Stephen: We have a special guest. We have Nitya from the founder and CEO of Para. We talk a lot about stable coins and wallet infrastructure onboarding. This is the Around The Coin podcast, and we're going deep with the release of the Genius actors, everyone trying to get into stable coins, and Nidia does a great job of breaking down the different nuances.

Talking about liquidity, composability, interoperability, every type of ability. That's to do with embedded wallets. Authentication identity. You name it, we talk about it in this episode. This is such a great episode. We even get into compliance and regulatory requirements around what's it gonna take to onboard some of the biggest web two companies into Web3, and we focus on fintechs and payments companies if you're FinTech or Payments.

Must Listen episode. Thank you Nitya for coming on such short notice, and I'm excited for you guys to listen to this episode.

Stephen: This is your host, Stephen Sargeant, the Around The Coin podcast. We have a lot of special podcasts, not that I've been as excited about as this one where I get to speak to Nitya. You are the founder and CEO of para. I want you to tell us a little bit, maybe about yourself. We're gonna ask a couple questions around your background, but you have a really interesting company and at a perfectly, I would say, timed relevance when it comes into the crypto stablecoin payments infrastructure and wallet infrastructure.

So I'd love to know a little bit about yourself and then we'll jump into your

background.

Nitya: Absolutely. So, hi, I'm, I'm Natia, I'm calling in from San Francisco. I'm really excited to chat today. Yeah, bit a bit about me. Started my career in FinTech as an engineer. And then moved into crypto. We founded Para about three years ago now. Just really focused on making onboarding and retaining users really easy in crypto.

Stephen: You know, I'm curious because, you know, and I don't know if it's pronounced cello or cilo, I've heard different pronunciations, but it's really one of the first mobile first. L two blockchains that was focused on ESG. Can you tell me about your time there, what you learned there? There's been a lot of great professionals coming out of that count, and maybe you

can correct the pronunciation for me.

Nitya: Of course, of course. So, a little backup from that. So my first entry point into Bitcoin was as a college student. So I'd gotten really involved in the actually running the first MID Bitcoin conference. And a lot of just, really like excitement about the, the technology of the space. But it wasn't really until around the 2017 time period when we had EBM, we had smart contracts.

When I got super excited about what crypto could do for financial inclusion, greater access and that was what brought me to the the seller team when, when they were first getting started. And so, yeah, so cell is, how, how you pronounce that, and a lot of the focus there was. So funny how these things kind of rhyme every cycle, but really focused on peer-to-peer stable Coin adoption and making it really easy for people globally to have access to sound money.

And so a lot of my work there was initially on the, the engineering smart contract side, but then later on, on the product side trying to build more like global peer-to-peer payment consumer products. And a lot of the insights from there really like led to the development of para when it comes to just.

Recognizing what developer primitives are really necessary to to move the needle. Like one example I'll give is during that time we were running cash transfer programs in in emerging markets. And we were in Southeast Asia running a, a cash transfer pilot where we needed people to self custody their wallet.

And we had a seed phrase in there. And just seeing the experience of people. Needing to write down a seed phrase in that it, in a language that's not their first language, by the way. And just recognizing how how difficult it was gonna be to scale this technology to people who really did need it.

And, and part of that just helped helped kind of crystallize what the, like true friction points, infrastructure wise were in this space.

Stephen: You know, you mentioned something about seed phrases. I've never really thought about it that way. You know, it's English language, you know, if you're in another country, you're saying words a different way. It's spelt even similar words are spelt differently. I never really thought about how that would be a huge challenge or a hurdle, much less a technology, but just even the basics of copying down that information and being used to it

or trying to memorize it.

Nitya: Exactly right. I think this is something that that we don't always realize. So, this is a, a tangent, but for the, for the standards nerd in the room the BIP 39 standard, which is how we generate seat phrases to private keys. It's available and I. Somewhere between seven to 10 languages.

That is probably a little bit out of date, but there are way more than seven to 10 languages around the world. And so if you are not kind of one of the, the lucky members of these 10 language speaking groups you're, you're kind of out of luck and you're just basically like trying to write this very foreign set of characters down.

Stephen: I'm curious, you said you learned about, you know, crypto. Was it, you know, Bitcoin first? Was it blockchain? Was it the thought of programmable money? Like what really caught your attention, especially as like you're building in the space and

building the community there At MIT.

Nitya: Yeah, so back then it was really about like distributed systems and having distributed systems that managed money. So I was I, I studied computer science. I was really involved in like, algorithms, cryptography, and this idea that instead of having. Some database that is holding my bank account balances.

I can have a distributed system that is censorship resistant and has some fault tolerance built in that holds my bank account balance. And I think when you're when you're at that stage at least for me you don't know as much about. The real problems in the world, like how our financial system works, like how everything else exists.

And so, it really took that to kind of put together the pieces of how powerful that was. But even at that point in time, just from a pure technology and values perspective it, it seemed like a, a great improvement to, instead of kind of relying on one party and trusting them being able to have a, a group and a censorship resistant way of kind of knowing how much value I had.

Stephen: And you don't really know. I think a lot of people talk about emerging markets, but you don't really know, even in first world markets, you know, I'm in Canada, how difficult it is to receive and send funds to us, to the uk. Without the bank, not only intervening, but having to reach out to them, having them call you to confirm a wire transfer, it is very onerous, very burdensome.

You know, some banks in Canada only operate with two types of bank accounts, so it's either USD or Canadian. So good luck trying to receive great British pounds. It, it's a lot harder than people think to just send funds. Even if I wanna send funds to a friend, they're like, yeah, Venmo me or, or cash at me.

And we're like, we don't use that. We do email money transfers though. Like it's, it's funny how a lot of these systems are still siloed and disconnected. You created Para, what was your thought process like? What was the void? There's so much wallet providers out there. There's so many infra or infrastructure providers out there when it comes to crypto.

You started three years ago, so you know a lot of the big names have kind of created their market share. What was missing for you, and based on either your experiences or you know, some of the experience that

you had with your colleagues or peers.

Nitya: Yeah, great question. First to just go back to your your point around like sending a dollar and a game that we like to play whenever we host events is we'll have someone who is not a US National and we'll basically have a race of who can get $1 to them the fastest. And it's always really funny to see how people approach it.

And so this problem is still not solved to your point. But what really kind of brought me to to para was recognizing that one, there was no easy developer primitive to onboard users. So at that time, every team was basically rolling their own infrastructure and building their own. Key management solutions in-house or they were kind of going custodial, and this is a big trade off.

And so, the custody space was well established at this point. But there are some big shortcomings, namely that if you want to use an asset or use a chain that your custodian does not yet support that's not possible to do. So.

Stephen: of them, right? Like when you think about custodian, like we work in like the crypto. Asset recovery, you know, law enforcement's like, Hey, you know, we're seizing these funds in the exchange. But the problem with when you have a custodian or exchange is they only have so many pairs. They only have so many assets they support.

So I think that's a huge deal. Like the custodians aren't really worried about some of these low value trading tokens or, you know, L

two L two utility toga.

Nitya: Exactly. Exactly. And even if something is really important or gets their attention, day one, support is always gonna be the exception, not the norm. And so if there is any sort of time premium. Built into your product around new assets or if maybe you have some slightly different criteria than your custodian does, you're not gonna have the exact set of assets you want at the exact time you want them.

And so there is this big like kind of disconnect showing up where non-custodial wallets we're really seeing as having a lot of potential at the long tail. So that was kind of one how we arrived on non-custodial. Wallets. And two kind of building on the UX side, I think it was somewhat known at that point that seed phrases were weren't the best user experience.

I will say that we got pushback on that at the, at the beginning of, of starting the company where people felt that that maybe wasn't the crypto way to to not give people a, a seed phrase when they onboard it. But, but we felt pretty strongly that we, there needed to be something that people were more used to.

But building on that, I think what was really kind of important to us, and that I would say still in the, the market is, is not really the norm amongst embedded wallets. In fact, we're the only ones that do this is having embedded wallets that are interoperable. So this is really where. The first app I use in crypto, maybe it's an NFT app.

And so, I'm using an embedded wallet. I make that wallet for that NFT. Now I have an NFT in a wallet. The next thing I wanna do is maybe go swap in in a DeFi protocol. I make another embedded wallet in the DeFi protocol. Third, I wanna sell that NFT. Now what do I do? That embedded wallet is stuck in that NFT app.

So I have to export my private key. Download an, download a meta mask or a a, an extension wallet, and then stick that private key in there and remember my seed phrase for the rest of eternity. So this kind of experience around people graduating within crypto or like actually leveraging these assets was really broken.

And I would kind of maintain that it's still really broken where the whole point of these assets is, they're on this like. Alleged self-sovereign system or this like alleged interoperable system where I can access them anywhere. And that's just really not been true by and large in the embedded wallet space.

And so, for us that view is, it needs to be much more of a single sign-on type of experience. And I think we have parallels in web two which I can kind of talk through. But everyone talks about like. Open protocols is a very crypto concept. Like, no, we've had open protocols since email. RSS, like all of the technology that we use is built on top of open protocols.

And so, just leveraging the fact that we can have this user layer also be more open is something that has been like important to us from the beginning.

Stephen: That user layer is extremely important. Anyone that's bought an NFT or you know, even tried to convert. Fiat to crypto, the amount of wallets, you know, passwords, seat phrases, it makes people are like, yeah, I don't wanna get involved that much, it seems, and then we wonder why there's so much exploits, vulnerabilities, and scams because there's so many touch points.

With all these separate DeFi protocols or, you know, decentralized onboarding, that it makes it really difficult to do operational, you know, exercises. You wanna you went through a few of them. I'm curious, what are some of the use cases, like you have huge clients, noble, ENS Vana, like what is some of the use cases or companies are like, we need this infrastructure to be built

into our system.

Nitya: Yeah, absolutely. So, we focus a lot on ecosystems, and I'll kind of go into a little bit like my strong belief is that ecosystems and FinTech are really converging. But our view is basically that users should be able. To access liquidity and have it freely move throughout throughout kind of their journey in crypto.

And this is a really aligned point of view with crypto ecosystem. So this is protocols like ENS. If my ENS name isn't accessible anywhere, it's kind of like this. If a tree falls in the forest does it did, did, and no one hears it. But for certain primitives it's really important that they're accessible anywhere.

So ENS and, and naming and identity are probably the most. Obvious example of this, where you want your public facing name to in fact be. Accessible anywhere and usable everywhere. But then it extends into, like with Noble, with vna chains. So on the VNA side they're really focused on they're basically data ownership.

So being able to leverage the fact that you own your data and connect different sources of data and your ownership there. If you think about the fact that and, and their whole goal is like, make that data portable, give users rights in, in their ownership of that data. And this can't be stuck in like 20 different wallets.

Like my, my Reddit data's here, and then one of my other Reddit usernames is here. Like, it, it needs to all kind of fit into one profile to actually build up reputation. Like reputation's a really interesting word in the, in the FinTech sense because I think it ties into a lot of things around like compliance and fraud and identity.

But. Really like from the Vana side. I think that's a great illustration of when you allow users to use the same embedded wallet and have the same data in that wallet, you allow them to build a reputation. And then Noble, I think is another really interesting case where this kind of fragmentation problem that I'm talking about in crypto is not just a crypto problem.

We're seeing so many new chains, so many new stable coins. The fragmentation's happening absolutely everywhere. And so when you think about an account that's holding. Stables that can look like a few different analogs in the fiat world. Like I try to, I, I kind of describe the app specific embedded wallet as a gift card.

So I can either have the, these assets in a gift card or I can have them in a credit card or an account. And the difference between a credit card or a bank account, of course, is I can access those funds anywhere versus a gift card. They're stuck there until I like decide to go back to DJ Max and, and buy, you know, another pair of shorts.

So that's a little bit of how we think about it. It's kind of upgrading these systems into something that's universally useful and as a result, kind of improving the velocity of, of money. And I can go into why that's important as well.

Stephen: I'm curious. You know, there's some people that still want just the gift card and they don't mind having 10 gift cards in their wallet versus. And, you know, similarly to have multiple addresses. What's the benefits for them? What are the people that are just like, you know what, I, I'm losing something by having this embedded wallet that gives me access to everything and all my financial products on the blockchain.

Just gimme 10 different. Gift cards in this example for what's the reasoning behind it? Is it a libertarian thing? Is it more of like, this is the ethos of crypto? Is it like just laziness, right? Like, Hey, I don't want to, you know, embed everything in one wallet and have to get rid of all these things and transfer my

crypto.

What is the reasoning do you.

Nitya: Yeah. Really good question. So, first I think around the the, the 10, the, the separate cards, I think there can be reasons to have. A siloed wallet. But what we do, and we actually have a product that is siloed, but we make that upgradeable into a universal account. So if the user is deciding that they're gonna churn from the product, they can, then they, the, the app can instead offer this upgrade path into, now this is a universal wallet.

Keep using it in our app, use it in other apps that's better than you turning. So we do kind of offer this like one way upgrade path. The other big reason that multiple wallets can be really helpful is privacy. So let's say I want to separate out my identities. And so we actually built a product around this and the example I like to give is.

Let's say I have my main wallet with a bunch of USDC in it, and then one day I wanna buy Taylor Swift's, NFT. Maybe I don't want that NFT to be associated with the main account that I'm getting all of my like direct deposit from my job into. What I can do instead is provision a wallet just to use that app.

But the difference is that as a user, I'm in control of that. I'm not letting some app kind of assume. Whether I want a separate wallet for something. And so, and, and I think the real benefit of this is actually it's not just kind of a, like this utopian dream of interoperability. It's actually a much bigger retention and conversion story.

So when a user already has a funded wallet and they're going into an app that's removing the cash in and funding wallet step, like, I think a lot of people talk about onboarding and wallet creation, but there's not much talk around how you actually go from like holding a physical US dollar into one USDC on chain.

That process is still it it, and it's always gonna be a little bit onerous because there is a mismatch between. The, the guarantees of a CH or credit or any kind of fiat rail and the corresponding crypto rail. So there will always be some fees associated with it. There will always be some kind of time delay associated with it, and there'll always be some friction.

So we think about once those assets are on chain, it's 10 x easier to get them into kind of conversion steps within an app.

Stephen: And I'm curious when it comes to stables, you know you mentioned it, everyone and their mother's mentioning stables, especially with the Genius Act rolling out in the US and really opening the floodgates. For programmable money around the world. I'm curious you on the website especially, it says like, Hey, you're bridging web two and Web3.

'cause you obviously see it's an onboarding issue. How do you get these tradify companies to start utilizing crypto wallets? Talk to me about that. Are tradify, you know, starting to come on your radar more, especially with the recent regulation? What are some of the questions they're asking? What are some of the challenges for them when it comes to, you know, coming to your

suite of solutions?

Nitya: Yeah, it's we're seeing a really interesting mix. We're seeing a good chunk on the FinTech side. And I think that's quite expected that there have been several organizations leading the way in terms of. Does deciding they're gonna launch their own chain, deciding they're maybe gonna have their own stable Coin.

Maybe that they're gonna have their own yeah, sort of L two but really kind of in their own wallet layer and maybe kind of owning various parts of that stack. I think we're seeing a huge rush towards that. And as a result I think within the FinTech space, crypto has now really moved towards a tool.

Versus like a, a separate industry which I think is like, there's just a bigger convergence happening where, where culturally crypto is not seen as this other thing. It's seen as a, as a tool, which I think for many of us in this space has been the goal this whole time. Is to really like, allow the technology to to achieve the value props that that it can.

But I think we're, what's interesting and maybe unexpected is that we're not really seeing this like wave based adoption with like. The earliest adopters first, and then the bigger players are kind of sitting back and thinking, no, I mean, JP Morgan has, has made announcements in around the use of stable Coin.

And so this is really kind of going all the way from the largest institutions to the kind of. Smallest fintechs and kind of the oldest institutions to the newest institutions. And so we're kind of seeing this fairly universally. And I think the big common denominator here is that unlike kind of previous crypto waves, a lot of the focus here is around revenue optimization and around like value capture.

And so that's why I think we're seeing this really big race to to kind of stable Coin eyes or crypto fi the, the rails. Because there is really like bottom line revenue drivers.

Stephen: I think you nailed it. Like value capture, right? They wanna build something in-house. They don't wanna rely on third party, you know, crypto companies for one reason or the other. But we saw recently Stripe just announced their layer one Robin Hood's working on a layer two. Even the exchanges are getting in it.

Coinbase launch base, their own blockchain. What are your thoughts? Where does, you know, where does Para pair themselves with, you know, these companies are like, Hey, we wanna do the same thing. We might not have the, you know, a billion users like PayPal or Stripe, but we wanna launch something. Is that, you know, the core audience for Para to be like, Hey, you can also do what these other companies are

doing using our infrastructure.

Nitya: Yeah, certainly. Like I would say that it's a, it's a mix of across these companies there are gonna be teams that decide what they wanna build in-house and what they don't. And so sometimes it'll be the chain infrastructure that that gets built in-house. Sometimes it'll be the wallet infrastructure.

That gets built in house. Like sometimes it's just gonna be the consumer app layer. And so where we kind of slot in is as teams are thinking about this the, the wallet layer, and there's something I've been saying for a little while that's now become a little bit of a meme, but every FinTech is becoming an ecosystem.

And what that means is that every single one of these it's, it's actually a very straightforward, kind of logical, path to take. But step one is if I'm gonna have money in stables, do I want to capture that interest myself or do I wanna pass that interest along to another stable Coin?

Probably wanna keep it for myself. So that's why people are issuing their own stable coins. Second, where do I issue this stable Coin? Do I issue it on another chain where that chain is capturing revenue from transaction fees or from like sequencers and settlement? Or do I put that on my own chain? 'Cause now there is, I mean, there have been some announcements around custom L ones, but it's fairly inexpensive both in terms of time and money to now have your own layer two.

And so maybe I wanna have my own layer two and, and capture sequencer fees. So that's kind of step two, step three. Do I want the user layer to be outsourced to another wallet? Or do I wanna have my own kind of wallet infrastructure? And that's what we do is white labeled wallet infrastructure.

Do I wanna actually own that user layer and capture the user relationship within my ecosystem? So what we do, of course, is every single user within. Your ecosystem has the exact same wallet, and as a result, that ecosystem as a whole is sticky as opposed to individual apps in that ecosystem. And so really across these layers, what we're seeing is there's this kind of compression around owning the user, owning the revenue chain.

And really, and then there's a brand element as well around how do I make sure that my brand is, is visible? I think that's another thing will. Start to see more and more actually is like even white labeled stable coins. Maybe there are organizations that don't care about the, the revenue capture on stables themselves, but just want a brand on it.

That's something that I, I think we'll probably start to see too.

Stephen: I feel like when you put it that way, it seems like a no brainer when you, when you put all those. And I think one thing that I'm noticing, and you know, maybe with some of these larger organizations like a PayPal, it's like, well, you also have hundreds of thousands of customers, so you can do creative and unique things in regards to, you know, you know, peer-to-peer payments of customers, lowering transaction fees, adding incentives.

Like, that's very difficult to do if you're outsourcing every single layer in regards to your ecosystem, because there's a fee attached to it. There's revenue loss attached to it, but you can get very creative when you have a, you know, a sequential set of customers that you can move funds around using your own stable or using your own

infras.

Nitya: 100% agree. Like there are teams that have been, this is, this is somewhat old news, but there are companies that have thought about things like how do you have conditionally reversible transactions how do you have conditionally private transactions? And you do need your own, at least your own contracts and in some cases your own Coin and even in some cases your own chain to manage some of these things.

And so I think like some of these key properties that right now we just, we just assume that it's really tough for. To have private transactions on crypto rails. But I think that is one motivator that we'll start to see beyond more teams, again, wanting to own this end to end experience.

Stephen: And one thing I saw interesting enough is that para has SOC two compliance. And that sounds pretty, you know, common in the traditional financial institutions. But I'm also seeing, you know, we work with the client Marinade labs. Doing institutional staking on Solana, they also got SOC two compliance. And now for you to be, you know, more of a wallet infrastructure play to have SOC two compliance, you're really opening up, I'm assuming, to your customer base or to the fintechs that service some of these more compliant and highly regulated industries.

What are your thoughts about compliance, especially in the fact that there's so much vulnerability? We've seen in DeFi billions of dollars being lost to address poisoning wallet drainers. Approval phishing scams. What are your thoughts about compliance and how do you have to make this kind of like the, the front, you know, thing that people are focused on when they're

entering into your ecosystems that you're building?

Nitya: Absolutely. I mean, we describe ourselves as first and foremost a security company, and that's been baked into everything we've done from day one. So, our very early team across so me and our, our head of engineering we come from the fintechs. Space. And so a lot of the, the products that we've built have always been soft to compliant.

We've even had to like navigate things like PCI compliance before. And so for us, I think it was really a decision around there's a crypto language around security, as I'm sure you're aware. And then there's a FinTech language and a finance language around security. And these are very different. Like in crypto actually a few years ago, the epitome of security is that everything is happening.

Clients. Side. And that's something that crypto people view as like extremely important from the security perspective. On the FinTech side, it's things like end-to-end encryption, encryption at rest, encryption and transit. Making sure that you have the right r like R back set up. Making sure that you have like multi-region failover, like it's a lot of more classic kind of distributed systems.

Technology, security principles, things like audits on access. So. For us, A lot of this was a step towards, we'd always built the company that way, but just making sure that we are speaking the same language. Because again, crypto is now more than ever a tool that people need to adopt. You don't need to buy an NFT PFP and make it your Twitter profile picture on Twitter to access the value profit stables.

And so the more that we can kind of speak that language around this is, this is how this product is built. You can kind of. Understand certain guarantees around how this works. That was really the, the core motivator for us behind the soft two pieces specifically.

Stephen: And I even like went to your website where I, it says like security's first and second. I love that saying, and I'm sure that attracts a lot of people. Like, hey, they're really, you know, they're really thinking about security. Funny that you made the Twitter profile, you know, imagine. In us hitting a hundred thousand dollars in Bitcoin and nobody needed to have laser eyes to do it.

We saw that kind. I was like, I wonder how many people still have laser eyes at the time we hit a hundred thousand. 'cause that's that, that novelty seemed to wear off. I wanna talk, we talked a lot about FinTech. You just explained you and a lot of the executives there come from a FinTech background.

You just launched your FinTech solution. This is obviously gonna be a lot to do with scaling with stable coins. Talk to me about the huge demand and institutional adoption, especially in the US regarding that. And, you know, the plans that you have for rolling out the FinTech product.

Nitya: Yeah, absolutely. So for us, some of the key areas that we're excited about with FinTech and that we've been kind of chatting with folks around. The first is treasury management. So this is again time value of money. If you don't have to wait until Monday morning to do a settlement you shouldn't have to.

And then kind of building on that, being able to kind of rotate in and out, especially if there are companies that are issuing their own stables. Just really like figuring out a treasury management scheme that works for for companies. The second thing that we're really looking at and seeing a lot of is trading.

So whether it is offering kind of tokenized stocks and tokenized assets to international audiences or whether it's again, doing like real time 24 7 trading or accessing crypto assets. So that, I think there will always be some demand even as the largest assets become ETFs. And so being able to accce access long tail trading.

And then the third element is really around identity and reputation kind of. Pushing back to like what we had had talked about earlier where in a lot of these payment systems it is really important to understand user identity. And in crypto, you know, there've always been things like sanctioned lists.

There have been analytics tools that kind of give you visibility. But the more that you can kind of get. Some notion of reputation from a user the better decisions that that you can make. And so kind of moving towards like the intersection of user identity within a payment system is something that we're seeing a lot of kind of excitement around as well.

Stephen: And there's some, you know, we have a lot of listeners that come from the pay payments, FinTech, they might not be into crypto yet. What would be their first step? You know, if they're like listening to this episode and they're like, okay, there's a path for us. To do this for onboarding customers, making it easy, what would walk us through a high level of what their kind of process would look like if they're

introduced to para.

Nitya: absolutely. So, with pout, usually when we're talking to, to fintechs, we kind of like to lay it out as a, there's a stack effectively of every decision that that needs to get made. And, you know, we have some some recommendations or some like short lists and we can make, we make intros usually if people are, are meeting us first.

But usually the first step is really deciding. Whether you're gonna have your own stable Coin or not. Second is really deciding on the chain side of it. And then third is, is the wallet layer. And so what we kind of think about there is like, there are ways to kind of like bundle that more easily.

There are ways to like kind of simplify that decision. But all that has to kind of come from the goals. And so, for example, if. If someone wants to issue their own stable Coin, but they're not gonna be holding that stable for any amount of time, maybe that doesn't make the most sense to do. And so just kind of starting to like unpack the why and like unpacking goals.

So I think there are a number of like very big reasons to go to use stables. We have a blog post about this. It's I think it's on our blog. It's just called if you look for staple coins, it'll probably the first thing that pops up. But we kind of talk through. Good reasons why someone might want to use stable coins.

And all of these are more or less either identity or value capture driven. There are probably other reasons to use stables as well, but I would say like the first thing to do is just being really, kind of concrete on the problem that you're trying to solve. Like there are also, I think as it's inevitable in a wave like this, there are gonna be teams that maybe don't need to, you need to have all of these layers of infrastructure to accomplish what they're looking for with stables.

And so we also try to help teams understand that as well. Where I think if you can kind of compress the time to value, that's really gonna that's really gonna help. 'cause usually most of these stable Coin initiatives start as experiments within larger organizations. And so, just being really clear on like the, the why and the end goals, and that helps kind of scope the minimum minimum viable pilot, if that, if that makes sense.

Stephen: The consultants listening to this episode are probably like in terror, like No, no. Don't tell them to like determine whether or not they use stable coins. We just sold them. We just sold them on a presentation of why they need stable coins and how we can consult for them. But to your point, because everyone else is using them is probably not the best, you know, reasoning to get jumped into the stable Coin market.

But with that, you know, the US is putting out guardrails around the Genius Act, around the Clarity Act and you know, market structure. I'm curious, you're non-custodial at Para, what are your regulatory requirements? Security, it seems like you have covered, but what are your regulatory requirements as of today?

And does that change with something like the Genius Act coming

into fruition?

Nitya: Absolutely. So yeah, the Gen Genius Act is huge, honestly, in terms of providing no, but I did like providing some clarity around what what sorts of activities are are permitted within non-custodial infrastructure. The biggest sort of north star we look to is control. So for us, users are always in full control of their assets.

If para were to go, and this is actually unique to Para as well, if para were to be offline, let's say we had a, an infrastructure outage, users can still access their funds. Further if para and. Customer are both down, users can still access their funds. And so that's kind of, the product standard that we keep is, even though this is kind of a convenience layer on top of seed phrases is kind of how we describe it is basically we've created a bunch of nice abstractions that people don't have to interact with them directly.

There is always a way to get out of the system. And so that's something that's really important to us. And then also just making sure that. That, you know, para can't access assets without a user's involvement or without a user being authenticated. And so things like that, that just make make this overall system resistant to any sort of single points of failure,

Stephen: I think in the last few years we've seen the downtime happens for a number of reasons. You know, whether it's. A run on GameStop, whether it's a breach of, you know, a database, whether it's an exchange being hacked, like good luck trying to remove any kind of assets during those times when you're probably at the most nervous and you wanna make sure that your digital assets, FFTX and Celsius is another example is that, you know, once you know they press the stop withdrawal button, there's very little that you can do to get access to your funds and it's, this is why I think a lot more people have moved over to decentralized spaces and using non-custodial wallet.

Structure. Would you, did you see a

trend of that, especially around FTX?

Nitya: Definitely I think FTX really we, because we, we started the company right around when FTX happens. It's crazy to think that it's been about three years. But what, what we really noticed is just this understanding that an institution that is custodial it is a. You are trusting that organization and that trust needs to be explicit.

And so I think what we have moved more towards is more of these like earned trust over time type of models. And I think that's honestly a better fit in a lot of cases. Rather than depositing a million dollars into some new unproven system that you have no access to starting with $10 and then kind of growing that, that balance over time.

Ideally, kind of whenever you do have larger sums, keeping it in a system that you fully trust or that you can access at any time. So yeah, I think, I think the non-custodial alternatives have just become very popular for, it's really two things in parallel. The first is is, is kind of a trust question, and the second has really just been the, the ease of these technologies as well as getting getting early access.

To new assets like you're never gonna get the earliest access to something on an exchange.

Stephen: You've been in crypto long enough to know that when something gets the hype, it's hot. Getting right now with the stable. Coins we already saw algorithmic stable Coin or at least one of them fail, I think. Do Coin just pleaded guilty to fraud charges. So it's only a matter of time before we see a spin on stable coins that somebody is gonna do to either attract VC investment.

What your thoughts about where we are in stable coins? How do we make sure that, you know, we keep things within a certain amount of guardrails? Are you open to maybe like, hey, maybe algorithmic stable coins can work, removing some of the hype or

fraudulent activity underneath it.

Nitya: Yeah. Yeah, so I had actually worked on an algorithm table Coin at at Cell. And I think what was unique to what what was unique to to Tara was the degree of under collateralization as well as the sort of just rapid front running of incentives towards deposits. And so that was really, I would say like the critical piece.

There versus it being an algorithmic stable Coin. But I think this is this is something where like we will, to your point, see different experiments if Right. An under collateralized stable Coin is in some ways this kind of big dream. And so I, I wouldn't be surprised if we saw something similar, but I think with all of these with any crypto cycle or any cycle at all, if something seems too good to be true, there's a very good chance it is.

And I think that's really what. The role that we're playing right now in terms of being that bridge between institutions and and the crypto world is understanding that yeah, just, just that there are sort of practical limitations. If someone is offering 10 X treasury yield on, on their stable, it might not be sustainable.

And so just like recognizing some of these patterns. And making sure that people don't conflate crypto with magic. There are very fundamental reasons why this value capture is possible in crypto. And, but, but there are limits to that.

Stephen: Yeah, I think Anchor and Celsius really showed this. Definitely there's some limitations or some high risk getting involved. I'm curious your thoughts as a CEO. You're building infra. But now there's so much conversation around AI and Bitcoin ETFs and all these at real world asset tokenization. You know, you, you probably never get your, your data shine, right?

You never really get that data to kind of come out onboarding, have all the VCs lining up, waiting to throw funds at you. What's that like as a CEO? Or is it just when you're a builder, you're, you just excited about building and you don't really maybe worry about shiny objects or the noise

happening within the industry?

Nitya: Yeah. Being a wallet infrastructure is very interesting because we do sort of. Get the tailwinds of all of these movements. So when telegram bots were all the rage, for example, a lot, we had like, you know, a few dozen telegram bots launch on our platform. RWAs, we're working with a couple of really great teams working in the RWA space.

Likewise with stable coins, now we're working with a bunch of institutions. So in a, in a way, like, it's almost a very, like. Pure infrastructure product in the sense that it's a way to access things on crypto. And as there become more and more interesting and novel things to do with crypto we're a way to do that.

And so I do feel that that gives us a lot of exposure. And then, I mean, I, I think there are different approaches to building a company. I would say like our approach has been one of very consistent sort of strong growth as opposed to more like. Kind of spike and drop type of behavior. And so that's really what we've optimized for is we are now at right, 10 million wallets.

We have about a hundred customers, like generally just focused on, on growth and sustainable growth. More than sort of spikes and crashes.

Stephen: What are your metrics that you look at as a builder? Maybe not what investors or VCs are looking at when you're a wallet infrastructure. You just mentioned a large number of wallets. Is it activity on the wallets? Is it unique wallets are being built on a regular basis? Is it an ecosystem that you're building in and maybe the brand name that comes with an ecosystem like ENS?

Like what do you personally think is a great metric that you're utilize, or maybe many metrics that you utilize for your team to show that growth? Like, are we really growing? Is it just like people's, like we see a lot of L two projects when you're giving away 50,000, $5 million worth of grants.

There's gonna be a lot of activity on your, on your, on your application and in your ecosystem, but we can see that that doesn't seem like a long-term sustainable model. What are your thoughts about that? Like what do you value as a

metric that describes your growth?

Nitya: Yeah. We think a lot about number of wallets and the reason that's particularly valuable for us is unlike other embedded wallets, it's really one user, one wallet. And so that for us is really the size of the network and the size of our. Our ecosystem. And so that's one thing that that we track a lot transactions is, is also important, like that's a proxy for activity.

We track kind of application level metrics of of how many live applications are there, how many live ecosystems are there, how really just these more like directional, how many people are we impacting type of metrics.

Stephen: And how do you approach marketing? Like what are your marketing tools? You don't have to give us the, the secret sauce. But as I said about those L two projects, like usually marketing is around giving away grants or, you know, trying to gain attention of large developer communities. How about for you? Is it word of mouth?

Is it like, you know, when ENS domain says, Hey, this is what we're using and this is why we're using it, people probably listen a

lot more. What your thoughts around that?

Nitya: We really try to lead with value. And I think that's something that is somewhat unique in the, in the crypto space. And as a result has been something that has kind of brought us a lot of value in the sense of we don't post partnerships until they're live. We don't really yeah, we don't, we don't really kind of, talk about like vaporware, like products that we haven't launched. For us, like we're pretty focused on like, if you see something from one of us, it's real and it's, it's real today. And so that's just something that I think has set an expectation of the brand that, that I think has like, benefited us in quite a few ways, given that.

The infrastructure provider you work with, you are putting trust in that organization. And so we try to kind of embody that at all in all of our activities. We also have, have found writing to be a great way to really like communicate more nuanced concepts, so things like interoperability.

Things like stable Coin. All of the different stablecoin decisions that people need to make things like ecosystem wallets. These have been like more effective ways for us to communicate. But marketing these days is still largely word of mouth. And I think we're very fortunate that we have a lot of very happy very happy customers that like to talk about us and recommend us.

And, and yeah. So for us it's really just amplifying. A lot of the teams that are using us 'cause really like they're the stars. And so just kind of promoting the products that are launching with Para has been how we focus.

Stephen: And do you have your own ecosystem? Like a lot of the L two projects, anyone that's building on them, they have an ecosystem. Do you have a similar ecosystem with your customers where there's an incentives, where there's, you know, partnerships, community?

Do you have anything like that on the side?

Nitya: We have a couple of things. If we have a Slack developer community, we have some other like smaller community initiatives. But for us it's mostly about adding value and so we'll make intros between customers. When we can. So we've kind of sent customers and sent referrals across our, our community as well.

There's nothing really formal in place there, and we don't have any kind of explicit monetary incentives around it. But we, we try to, you know, help the teams that we're working with when, yeah.

Stephen: That makes sense. And you probably know they're just like similar for me when I'm working with, you know, content creation around several different blockchain analytics companies, you tend to know a lot of where the overlap is and where you can kind of point people in the right direction. Like, Hey, talk to this person about this.

I'm curious about composability. What is it for a high level? I, I know a little bit about what it is, but you've been very, you and your team have been very vocal about it, whether it's dead or not, and then I want you to tell me why that's crypto's

unfair advantage.

Nitya: Absolutely. So, composability is basically this idea that if I have some some asset or some contract, I can build on top of that asset or contract instead of starting from scratch. So an example of composability is. When I, if I wanna go to Ave to deposit some funds into a pool and I don't have the right token pair first, I can go to Uniswap and swap into the right token and then go to Ave and put it in.

Yeah, put it into the right pool. This kind of extends where if I don't have that token on the right chain, I can bridge it. And take it there. And this isn't something that has to be across three or four different apps. It sometimes is. But it's even this idea that because all of these are open composable.

Smart contracts, I can do all of these different actions without having to kind of log out or export my private key or like move to a different system with different rails. And composability is really what enables flywheels. Because instead of kind of cutting out of a system and going somewhere entirely different.

I'm staying within this system to do everything from lending to staking, to investing and crypto is ultimately one very large flywheel composed of many of these smaller actions. And so this is, I think, the true advantage where instead of kind of moving from. My, my checking account to my brokerage account, to my 401k.

I'm able to do a lot of these things in, in one place or in one action. And so this is where I think. This is really like the second order benefit of, of stables today and tokenized assets and kind of going forward. Even things like tokenized 4 0 1 Ks is being able to kind of leverage these assets in a, in a composable way and ultimately make capital more efficient.

And so composability and capital. Cr basically the same thing. Composability is a crypto term. Capital efficiency is, is the kind of traditional finance term. But it's really what allows velocity of, of value and velocity of money. And so that's kind of how we think about unlocking composability means unlocking capital efficiency.

Stephen: And is there an impact on user retention? Like if you have to do all of these different things through all these different apps, is there the kind of concept that people just wouldn't do it at all? And then we're losing that ability to, you know, further the ecosystem? 'em or expand adoption. 'cause people just

aren't going through all these different steps.

Nitya: Yeah, great question. I think the crypto natives are going through these steps, but that's, to your point, not gonna be how most people operate. I think what is gonna be essential though, is that all of these things are possible in one app which today that's not right. If I wanna do anything in traditional finance that touches, let's say an asset class that's not available on my brokerage.

I need to go find a different brokerage. And so it's this idea of actually this boosts retention because you can access any of these tokenized assets from one app, and so you're not limited by what is listed on the brokerage. I happen to, in my case, like start using at age 21. And so it's, it's really this it's actually a, a much more retentive story than something like bouncing between different apps and, and churning.

It's being able to do everything I want to in one place.

Stephen: And I think that's why we're seeing a lot more of the wealth Simples and Robin Hoods of the world is because people don't have the ability to get, you know, different coverage for different financial assets and products, but then still use their checking account.

Nitya: Right, exactly.

Stephen: cur. I'm curious, any exciting announcements coming from you and the team, especially as we go into late stage of 2025, which is usually conference season, you know, the fall conference season you know, devcon just happened, I believe, and there's some other, you know, pretty important developer conferences around

the world.

What are your thoughts?

Nitya: Absolutely. So we just announced Para for Fintechs which is really the set of products that we have optimized for FinTech usage. There's gonna be a little bit more there. So I don't wanna wanna steal the thunder for later. But really just a lot more optimized around the needs of larger organizations.

So. We currently have server side wallets we're probably gonna be expanding that product line quite a bit. And then just making it much simpler for, for users on the UX side. So a lot of that looks like small product tweaks, but there are some bigger announcements coming up there as well.

But a lot of this is really focused on expanding the number of applications that can leverage para as well as making it easier for users.

Stephen: You know, you're in SF in San Francisco. There's so many builders in in that area, especially around crypto, FinTech, the hub of Silicon Valley. I'm curious, are there anything that you, your nerdy friends are still playing with, whether it's like biohacking, whether it's like, Hey, the tinkering with ai, is there anything that's.

Caught your attention that people are doing on the weekends and you're like similar to Cold Plunge, we're gonna see this hit Mass Society soon and be

all the rave.

Nitya: What a good question. I'll be so honest. I think a lot of people I know have come full circle to like a nice walk in the park. And, and like just keeping things really simple. I do think that bio, that biohacking and in general, medi, like medical information being more accessible is something that I think we're seeing a lot of people take advantage of.

Just it being so easy to do something like function health and get all of your biomarkers and kind of be in the driver's seat. That's definitely a big one. I think like self-driving cars are now in a lot of different cities. So that's by no means new and exciting at this point. But yeah, I'll, I'll say, you know, a nice walk in the park.

I think we're, we're heading back to to just like keeping it simple.

Stephen: What's your biggest gripe with self-driving cars? Is there anything? Is it like, hey man, like cut that car off and they're just kind of like waiting there in the alley, not being able to merge into traffic.

Nitya: I. They're, I guess they can't go on certain streets, so it's usually a lot slower to get where you're going. But it is more comfortable. So yeah, maybe the biggest gripe is is, is speed. But I, I don't have many gripes itself driving cars. I think they're, they're endearing,

Stephen: I need an aggressive one. I need to like be able to like turn up the aggression level just a little bit and get to the max, especially if I'm trying to get to the airport. Nidia. Where can people find you? Where do you spend most of your time? Is it Twitter? Is it LinkedIn? GitHub? Where can

people find you?

Nitya: Absolutely. So all of the above. On Twitter, I am _nityas and then I'm also on, on LinkedIn as well, so either of those works great.

Stephen: That's amazing. You took this podcast on extremely short notice. You know, shout out to our friend Jay at Eco that put this together because, you know, we're really haven't talked that much about wallet infrastructure and now the stable Coin conversation has really opened it up. And to your point, onboarding is gonna kind of be the backbone to a lot of what customers, fintechs. Crypto, you know, web two slash Web3. Companies are rolling out.

Nitya: Amazing. Yeah. Happy to be on. Thanks for having me.

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