifically? Yeah. SDK. Okay. S Alright. Keep going. I just wanna make sure we were showing the right thing here. And

with this life cycle increase of the yield, right, so now there's the Stablecoin card that contractor can pay. Right? So the yield is actually generated on a higher basis. Right? So you can actually earn money. And with us, right, so you can all all the transactions happening between the wallets are private. So what appears on chain is the relationship is hidden, which is the wallets are hidden.

And amounts are hidden while you use the same wallets because, you know, your private key actually unlocks private balance inside Hinkle Smart Contract. So this is, you know, the the the how privacy is achieved. And second big use case, right, outside of this neobank use case is actually PSP to merchant settlement. Right? So whenever you settle merchant, if this merchant, you know, makes a payout in stables and lots of industries actually prefer payouts in stables. Right?

So same, you know, payout paying out creators or paying out, you know, for vendors in industries such as iGaming. Right? This is especially crucial. You know, you're you just leak your revenue immediately. Right? So you go into but you you receive settlement in Sablecoin, then you make payout to vendor. And your vendor sees how much you're earning, how much you know, what's your economics with your users. And, you know, it just leaks super sensitive info.

So PSP to merchant settlement in the second biggest use case for privacy that we are focused on. And then the third one is just custodians. Right? So all the custodians was, you know, are now actively focused on privacy. Right? And what they are looking for is, like, multichain privacy that plugs in current infrastructure, hides relationships, hides amounts, and is fully compliant. Right?

So I think it's a head of charge ept moment for privacy that I'm super excited because, you know, it's kind of three and a half years in waiting. So I'm always comparing myself to Figma, you know, some to get some excitement about that. Let's go. Let's go.

So you guys, you have some really strategic relationships, it looks like, and something that it looks like the different one of the big differentiators here for you is the networks and the relationships that you have to these different chains. Speak a little bit about how that came to be. It sounds like you've been building these integrations out for many years. What what sort of competitive

positioning do you think that unlocks for you guys? Yeah. So I think, you know, privacy is was the most unsexy industry, right, for the past three years. So no one was actually looking for, privacy, right, actively because they were okay. Like, there's VCs basically got burned with privacy architecture because, you know, they it underperformed from a token standpoint. And, you know, it was just less attention also because of compliance issues. Right? It had with Trinidad Care sanctions.

But now, you know, finally, you know, it just became very obvious that it should happen, right, and privacy should be enabled on public chains, right, with existing, stock. And, you know, the the like, Polygon deal there, I'll I just shared. It's they're just far ahead because it's not just a chain. It's a fully vertical stack. So with all the embedded wall, it's on and off ramps, right, and enterprise deals.

But from a standpoint of networks, wouldn't think that, you know, all the networks are going to build the vertical stack. Right? I think, you know, Polygon is, like, the exception. So what when I think about Polygon delays, the the closest comparison is, like, region preview, right, Or, you know, CrossMaintain, you know, some other solutions there. So it's basically, you know, full stack there.

And, like, what what integrators are looking for is something that, you know, already works with the infrastructure they have. Right? Because you don't want to make them move somewhere else. You know? If wallet doesn't support, like, whatever Stellar chain, right, and you have privacy only on Stellar chain, then, you know, it's a kind of hard no. Right?

Because you have they have to migrate infrastructure to new chain support, you know, basically move the wallets with the stablecoins that are not supported on this new chain. Right? So we are just meeting the the customers where they are. And, you know, even if you think about your major volumes now. Right? So USDT on Tron. Right? So we we never thought that USDT on Tron would be so popular. But we go to PSPs, and they were like, we do USDT on Tron. Right? So some somehow USDT is associated with Tron.

So we had to build actually deployment. We had to deploy Hinkle to, no, to Tron chain, right, to make this possible. So now, you know, they were okay. Like, is there USDT on Tron? Yes. Like, new newer chains that they are increasingly trusting is Solana. Right? Do we have Solana? Yes. And are they getting everything in one SDK? And now we are also adding APIs. Right? And WAAS solution. Yes. Right?

So it just need always removing the friction to use your solution, and I think this makes, you know, makes us actually, you know, one of the most competitive solutions there. I I don't think we have lots of other solutions when we talk to integrators.

Yeah. It's interesting. I think there's if I'm you know, from my vantage point, we talk to all the teams and all the builders and ecosystem partners. It's like there's a ton of buzz right now around Canton and what they're doing for institutions, privacy, confidentiality, and, like, having that be some sort of, like, integrated baked in value add to their chain.

And I think a lot of these, like, you know, ecosystems that have been around for a long time and have had many different seasons, it's almost if I'm understanding this from the outside, it kind of seems like what Henkel is providing is the ability to offer effectively the same types of benefits even if that wasn't necessarily the story or the history of of a network like Polygon. Working with you guys almost brings them up to speed in terms of those value adds so that they can continue to retain

their their developers and builders and and continue to stay competitive against some of those, like, privacy focused chains. It's a good way to think about, but I think we should think about, you know, the the use case and adoption of this use case. Right? So, yep, I I'm not super familiar with content, but I know base architecture. Right? So content actually hides amounts and, and and also relationships. Right? The same what we do. But the problem with Canton is, you know, you have to migrate.

There is no way you can migrate. You can avoid migration. Right? And with migration, like, you know, you don't have major wallets supporting Canton now. You have Braun and a couple more. Transactions are expensive. Right? But then, you know, they have unique architecture for this, you know, standalone sub chains, that fit to Wall Street and, you know, deep pockets to subsidize. Right? You know, I saw that, you know, their, you know, annual incentives is 1,000,000,000. Right?

So that's how much it takes, right, for you to bring someone to, like, new chain. So it was Polygon. It's easier story. Right? So Polygon already has tons of users. So and then I think where Polygon and, you know, other chains that, you know, Solana and, Base, Ethereum will win here is with tons of users, you know, think about use case PSP to merchant settlement. Your settling was a merchant. It's a stablecoin. Right? Canton, you know, brought this merchant in. It can be, the bank. Right?

And then, you know but now you have this you you you are on Canton. Right? And you have to make payouts. And the probability that your vendor is use is on Canton chain is close to zero. Right? Because, you know, it's all, like because they should somehow bring also all the vendors and all the employees to Canton. Right? So to just continue supply chain, right, of privacy. Otherwise, you're just becoming public and bridge it out of the chain.

So I think that's a problem that I'm having with private chains because it's just one lack of privacy,

and then privacy is gone all the time. Yeah. I love dude, I love hearing you speak about this and the differences there. You've spent a lot of time in this space and thinking through the differences, and we need to wrap here, but we're really excited to bring you on in more of the ecosystem around around these considerations

and highlight them more because the use cases and the trade offs that that are at play here are they make or break so many things. So thank you for what you're building, and excited to continue to cover the ecosystem around Henkel. Yeah. Awesome. Thanks, guys. Thanks for having me, and, yeah, looking forward to our partnership. And You got it, man. I I loved how you you took us through comparing these sort of unknown novel things to known things. The homework assignment is next time. I know you're a judoka.

You gotta you gotta give us judo and privacy and how it all relates. It's gonna be fun. Yeah. You have to learn now about privacy, right, because it will become dangerous.