The Exchanges

Q What does your team look like to be able to do all of this in ways that other people can't?

A We're around 700 people strong. The majority of those folks are engineers that are working in building the Chainlink ecosystem. Where I sit is an unbelievable team of practitioners that have a ton of experience in capital markets. What has been missing In this space is that when you typically go to a technology vendor, they're going to be able to talk technology to you. If you go to a cloud provider, they may just say, well, here's how the cloud thing works. We hire people such as myself with strong backgrounds in these industry specific verticals that not only understand the technology, but understand the business. It's way more important when you're trying to work with traditional finance firms. It's like, yes, I know what a broker-dealer is. I know what post-trade settlement looks like. I know what an RFQ is. The wider you can get of taking the technology and simplify it into terms that a customer can, that's what we do better than anyone In the industry. If you come to us and you say, I want to build some very specific thing with a specific financial instrument governed by these regulatory and compliance rules, we have it covered because we have those experts in house.

AI assessment note: “We're around 700 people strong. The majority of those folks are engineers”

Q So Ryan, six years ago, you looked at what you were doing and said it felt inevitable that a lot of the pipes and a lot of the processing in the financial world needed to be on blockchain. How far along are we today in the institutions that are comfortable or secure and can move forward with the technology?

A If you would have told me six years ago the CEOs of all the major exchanges were saying we need to get on chain, I would say that is a dream. I was just at a conference. I believe the CEO of NASDAQ was up there talking about getting on chain. So from a comfort level, we're there. From a execution level, we still have a ways to go. People think Oh, you just mint a token on a blockchain. Nah. These are the problems that we're solving. You need to think about how to connect that asset to existing standards and systems. What are the venues in which those tokens are listed at? How do those venues match orders and send post-trade settlement instructions to a blockchain? The simplest thing of delivery versus payment. Devil's in the details, but we're only three hundred billion in stablecoins. We've dealt with problems around how do I coordinate an on-chain asset with a traditional payment leg? We've solved these problems. It's tracking the payment, holding the token in escrow, sending a message back to the escrow, and then releasing the asset. There's a good example. Corporate actions. If you have an equity and it's minted across 15 different blockchains, keep in mind, blockchains don't understand time. None of them are on the same page as far as it's 2:40 p.m. Eastern Standard Time right now. All they understand is how they're programmed and they give strong guarantees about how they…

AI assessment note: “So from a comfort level, we're there. From a execution level, we still have”

Q What's the role that Chainlink plays in the ecosystem?

A If you think of blockchains as factories and data as oil, you need to get the oil to the factory in a highly secure, reliable, compliant way. We're the pipes that carry that oil. Now, there's not just one factory. There's multiple factories. This is something I learned firsthand at Vanguard. But without reliable data onto a blockchain, you can't build an application. That's the fundamental problem that Chainlink solved. Now, the problem we first solved is that blockchains are like walled gardens. They're very good at creating tokens, validating tokens, validating that Ted owns those tokens and Ryan exists and validates that transaction occurred through consensus. But for you and I, Ted, to build anything of value outside of creating tokens and moving tokens, you need to bring reliable data into that blockchain system in a decentralized way. Because if we just relied on a single API, that API could fall over, and the application that you and I have built is essentially useless. Steve Jobs says the computer is like the bicycle for the mine. DeFi is like the financial bicycle for the folks that majored in finance, understand computers. It's completely open and permissionless ideation and deployment. What we've been able to see is providing the developers that have these ideas, giving them the trusted, reliable data to build those applications has proved to be another type of parad…

AI assessment note: “We're the pipes that carry that oil.”

Q If you think about a pipe transporting oil, what makes it technologically difficult for you to be able to do that in a way that others couldn't?

A A lot of the documentation of these specific blockchains isn't easily consumed from your average developer. There's a tremendous amount of research and development that has to go in to how that system works. Each blockchain has features that are specific to that blockchain. There are different types of protocols and languages that each blockchain uses. There's the world of Ethereum, which has their version of the computer, the Ethereum virtual machine. There's, for instance, Solana, who has their version of the world, and the Solana virtual machine, EVM, SVM, And then there's a lot of emerging blockchain technologies like Canton, for instance, that uses a completely different type of technology. Those are three blockchains, just as a simple example. Learn about all the complexities in a reliable way, how all this idiosyncratic risks and understandings of how all of those systems works. It's a valuable thing that We provide these essentially middleware services to ensure that that pipe is always going to work. There's a coordination within our middleware that is decentralized. To be clear, Chainlink doesn't run the software itself. We have tier one teams that run the nodes of the technology. Such as T-Systems, Deutsche Telekom, companies that are very good at running infrastructure If you chose the redundancy and the value proposition of that system, the moment you decide to pic…

AI assessment note: “There's a tremendous amount of research and development that has to go in”

Q When you're providing what sounds like effectively mission critical service in getting the data onto the blockchains back and forth, what are the other alternatives that someone can go to that a blockchain that needs to get access to data that a bank who's trying to figure out how you communicate with all these different blockchains? What does that competitive landscape look like for you?

A The question would depend on how many blockchains you want to integrate your services into. If some folks want to do crawl, walk, run, and you just want to start internally with your own private blockchain in a nice controlled environment, you can build those services yourself because There aren't threat actors. It's all under your own walled garden. There's basic tools that you can use to get up and running there. But if you're building a full bore commercial, you have a P&L, you almost have to have multi-chain integrations. Your application can't just sit on one specific blockchain. If you're an asset manager and you want AOM and your customer base is users with wallets that have stable coins, you're going to need a multi-chain strategy. We do have competitors at a specific type of service, but we do not have competition as a general platform that does all of these things like compliance, orchestration, data, interoperability. No one else can deliver all of those products at scale with the level of security and reliability and track record that we've had. We take our time, we ensure that things are highly, highly secure and reliable, and when folks really want to work at scale, we'll build it together.

AI assessment note: “We do have competitors at a specific type of service, but we do not have competition”

Q What was your first paid job, and what'd you learn from it?

A Country Club. I was always into golf. When Tiger Woods came back and won the Masters, I think it was 2009. That is the most incredible thing I've ever seen in sports at the time. So I gravitated towards golf. My dad was an engineer, and my mom was secretary. Mom's the nicest person in the world. Dad was nerd engineer. When you work at a country club, you get exposure to entrepreneurs. And I'm from a small town. All you do is talk to entrepreneurs. How you utilize those conversations is extremely important. I was the bag club person. It's like, Brian, go get my clubs, put them on a golf cart. I'm going out to play nine as they park their Porsche somewhere. But I used it as extracting as much information as I could from these people. What made you successful? How do you tick? And through osmosis. Of just being around all of these people. There's a saying of, to play better golf, you just play with better golfers. It had a profound impact on me just because of, you interact with successful people, it changes you, just like Chapman. So I'm not the same person I was four years ago, working with all talented people here.

AI assessment note: “Country Club... I was the bag club person... used it as extracting as much information”

Q What are some of the other ways you've seen traditional finance players in the ecosystem adopting some of the blockchain technologies?

A If you look through history, there was paper. There was open outcry. Let me take my paper into this pit of brokers and have them fight. Then when there was a trade, someone would write it down and then take it to the transfer agent who would rip up the piece of paper and then create. Ted just sold some stock to Ryan. As a nerd of market history, that essentially blew the system up in 1969, known as the paper crisis. They had to shut the stock exchange down because they couldn't handle all the volumes of the stock trading at the time. If you look at what happened in the sixties and ultimately into the seventies, technology took off. NASDAQ was launched, I believe, in. 1974, 1975. The paradigm shift from paper and open outcry was then upgraded to Bash-based database technology. Mainframe technology in 1975. Hasn't changed since then. When you own a stock, it's like you're owning some database entry that's very static. A lot of these firms are asking the question about how do I upgrade that system? Because it's time for a technology upgrade. Smart contracts and tokenization If you think about what tokenization means, it means you're representing almost a legal claim in equity or fixed income into software, which is a smart contract owned by the issuer of that asset. We've now have this paradigm shift of it's not just the database entry. That has Ryan owns a hundred shares of XYZ. …

AI assessment note: “Smart contracts and tokenization If you think about what tokenization means, it means you're representing”

Q As in the last couple of years, AI has exploded, a lot of the crypto blockchain Buzz has quieted down. I'd love to hear what's been happening behind the scenes. 27 trillion dollars, that's a large number. So what are you seeing that you're able to power that have taken off the last couple of years?

A If we zoom out to talk about AI and blockchains, they're very complimentary. You have to look at the origin story of both. AI comes from academia, big tech, going back to the big data story. Everyone's been through their big data moment. I went to AWS. I have this giant snowflake database. AI comes from a different spot than this technology. This technology didn't come from academia. In fact, a lot of academia didn't have very positive things to say. About this technology. It certainly didn't come from big tech. However, you're starting to see the light. When I see that AI is taking a lot of the mindshare, AI is good at cheaply producing outputs that's hard to verify. It's a bit of a black box, isn't it? We're going down this path of it's becoming very cheap to impersonate people through video and audio. It's becoming very cheap to listen to this podcast and get a transcript, maybe redo it and say, Ryan said that. We're headed into this path of there's an overabundance of information that is not quality. It's hard to tell what the truth is. If you look at the foundational value proposition of blockchains, it is a single source of truth. It is a unified golden record. I often say if you ask seven different countries what the color of the sky is, you may get seven different answers. But if you ask them, what is the state of a fully decentralized blockchain? There's no rebuttal. I…

AI assessment note: “If we zoom out to talk about AI and blockchains, they're very complimentary.”