Talk us through with an example kind of maple's operation as it relates to to the kind of unlock that it's giving to the world

yeah so the way our operation would work at maple is you know we we give you a significant improvement in speed so if you are an institutional borrower you have maybe you're an asset manager and you hold a bunch of bitcoin or eth you can come to us uh We'll give you a quote.

You sign the legal documents.

So we have full recourse loans.

But then you can keep your collateral in a qualified custodian.

So one of the big advantages we give you is that you don't have to lock your collateral in a smart contract where it's exposed to hack risk from North Korea or Oracle manipulation risk.

You can put it in Anchorage or BitGo or Zodiac or Coinbase custody.

Because there's kind of counters to that as well, isn't there? But if you think about how the banking system works, there should almost be this carry-on towards the people that actually hold that capital certainly with yields where they are that are now backing up stable coins for the most part do you think we're looking at a world where actually money inherently carries yields I guess there's a lot that goes into that

Can you give me, if we take a step back, Sid, and you just walk us through your typical client that you have on the borrower and lender side, and why are they coming to Maple Finance, and what are they looking for? And how could this be different from what people are doing in the tradify space?

So I'll start with the borrower side.

So a typical borrower for us could be a prime broker.

So this is a firm that does a lot of OTC trading.

They do settlements.

They run their own strategies.

They will borrow from us to extend margin or settlement finance to their clients.

Like how you see the next couple of years of this industry, or you think everything will need to be KYC'd, there'll be all compliance on every user, or we're going to say, you know what, it's purely DeFi on-chain and we need to relax how we look at some of these compliance requirements.

Uh, I would really love to hear you try to explain for our audience how this rules-based buyback program works for the Syrup token and, and what this governance proposal change does for the tokenomics here.

Yeah.

So we-- It's worth taking a step back and kind of looking back a few months ago.

So- A few months ago, we had a proposal that passed, which was we were gonna take twenty-five percent of revenues and allocate it to the Syrup Strategic Fund or SSF.

And there it could either be used for buybacks, or it could be held as stable coins or as Bitcoin or other liquid assets.

But it was gonna then benefit the growth of the protocol, help provide liquidity, and, and be this kind of strategic reserve.

Uh, the feedback we got was that token holders wanted to see more allocated towards buybacks, uh, as opposed to reinvesting in the growth of the protocol.

Um, but how does this shape the behavior, the decision-making of Maple? And just talk to me about how you think about Maple and its relationship to Syrup and, and how that drives a lot of the business practices at Maple Finance.

SOME OF YOUR THOUGHTS ON WHY THIS HAPPENED.

Yeah, it's a great question.

I think the market's a little bit spooked.

As you mentioned, they previously assumed that strategy would not be a seller of Bitcoin.

And I think the question is less around solvency and more people are treating it as a bit of a cash flow issue, and they're wondering whether this may trigger future sales of Bitcoin by strategy.

The key issue that came up for them is they have this preferred equity that requires them to pay around 1.7 billion a year in dividends.

Previously, they had around 2 billion in cash, so they were adequately covered there in dividend payments.

So how could MicroStrategy further benefit from institutional adoption?

i i said you know why aren't you you know taking loans he said i don't understand the risk he said it you know but now he's got strc all these things like isn't there couldn't he take 20 of it and

well i i actually think it would be a good idea for him i mean i know earlier on they had i i believe it was an svb loan facility you know when they're much smaller 200 million something like that now i think if you look at his capital structure the the the cost of capital on strc is is somewhere around the 10 mark So, you know, if you can borrow against your Bitcoin, you can get a cost of capital somewhere closer to the six percent mark.

So I think ideally that's going to be accretive to common equity in strategy.

So I would advise to do it.

And, you know, it can be a relatively conservative loan to value ratio, too.

So there is very minimal risk of him getting liquidated.

And even still today, we look at putting in triggers like.

Let me take this off and see what happens.

Yams,

yeah.

So what happened was over the weekend, so KelpDAO is a staking protocol.

So you put in ETH, it gets staked, you get an LST or a liquid staking token back that earns you yield.

But what happened over the weekend was that KelpDAO's bridge was compromised.

So there was an exploit there that enabled the hacker to mint, call it roughly an extra 20% of RSE.

So in effect, they were able to create more LSTs than the backing that KelpDAO had.

Before we move on from this topic, Sid, yeah, I mean, Maple obviously is deep in DeFi, right? So I guess directly can ask you, like, how did this affect you? How do you risk manage around this, you know, on the front line while this is happening over a weekend?

So how do you think about that decision? And I'm also curious if you have any thoughts on the strengths or weaknesses of the on-chain institutional market, both on Ethereum and Solana.

Yeah, it's a great question.

There is a lot to unpack.

I'm not technical, so I will do my best to kind of simplify for the audience.

But effectively, Maple deployed our key contracts.

So where we originate loans to institutional borrowers takes place on Ethereum.

And then, but this limited our reach.

It was

How much do you think some of those irresponsible credit activities in 2022, let's say, set us back as an industry? And was that purely a matter of individual actors making brash decisions and some accompanying contagion? Or how do you look back on that period and the mass fallout that we had?

Well, it definitely set us back, I'd say probably the rest of the duration of the Biden administration, right? So certainly at least two years, because it's only now that some of the players who initially had their own blockchain and on-chain project teams doing something, all those teams effectively got shuttered.

And I would say it's only now that we've kind of come through to the Trump administration where there is more of an appetite for the industry to be based in the U.S., that those teams are getting restarted or those people are getting rehired again.

So I'd say at least two years, but it's always very difficult to kind of run a Schrodinger's cat type scenario on the probability that didn't play out.

But to your other question, I hate it when somebody says, oh, well, the causes are multi-factor.

I think it was due in a large respect to individual bad actors, but what kind of creates...

the condition.

Was that for distribution or what inspired that?

Explain to me how I would say, all right, Maple is clearly a completely different structure here.

Yeah, for sure.

I'll try and point out the most salient points from my perspective as to how we're different.

And we indeed learned a lot of lessons from going through.

We were around in the 2022 cycle.

We survived and we tried to take as many lessons as possible about what we should change as well as just what not to do.

I think for folks who are listening at home who may not have been familiar with Celsius, what it was doing was it was taking in deposits, both retail and institutional, and it was ostensibly running a lending book and lending those out.

What would that do for the strategy for Maple to possibly make a US based product?

So let's talk about maybe the state of RWA and then we can dig more deeply into like specifically where you think we're going to see the real use cases.

Yeah.

Well, I think like you said, Scott, so super hot narrative early last year.

And really this kind of kicked off with, I mean, it was partly driven by things like Chokepoint 2.0.

So it pushed all the crypto companies out of the banking system.

So they had to find good savings products.

And the first real RWA product in that category to take off was tokenized T-bills.

I guess, like, do you expect this to happen? How much is the regulatory change, do you think, affected then RWA if we're going to start to see these products trading on the stock exchange and you don't need to necessarily go on chain for exposure to some of these things?