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Demystifying the conversations we're already here at RRE and with our portfolio companies. In each episode, your hosts, Will Porteous, Raju Rishi, and Jason Black will dive deeply into topics that are shaping the future, from satellite technology to digital health, to venture investing, and much more.
Raju: Yeah, yeah, yeah. So, I’m going to say Rajucoin. It’s coming soon. It’s coming soon. I mean, it’s going to—I don’t know. I feel like, I feel like it should be coming soon [laugh].
Vishal: Yes, Rajucoin: dollar sign R-A-J-U—is not something I’m launching, but I’m sure I’ll list it.
Raju: Yeah. Yeah, yeah, yeah. I think so. I mean, the J should be backwards or something, you know what I mean? Like, make the J backwards, or upside down.
Raju: I'm Raju Rishi.
Will: And I'm Will Porteous. Welcome to RRE POV the show in which we record the conversations we’re already having amongst ourselves, our entrepreneurs, and industry leaders for you to listen in on.
Raju: Hey listeners, this is Raja Rishi, co-hosting with my partner, Will Porteous. And today we’re joined by a long time friend and finance crypto guru, Vishal Gupta. I’ll give you a quick—well, actually, a super quick, synopsis regarding his background. We might be here for several hours if I gave you the full thing. We have a lot of joint activities together, which probably we’re not allowed to talk about anywhere. I think it’s against the law [laugh]. Anyway.
So, after graduating RPI in 2002, Vishal started his work stint at this super innovative, brilliant startup called Rave Wireless, started by none other than yours truly. So, a little bit. Okay, anyway. From there, it’s kind of all downhill. He went to this multi-year executive roles at Goldman Sachs, Goldman Trading, MoneyLion, Circle slash USDC, and finally, Coinbase, where he was the head of the exchange.
And about a year ago, he left Coinbase to start a new company called TrueX. And when Vishal told me he was leaving Coinbase, I kind of hesitated for about 30 seconds before agreeing to co-lead the round with Reciprocal Ventures, but there’s no way I would not invest in this guy. So anyway, we’re here, and—
Vishal: Yeah, you were the easiest yes, let’s put that way, on my side.
Will: [laugh].
Vishal: I was like, if Raju says he wants in, he’s in. Yeah.
Raju: [laugh]. I get the luxury of doing that.
Will: [Upgrade 00:02:10]—
Raju: I think you got, like, eight [unintelligible 00:02:11]. I don’t even know how many you’ve got [laugh].
Vishal: Yeah, a little more. Yeah.
Raju: It was crazy. Yeah, it’s some of the luxury of having known you for a long time. So, I’m appreciative. Anyway. So, some terrific financial services companies in your work experience. Can we just start by talking about the impetus to jump from traditional finance into crypto? You know, kind of why did you make that move, many years ago?
Vishal: Yeah, no, absolutely. And just want to thank the team. Thank you so much for inviting me on this podcast. I think it’s going to be a lot of fun, and I just love any chance to, like, talk to Raju and team is great for me. I know Raju and I talked hours and hours and hours, and this is just a chance for us to do it on camera, and I appreciate the time. Thank you.
Will: Well, you got to leave us with some Raju stories before you wrap up.
Raju: [laugh]. Okay, okay—
Vishal: Ohhh. I’ll try to pull something together, but he’s been a great mentor throughout the years, and that’s something he wouldn’t say out loud, and I really have had a great deal of value in our relationship, and I appreciate it. Thank you so much.
Raju: Oh man, I appreciate it as well.
Vishal: [laugh]. I spent probably a total of 15 years in, like, traditional finance—or TradFi—everything from helping build one of the first real ATSs at Goldman called Sigma X, and kind of being a part of that team, and just, like, learning about the markets, and internalization, and a bunch of things that were happening, like, you know, a lot of really interesting stories came out of that timeline where the markets were taking the excess capacity that we had built for what we thought was internet 1.0, and kind of position it towards, like, high frequency trading, and, like, the ability to, like, use that bandwidth in the markets, really, was interesting. I joined Goldman at 2003, as you mentioned. This is pre-Facebook launching. This is pre everything.
Like, this is a time where there was capacity, and Wall Street decided to use it to innovate the markets, and to kind of like be there for that first, like, real, like, innovation cycle, where we took things from dot matrix, and take things from actual paper tickets to electronic markets, so it was really interesting. And again, I was 21 years old, and, like, a computer engineer straight out of the… RPI. Like, you know, I saw everything as, like, an opportunity to innovate, and it was a really great time to be in traditional finance and, like, take those markets from old school and, kind of bring them to the forefront of technology. And seeing, like, the first wave of innovative technology in TradFi was really interesting.
So, I was able to touch equities, futures, FX, and ended up running the options business there, and I’ve learned a lot. You know, I helped build out trading UIs. I think I have a patent for trade UIs from Goldman still active. I would push pixels, and tell people, like, how the trading UI should look. And, you know, I was using some of my Photoshop skills to kind of—we didn’t have designers in house at a bank; I was just—we were trying to do this, really, in house.
I learned so much there, so quickly. One of the key benefits of working at a place like Goldman is that you are working with top-tier people. You’d walk in a room, and you’d be like, “Well, these are the best people in their own industry,” so I’m learning from the best. And this is also when I met my co-founder, Patrick, 17 years ago. I hired him straight out of Rutgers, straight out of school, to join my team, and he ended up becoming my, like, CTO for life. He’s a much better technologist than I’ll ever be, but together, we really are like left brain/right brain to these markets.
And so, as we, kind of, saw the S curve of the innovation that we saw in TradFi, I started asking myself the question of, are we still innovating? And the reality is, faster was no longer innovation. You know, just trading faster, trading, trading, like, faster and faster, wasn’t what I would consider to be innovative. And there were very few seats in this world. You kind of have to work in a bank, or you have to work at, like, a big-time broker, to just kind of waiting for very senior people to retire to get a better seat.
And I had already, essentially, taken this options business at Goldman, which was very small, and made it relatively large, and I didn’t know where else to go. I didn’t necessarily want to go to another bank. You know, we ended up launching a similar business at a market maker called Volant Trading. And that was interesting, and it held my interest for a little while, and we took something from zero to one, and I learned a lot about taking something from zero to one, and being outside of the branding of a Goldman Sachs desk, and trying to really launch a business, but honestly, like, the innovation in TradFi—this is back in 2015-ish—I hadn’t felt like we were innovating anymore, and I wasn’t waiting around for someone else’s seat anymore. And I was the ripe age of about 32 years old, and I’m like, I’m young and old, and old and young, and I need to go faster.
And I was tired of seeing all my—you know, my friends innovating at these amazing technology companies. You know, like I said, Facebook hadn’t even launched when I started at Goldman. But to see all the innovation happening on the West Coast felt like I was doing the wrong thing at the wrong time. This is at the emergence of FinTech and kind of the unbundling of the banking sector, and just being able to join a team like MoneyLion, and finding opportunity to offer everything from lending to investing to clients that may not have those opportunities seemed really interesting to me. And then further, as I kind of dug myself deeper into the world of crypto, and was trading it as a personal investment, and kind of just understanding what the opportunities held with Bitcoin, Ethereum, and others, I felt like, if I had to pick a perfect combination of technology and finance, where would I go? Crypto made a lot of sense.
And honestly, I think one of my best friends, Dave, who, you know, he’s a great entrepreneur, and [unintelligible 00:08:09] Shark Tank interview he did last year, which was great, and he got some investment from [unintelligible 00:08:14], but he was one of my peers that would ask me over and over again, like, “Well, why are you in crypto?” And at some point, I knew I could make a dent in that world. And I do think that FinTech and crypto sit in a world that look like Venn diagrams right now, but I think in the future, we’ll speak of them as one and the same. And finance and technology are one of the same as well. And I do think crypto is the next generation of what finance will be, and I’m sure we’ll talk more about that.
Raju: That’s super interesting. So really, the impetus here was an innovation layer, right? You just kind of had done all the things that could be done in FinTech. I mean, you’re obviously incrementally innovating there all the time, you know? It’s just a little bit faster, a little bit cleaner, a little bit less unbundled, I guess, or, you know, bundling, and re-bundling, and unbundling that happens [laugh] all the time in FinTech. But yeah, so it seems like that’s an innovation layer that kind of interested you.
Vishal: There [unintelligible 00:09:12] stuff that we see. Like, we see these innovation curves, like, change very quickly, and I do think there’s more innovation in TradFi still; I just kind of felt we hit an S curve, like, the top of the mature markets that I was in. So, I felt like it was a time to switch gears.
Raju: That’s awesome. That’s good to know, and we appreciate you having made that leap, frankly, because we wouldn’t be on this podcast. I’d still be friends with you, but you know you’d be telling me boring stories as opposed to fun stories that you’re going to tell me now. So [laugh]—
Vishal: [laugh]. Of course, yeah.
Raju: So, let’s jump to USDC and Circle. You know, I understand you led the development and launch of USDC inside of Circle. Can you give us some insights into that decision—and maybe some of the challenges that, you know, existed at the time, either in the industry, or in the company, or, you know, however you want to describe it—because it’s probably one of the most powerful stablecoins out there right now. So, you know, kudos to having done that, but you know, just a little bit of history around that would be great.
Vishal: Yeah, absolutely. And I should be clear, like, you know, when I joined, they had the token ready to go. It had not launched yet. Center wasn’t fully formed, and Center is essentially the external company to allow for a multi-issuer stablecoin to launch. I don’t think that we had the story down to why USDC would be better than any of the other stablecoins that were launching in a post-Tether world.
And so, this is a time where TrueUSD was launching, GUSD was launching, there was all these other stablecoins that had launched before USDC, and we still didn’t have, really, kind of the story as to why USDC makes sense. And Coinbase hadn’t joined yet as an issuer, so it wasn’t even truly multi-issuer. And I do think that Jeremy and team had created an opportunity for this product to stand out and just to tell the story correctly, allowed us, kind of, to be a different stablecoin in a world where there were a lot of lookalikes. And let me zoom out a little bit. Like, people would ask me a lot, like, “How do we peg a stablecoin to the dollar,” is the question I would always get. And then I would say, “We do none of that. That is not the job of a stablecoin issuer.”
The market has an underlying belief that there’s a dollar back there, whether it’s, like, a third-party attestation or anything that would say, “Hey, there’s a bank account with actual dollars back there that we can attest to,” and then you add any utility. Hey, there’s a lot—like this—USDC is a lot better than a paper dollar for many reasons, right? So, you can send it electronically, you could AirDrop, you know, interest, electronic dollar has a lot of benefits to it. But then there’s also a potential for risk, right? So, there’s risk of blacklisting, there’s risk of a regulator coming in and saying something, there’s a risk that they won’t let you redeem the assets.
So, a lot of the stablecoins at one point had this problem where you could mint ten million of XYZ USD stablecoin, but the moment that you tried to burn it and take the stablecoin from stable back to dollar, they would kind of pause you, or they would stop you. Now, if I said, “I’m going to give you $10 on Venmo, but you can’t cash it out till Thursday,” it’s no longer worth a dollar right—it’s—or the dollars. It’s worth less because of the time value. So, the one thing that we said to the market as USDC is, number one, we’re not going to stop you from burning this thing, right? So, come and burn it as quickly as possible; we’ll do it as quickly as possible.
Number two, it’s not just us that’s an issuer, it’s Coinbase that’s also an issuer. So, if for some reason, Circle has the door closed, you can always go to Coinbase to burn the dollar effortlessly. Now three, the third thing that we did, or I guess the thing that we did really well, was that we were the first to integrate with Silvergate, and the SEN network. So, it allowed us to create USDC from the dollar very quickly, in the order of seconds, but more importantly, to burn it was even quicker. So, we minimized the risk associated with the stablecoin. Again, we were the last to launch, but we were able to show the market that the risks associated with USDC were much different than other denominated US-dollar-backed stablecoins.
Raju: That’s super interesting. And [unintelligible 00:13:26], a lot of them have kind of fallen away. I mean, we see it with Tether and all of this. Why is there such a belief around USDC, even today, that kind of prevents a lot of the machinations that happen with some of the other coins, stablecoins?
Vishal: Yeah, I think that we’re all seeing natural evolutions in the crypto market. Every bull market, you find something new, you find something that works. I think Tether actually is a really strong stablecoin ex-US. It’s a US denominated, non-US domiciled stablecoin that we would consider fully backed at this point. I think that they’ve done a lot to, kind of, make sure that they are a fully-backed stablecoin, so I won’t talk any trash about Tether. I think they’ve done a really good job ex-US.
I think that in terms of US dollar-denominated, US-domiciled stablecoins, it’s clear that USDC is the winner, but that doesn’t mean that it’s the final form, either. You know, you see players like PayPal, which is obviously a huge operator in both finance and fintech, and crypto now, launching PYUSD, not only on Ethereum, but Solana as well. So, they are being very front-footed as well. And I do think we’ll see natural evolutions of this market. I see Paxos as a player in the space that obviously enables PYUSD and other stablecoins, and there’s many different market models here.
And I don’t think we’ve seen the final evolution. I do think we’ll see core innovation in the space. I do think players like ourselves will become core infrastructure for stablecoin settlement, and you can s—there’s a—a Trojan horse of everything we’re building is essentially a clearing house for stablecoins multichain. And this would be not only in the US, but globally. So, we—and we’ll talk a little bit more about what we’re building—but we believe that stablecoins need to be at the center of everything we do.
Raju: Super interesting. Well, I’m glad we had that discussion. Let’s jump to Coinbase real quick before we get into, you know, kind of what you’re doing today. And you know, I really want to spend some cycles on that, but Coinbase is, kind of, one of the most recognized names in crypto, and easy to understand why they would want you and why you would want to join. Can you talk just a little bit about, you know, your responsibilities and achievements at Coinbase before we jump into True?
Vishal: Yeah, absolutely. So, I was really happy to join the Coinbase team. I think the leadership team is really unmatched in both crypto and fintech, in technology worlds in general. I think Brian Armstrong is a great leader, and I was really happy to be under the exec team there. You know, when I joined the exchange, I would joke it would, you know, fall over every Thursday, and would only trade 20 assets.
And the reality is, Pat—and Patrick was one of my first employees there—infrastructure development was really, kind of, our core focus in the beginning. Taking the existing exchange that was launched in 2014, really only know—like, with the assumptions that it will only trade US dollar against Bitcoin, and, we had to evolve it in many ways. We had a 10x and 100x it in many ways. So, we were able to take the infrastructure and scale it. With that, we went from 20 assets to 235 assets.
And I helped focus the team around asset edition and really do that, and I think that was an important part of, you know, Brian’s Amazon of assets kind of strategy, of really allowing—you know, don’t pick the winners or the losers, allow the market to pick it. And I think that that was a really—both Brian and [unintelligible 00:16:49] officer, that was their strategy. And I think that, you know, I was meant to execute on that, and I did. We took it from 20 assets to 235 assets.
But further, we also realized that the crypto markets and the crypto traders out there really need access to leverage, and in the United States internationally, we deal with that differently. So, I was, again, as essentially the CEO of the exchange business, I was tasked with acquiring a company that had the right licensing in the United States. So, the right licensing in the United States is a kind of an alphabet soup of DCM, DCO, FCMs. These are CFTC regulated entities that act as a broker, act as an exchange, act as a clearing agent. Like, we needed to fill all of this stuff before I joined Coinbase.
We had no ideas what a derivative was, and by the time I left, we had launched two derivative exchanges. So, we had acquired a company called FairX, which had the DCM. Within a couple months, we launched a Coinbase derivative exchange that runs right now. So, you can trade Bitcoin, Ethereum, Doge, futures in the United States, including New York, which is amazing. And if you think about how far we came, that’s amazing.
But moreover, that infrastructure that we were able to pull from the FairX team, which is, like, an amazing infrastructure, and the team itself was very, very good, and some of the people I’ve known in my past, we were very happy to take them, take that infrastructure, and from spec to trading, we were able to launch an international exchange that was trading perpetual futures, leveraging a Bermuda entity. And that was like, that’s essentially finance’s bread and butter, right? So, some of the coolest calls I had were, like, explaining the in-and-outs of the markets, obviously, not only that Brian Armstrong, who owns it, understands it very well, but, like, Marc Andreessen, Fred Wilson, even explaining that leverage is really important in the crypto market. And because we were 75% of the US spot market, but the US spot market only made up 4% of the entire, like, crypto trading world now—which, it used to be twenty-five percent—we essentially were the biggest dog in the smallest pond. And what we wanted to do by launching an international exchange, is we wanted to open up the gates to the other 96% of the market, and really just leverage the technology that we already had, and the know-how that we already had.
And this is a testament to the team. We were able to launch that business without hiring any new people, and we were able to maintain profitability all the way through. And we launched the perpetual futures exchange in six months. And this was before FTX blew up, and we were able to, like, really show strength into a world post-FTX.
Raju: It’s amazing. Well, did a lot there. So, we’re going to get to today, now. So, you left Coinbase [laugh]—
Will: Yeah, I did.
Raju: And you’ve been working on TrueX in stealth for past year, which… you know, I’ve been there with you, and I love what we’re doing, and it’s just launched. First question is, like, why leave the best established crypto player in the world to start this? And the second question is, what is it [laugh]?
Vishal: Yeah, that’s a good question. So, first I’d say, you know, I was really proud of the accomplishments that we had at Coinbase. And I think we took our market share from what I call US-enabled markets—which are essentially any market that was enabled in the United States—we went from, like, 35% to 70% of the market. And some of our guardrails that we had as Coinbase was, number one, maintain profitability even in a bear market—so this is just for the exchange business. This is for, like, direct connectivity traders; this is not the retail business—number one, stay profitable in a bear or bull market.
Number two, get your market share above 50%. You have to be at least 50% of the market. You have to be the biggest animal in the room. Number three, you don’t want to be more than 70% of the market, either. You don’t want to be monopolistic. A good part of our business was to be a broker. The Coinbase Prime business is meant to be multi-venue.
You know, I think it’s really important to offer that broker-level experience where they will give you a white-glove service that offers leverage, and also offers you execution to all the great venues out there. And that’s one of their core businesses, so we were able to raise rates, and we were able to be not only the largest exchange out there, but also maintain our margins. And at some point, I had out-competed myself, and I didn’t know where else to go. I had come in with, you know, five things I told Brian—
Raju: [laugh].
Will: I wanted to do, and I’d done four-and-a-half of them, I’d say. The one thing I didn’t really do is in the securities world, and we can talk about that someday. But I had done everything I wanted to do, and I was kind of architecting what I thought the next five things would be, and some part of me said—you know, [unintelligible 00:21:28] me since I was 21—this would be the best time for me to, in a post-FTX world, to kind of see if I could do them on my own. And I have always had that entrepreneurial bug. This is my first venture-backed business, but I have started businesses from scratch.
And the next five things kind of led me to this is my manifesto of things I want to do at TrueX, or, more importantly, [the top co 00:21:50], called True Markets, for many reasons. So, maybe now I can talk about what we’re building. And I think it’s important to understand the naming. We call it True Markets because I do think that there’s, like, truth to markets, right? And, you know, what is the True Market? If you talk to a trader, people talk about NFT floors. Like, “Oh, that’s a floor of the NFT.”
Or maybe I own a property in New York, and I’ll be like, “Oh, it’s worth 2 million bucks. I’m going to sell it for $2 million.” Like, the True Market is actually what both buyer and sellers agree to as the market. And that is—like, the value of the True Market is actually that. You see people using that today, like, with prediction markets outpacing polls on the political side of things, you know? People are quoting [unintelligible 00:22:30] market, they’re not necessarily quoting the polls anymore because the more real-time things you see are actually on the markets.
That’s what we named it True Markets. And TrueX itself being our first product is what we think the next evolution of markets will be. Now, in every bull-bear market or bust that we see in crypto, we see some evolution of the markets. You know, we saw crypto-to-crypto trading with exchanges like Poloniex. We saw fiat-to-crypto exchanges like Coinbase show up quickly after, once we could get bank rails.
Then you saw perpetual futures launch with Bitmax. So, you saw BTC futures trading with BTC collateral. That created, like, a little bit of a risk problem, where your collateral is being reduced as Bitcoin goes down, and you’re seeing people get liquidated more often than not. So, one of the key innovations of a player like FTX was like, let’s use stablecoins for collateral, right? And they did a really good job of unifying stablecoins to say, “Hey, you can come in with TrueUSD, GUSD, USDC, and we’ll use it as collateral as USD.” Now, they had an ability to, like, manage the inventory, and—you know because they had a market maker internally.
Raju: When you say, “Manage the inventory,” that’s, like, a, you know—
Vishal: Trying to, I’m using a lot of quotes here.
Raju: —euphemism for something there [laugh]. But, yeah, we don’t go get into that. But yeah, it’s a good explanation.
Vishal: Well, I’d say that there’s better ways to do that, is the way that I would say it. Like, we do not have a market maker internally, so we can’t do it the way that FTX does it. So, there’s these natural evolutions, these markets that we see. And in a post-FTX world where we saw a blow up, we see a couple things that we need to build correctly. We see a couple big restarts here. And the reality is, like, I’d love to do it at a place like Coinbase, but why not try it on my own? Like I said, I’m an entrepreneur at heart, and when I see an evolution like this, I want to jump in.
Raju: Yeah, but there was another reason, right, Vishal? Like, part of the logic here is that Coinbase is got a legacy business, and they hold custody, and they’ve got a lot of other things here. So—
Vishal: Exactly.
Raju: —I know kind of the logic that went into it because you and I talked about it, and it’s fascinating, actually. You wanted to do it in a way that was really sort of true democratization, and with no sort of, like, potential litigat—risk associated with regulatory.
Vishal: My gut is, that by regulator or by client request, you’ll not—need to see a separation of execution in custody. I think that the FTX blow-up showed us a lot of things, and the reality is, you need a qualified custodian like Paxos—who’s also an investor in us—to house your assets, so they sit over here. And we’re pure execution, and the only thing we do is we settle trades. And I think that that’s the first core differentiator that we have, right? So, that is actually really important.
Number two, we believe that stablecoins are a power that we need to leverage, right? So like, touching the banking rails every single time you want to settle a trade, just doesn’t make sense. The reality is, if you have something like a USDC or a PYUSD, you want to leverage the power of the stablecoins. And there’s a lot of powers to the stablecoins. One of the key ones is that they can officially manage the dollars that sit behind the stables to make sure you’re getting the highest yield on the assets as possible.
So, in these fully-backed fully-US-dollar-denominated stablecoins, these things can be sitting in long duration vehicles, and you can be getting a good deal of interest back as an issuer or potentially as a client. So, we want to power these things using these efficient vehicles, and you don’t have to touch the bank rails every time you want to settle a trade. So, leveraging this is important, but also unifying it. So, we use a mechanism that allows us to default a stablecoin, and I think, like, hopefully, by the time this is out, we’ll have that public, but we will be leveraging a very powerful stablecoin as our default stablecoin, but a client can come in with any of the stable assets, and we’ll manage the trades all the way through. So, we do it in a much better way than FTX did.
So, there’s these key aspects—and kind of, the third aspect is this whole idea of self-custody. So, there’s a question as to how much of the execution-, the order routing, execution, and settlement should be going on in the chain or not. And you know, we have two big L1s on our cap table, Solana and Aptos, and the reality is, we do believe that the future is on chain. Now, there’s a bunch of different ways you can do this, though. The way we’re doing it is we’re really focusing on settling the assets, or allowing for settlement to happen on chain first.
So, if you’re a client, you can send an order to us, to our protocols, and we will allow you to settle that trade on-chain. So, you can even settle it to a qualified custodian, or you can settle on- chain. It’s your choice. It’s kind of a post-trade decision. A lot of people think of centralized exchanges or decentralized exchanges as venue decisions. “Am I going to Coinbase or am I going to Uniswap?” We think of it as a post-trade settlement.
So, we’re going to make sure you get best or great execution, right? So, you want to make sure you get a good price, we want to manage your fees, which include gas fees, and we want to do all of that and then allow you to settle, either to a qualified custodian like Paxos, or your self-custody wallet. You shouldn’t have to worry about, did they get the right price? Am I getting slipped? Is there MEV? Is there something—am I doing something wrong?
We want to manage that for you, and that’s how we do it. Again, first, really nailing down separation of execution and custody, second, using stablecoin as the center of everything we do for settlement and collateral, and third, allowing for self-custody and post-trade settlement to your own wallet.
Raju: That’s awesome. And then, does speed matter here?
Vishal: It’s a really good question, really, really good question, and I would say one of the core strengths of what we built here is that we’ve built a TradFi-level throughput, and… like, high-throughput, low-latency matching engine from scratch. So, if you look at some of these other exchanges out there, a lot of them are taking things off the shelf. We are building this from scratch, and this is meant to be as faster or faster than anything you can find in any product class. Crypto traditionally has had really bad technology on matching engines, and I’m speaking as a guy who used to run one. And I’d say, if anything, starting from first principles and starting over allows you to re-innovate, and really build kind of best-of-breed here. And I do think throughput is very important, latency is also very important, but most importantly, when times are tough, is your exchange up or down? And the reality is, when you’re building on old technology, sometimes it’s hard, and it’s really refreshing to start from scratch.
Raju: Yeah. I’ve met Patrick, who’s your CTO and co-founder, and man, that guy’s impressive [laugh].
Vishal: Yeah, he’s great. One of these times, I’ll have to get him behind a mike. He’s the man behind machine, for sure. Yeah.
Raju: Yeah, he just, like. He’s like a wizard. He’s like Harry Potter. I mean, it’s just amazing.
Vishal: He is a six foot three Harry Potter, yes.
Will: So Vishal, if I could interject for a second, hearing you lay out the three crucial components of your strategy, from settlement to leveraging the power of stablecoins to self-custody, I’m curious, like, when you sort of crystallize what you’re going to compete on—and you just kind of, you know, stressed the importance of high throughput and low latency and resilience—when you think about what you’re going to compete on that’s going to allow you to really break through and pick up a lot of volume, particularly when there are really well-run platforms with a lot of resources. What are you going to compete on? What’s going to make the difference in the minds of players in the market?
Vishal: Some key facts here is that four exchanges make up 98% of the volume in the US-enabled markets, and the top exchange is Coinbase at 75% of that volume. So, you have the likes of Kraken, crypto.com, Bitstamp, kind of like racing for, you know, the also-rans. And the reality is, there hasn’t been a lot of innovation in that space. There hasn’t been—you would think that there was 400 exchanges out there, but in the US, it’s four, right?
And the reality is, there’s a lot of opportunity here. Number one, the systematic traders that make up what we would call market makers historically, we had a market maker program at Coinbase. The large amount of our taker volume actually came from the small cluster of [unintelligible 00:30:34]. And there’s a handful of market makers that would both provide liquidity and take liquidity. So, you should be catering to them, you should offer programs. And we have a liquidity program at TrueX that allows them to not only trade on our exchange, but own a part of the exchange, and compete for more equity on the exchange. So, that really gets a zero to one.
So, we have a liquidity program that they can tie to, and if you go to TrueX.co, and you go to our liquidity program, you can find out more. Anybody can code up to that. Any, like, if you’re two guy—your ex-[Tower 00:31:01], ex-Facebook or whatever, and you want to code up and own a piece of this, the future of crypto, you could do that, and the liquidity program offers that. And actually, it harkens back to, like, the old CBOE days where you’d buy seats at the exchange. It’s very similar to those ideas, right?
Will: [laugh]. Wow, that’s a hell of a historic parallel, and really an exciting way to enable the community around you. That’s cool.
Vishal: Yeah, and second and third, like, we see two things happening. We see brokers that, like, want to be the next Robin Hoods of the world, and maybe they are a PayPal or whatever, and they want to offer crypto, but they don’t want to necessarily own their own exchange, right? So, we make that really easy. And not only will we—so in traditional markets, they would pay to execute a trade. We’re offering a new market structure that allows them to get paid for this order flow.
So, then the next Robin Hoods of the world would not buy an exchange; they would just code up to us, and they would send all their flow to us. So, that’s really hard for us to do at a Coinbase, where they would naturally see us as a competitor, right? So, that didn’t work well at a large company like Coinbase, but we can offer that. And also, I think retail advanced traders, especially in the United States, have—they’ve kind of lost their homes here, right? So, FTX is no longer existing, Binance.US doesn’t really exist. Coinbase Pro doesn’t exist in the same format it used to exist as a bare metal, you know, straight-to-the-exchange opportunity. We offer that.
So, if you’re an individual, and you want to code VFX to our [exchange new 00:32:23] also, if you’re using advanced platforms, like, a 3Commas, or any of these, like, really advanced UIs, we’re building an app store that essentially allows these platforms to natively integrate with us. Whereas if you wanted to use, like, a traditional exchange, you would take their API keys, and just throw it into this third-party. And that creates a real security risk around your own platform, and we’ve seen hacks there. And this is not talked a lot outside of the crypto industry, but there’s a lot of hacks of that happening, and the only way to do that safely is to create, like, an app store with a handshake, and that those are things that we’re building.
Raju: Mmm, that’s super interesting. You know, the more you describe this, the more it’s like, you’re one of very few people that could potentially do this because of the worlds that you lived in [laugh], you know? Having been through Goldman and, you know, been through all of the different sort of traditional MoneyLion, Volant, you know, trading. It’s almost as if you had to have that experience to be able to do a real crypto exchange the right way.
Vishal: I think you’re right. I think the story arc is very clear, and especially starting with you Raju, as well. Like we built a lot, both Patrick and I built a lot of muscle memory from one business to the next, understanding retail wholesaling, understanding execution, understanding best execution, building order routers, all these things helped us build the future of what cryptos—and these are, we’re not talking out of thin air. People use USDC every day. People use Coinbase’s exchange every day. They trade the derivatives every day.
And these are key infrastructure pieces that we built, and now we were just taking all that muscle memory and just building what we think is the next evolution of markets. And this includes crypto, this includes derivatives, obviously, but also, like, we want to evolve all markets, prediction markets, securities markets, like, those are all up for grabs.
Raju: Yeah. I know I don’t want to jump too far ahead in your life, but I mean, at one point you talked to me about a real estate exchange.
Vishal: That’s true.
Raju: You know, you’re an exchange guy. Like—
Vishal: I’m a market structure nerd, yes.
Raju: You’re, like, a market—like, if I want to get rid of my Pokémon cards, I mean, I’m going to do it through your exchange, at one point in my life. And I have a crazy story about Pokémon cards, but another day; this is about you.
Vishal: [laugh]. I can make a market, yeah.
Raju: Can I shift gears a little? Do you want to say anything more about True Exchange or True Market?
Vishal: We’re really, really happy to be launching. You guys’ll see a lot coming out in terms of the comms, and our manifesto, and everything, so I’d love to hear from everybody listening to this.
Raju: Yeah, no, it’s going to be fantastic. I can’t wait for the launch, which I know has either already happened, because this is slightly pre-recorded or will be happening imminently. So, a couple personal questions, then. You know, so you’ve been in the crypto world, and we’ve heard some crazy stories about crypto, like, you know, FTX, and even, like, the origin days, early days. Anything that you’re comfortable enough sharing with our audience about the early days in crypto? You can leave names out or whatever, or you can say, “No.” But I know you’ve been a part of a lot of interesting, you know, dialogs.
Vishal: Oh, man, I really, I have some queued up stuff, but I, you know, it’s probably too close to the chest. I—
Raju: Yeah, yeah, yeah, okay.
Vishal: I mean, there’s some things I’d love to talk about. I mean, I would say I learned a lot about launching USDC. You know, I saw people launch exchanges, and I saw people do it the right way, and I saw people do it the wrong way. I was very competitive with our competitors, you know? I paid attention to every tick. I would have a bi-weekly with Brian and the exec team to talk about market share all the time.
I would tell you that it was hard to be considered a second exchange at some point, and I’m really glad that I got to help Coinbase and, kind of, help, kind of, rise it to the next level. It’s exciting to start from zero again, and I’ve seen exchanges start from zero and do it the wrong way, and I’m really excited to do it the right way. And I think that you really do need adults in the room and, like, I—bless my skin care routine or something—I am 44, and this is my 20-plus years in markets. And I’m not just some TradFi guy trying to trade crypto, and I’m not a crypto guy trying to pretend like I know markets. Like, I’ve done both, and I’m really excited to really get out there, and I do think the market needs what we’re building. And I think this is probably the most exciting time of my life.
Raju: Yeah, yeah, no, no, it’s definitely. And we’re going to get to your skincare routine in a second.
Vishal: [laugh].
Raju: So, you know this freaking guy. I mean, he’s not that much younger than me. It looks like he’s like, 25—
Vishal: Thanks, man.
Raju: —he’s dating, like, supermodels.
Vishal: It’s exactly [crosstalk 00:36:50].
Raju: —just I, I—
Vishal: All right, all right [laugh].
Raju: I literally told my wife, I was, like, best looking, perfectly fit Indian guy out there. And then this guy walks into dinner with my wife, and she’s like, wait a minute, you said you were the best looking, most fit Indian guy. And you know, anyway.
Vishal: I don’t know if you can tell with my skin color, but I’m blushing. But yeah, we’ll edit that out [laugh].
Raju: What’s your diet and workout regimen? Come on, lay it out there.
Vishal: Just focus, man. Just get it, get it done every morning. Let’s go.
Raju: Okay, fine. Like, we went to a taco place. We went to a Mexican restaurant, he’s eating, like, chicken, like, just no, no—
Vishal: [laugh].
Raju: Fajita bread, nothing.
Vishal: My trainer would tell you, I cheat plenty. So yes, yeah, that’s the thing.
Raju: Okay, fine. Fine. Just send me the pictures of the cheats because I don’t believe it [laugh]. Anyway—
Vishal: Yeah, exactly.
Raju: Okay. So, a rumor also has it that you’re an investor in local New York businesses, a couple here and there. So, which ones have you invested in? And what gets you excited enough to put money into a business—personal money—into a business?
Vishal: Yeah, so I’ll speak non-crypto for a second here. So, a couple of the ones that I’m really interested in, the ones that are, I think, are amazing. You know, I invested in Bird Dog Shorts. They’re kind of like a little tongue-in-cheek, you know, yoga slash pool slash gym shorts that, like, they have a kind of a brotastic marketing that’s great, and you know, they’ve done amazing there. And, you know, the CEO was an RPI grad as well, and you know, he’s a fraternity brother. And just, I don’t know, they’ve done really well. They’re also on Shark Tank. They did a great job.
I just thought it was a really interesting story. My buddy Dave also was at a Shark Tank. He’s a COO of a company that does head wraps for African American men and women. And just supporting my friends is always really important. He’s always supported me. They won a great investment by Mark Cuban a couple months back. And then a couple years back, I invested in, I think, the first US-based premium sake brewery called Brooklyn Kura.
Raju: I mean, how many years have we known each other, Vishal?
Vishal: I haven’t gotten you a bottle yet, I know. You know, I don’t drink, but I’ll drink a little sake every once in a while.
Raju: I know, but like, I literally, like—
Vishal: I owe you.
Raju: —I feel like I raised you [laugh].
Vishal: [laugh]. I owe you a sake and sushi dinner. I promise.
Raju: I know.
Will: Vishal, don’t fall for the guilt trip here, the paternal stuff [laugh].
Raju: [laugh].
Vishal: [laugh]. I do owe him something, though. So.
Raju: Oh, I don’t tell him I’m his father. Like, when people are out, I’m like, “Yeah, we’re brothers.” It’s just same age, man. Like we’re twins.
Vishal: Yes. Same age. Twins.
Raju: Twins. My hair is a little white, but still. Like, that just happens.
Vishal: No, you look great.
Raju: Okay [laugh]. So, of all the prior jobs you had, you know, which one was your favorite? And honestly, you know, you can say it was Rave Wireless when you worked for me and Rodger Desai.
Vishal: [laugh].
Raju: I mean, I’m not going to encourage anything here, but like, damn, that’s got to be a good job.
Vishal: I will say that, as much as I love my time at Goldman and Circle and Coinbase, the impact of, you know, having an internship and, just like, getting a chance with a bunch of entrepreneurs and—like, honestly, I was a guy right out of college, I cold-emailed Rodger, who happened to be a fraternity brother, many years out, and living in New York, and you guys—Raju, you know this—like, I was just doing whatever I could to help, and launch a company, and kind of seeing it from the outside in was nice. And you guys took a chance on me. And I’ve actually tried to pay it forward in my career. I’ve always been really keen to hire interns and, kind of, teach them the ropes. And even a Goldman, I had a whole lineage of interns that did really well and, like, they’ll remember, and hopefully they’ll watch this podcast and reach out. I think that you guys taught me to invest in the future, especially young blood brings a lot of energy, and I do appreciate that.
Raju: Oh man, you were great. You were great, like, honest to God. So—
Vishal: I’m hiring an intern right now, so if anybody wants to join the TrueX team, they want to sit side-by-side, I’d love to have you.
Raju: Oh, man. Hey listeners out there, if you’re interested in something, and you know, you want to learn from the best, this is a guy. This is a guy. All right, we have a section of this podcast called Gatling Gun, and it’s where I ask you, you know, weird questions—some weird, some cool, some interesting—and you just kind of like, one-word response, one-sentence response, you know, just whatever comes off. And, you know, best guess. You can be wrong. It doesn’t matter. So, I’m going to start that. So, what do you think the price of Bitcoin is going to be when the ball drops in Times Square this year? Or at the end of this year?
Vishal: Yeah, I think, as we speak today, it’s been touching 70k again. And I think 70k is, I think, the theoretical—like, it’s the most recent, like, limit to where we’ve been seeing. And I do think that with what appears to be a changing regime, regardless of if we have a Democrat or Republican in the House, I think the days of Gary Gensler are probably going to be short-lived. I do see an opening here, especially with the ETFs launching and things happening, I think we have an opening here for a surge up. And, you know, I’m rarely a person that will even say that, you know? I’m a markets guy. I think that there’s value and both markets moving up and down, but I think that there’s a lot of push.
And if you look at the kind of the political environment right now, crypto is actually, you know, front-and-center as a core piece of the puzzle. I mean, the largest PAC out there, the largest Super PAC out there, is a crypto Super PAC. And I do think that, with the election looming, I think people will be speaking about this. And as more people speak about it, you see more investors, and people asking the question of, like, should I be allocating more assets to something like Bitcoin, Ethereum, Solana, all the other core assets. And then you have the question, like, how long is it going to take till we see, like, a Solana ETF? How long is it going to take till we see BTC options on the future option on the ETF?
Like, the options world haven’t really been opened up in the United States. Like, as those things open up, that’s really interesting. You see people using prediction markets in the US as, like, explaining what’s happening, but you can’t trade them yet in the United States. Like, so as these things start to open up, I think that you see Bitcoin itself—if I had to pick a number, we’re at 85k.
Raju: Okay. 85k. And how about 2030? 2030 price?
Vishal: Whoa. 2030. I have to think on it. It would be a percentage of the gold market cap.
Raju: You’re thinking about this too analytically. You get to say some number [laugh].
Vishal: Yeah, no one’s going to look back at this. I’m going to say in 2030 it’s going to be worth a quarter of the market cap of gold. How’s that?
Raju: Wow, okay. Shit. All right, fine. I think I’ll buy some today.
Vishal: [crosstalk 00:43:26] math on it.
Raju: [laugh]. But okay, the year that an average person can use crypto to pay their restaurant tab?
Vishal: You know, it’s funny, we talk about store of value, we talk about transaction assets, and we talk about things like stablecoins. I don’t think it’s a—when I think about whether it’s Bitcoin or stablecoin, I think, like, those are all—like, I think that’s all crypto, and I think using crypto for transaction services will become more mainstream over time. I do think stablecoins are probably—if US government really had a future view on the dollar, they would say, “Let’s double down on the stablecoins. Let’s make sure that they can work freely, not only in the US, but also outside of the US. Let’s get that right, and transactions across the globe should be using US-dollar denominated stablecoins.”
Now, whether or not that’s going to happen is going to be a question, but I’ll tell you the truth, like, it’s not that crypto is getting better, it’s that we’re getting better at tapping our phones on things to pay for things. And at some point, if the [Quarter Mart 00:44:24] says, “Hey, it’s $5 cash or $6 using a credit card,” maybe he says it’s $5 using the stablecoin and all of a sudden, things start to tilt your way, and you have the ease-of-use of something like a credit card, but the underpinning could be a stablecoin or a crypto sitting underneath it. So, I think we’re getting there.
Raju: Yeah. So, pick a year. What year do you think your underpinning of your credit card, or you’ll just be able to say, hey, look, let me transfer 5 XYZ coins to your thing for your—
Vishal: I think you’ll start seeing it be, like, large digit number percentage of transactions in… by 2030. Like, five to ten percent.
Raju: 2030. Okay. Okay. What’s the most interesting slash important crypto coin that most people have never heard of?
Vishal: So, I actually refuse to answer this question because I think that’s part of my… part of my ethos, no part of my ethos, as being the guy who lists assets on an exchange and doesn’t trade them themselves. And I’d love for any other exchange-specific—I don’t trade crypto. I’ve been paid in Bitcoin, I’ve been—I own Ethereum, I’ve owned Solana in the past, but, like, the reality is—and I own these things as, like, I’ll get paid in them. I think it’s really important to have someone that says I am agnostic, and I am building the markets.
Raju: I love that answer.
Will: And so, I’m the guy that lists the assets, and at my time in Coinbase. I was not trading it, and I’m not an active trader. I do like having exposure to it, and it is a large percentage of my net worth, but like, I’m inherently long on this thing, and I own still a ton of coin-based stock as well.
Raju: Yeah, yeah, yeah. So, I’m going to say Rajucoin. It’s coming soon. It’s coming soon. I mean, it’s going to—I don’t know. I feel like, I feel like it should be coming soon [laugh].
Vishal: Yes, Rajucoin: dollar sign R-A-J-U—is not something I’m launching, but I’m sure I’ll list it.
Raju: Yeah. Yeah, yeah, yeah. I think so. I mean, the J should be backwards or something, you know what I mean? Like, make the J backwards, or upside down.
Vishal: Yeah.
Will: That’s the perfect answer for the guy who’s building the best platform for exchange and settlement in the market, right? And probably things will grow and surge on your platform that people aren’t talking about today, as people have gotten onto the opportunity, and particularly as you talk about people coding up and using it as a place because it’s so damn fast and amazing things can happen.
Vishal: Yep. And agnostic.
Raju: Yeah, I love that.
Will: And agnostic.
Vishal: We have to be agnostic. Yeah.
Raju: Do you own any NFTs?
Vishal: I do. Actually, it’s my time to plug one of my best friends here, and an investor in the company as well. He’s one of my favorite artists before we were friends, and he ended up painting Logic and Kid Cudi’s album covers. And he has a really interesting viewpoint on NFTs, and him and I have talked a lot about this before he ever launched anything. And he’s really kind of a world-builder, and he’s been building this world around this thing called Luci, which I love.
It’s essentially a story—I’m going to butcher it—but it’s about either a prehistoric or future world where pseudo-humans or apes rule the world. And he’s, like, a bunch of beautiful artwork. And if you bid on some of his Genesis artwork, he gifted you a NFT and those NFTs, I think one just transacted for 85 Eth, and there’s 49 of these skulls out there. And I happen to own one of them, and it was gifted from him, and I do cherish it. And with that skull, you have access to what they call the Council of Luci, where we actually meet, and we talk about how we can build this world out. And he is a true world-builder in the NFT space. So again, Sam Spratt, Luci Skulls, amazing. So, definitely worth googling if you don’t know him.
Raju: That’s cool. That’s really cool.
Vishal: And a happy investor in True Markets.
Raju: That’s awesome. Okay so, best money movie of all time? And I have some choices if you don’t know of any. I mean, Wolf of Wall Street, Big Short. You can go for them, if you want, but—
Vishal: Okay, so first I’ll say it’s really hard for me to watch, like, Wolf of Wall Street and these, like, Wall Street-focused, even, like, you know, any TV show based on, it’s like a doctor watching ER. It’s like, “Eh.” You know? It’s like, it’s kind of like that, but like, not really. Like, I was sitting on training floor for a good decade, you know, plus, and like, I’d say that it’s probably not—
Raju: It’s like a VC watching Shark Tank. I get it.
Vishal: Exact—
Raju: I totally get it.
Vishal: Exactly. I’m like, “This isn’t how it is.” Like, it’s not—it’s over glamorized. I don’t know. There’s, I’m sure—and, you know, honestly, I joined TradFi at a time where, like, I think the tail end of that old-school Wall Street mentality was just coming out. You’d still see and hear about, “The last Christmas party was pretty crazy.” But, like, it’s hard for me to watch those movies. I would say that I don’t have a favorite, and I apologize for not having a better answer for that. But yeah.
Raju: No, no, no, that’s okay. That’s okay. I mean, I like Big Short, but I mean.
Vishal: You know, I couldn’t read Flash Boys. It was too close to home, you know? We’re talking about projects that we were building, and it’s like it was too close to home.
Raju: Yeah, yeah. Okay. So, I know your best bud, [Sean’s 00:49:29], a DJ—
Vishal: Yeah.
Raju: So, have you ever taken over when he needs to go to the bathroom?
Vishal: [laugh]. Yeah, Sean is a great DJ. I do not take over. I know my lane. I am—in the car, I will say I’m the DJ, so whenever we’re taking a road trip, I give him the day off.
Raju: Okay, fine. So, what’s your favorite artist to throw into the mix set?
Vishal: You know, I’m, like, a big Kid Cudi fan. I think, like, every chance I can see him live, I will. I have tickets to go see Childish Gambino coming up soon. I’m an old school hip hop-head. I think being a New Yorker and kind of growing up in that era of, like, Wu Tang and all that stuff, I’ve always kind of been a big fan. Yeah, it’s that—you know, Kid Cudi. And I think there’s a meme that Kid Cudi saved my life. Like, I think a lot of people say that. I think Kid Cudi is a great artist, and I love listening to stuff. Yeah.
Raju: That’s awesome. Well, listen, I appreciate, I’m sure Will appreciates you being on. It was really candid, it was really genuine, I loved the answers. I love the fact that you refuse to answer some questions. I mean, nobody’s ever refused me, ever. I mean, like—
Vishal: I’ve known you that long.
Raju: [laugh].
Will: [laugh].
Vishal: I can refuse it.
Raju: No, but it was really good. I mean, I appreciated the reasons you chose for not answering some of those questions. It was wonderful. Anyway, best of luck—I mean, obviously we’re a co-investor here in True Markets—best of luck with the launch, and, you know, really appreciate having you on the podcast. And, you know, maybe we’ll do a follow-up one of these days, post-launch or something.
Vishal: I’d love to. Thank you both. Thank you to the entire team at, you know, RRE, and the rest of the investors [unintelligible 00:50:58], and really kind of believing in us since day one. And I can actually say day one because I’ve known you for more than half of my life now, Raju, and so it’s really great to kind of work together. Really excited about this, and we appreciate your support.
Raju: Yeah, a hundred percent. All right. Well, thanks guys.
Will: Thanks, Vishal.
Will: Thank you, everyone, for tuning in to another episode of RRE POV.
Raju: Thank you, all. Thank you for listening to RRE POV. You can keep up with the latest on the podcast at @RRE on X or rre.com, and on Apple Podcasts, Spotify, Google Podcasts — or wherever fine podcasts are distributed. We’ll see you next time.