Zivoe: Bringing Consumer Credit Onchain

0:00 Welcome back to the Permissionless podcast. Of course, brought to you by the team at Guardian. And as always, we're going deep with DeFi builders, folks who are building on the edge, introducing a new product in the DeFi space. And I I think we are we are upholding that mission today with the team from Zivoe, which is bringing a new type of access to loans that otherwise was totally not available in the existing DeFi marketplace.

0:29 And it's totally orthogonal to all of the different borrow lending opportunities and and different yield opportunities in general in DeFi. And this is access to consumer credit. So, we're going to let the Zivoe team go much deeper into what that actually entails, but essentially it's a a source of yield that is not involved with anybody who's already lending or or borrowing on chain or anything like this.

0:54 They're actually bridging capital that's onchain to be able to use by consumers in the real world who might not even have any idea where the capital is coming from onchain and and they don't use DeFi at all. So we'll let the Zivoe team go much deeper into all the complexities and integrations across the stack that need to happen to make this occur and then you know even look at the risk and opportunity in in the risk adjusted yields for what they're building here and look at the scalability and and discuss a little bit about how this will impact DeFi and and ecosystems going forward.

1:30 But of course before we get into that, my name is Owen and almost four years ago at this point I co-founded Guardian and we set out on the premise that DeFi would house hundreds of billions and trillions of dollars of the global financial system on chain and that we would need a standard of security assurance that was a stepwise jump higher than what was available for institutions to be able to come in and build the products that they that they ultimately want to.

1:59 And today I'm happy to share that we have achieved this standard necessary at Guardian. We use multiple auditing teams on every audit. We use some of the most advanced fuzzing techniques in the industry. And we use some of the best security researchers in the world to achieve a level of security assurance that is so high that we're able to put up our own funds as a bounty on the contract on behalf of our clients.

2:29 And with this level of security assurance and confidence, really it's just a matter of time for DeFi to catch up. And now, of course, with all that out of the way, let us get into this conversation with John and Thor from Zivoe.

2:50 Awesome. Well, I mean, first of all, dude, Thor and and John, thank you guys so much for taking the time to hop on and and discuss with us today. I'd love to get to before we even get into everything you guys are building today at Zivoe and and some of the new stuff that you're working on. I'd love to go back and let's understand like the context of how did you guys even come into DeFi in the first place and I mean maybe we can follow that line and see where you guys got to this opportunity today but how did you guys even get into crypto blockchain those years ago?

3:18 John, why don't you take this to begin with?

3:20 Yeah, you know the way I actually got into developing in crypto was kind of a crapshoot actually. So senior year ASU, Arizona State University, we you do this capstone project which goes for the whole year and I had initially been assigned to a project that was for U-Haul and it was like to design this new app for U-Haul which is by the way I think one of the largest companies in Arizona and like the two richest founders the the brothers out here.

3:51 Oh, they're based in Arizona.

3:53 Yeah. Yeah, they're based in AZ. Actually, I know they're watering hole. I won't disclose it. But so at any rate, I was assigned to that project and by some sheer luck, someone wanted to join from a different one and I said, well, I'm not really married to this, so like if there's something else out there, I'm happy to take it.

4:12 And I ended up joining a different group and we were assigned this ticketing application using Ethereum which was a phenomenal opportunity because what ended up happening was I I did kind of the smart contracts on Ethereum to do the ticketing side then got into the front-end development and then also like the bisdev and networking side and going out and actually saying hey now you got a crypto product.

4:36 How do you actually launch it in the real world? And so you kind of need all three two or three components of those to have a successful project and to get it out there and be useful. That turned into me talking with like the head of ticketing at ASU. turns out they have like this ironclad contract with ticket master which can't be broken like for decades or however long.

5:00 Maybe it's that was like I don't know it was like seven or eight years ago. So maybe it's coming up now the 10 year contract or something like that. ended up then finding this company called Aventus at the time. they were trying to get into ticketing. It was really cool because they had raised like 3 million in ETH and like as I was talking to them and over like the six to eight months that we were working together on this because I was actually trying to get them to to use some of their stuff and see if we could get it working at ASU.

5:29 Their 3 million in ETH had somehow ballooned to like 29 million in ETH. It was a crazy time. they raised in ETH so it just skyrocketed and they ended up having so much money that they didn't know what to do and they started out branching to different products and services and expanded their region. So that was like how I got into crypto to begin with and I've worked on like a vast array of projects from from there.

5:54 I I'm just really fascinated by decentralized technologies in general. So I started working on like IP with IPFS like decentralized file storage understanding the value there dduplication of similar files doing private networks so people can get that value but still have like private sharing of files let's see NFT projects there was a small project out of Australia called Zed Run that they were doing these NFT horses and I came in and I said well guys you got to do betting too because with smart contracts we can implement the pari-mutuel wagering side of things and have everything handled on chain, the accounting side.

6:31 Then ended up working at Maple Finance for like the early like a year and a half. Worked very closely with Sid and Joe and that this very small team to evolve the product. We can get into that later. It's it's a really awesome kind of that was it was a great experience, great journey. And Thor happens to he just graduated but he was a student at ASU about two and a half three years ago.

6:55 I was invited down to the ASU blockchain club for this speech. They and I was like, well, why don't I give people kind of my background, my experience in crypto if people want to get into the space? What are some really good tidbits of advice, some guidance that I could give them? And that's where I ended up meeting Thor and that's where Zivoe ultimately started.

7:18 Wow. How serendipitous to just kind of happen upon that capstone project kind of. I mean, it seems like you were you, you know, at least interested in blockchain tech or like even knowledgeable about it before that or did it just kind of happen upon you?

7:33 My background experience prior to that was purely

7:37 I guess I had heard about it a couple of times. I I knew about the Silk Road and people were using Bitcoin to buy drugs, but that was pretty much it. I didn't really understand like the software development angle of it or its like use cases or applications. Like during that time period, I read the Ethereum white paper and really got into it and understood like, wow, this is where smart contracts can go.

7:56 I I heard you mention that you audit a lot of like derivative products and things of these this nature,

8:02 Synthetics. Yeah. one of these

8:05 Really wanted I worked very hard early on actually on a on a side project to launch like an options decks and I had designed this was before the die stablecoin even launched and I was like wait a second we can use smart contracts to settle options on chain we can do stablecoin covered calls well I guess it would be cash secured puts and like ETH covered calls stuff of stuff like that so yeah I've just but but that's it was serendipitous that I stumbled into that project Yeah, dude.

8:33 I mean, how glad are you that you ended up, you know, just saying, "Hey, I I don't want to do this U-Haul thing." And instead,

8:40 It really caught on to because even after I had graduated, I was so fascinated by this type of technology. I I had an interview with AM American Express. They've got a huge office up in in North Scottdale here. And they I went in for the interview and I said, "Look, I understand you have a blockchain team. I spent the last year working on this blockchain product and you know I'd like to work with you and your team on it and push that forward and specialize in that area.

9:07 And the guy interviewing me said, "Well, sir, you see here you have this little whiteboard and this is your three-year plan here. You got to walk before you can run and you've got to, you know, go down this path of basic software engineering and in three years you can go work at any bank. and if you'd like to come and work on our blockchain team after that, you're more than welcome to.

9:30 I said, "That's too long. I can't wait three years." And so I think by the end of the three years was by the time I had built Maple and and launched that, you know, I would have still been in this weird track with American Express. Yeah.

9:43 You know, instead we I was able to to contribute a great deal to the to the protocol architecture of this project, which is like a multi-billion dollar AUM project now. So, I think it was a good move not to to go with Amex and to stick down that that path. And one of the awesome things of Okay, kind of segueing into Zivoe a little bit.

10:03 I'm sure Thor's Thor's got a lot to say about his background, but I want to mention one thing is with Maple, we focused on corporate credit, which is like great. I think it was really needed at the time. and we so what we relied on was building a loan book of these like large notional size loans, but just a few of them, right?

10:20 Like five to six of these large notional size loans kind of revolving every 3 to six months. But with Zivoe, we're actually focused on consumer credit and it's one of the most fascinating things. It's what kind of drew me into the project initially, which was we can take a loan book, fill it with thousands of these UK to 10K size loans, have them all effectively crosscolateralized, right?

10:43 And you can actually build a very solid model with loss rates and say okay if we get a 15% loss rate and you know our net performance is like 35% and we get the spread and we can deliver a 15 and a half% yield on chain and like we can model that out for 100,000 10,000 100,000 loans right so it's it's it's very scalable and like the risk adjusted return like from that perspective was very alluring I was like, "Okay, well, we we've got to bring this product on chain.

11:16 We need to tokenize it." And I'm not sure I would have necessarily been as fascinated or really kind of taken on the project as I did if it was if I didn't have that experience of like the corporate credit side seeing that like, okay, now we need to get consumer credit onchain.

11:30 Yeah. So, I am interested like what the background and experiences with consumer credit and how you guys saw this as an opportunity. I think obviously Maple Finance was like a prerequisite for experience and seeing that opportunity, but I'm also assuming Thor, did you have experience in this like consumer credit area before coming in and obviously building Zivoe?

11:49 Yeah, happy to touch on that a little bit. I'll maybe just kind of run down my background super briefly and can jump into the consumer credit part. I think that's part of what makes our team really interesting. Also, apologies for anyone who's watching this on video. You had to look at my nice webcam background, but it looks like we're all fixed now.

12:06 So I kind of got involved in the space originally back in 2017 just as a user kind of during that big Ethereum bull run that happened. Got involved at the time bought just a tiny bit of ETH more just as like you know kind of excuse my language shits and giggles and then you know after doing that I was like you know I should figure out what it is I just kind of got involved in and you know went down the rabbit hole ever since.

12:29 Also free piece of advice never buy something without knowing what it is. Always good but got involved kind of back in 2017 and had just been a user in the space ever since then. I did a brief stint in investment banking and then you know got involved with kind of the rest of our founding team at Zivoe and I'll kind of touch on you know their backgrounds a little bit as well just kind of you know like why consumer credit right so two of our other kind of founding team members both come from consumer credit backgrounds.

13:02 So, our one of our other or two of our other kind of founders previously worked at a lending company in the United States focused on unsecured consumer loans. And what they saw there was a huge unmet market demand. And one of the things that's really interesting is there was a company that started back in 2005 called Lending Club.

13:21 And Lending Club was like the OG like peer-to-peer lender. Anyone could come to Lending Club. You could fund like specific loans. like you could literally go onto their site and choose like I want to fund this loan. I don't want to fund this loan and like down to like a granular like loan level for like these like $2,000 loans.

13:40 And they ended up transitioning to more of like a traditional model where you go out to like a credit hedge fund and basically just go get like a really big large line of credit and you know you just fund all your loans that way. And a couple of different reasons I ended up doing that. One is you know it probably wasn't the best idea to just let people like choose which individual loans to fund.

13:59 That's just like a horrible UX experience. And two, it's just a lot easier to manage like one big line of credit than it is to like deal with all these individual people. Like can you imagine back in like you know 2005 2006 like just from like the accounting standpoint on the back end like you have all these tens of thousands of users who want to fund these loans and you have to like keep their funds segregated.

14:21 You need to track like which loans they're funding and manage all of that. Like that is a lot of overhead. And

14:27 One of the beautiful things about kind of having an onchain lender is all of that can just be encapsulated within a smart contract and essentially your blockchain is acting as your you know your ledger or your accounting software effectively tracking all of that and kind of the movement of funds. So our team kind of came together as I was talking to kind of some other our founding team after they had exited from the previous kind of consumer lending business I was mentioning and they grew that business to be one of the largest of its kind in the United States.

14:55 Wow. and we kind of started working on Zivoe then and yeah, it just literally so happened to be like happen stance that I was fairly heavily involved in the like local crypto scene in Arizona and you know went to an event one day and you know here was John up front talking about building you know Maple and a credit protocol and I was like oh my gosh you know this is like perfect went and talked to him after the event and kind of the rest is history but we have a really good kind of blend in terms of backgrounds you know we've guys like John and myself and Dennis on our team who come from, you know, a little bit more of like cryptonative backgrounds, although a lot of us have TradFi experience as well.

15:35 And then we have, you know, kind of some of the the more boomers on our team like Jay and Crystal and Walt who, you know, have 20 plus years of experience in TradFi just doing consumer lending. So like Walt, who is our chief risk officer, was actually like the chief risk officer at Lloyd's Bank over in Europe at one point, was a vice president of risk at JP Morgan Chase and actually took a company called Elevate Credit Elevate Credit public, which was a consumer lender that operated in our space.

16:03 And that company has had they're still around. They just went private again. But when they were public, when you can even go look at like their their filings, like they had billions of dollars worth of loans outstanding at any given time. They were they were, you know, quite a big company.

16:17 Yeah. Well, I mean, certainly the pipeline from people aping into random coins and on Ethereum and then starting to get interested after they lost their shirt on on something. It's definitely strong. I know it happened to me. I definitely aped into, you know, the own forks and all that good stuff. And that's my onboarding to DeFi. It's kind of like the cost of entry.

16:37 Yeah. And I mean, thank God, thank God you did ape into, you know, whatever it is that you ended up buying. it it's kind of just serendipitous how it seems like you know paths just kind of cross. I mean to have you know somebody with your background experience connections to people who already have a lot I mean it seems like you guys have already you know done this in consumer credit intersect with John who's literally done something kind of adjacent to it on the blockchain side.

17:01 Yeah. Pretty serendipitous to of a founding story. But I'm interested like what is the blockchain aspect of this unlocking for you guys that allows this to to be let's say I mean ideally like an order of magnitude better than let's say the previous business like what what is this solving? Is it unlocking a constraint that was previously there on the lender side?

17:22 What's the the big benefit?

17:24 So I can hit on a few things and I think John probably has has has a lot there too. to as I kind of mentioned even in the leadup to this like the lending club example is there is a you know a lot of like you know backend stuff that goes on at these lenders that a lot of people don't necessarily see and like that was a 2005 examples so is a little bit more like archaic harder to manage but even now right at lenders you use things like loan management systems right and these are a lot of times like third party pieces of software you go out and like white label and you know a lot of those different pieces you know add to your overhead Right.

17:58 And over time, we want to bring as much of that on chain as possible to reduce your cost of actually doing business. And one of the things that's also really interesting just from like a capital availability standpoint is a lot of times what happens at these lenders is you actually go out and when you originate loans, you place them into an SPV or special purpose vehicle.

18:18 That's just a company set up for like a very specific purpose. In this case, actually custodying loans. And you go out and securitize that and you're able to then go get liquidity. Now those kind of deals are typically only done OTC and they're you know kind of only available at certain times whereas if you're able to bring this on chain you're able to give liquidity to a token for instance and John can talk more to that you know you're able to do that at any time.

18:41 One of the other things I think that's really interesting too and Lending Club tried to do this back in the day a little bit is I think there is a benefit in terms that you're actually able I think over time to lower your cost of capital by allowing anyone in the world effectively who qualifies to come and actually fund some of these loans.

18:57 So I think there's a whole bunch of stuff I could touch on with that and you know I'll let John kind of hop in as well.

19:03 Yeah. And it also seems like you you've opened up your market of lenders too. I mean, unless you're really doing a lot of work on the UX side, it's now a new market of lenders. Like, I can imagine from I think it was lending club, the target lender is probably a little bit different than the target lender for Zivoe because I can imagine they've, you know, they've got to have assets on chain to be able to deposit into the the zVLT vault.

19:26 So are you guys starting out with the target lender as somebody who's already DeFi native and then trying to expand from there or are you guys already going straight to you know lenders who are you know web 2. They have no idea what web 3 is.

19:39 So we actually are catering to both versions of that type of client. So there's DeFi native clients and there's tradi native clients. We're actually right in the middle of a partnership and integration with a custodian where effectively you can have a web 2 experience. So if you want exposure to zVLT, all you have to do is just wire capital, you know, fiat from a bank account onto this platform.

20:05 And we're setting up this integration to where you can simply you know just click a button or request for them to execute a certain transaction and it'll you know that on the back end they'll handle fiat to stable coins to zVLT. Right.

20:21 I see.

20:22 So and the nice thing about that is if you're more of a traditional investor, you don't want to work with wallets. Yeah. if you don't want to work with you know gas and all these things they're going to handle all that for you. It's also insured. So if they're you know you don't have to worry about the self-custody if you would like somehow well they're not going to let anything happen in their system but you don't have to deal with like oh I sent my tokens here it should have been over here.

20:47 So that's how we're working with the trady traditional investors. And then the DeFi native side, I mean, we have we have our web3 application so people can just come to the platform, deposit stable coins. That's that's how we're going to to market there. Your previous question about why why how are we unlocking value for this particular asset class using blockchain is huge.

21:12 Like there's a lot of meat on the bone there, right? Directly clear right off the bat. And there's it's so nuanced. It's like it's really like an onion. like you start to peel back the layers and you can see like why this asset class is particularly ripe for tokenization and it's so I'm going to try and start biting away some pieces of that right to begin with actually there's been a huge trend in user bases across all of these various chains Ethereum you know EDM compatible chains side chains

21:43 And and these particular ecosystems where their user bases have a lot capital on them but they reside in certain countries in which they're just not able to really generate good yield off of or it could even be in the traditional finance sector right so so for example like Japan Korea you know Hong Kong like these these types of markets it it's actually very hard for them to generate yield just like a cash in a bank account and they they like to use crypto so they come to crypto and they see okay I can generate like 4% % on stable coins and even that is starting to trend downwards now.

22:24 And so we're kind of shifting towards this very low yielding crypto environment.

22:30 Yeah.

22:30 And even in traditional finance, low yielding kind of bank accounts environment, right? I mean, we've we've certainly been trending upwards over the last, you know, few years, but now we're I think trending downwards on a on a macroeconomic scale. And what what we've been working with on a lot of these different chains is saying hey what is it that you're looking for?

22:48 What is what are your long-term roadmap for your users and they're like well we have you know a good application system like user apps, mini apps, stuff like this. We've got a ton of users you know we're licensed in all these countries. We can onboard these particular demographics. We lack DeFi native crypto yields or RWA tokens that generate a yield based on offchain assets.

23:15 We are, you know, I'm actually incredibly bullish on where our project is in the overall trend of the space because I what I see happening is you've got these large user bases that are looking for yield on assets in their wallets.

23:28 Yeah. And so you know right now what we're doing is we're we're partnering with these different chains to to integrate onto the chain whether that involves doing a standalone vault or deployment on their chain or whether they can use some kind of crossbridge like bridging liquidation. there's a I don't know exactly how you would call it but they have these like liquid systems where if you have a token on one chain they can replicate it on the other and they have like stable coins.

23:55 So if someone has a stable coin on this chain, they're like, "Okay, buy it and then it'll work with stable coins on other chains and really easy for us to integrate into these types of systems. So I think we're going to be seeing a large trend towards crypto users just looking for yield out of their assets, right?

24:11 And and that market really doesn't ex exist. It's it's very early on. And I think there's ways that all of these projects that are generating generating yield can differentiate themselves. But I almost feel like if you if you were to walk into like a store and you were to, you know, say you like beer and you're walking into a store and you're looking for some nice craft IPAs and you're just walking down the the the aisle, it's going to be like three or four selections, right?

24:39 Like there's very little variety and it's all very watered down three and a half%, you know, Michelob Ultra stuff like this, right? I'd like

24:50 And you know I I kind of liken ourselves to like a very strong craft IPA. Very wellmade and delicious. I just came up with that metaphor on the spot, but I think it's actually very apt.

25:03 Yeah. And and to kind of tie it into like the the financial metric side of things, I really believe our asset class is one of these like most hedge funds even on the institutional side like I'm I'm talking more on like retail side and having options, but even institutional clients like they're looking for higher yield generally with higher yield you have to go farther out on the risk curve.

25:21 But I really believe that we we're building a product that takes you higher out on the yield curve but lower down on the risk. So just it's just higher risk adjusted return with private credit and that's that's like one of the layers you peel back one of the layers of D5

25:38 Like an

25:39 Yeah. Well, I mean first of all there's there's a lot to to address there and I think also I think we'll get to the scalability of the opportunity because I think that's another really important aspect here. But I mean to touch on the point of like you're offering a new like yield that is totally orthogonal to what is already existing in the existing DeFi ecosystem and I think that just enriches the rest of the ecosystem and I'm excited to have more of these products coming in and offering these offchain web 2 you know real financial world like opportunities to the capital that's already onchain because I mean the beauty of DeFi is that once you do bring that onchain it's infinitely composable and people can start using your zVLT tokens and and start using

26:21 Them in other DeFi applications. And that just exposes the value of the yield that you're bringing on chain to every other application which can now build on top of it and provide, you know, maybe even more value. Maybe you can lend against the zVLT tokens as collateral, you know, whatever whatever that might look like. But yeah and I think that's the beauty of DeFi and once we get more applications like this, more opportunities like this of you know folks like yourselves who understand the trady aspect of this and have all the knowhow of like we've got to connect this to this and then this is how we're going to market this.

26:54 This is how we're going to you know give out the loans and stuff like this to bring that on chain and now everybody can benefit from that all at once. So I think that's where we really get the flywheel started and then DeFi will just become infinitely more valuable and suck in more opport and eventually it will have so much capital just pulled on the networks that it's like well that's the first place you want to go to get capital for something like this cuz I mean you guys are in an interesting spot where you've got the the onchain sort of self-custody you guys you hold your own zVLT tokens you do whatever you want with those and then you've also got the custody solution where it's you know you just send you wire however

27:31 Much and then the custodian holds it for you. You don't even really understand or know, you know, what these tokens are. So, yeah, it'll be interesting. I'm also interested like what's the split that you guys are seeing right now between the two? Is it mostly one or mostly the other or is it 50/50 between the two? Well,

27:48 Between our custodian well, we're currently integrating with them right now. So, we're we are developing the the techn technical rails basically to onboard users and we're doing a prototypes. So let's say within the next 4 to 6 weeks that solution will be in place. Maybe 6 to 8. I don't know. I'm always saying it's going to get done sooner rather than it does from an implementation perspective.

28:10 So 100% defi native right now, right? Gnosis safe's best solution out there on the market for these kinds of things. Multiple signers on them pretty secure hardware wallets, things of this nature. oh and you touched on a very interesting number of things there and I think that's the second layer we can we can peel back which is like Let's get to it.

28:30 Let's do the second

28:31 DeFi composability, right? Like actually leveraging that's a bit of helper there. We're leveraging onchain defy mechanisms for the benefit of yield risk diversification whatever right there's a number of vaults if we if we think of kind of this revolution of AI agents taking over and managing treasuries and allocating certain portions of these vaults or dows to different protocols within the space.

29:00 I think this is a huge market for us to tap into because in general I mean it depends on the strategy of how they're trying to diversify their portfolio but if if there's a component that's looking for stable like high yield tokens so we're gen currently generating 50 and a half% APY on chain then we can be a very strong component of portfolios that are looking to allocate towards that right they want to go higher on the risker they don't want to be in like 4% % stables, but they'd rather be in like 50 and a half percent like private credit.

29:35 And, you know, then there's always going to be these these agents that are like, you know, full pedal to the metal. let's take a quarter of our portfolio and throw it at these like five random meme coins and they're going to either 10x or go to zero, right? So I think we can fit into this space very well and by just showing you know over time a consistent stable yield and I do believe portfolios will latch on to that whether it's even if it's human-driven or AIdriven that's that's one thing you also talked about leverage or you know there's a very common loop leverage system in the space you know using pendle to split your token into principle token and yield token and creating a borrower market against that.

30:24 We do the yield token on like Morpho or Euler and you can kind of create this system where you're borrowing against the initial yield token, selling it off, creating more. you get into that like 5 10 some trading firms will do this like 19 times on ETH derivatives, ETH staking derivatives, right? And they somehow take what would be a normal 3.2% yield and jack that up to like 15 or 18%.

30:58 Now, if we're starting out at a 15 and 12% base yield and you start looping that just a couple of times, that gets very interesting very quickly. And so we are currently working with a number of curators on different platforms and going through DD to pretty much onboard our zVLT token into this type of system. It's it's our belief it's come to be our belief after having worked with a number of firms that are trading firms, hedge funds that are essentially doing these types of loop leveraging system that like a a a northstar for RWA protocols is to basically get into this type of loop leveraging system so that you can just extend the yield that you have because if the the underlying asset class performs in the anticipated way.

31:52 Obviously, you're taking on higher risk when you leverage, but you're still extending basically you're maintaining riskadjusted returns. So, it's something we're actively working towards right now.

32:03 Yeah. And it's I mean, you pointed out that one of your strengths here is just that you have a yield source which is just completely uncorrelated with the existing DeFi market. And in that sense, you can probably fit into a number of sophisticated portfolios now on chain that want to include this yield source that's not correlated to whatever ETH staking is yielding and not correlated to whatever, you know, a has for whatever ETH market or something like this.

32:29 But also yeah when we start to talk about leverage then obviously the risk starts to become increasingly important in how do we observe that and how can we actually quantify it in models and I think this is another aspect that we could probably dive in very deep is the first of all the scalability of this opportunity in terms of well first of all it's very it's not so discreet like you said with with Maple you have less agreements but you have much bigger agreements and the I guess you could say your your exposure to Let's say like the standard deviation is more concentrated.

33:02 But then if you scale this amongst like a,000 2,000 5,000 10,000 individual loans, then you flatten the curve and it's all very predictable. So what is let's go let's go all the way to the the fundamental atomic case. What what is underlying? What are some of these loans? What do they look like? Are they like auto loans?

33:20 Like what is this consumer credit at the base level? What is actually happening on the ground? Yeah, happy to kind of jump into, you know, the actual loans that, you know, Zivoe is backing. So, the loans that we're focused on are loans between$2 and $10,000 in the United States. And these are actually unsecure consumer loans. So, you know, you kind of touched on something there, which is like when you flatten them out and you have like 10,000 of these, you can kind of predict how they can perform.

33:44 So, this is kind of a space that's been around for, you know, almost 50 years now and there's a ton of credit data going back on it. You know, that's publicly available and tons more that's not, you know, companies in their 10Ks and stuff, you know, regularly report kind of this stuff. You know, you don't necessarily know how one loan is going to perform, right?

34:02 It might be a coin toss and it's not, you know, necessarily worth funding one loan for, you know, let's say a, you know, 15 12% return. However, when you have 10,000 of these loans or even a couple hundred, it begins to become a portfolio that you can predict the performance of using analytics and that is where it gets really really interesting.

34:21 And that's also where I think even the experience of our team comes into play significantly because you really need to understand how to underwrite those portfolios and how they're going to perform and that is something that I think we bring to the table in the RWA space that's really unique to what we're doing. So, I guess to to kind of circle back to it, yeah, these are loans between $2 and $10,000 in the US that are unsecured and effectively we put them through, you know, a full underwriting flow before they're originated.

34:52 So, just to maybe like share shed a little bit of light on like what that would look like, like someone would come and apply for one of these loans and typically like someone is pre-approved. So, we already kind of have an idea of like who you are before you're coming to apply for one of these loans. And you know, you can get data from like credit bureaus and stuff that allows you to kind of do that.

35:11 And when someone comes and applies for one of these loans, you know, they input their information and then you kind of have like a soft decision out of the gate like, hey, you know, based off what someone's entered, you know, we'd probably approve them or not approve them. And then if you know, you think you would approve them, you kind of will take them to like a next step and put them, you know, through like a true underwriting flow.

35:28 Like you'll go do bureau polls and then you'll put them effectively through a decisioning engine and literally will pull like thousands of attributes. you only end up having some that are like actually significant that you're actually like underwriting on. But, you know, it's a very intensive process when you're actually looking at this. And one of the really interesting things too, right, with with these models is as you continually underwrite more and more people is the models get better, right?

35:52 Because you can begin to kind of look for attributes that are common between people who, you know, are paying on time and paying successfully versus Yeah. focused on specifically you know that opportunity is tens of billions of dollars. So just to give an example like elevate elevate credit the company that our chief risk officer took public once upon a time back in I want to say 2014 or 2016 is when they went public.

36:43 At the time they went public they had just under a billion dollars in loans and that's like a midsize company in this space. So like a lot of these companies have multi-billion dollar loan books and you know the thing that's really interesting too about consumer loans is at the end of the day all a consumer loan is right is a contract.

37:01 There's not like a physical physical asset associated with it. And I actually think that lends itself to scalability because like if you're tokenizing like a phys like a true physical asset like something like gold, you know, you have to custodian that, you have to manage that and there's like physical assets that you have to like continue to stack up and that adds another element to like how you're able to scale it.

37:21 And like we talk about real world assets now and you know right now we take you know capital offchain and we're using that to originate consumer loans but like going back to it the beauty of a consumer loan is it's just a contract and so like we're going to get to a point where you know you should be able to essentially do all of this flow like almost entirely on chain and you know eliminate even more of kind of like the services in the middle that you're relying on like I kind of talked about before like a loan management system or some of these different kind of payment providers.

37:51 Providers even or servicing providers. And so that's where I get like really really excited about like where I could see us, you know, let's say 5 years from now.

37:59 Yeah. And I mean obviously I think you guys also work with some partners on like the underwriting side. So it's not even just you guys who are doing all the underwriting. You have like third party agencies that are well and obviously the credit bureaus and stuff like this people who do this and they've done this for decades at this point, right?

38:14 Yeah, exactly. We work with a company called Zinclusive that actually is kind of doing a lot of the end underwriting to your point. you know, that team has been doing this. I mean, combined within that team, there's probably hundreds of years of experience with literally like just credit underwriting and and so that is something that I think is very unique to us in the asset class that we're focused on because I think there's like a lot of opportunities in RWA right now and I think a lot of the technology is really good but I think you know I think there's a few teams that do it well like meshing the like technological expertise like we have you know in John internally but also like the financial expertise to manage risk effectively as well.

38:51 Yeah, and it's actually pretty exciting with the advent of AI and like you mentioned like as you get more data then you can optimize and improve even the risk adjusted returns based on what kind of loans and the parameters that you optimize for. So I mean that's that's a pretty bullish sort of input for going and actually scaling this thing.

39:14 It actually gets better as you scale it because you have more data instead of the the headwinds kind of scaling against you which unfortunately happens in a lot of these yield opportunities especially the ones that are on chain. So I think that's that's something that will allow this to I mean who knows I mean what is the bottleneck?

39:30 Has the bottleneck in these businesses typically been on the lending side or has it been on the lender side? So it's a little bit of both on that. I think in terms of like the borrower side like people actually taking loans is you know you can scale these portfolios to be billions and billions of dollars. Like that is very normal.

39:48 Your constraint on that side right if if you're managing risk correctly is you can't just go out and lend a whole bunch of money in a really short period of time. Like it takes time to get to scale. But the scale is you know for all intents of purposes pretty unlimited. You just can't go out and go lend you know a couple billion dollars in a year.

40:06 But you can lend, you know, let's say a few hundred million dollars in a year once you're like really up and running and at scale and kind of have your model dialed in correctly.

40:15 Yeah, I can imagine a lot of it is getting the infrastructure set up and the relationship set up to have that stream of volume which you can fill from the lender side and then obviously the flip side of that is just getting the volume to be able to lend out in the first place which also takes a lot of infrastructure relationships and and whatnot.

40:33 But on on terms of that side, what do you think is the catalyst? I mean, I think it's a pretty easy sell to sell like 15 17% APY. Do you think that is enough? or are you guys trying to build even more on top of that?

40:46 So, we're definitely trying to build more on top of that. And I'm going to kind of throw this to John to talk about because we, you know, kind of came out of the gate with like an MVP DAP that we had built internally, but you know, we just went out and kind of did a full, you know, UI UX like redo from scratch along with the new zVLT token.

41:04 And I think that's really going to lend itself as well to kind of driving additional TVL along with some additional things we're doing like kind of Pendle and looking at some of those things. So, I'll let John kind of hop in and talk about that a little bit.

41:16 Yep.

41:16 Yeah. Owen, this kind of goes back to this trend I was talking about with different chains with different user bases that are effectively looking for more yield. So in general, I would say the bottleneck or the challenge that we face as a business is ultimately sourcing the demand side for this yield. And I say that because we have a very strong supply side system in place to once we have the capital on chain to then deploy it.

41:48 It's been our primary focus over the last let's say 3 to 6 months. well perhaps it's primary right now. I'll say secondary was we were launching this new vault token. but we're going to go live with a new DAP. We've been working with with a design agency over the last couple months as well. So that's going to complement the vault token.

42:12 And we're just doing basically just deposits withdraw and then for the we we'll be like releasing additional pages. So we you get a nice portfolio dashboard, nice governance dashboard for all the tokens within our ecosystem. but right now our primary focus is really expanding our reach on chain to source capital.

42:31 Yeah. And so again, we're partnering with a number of different chains and exploring what our best options are from, you know, we have to evaluate everything like feasibility of integration, closest path to revenue. That's certainly something any business needs to consider is like which you know maybe this chain has a very large user base, but it's going to take us six months to get there.

42:52 So okay, let's take a look at these ones. We can get out in the next month, two months to start building some momentum. But I think we're we're very well positioned. We understand it's a challenge and that's pretty much what we're currently focused on. It would be phenomenal to have zVLT on a number of different chains. Ideally, the best chains that we go to are the ones that we can kind of create a wrapper.

43:14 The one thing I'll say from a technical perspective is bridging is not ideal. Deploying a replication of a system on another chain and then bridging capital from one chain to the other. there are some systems and solutions which kind of use bridging, but in a sense it's not not the like Stargate Finance. It's not like we're just kind of sending stable coins off into the ether from one of our contracts to another, having some kind of wrapper for a token or just maybe having standalone lightweight implementations.

43:43 These are the kinds of things we're looking at and considering.

43:47 Yeah. And I think also a lot of where you guys determine that you're going to launch on first is dependent on the integrations that you want to have. What kind of integrations do you guys want to have in the next couple of quarters? If you can share, if it's if we're not going to spoil your your marketing.

44:02 To be quite honest, I'd rather not share right now.

44:04 Fair enough.

44:05 When we're able to, we will. Let's just say that much. But no, they're very huge and excit All I'm going to say is they're very huge and exciting partnerships. you know, it's more just like there's no really reason for us to disclose until it's in the bag and we're like, you know, deployed. It's kind of like raising capital from investors, right?

44:22 Like you can paper the deal and it's like but until the money's in the bank I'm not going to say anything.

44:28 Yeah, that's that's true. Of course, and and you don't know, you know, what kind of roadblocks you're going to run into, but obviously it sounds like we're going to have some form of leverage. Who's to say who's going to end up ultimately providing that, but some form of leverage for for zVLT? I'm also interested actually on the technical side because obviously this isn't the most liquid thing but then I think you mentioned you can have this securitized and have some counterparty who's offering liquidity against your loan book.

44:54 What does that look like when you bring it into an onchain context? Is it like a two-step withdrawal from the vault? Like how does that work? So actually we have two onchain and let's say a third off-chain solution for how we're handling liquidity and redemptions from within the system. So to begin with and this is probably the the most attractive option is atomic liquidity which is a direct one to one or direct redemption for NAV that asset value out of the protocol.

45:29 So what we what we're what we have in place although we haven't it's built we just need to launch it on chain and actually deploy it. This is all part of this like over the next couple weeks we're going to be launching this. It's an instant redemptions locker. So if you have zVLT you can effectively burn the zVLT and we will have stable coins within the protocol that you will receive in a onetoone basis based off the nav because our our vault tokens will have this index price that's just linearly increasing as it accrrews value.

45:57 So maybe it starts at a one, then it's 1.01, 1.02 per token. So based off that index price, however many shares of our vault token you burn, you would instantly receive liquidity out. This is, as we're noticing, very valuable to curators and parties that do lender lending for like loop leveraging stuff like this, right? in conjunction with that we have a partnership with FRA where we will be deploying a 500k liquidity pool on curve finance and what we're doing there is actually it's actually really cool.

46:35 This is one of the things that's like yeah blockchain has some really awesome things which is there's a there's a pool type called ERC 4626 which you know it's that's the standard for the vault token. When you launch a curve finance pool, you can specify that it is an ERC 626 token. What it will do is look at the amount of underlying asset that's in that vault token and say, "Okay, we're going to track the exchange rate on the DEX in accordance with that index price."

47:04 Right? So instead of you know someone having to like say constantly buy up and kind of maintain some sort of peg to the nav on that market, it's just algorithmically adjusting the exchange rate based off of what the effective market rate is, the effective index price. And so it's nice because we have an autoco compounding token. Autocompounding in the sense that every time you like compound it is a function on chain, it updates that index price, right?

47:33 And so what's nice is like we can kind of just see, you know, every 6 to 12 hours, hey, our token is appreciating in value. And the exchange rate on that market will like constantly be adjusting. Maybe there's some like very shortterm arbitrage, you know, opportunities in place based off of compounding it and stuff of this nature, which is fantastic.

47:55 The market will take care of that. Or someone can come along and build an algorithmic solution to maintain that. you know, there's but that's just me for you. But it's it's it's actually really cool building systems that create MEV opportunities on chain as well. So

48:09 Yeah, I think I mean the curve pool should minimize that as well because it's automatically adjusting the price rather than relying on somebody coming in and arbiting it and you know essentially taking value from the LP there in that case.

48:21 Well, if if hasn't been compounded for a while, you could theoretically like buy the token, compound it, and then sell the token off at a higher rate. Now, I don't know. I mean, I think if you'd have to do that at a pretty large scale and like deal with fees and whatnot, but honestly, it's cool because you that forces someone to call the compound function while also deriving value for it.

48:44 So, you're creating me that forces people to compound your token. Like

48:49 I would say to an extent I mean it depends on the because you could like maybe flash loan a ton of money and then just take the compound value by like inflating away the token supply. But if the fees are large enough, I guess that's the the lever is like if the fees are large enough, then it becomes unprofitable.

49:05 Yeah. And there's there's always a liquidity available at NAV as well. So that would not take away from that particular part of our our system. So that's so those are the two onchain systems that we have as far as liquidity for our token. For larger this this third offchain is really for our say larger institutional clients. You know, people that want to come in with like a 5 or $10 million position.

49:28 What happens is this would need to be done on more of like a face-to-face basis, but basically if they say, "Hey, you know, we put we put them in and we'd like to redeem this." What we would do on our end is look at a particular trunch of loans that we have out and say okay what we can do is basically take the interest payments from this and within like an 8 to 10 month period again it it really depends on size and how the portfolio has scaled at a particular point and say we're going to take you know principle and interest from this and like set it aside and we can we can basically wind down a portion of the portfolio if someone wants a redemption.

50:09 And I think that's quite feasible within a one-year period for certain positions. This is you know again it it becomes much easier to do that at scale right but these are things that we can facilitate for like larger size position. Yeah. And I think that's it also helps kind of like on the on the lending side having a lot of these smaller loans and also on the lender side having you know not like just two or three whale lenders who all of a sudden when they say oh we want to pull out now your whole loan book is kind of messed up.

50:39 It helps to have this DeFi side where it's like you have a lot of the smaller mid-tier lenders and in that sense you can sort of model out and just like you can on the lending side you expect some rate of redemptions to happen. You can have liquidity for that. and obviously yeah there's a lot of interesting risk parameterization that needs to happen to understand how much leverage can some of those venues offer on something like this and what kind of based on what kind of liquidity but I think the beautiful part is that as all of this scales you can employ more leverage and you can even probably get a even better risk adjusted.

51:16 So it scales very nicely which is great to see. One of the peing back the layer a little bit more. One of this like really interesting onchain mechanisms that we can do is let's call it wiping debt from the system. So say we have a secondary market up and it's trading at 98.5% of par value.

51:38 Mhm.

51:38 So our index price is like $1.15. It's trading at $1.13. Like okay, what can we do here to take advantage of this particular discrepancy? And how can the protocol at large actually generate value or derive value from these kinds of discrepancies in markets, right? So let's say we have unallocated capital in our DO. Theoretically, we could build a system that would buy up these vault tokens at a discount and burn them.

52:07 And so what this is doing is basically it brings capital out of the system, right? But you actually are building equity for the entire system at large because someone puts in like a dollar and then we buy back that dollar for 98 cents. We've now just generated 2 cents of free working capital. If we can do that, like let's say we we we scale up to like a 100 million 200 million TVL and we're able to do this like debt wiping system over like I don't know 10 15 20 million in volume per year.

52:43 Like that's pretty low for that kind of like TVL, right? Well, let's just say 20 million 2% that would be 400k, right? So now we've just kind of generated 400k in value out of nowhere. And on top of that, we have in effect created a more stable market where as a result of us buying up our token, it stays closer to par value.

53:15 So if people want to just cash out like 5 10k they want to sell off a little bit on the market like we can facilitate that and we can maintain it at peg too. so like every time it comes down a little bit we just have something that automates like buying that up and I think that's going to generate a considerable amount of value.

53:33 Yeah.

53:34 Just now.

53:34 Yeah. Because when you do get into that state I assume it would be when you don't have atomic liquidity to withdraw on chain. That's really the only way you're going to end up with a der in the in the market rate. And then I I guess yeah, you you can just buy that up and then burn those burn those vault tokens, but burn them in a way that redistributes the value to the rest of the vault tokens and not not just like locking the that portion of the supply.

53:59 Yeah, I I think I mean that's another way to well you keep the market in line and then now all of those people can atomically just swap out of it. Keeps it very liquid. and it just redistributes that inefficiency back to the holders of the vault. I'm interested in So, obviously there's a lot of the infrastructure that you guys have to lay out and this is kind of an interesting DeFi project because normally DeFi projects don't have so many different layers of infrastructure and providers that they need to interact with and you touch up against all this different surface area and web 2 and traditional finance.

54:32 What kind of regulatory on the regulatory side? I can imagine you guys probably have some legal legal brains in your corner who have done this kind of thing before on the consumer credit side, but what does that look like when you marry it with with DeFi? Is there any particular consideration there? What has that been like?

54:48 So, I'll touch on this a little bit, but I'm not going to go too too deep. So, just one of our founders, Crystal, is a consumer regulatory compliance attorney. So, this is her wheelhouse and she's been doing this a long time, so I don't want to misspeak. But at a high level and we I mean we're following all applicable rules and regulations in terms of you know actually conducting like KYT and AML checks and all that kind of fun stuff.

55:14 And so the way you can somewhat think about it is it's no different than any other fund kind of lending into the United States. you need to meet all applicable rules and regulations

55:25 And you know there's stuff you have to make sure you're doing there which as I mentioned before we're kind of conducting all those required checks. So yeah, no, that's something that's definitely super important and we have, you know, kind of covered our bases in spades there and, you know, I would probably leave it at that just because it's not my, you know, wheelhouse as much.

55:44 But no, that's something that like internally we have a ton of experience with.

55:47 Yeah.

55:48 Just given her background and we also have outside counsel as well that's kind of very reputable in the space. And so no, that's something that like we take very seriously. Like obviously if you're touching real world assets like you have to follow all applicable real world laws. like that's kind of part of the the deal with RWAS and so that's something yeah you you know if you don't you know one of the easiest ways to go out of business is to not follow you know all applicable rules and regulations and you know we would like to be in business for a long time.

56:14 Yeah, that helps. And so I mean technically speaking, is there do did you guys implement any like checks like KYC checks even just depositing into the vault stuff like this? I know there's products like Predicate that have been working on this, a few others, but yeah, do you have did you have to implement some of those checks on chain with the actual vault?

56:31 Yeah, we have some of that stuff built into our to our UI. So yeah, there are are kind of checks and stuff in place like we work with Chainalysis on like the KYT front in terms of like screening wallet addresses and stuff. Yeah, we do perform those types of checks.

56:44 I see. Yeah. And I guess I mean Yeah, it's it's interesting to see. I mean, it depends on who I talk to where it's like the front end versus the contracts and it's like what entity owns the contracts and all this stuff, but that that stuff goes all way over way over my head. in terms of what you guys are working on right now, it sounds like the vault getting zVLT out and then UIUX overhaul.

57:08 What else is is on the on the timeline if if there's anything coming up. So I think something that might be worth touching on that's really interesting for like the demand side and I think is like something that is really interesting just like for RWAs as a whole right now is you know in the second half this year once one of the things we want to release after kind of getting our new DAP out and launching zVLT is like a loan transparency dashboard where you'll be able to kind of go and see all the actual like off-chain loans and the performance of those loans and John can talk probably a little bit more about that from the technical side of how all that would actually work.

57:46 But I think that's something that's super super important, right? Because like with all RWAs right now, right, like we have, you know, a very solid structure in terms of like how our assets are flowing, but it's still kind of like, hey, you to some extent have to take like our word for it. And like we are a team that's done this for a long time.

58:03 We're all docs. We're all like US citizens. And you know, we've all kind of been in the space for a while. A lot of our team has been in business as I mentioned for like 20 plus years. but with any RWB protocol like I don't there's only a few right now I think that do like a really good job of actually like providing attestations of like assets that they're involved in and most of those are like treasury related projects and so that's a lot like of a simpler like thing to actually go and implement.

58:28 So that is something that like in the second half of this year we're going to roll out. still working through some of the stuff in terms of like what we can and cannot show because there's like

58:36 You know PII that you're not able to show for instance. So kind of working through some of those things now but that'll be coming in the second half of this year. So that's one of the big things we kind of have coming down the pipeline that I think is going to be super just super cool and also like really good for the demand side as well because I think that's just going to be another like level of increased confidence that you know like hey this is where like all of this is going.

58:59 Yeah. And it speaks more to the ethos of people who are already in the DeFi landscape and looking to invest in opportunities that are transparent. I mean, you might not be able to see every everything exactly onchain and all of that, but if you see the actual loan book, all of a sudden it becomes a lot more real.

59:15 It's not just like 15% 16% whatever. You know, you just see number and then you're like, "Oh, okay. I guess that works. I guess it doesn't." And I think that's that's really important when it comes to DeFi because we do have all these different opportunities where it's like 30% you're going to get 30% leveraged concentrated liquidity farming or whatever.

59:35 And a lot of these if you look into it it's like well I mean there's so much like impermanent loss going on under hood or or you know whatever it's hard to even assess right so it's hard to even compare these APY numbers but when you have like the actual addition like atomic unit value of what is producing this this income it becomes very variable and I think that will speak to especially the the DeFi market.

59:59 We're we're a very transparent team. You know, we're also an agile team. So, we listen to market feedback and yeah, essentially, you know, investors want confidence in the underlying asset that they are investing in. So, it's like, okay, what's the best way for us to provide that? Because we are trailblazers in a sense that no one's really doing this right now.

1:00:22 So it's not as if there's like a tried and trueue path to providing consumer confidence and transparency. So we're just coming out with our own ideas and delivering in the best way that we see fit for the markets and I think over time we'll we'll be able to adapt as you know hopefully people come to us they say they want to see something and we'll evaluate it and if it's a good idea we can proceed with it.

1:00:46 You know we're not like kind of we're not a closed doors kind of company. So yeah, we listen to market feedback.

1:00:53 Yeah. Excellent. I mean, of course, the more time that you are in the market and you show like, hey, over and over again, this is actual real yield. I think that will just have a lendy effect. And of course, it's beautiful that it can just be on chain and other protocols can start to integrate it as well.

1:01:06 And like it gets kind of interesting when you have those people kind of doing your go to market on your behalf. So, I mean, I'm I'm excited to see what the what the near future holds for you guys, but what is the long term? Where do you see Zivoe in let's say 5 10 years? I mean that's really not even that long of a time in this kind of an opportunity but let's say in a decade like what is the the ultimate version of Zivoe?

1:01:29 A decade. I'm going to give my opinion and and I'm curious to hear Thor's Thor's opinion as well. 10 years is a long time. Let's go on crypto but let's go big.

1:01:41 Yeah. Yeah. Well, I think we have Okay. So, so let's kind of look at where we're at right now and where we could be in the future. So, we essentially have the entire system proven out in my opinion, right? From like the DeFi from the Trady side, we have the ability to basically scale with our current infrastructure to like I don't I don't really think there's a cap.

1:02:05 Let's say it's just a couple billion, right? This would stem initially from our the lending business, our partners inclusive, but we've been working with banks lately and to develop a partnership where if they have existing loan portfolios and we suddenly have a large inflow of capital that we cannot deploy through Zinclusive, we could we can buy loans that are within the exact same markets that we're we're looking at.

1:02:29 We can say, okay, this is the private credit like this this this is the model that we want. This is these are the appropriate risk metrics. This is the kind of yield target that we have. We can just buy loans off an existing book from a bank, right? And then bring that into the exact same structure we have, which is an SPV.

1:02:45 The DAO, the protocol has the rights to all the interest payments from that. And it's basically just kind of expanding the current like on the legal side, the current infrastructure to house these loans and deliver that yield on shin. and that's just within like like private credits and and US banks.

1:03:02 There's al and there's two other things we can do. So there's there's actually a very large demand for the types of lending that we're doing whether it's refinancing high interest loans or installment loans for like just just you know consumer in consumers in general markets like Crystal would know this so well the other markets that we're trying to go into these I'm probably going to mess up the countries but LatAm East Asia and a number of these markets like there's there's there's really good opportunities in other countries for us to expand the same type of lending we're doing in the US but to other countries and that just requires effectively expanding it's more of like a exercise in I guess the legal side of things setting up entities being compliant within these countries to do

1:03:49 Lending sourcing the data from within these countries it might be harder to source the appropriate data you know in the US you have you have very good data very good banking infrastructure to source that if we can achieve that and if banks evolve in other countries to allow allow us to do the same type of lending with the same kind of metrics and attributes that we do in the US and I think that will happen in the next 5 to 10 years.

1:04:10 We're going to expand globally into different geographics. There's also like if you look at Zivoe as more an ETF for onchain private credit, we can expand into other aspects within private credit. So there's something like called the the merchant cash advance, the MCA industry which is is an alternative form of private credit more to like let's say businesses smaller size companies but it kind of falls within it's not like large corporate size maybe it's like somewhere between like I don't know five and 50k or something like that.

1:04:47 Hopefully I'm not talking out of my ass on those numbers, but we happen to know some people within that particular industry that have like I think over half a billion out on the street already and they're looking to sell off a portion of that portfolio and they're web 3 friendly and they understand what we're doing and they were like, "Yeah, let's tokenize this.

1:05:07 Let's sell it off and get some liquidity out of the portfolio." They want to do that a little bit, not a whole lot. So again, I think Zivoe presents a very strong portal to private credit on chain. The supply side is there and that's why our primary focus is on the demand side

1:05:24 And if we can solve that, we have both sides of the equation and we can scale up. So I I see us evolving into a ETF of onchain credit private credit of sorts.

1:05:36 Beautiful, man. And Thor, I guess any anything you want to add to that? any any other details for for the long-term vision of Zivoe?

1:05:44 No, I think John John nailed that pretty well. I mean, you know, if you look at like some of these traditional finance companies, right? Like, and I'm going to I'm I'm using them over and over again just because it's an example I know well, but like a company like Elevate Credit or Enova International, which started out with like unsecured consumer loans, and then they branched out into like auto loans and kind of tangental products, right?

1:06:04 Like that's a pretty normal life cycle because a lot of the like customer base you're touching, you know, are fairly sticky and are looking for some of these other products too. The one thing I would add to what what John kind of said too that I think you know is really interesting for instance like expanding outside of the US to some of these other markets like Brazil and stuff for instance is when you get into some of these markets it becomes possible to do like a direct to consumer loan origination from almost onchain and a manner that to me has always been like the holy grail like gets me like super jazzed because like you can just do a whole loan flow like from directly onchain from the protocol to an end consumer.

1:06:43 In some of these markets that's not necessarily possible in the United States. And so like that's another aspect that of like long-term where we're going to go that gets me really really excited. But I think John kind of nailed it on the on the head. So, you know, we're we're really happy with where we're at right now.

1:06:59 And I think, you know, we've got this new kind of DAP and UI coming out along with the new token. And you know, now as John said, the focus is really on kind of growing the demand. We've been out to market for a little bit, just kind of almost in like a pilot, just proving out that everything works, getting kind of lending up to scale, and now it's time to kind of put the pedal to the metal, so to speak.

1:07:17 Yeah. Yeah. And I mean like John said, you guys have such an opportunity on the supply side and it's also such a unique like diversified opportunity relative to everything else that's available in DeFi today that I mean it it almost seems inevitable that you guys just keep just keep shipping and just keep consistently showing the revenues and you know having good riskadjusted returns like to me it's almost inevitable.

1:07:39 Then I mean you go and you add an appropriate level of leverage on top of that. I think you know it's it's a it's a match made in heaven and really at that point it's only a matter of time. And I think this in particular you guys benefit from having the exact right team to do this because this is not a product which you want to invest into with a team that hasn't already learned all the lessons.

1:08:00 And there there are probably a handful of mistakes that you could make in this kind of a product. But you want to have the people who have already made those mistakes with somebody else's money like 10 years before. So, and it sounds like that's exactly what you guys have.

1:08:12 Yeah, 100%. I mean, it's it's kind of a beautiful marriage of, you know, the kind of DeFi side of this and the technical expertise that John and our development team brings to the table and, you know, the team that comes from TradFi and kind of has been, you know, lending for 20 plus years has. You know, to your point, you know, they made the mistakes 10 years ago.

1:08:32 And kind of know know the ins and outs of how to manage these portfolios in a way that is a huge bonus. I think I want to say this is a quote. I could be completely wrong, but I'm pretty sure it's a quote, but you know, a lot of I think you know, fintech companies a lot of times they have the technology component down really well, but they kind of overlook the finance component of it sometimes and like at the end of the day that is what is, you know, making money and so you need to have both pieces married together really well.

1:09:00 Yep. Absolutely, man. Well, I mean, first of all, you guys are in a really exciting spot right now. I think, you know, if we had done this maybe in a year from now, you'd probably already be scaling to those, you know, hundreds of millions and beyond. So, yeah, dude. I'm just excited for you guys and and what's to come.

1:09:16 Is there anything in particular we should push folks to? I mean, of course, we've got the zVLT vaults are going to be coming out probably around the same time when we release this episode, the UX overhaul. Anything else that that we should shout folks off to?

1:09:29 You know, I think those are the big things. Definitely check us out at, you know, zivoe.com. That's zivoe.com. You'll be able to kind of get to all of our different you know, socials from there, our documentation, which we have, you know, very detailed documentation kind of going over the whole system, how everything works, and yeah, definitely check out our new product launches coming up at the end of the month.

1:09:49 Excellent. All right. Well, of course, we'll we'll have Zivoe linked down below. Of course, we'll also share Thor and and John's profiles as well in case folks want to, you know, have any questions or anything like that if they're looking to check out the investment opportunities and in the vault and zVLT that's going to be dropping very soon.

1:10:09 You guys can check it out on the website down below. But yeah, I want to say first of all, John, Thor, thank you guys so much for taking the time to hop on. Thanks guys.

1:10:17 Thanks for having us. Owen, Brendan, it was fantastic.

1:10:20 Appreciate you guys having us.