All right, to kick things off, I'm going to be talking about the road ahead for internet capital markets. Over the last year, this term of internet capital markets has kind of become the rallying cry for the Solana community. It's both a descriptive term and a somewhat evocative term as well. And if you play around with Solana for a little bit, it becomes actually pretty clear why this term is fitting.
Probably the most frequent question at this point we get from investors and friends is, okay, well, internet capital markets, it's a cool idea, but how do you actually see adoption happening? And so this morning in this presentation, I'm going to pull out my crystal ball and I'm going to try and answer that question.
Simply put, I think when we look back in 20 years, it's going to be very clear that the Genius Act was really the single most important catalyst for global crypto adoption. Stablecoins really are the Trojan horse and the rest of crypto will just naturally follow from there. Once you have a private key in your pocket, you can hold stablecoins. But that means you can also then interact with anything in internet capital markets. Borrow, lend, derivatives, prediction markets, NFTs, equities onchain, whatever you want. Once you have that stablecoin in your pocket, you can now interact with everything in crypto.
One of the hardest parts of understanding crypto is that it's a very heterogeneous kind of thing. Based on your priors, you will kind of understand crypto in different ways. For example, some people think of crypto as a gold-like store of value. Others only understand crypto as a payments technology. A lot of folks from Wall Street see crypto as a new substrate for tokenization and trading. Some people just see it as speculation and nothing more. And actually, if you ask a lot of the core cryptonative types, they'll tell you that they see a programmable finance system that can unlock new forms of capital formation. Crypto is not one thing. I'll contrast this with mobile. With mobile, you just pulled out a glass rectangle in your pocket. It was very clear what that was. But crypto is a little more abstract and amorphous and it's harder to understand.
We have tried to boil down how we think crypto adoption is going to happen given all of this complexity and heterogeneity into roughly five buckets. We think these five types of companies and applications are going to be broadly speaking what are going to onboard hundreds of millions if not billions of people to crypto over the next decade. We think each of these major categories will be supporting hundreds of millions if not billions of users each. So let's dive into each of these.
First off are DeFi native stablecoin neobanks. There are 10 of them we have listed here on the slide, but there's at this point probably 30, 40, 50 of them out there. The most common characteristic of these applications is obviously beyond the fact that they're all stablecoin focused is that they are really focused in different geographies around the world. For example, Dollar App, Lemon, Felix Pago, they're all focused in Latam. Yellow Card is focused in Africa. The reason this really needs to be the case is that in order to succeed, these companies need to have a regional focus for both go-to-market localization, marketing, and all that stuff, but then they also need to do the correct product integrations, think local fiat on and off ramps, engaging with governments as necessary, if they need to get something in a local grocery store or gas station. You need to do all that heavy lifting work on the ground in these different jurisdictions. We see these companies popping up very regionally. I've highlighted two Multicoin portfolio companies on the far right-hand side of the slide: PDP.me, which is focused in India, and El Dorado, which is in Colombia and Latam.
The next major category of application and company that we think is going to be bringing people into crypto are actually the incumbent financial institutions. It's pretty obvious that a lot of legacy financial institutions will be disrupted by crypto, but actually we think a handful are going to adopt crypto and use it offensively. Crypto rails enable financial institutions to use their most valuable asset, which is their brands, which in some cases are now more than 100 years old, to expand their reach to new customers in new geographies. Much in the same way that Starbucks was able to use their brand to expand into India, China, and around the world, we expect that major brands whether it's Revolut or Morgan Stanley or JP Morgan are going to be using their brands to reach a billion new consumers around the world on crypto rails. The reason this is possible is because all of these crypto technologies are self-custodial and therefore you don't have to deal with money transmission laws in each country.
Three major companies like Robinhood, Nubank, and Revolut are already moving this direction and all now have major crypto initiatives in their respective products. I expect you're going to see a lot more follow in the years to come and I think you will see the big American banks move in this direction as well. What's very interesting about how these guys are evolving is if you look at all three of their respective products, they all start off by including a dedicated crypto section or tab in their respective applications. This is pretty natural, but in our view, I think this is going to fade over time and I think you'll start to just see crypto become the core plumbing of these apps. Actually, I think five years from now, these three guys' apps will look more like the apps from the prior slide, the DeFi stablecoin neobanks, than they will in their current form.
The third major category of application are the crypto wallets. Most of these users today are speculators. Some of them are purely DeFi native, some are custodying on Coinbase or Binance. But most of these folks are here because they're managing a portfolio to speculate. Again, the user interfaces across these products will be fairly heterogeneous. Some will just look like Phantom where you have your list of your assets, your portfolio, you can click in, see a price chart and have a buy and sell button. But a lot of them are actually starting to experiment and look pretty different. Apps like Pump.fun have really pioneered entertainment finance. They have social message boards built into their products. They have live streams. These things no longer just look like a traditional portfolio product. We continue to think that this entertainment finance sector is going to really bloom and blossom in the years to come. Bashall will touch on that in his presentation today and Jason Kat from Cheddar will show you all later today what we think is one of the most compelling product experiences in entertainment finance. Broadly, we think that this sector of users is already north of 100 million people today around the world and I think this is going to grow to a billion plus in the next few years.
The fourth major category of company that we think is going to help onboard folks to crypto are actually the major social companies. I'm sure everyone remembers a few years ago the folks at Meta tried to launch a thing called Libra. The prior regulators did not have it and they shut it down. But now with the Genius Act, it's pretty obvious that Meta is going to end up launching stablecoins and integrating them into their core products. They already tried this. They spent at least a billion dollars on Libra trying to make this happen. Now they have the green light to go ahead and do so. What's interesting to note is that whereas previously Meta tried to launch their own stablecoin, the Genius Act actually precludes large tech companies like Meta from launching their own stablecoin. So you should expect to see them integrate presumably USDC, USDT, maybe some other names around the world. It's pretty obvious that this should fit into WhatsApp, into Instagram for commerce, into messages, into threads. It's clear they have the reach and distribution and they want to do this. The other one I'll highlight, this one's a little more speculative, is X or Twitter. X has a money team. Actually, Elon tweets about it from time to time. X's new chief product officer is a guy named Nikita Byer and he is actually an adviser to the Solana Foundation. If you look at his X, most of X for at least people in this room is probably discourse around crypto or financial markets. It just kind of seems inevitable that they're going to be embedding money in X and being able to use it to engage in capital markets functions. This is a very natural evolution given all of the above. The other obviously really cool thing is that X has announced partnerships with both Kalshi and Polymarket. I'm pretty optimistic that we're going to start to see prediction markets embedded natively in X feeds, which is going to be a very cool product experience.
Lastly, but certainly not least, is the opportunity for iOS and Android. I think probably the single biggest unlock for crypto will be when iOS and Android natively embed stablecoin wallets and private keys into their respective operating systems. Both iOS and Android have had for roughly a decade now a wallet app in their respective products. There's a natural place of course today for users to go to find their assets, whether those are stablecoins or other assets. When this rollout happens, it should probably come with APIs so that third-party application developers can embed the native iOS and Android stablecoin keys into their respective applications. That means that all of the companies on the prior four slides should be able to accelerate their growth and adoption by offering that built-in experience in iOS and Android. One day we're going to wake up and six billion people are going to have a private key in their pocket for free without thinking. I really don't think you can understate just how big of an unlock this is.
We've talked about a lot of different ideas here and so the one thing we ask is, how do we track broadly if progress is happening? Are we moving in the right direction? The high-level metrics we look at to understand this adoption are twofold: one, total number of stablecoins outstanding, and two, total number of funded wallets. What you can see here looking at both of these is they're basically up and to the right only. Everything continues to grow very nicely on these fronts.
As we put private keys in the hands of billions of people, one natural question is, who are the winners and losers? We believe a lot of our portfolio companies across both our hedge fund and our venture fund are going to be winners and we have those highlighted on the left-hand side of the slide. I'd love to point out that Nateeshoth from DFlow and Guy Young from Athena will be on stage later today talking about their work. But maybe the more interesting question actually is who are going to be the losers, and a few categories stand out. I'll touch on those briefly. First, as more people have private keys, that means more people can pay and be paid over crypto rails. We think this is really bad for closed-loop payment systems and for credit card networks like Visa and Mastercard. Second are legacy banks in emerging markets. A lot of these banks, think Turkish bank number 24, Filipino bank number 92, these guys are probably pretty complacent businesses as they have effectively regional oligopolies or maybe even in some cases monopolies. All of the DeFi native stablecoin neobanks we think are making a really hard run at these guys actually now. I think that overwhelmingly the new DeFi native stablecoin banks are going to win in these markets and that's going to create a lot of downside pressure on these legacy banks. Third is remittance facilitators. As more people hold stablecoins and as you have more FX happening natively on chain, that's going to make it trivial for people to send money back home. That means you're going to be able to get around the exorbitant fees that the FX providers charge. And the fourth one, this one's probably the most interesting or least obvious on this slide, is sportsbooks. As more people hold stablecoins in their wallets, that's going to unlock the opportunity for peer-to-peer onchain prediction markets. That's going to make legacy sportsbooks like DraftKings and FanDuel, we believe, irrelevant in the medium to long term. We don't think either of these lists is exhaustive, but rather we just wanted to provide a sense for just the sheer breadth of impact across basically all financial services companies around the world. Every company in financial services is going to be impacted here and that means there's going to be incredible opportunities to go both long and short.
Looking ahead, it's clearer than ever that crypto is now starting a decade-long megatrend. We don't even really have to project anymore to see that. Today you can download and use all of the apps and you can see how people are using them and understand their growth trajectories. There have been and there are going to continue to be a ton of great investment opportunities at every layer of the stack and we certainly are looking forward to capitalizing on those in the years to come. Thank you.
