So I'm Yuval. I'm the co-founder and CEO of Digital Asset. We are the creators of Canton Network. Quick background: I started my career at Citadel as a quant, then ran high-frequency trading at DRW Trading. I was there when Cumberland got created around 2012, and then I left to start Digital Asset, which in crypto terms would be Canton Labs, but we on purpose do not want to be called Canton Labs, and I'm happy to explain why later.
Maybe I'll actually start with where Charlie was. I think RWA as a team have done a tremendous job for this industry because they put a spotlight on what is happening, but I also think that they are exposing, as a result, the challenges that they're trying to solve, which is one of the challenges in this industry, which is what means what. At the end of the day, I give them a hard time because I don't necessarily agree with everything that they do, but not because I think it comes from a bad place. They need to think about a product that services an entire market that is very different in the terms that they use, and they need to find a framework that will satisfy an entire market, and they still need to build a business. So I appreciate it.
But you know, the reality is that I think one of the biggest challenges of this space is that we like to use very short terms because they're good for marketing, but honestly, they are very misleading. You start with, you know, a lot of people think this is all about gambling, and then the next presentation is about looping. You know, we can say leverage, and we can say that BlockFi blew up because of leverage. You know, that's fine. People want to take risk, that's fine, take risk, but let's just call it as it is. I think this industry likes to create new names because it's good for marketing, it's good to pump coins, but at the end of the day, all that looping is is leverage. That's all it is. Call it as it is. And we are enabling a lot of people to take risks that they don't understand, and some of them will win, and the majority will lose.
So, you know, Digital Asset, when we created it, we started the company, we called it digitalasset.com. I didn't pay $70 million for the domain. We, I think, paid $10,000 when we started. And our view was that everything will be a digital asset. And it's a terrible name. I'm very sad that I chose it. The SEO is horrible. A lot of scams associated with us. I can't even tell you how many people apparently I scammed to buy coins. But yeah, that's kind of like where we started. And you know, we were three co-founders. One of my co-founders is the guy who started Cumberland. The other co-founder is one of the creators of ZKPs, actually one of the authors of LIPNARKS. We do not touch ZKPs, to be clear.
But the reality is that when we started, around the same time when Ethereum got created, our view was that in order to satisfy the mission of making everything a digital asset, it inherently will require institutional adoption. And if you want institutional adoption, I actually disagree with Charlie that regulatory clarity is what's needed. I think privacy is what's needed. The reality is that we can have the best tokens in the world, but Wells Fargo is not going to expose their position to the rest of the world. Citadel Securities is not going to expose. And I'm pretty sure that all the people that are being kidnapped in France do not also appreciate the lack of privacy. The reality is that privacy is a core component of orderly markets. And we'll talk about what I mean by privacy, but for us, we really took our time to think about what does it mean to build a public permissionless network that has privacy. And that's why it's taken so long to bring Canton to production.
So, you know, we talk about the opportunity in blockchain, and I just want to put some... we talk about asset mobility. Charlie brought a lot of the opportunity: asset mobility, composability. I totally agree. $42 trillion worth of assets in the world are effectively sitting idle. They're not being used. And the reality is not because people do not want to use them. It's because in order to use them, you have to mobilize them all over the world. So just for those that don't know, Basel 3 after the financial crisis tells banks, you have to hold certain things on your balance sheet based on your portfolio size. Now if you are JP Morgan, you have legal entities all over the world and you need to satisfy these requirements per every legal entity. Meaning if you have money in the US, it does not satisfy your requirements in the UK and vice versa.
And therefore, because you don't know what is going to happen tomorrow or in a few days, you do what you call liquidity buffers. You over-capitalize all of your legal entities. And not because you want to, because you have to. You have to meet your obligations. And that's also true for corporations. If you have payments to your employees, to your vendors, or you're supposed to receive, you have to have cash available in all kinds of jurisdictions, even though you could have potentially used it somewhere else, but because it takes time to move money or collateral, you effectively hold it idle. The fact that you can't move cash into yield-bearing assets in real time means you're sitting on idle cash as well. So our view is that the opportunity is ginormous, and to be honest, crypto hasn't even scratched the surface. We're nowhere close. And we'll talk about the Broadridge repo in a second.
So this is from RWA, and to be clear, the amount of treasuries that have been tokenized to reach this number is even higher. $430 billion is really the volume that actually gets traded every day, give or take, and even that is nothing. So just to put it in perspective, the repo market globally is about $10.5 trillion notional every single day. So, I'm very proud because Broadridge is almost 10% of the US repo market, but there's still a lot to do. And the only point here is not actually to gloat about Canton, but it's really to open the eyes that we're so far away from actually achieving the value of this technology. We're not even close from a scale to get to the point of really getting some serious returns.
So, Canton was a fair launch. We didn't sell any tokens. We started at zero. I can happily explain the scale, but again, I think that when you actually solve for what the clients want in terms of privacy and aligned incentives, and we'll talk about the aligned incentives, you see that you can actually build a network without having to go through the typical crypto motion. I'll give an example. If you have the right aligned incentives, you don't have to bribe your ecosystem to come and join. So at Canton, we have given to date two grants. That's it. Two years in production, two grants to date. I'm pretty sure some of you have received grants from foundations and participated. And our view is that that is not the right incentive model. It's a one-time payment. That payment gets wasted very quickly. But really you need to create the right alignment between the network and your participants.
And everybody that you see here on the page, and I'm sure you've heard from crypto large digits to create an integration, everybody have joined because they see the value in the network and not because the network have actually paid or gave them a grant to participate.
So this is to us, when we've built Canton, I can't take credit for the last bullet point, that was something that we solved when we started 10-plus years ago, but mobility plus privacy was definitely the core building block. Our view is that mobility is a huge opportunity, but without privacy, we're just going to stay a crypto playground. We're not really going to get institutional adoption. When you look at RWA, and this is my personal view, when you look at the asset managers that play in tokenization today, it's purely a crypto money grab right now. There is no institutional usage in the tokenization world today. There is no product-market fit for stablecoins. Whoever says that, I think, is misleading. Most of the use of stablecoins today is for crypto use cases. You don't see corporate treasuries optimizing their cash using stablecoins.
When you talk to payroll companies that are using stablecoins and you ask them which companies really use stablecoins for payroll, they'll say, 'Oh, foundations and crypto companies.' Like, okay, cool. The idea of mobility is extremely powerful, but if you're not going to give privacy, anyone who has fiduciary duties to their employees, clients, investors is not going to touch this technology. That is my strong belief. You don't have to agree, but I think it is starting to play out in the market. And then the last thing is in order to launch a network that has partners that see long-term and want to build with you long-term, we think that you need to have the right alignment in terms of incentives.
So now I'm going to become a bit more trolley. So why do we believe that we haven't solved some of these problems till today? The problem, in my opinion, is that the approach has been too radical in two directions, and the world is just not homogeneous. I know we like to live in a world where everything is binary. You're either this or that, and if you move an inch, you're immediately on the other side. But the reality is that the world is not really homogeneous. So if you take the approach of the public permissionless exchange today, they're saying this is our model, this is it, and if you're an application, you have to subscribe to this world, and if you don't, figure it out yourself.
So when we talk about tokenization today, I actually don't think that we have tokenized anything natively on-chain for the most part, because even when you look at Securitize and things like that, the actual legal tender or the actual legal record of the asset is with the fund admin that sits off-chain. When you hold a token, when you hold Circle or USDC or Tether, guess what? You're holding a claim against an off-chain system. You have no way to verify that your token is actually backed by the asset. When you hold BUIDL today and you get USDC payment at the end of the month, you have no idea if you actually got paid the right amount. Your only way to verify is to actually reconcile against the BlackRock money market fund and make sure that you received it. And if not, guess what? Send an email to Securitize to reconcile. Sounds familiar? That's how capital markets work today without on-chain.
So this radical transparency, first of all, in my opinion, doesn't only prevent institutional players to join, but it also has all kinds of other flaws. If you look at Solana's fees, over 90% of them are MEV fees that go directly to the validators. Now, a lot of people will say MEV has some positives, but we know for the most part, look at the class action against Pump.fun, what most of these fees are used for. I talked to a friend, he has a company that does remittance, a bunch of FX traders figured out their wallets, and every time they move money, they front-run them on the FX. I mean, and we talked about front-running. So, I think that a lot of that approach, although the technology is amazing and very inspirational, it just doesn't cut it to actually do things for grown-ups, which is my opinion.
The other thing on the left-hand side is governance. And I think, you know, I'll publish an article soon, but I think that governance is something that crypto has gotten quite badly wrong. And to me, governance is potentially more important than the technology. Meaning if you're going to run a mission-critical business on a piece of infrastructure and something goes bad, you're like, is Vitalik going to tweet about it? Like what is going to happen? Or I'm effectively betting on a labs team that is going to have full control and can change overnight something that I've built on for years just because they think that that's the right thing to do. So governance is also a thing that is missing.
And as a result of that, we swung all the way to the other side: governance by corporation, what they call corp chains, that first of all didn't even solve privacy, actually just reduced the surface area of people that can see. So Base and Arc, to the best of my knowledge as of today, still do not have privacy, but have much more control of who can be part of that chain, and as a result of that, lost all the value of blockchain, which I agree with Charlie is composability. That's the only value of the technology is composability. And I think that those two radical approaches have really hurt the industry.
So when we built Canton, we drew a lot of inspiration. Our R&D team is in Switzerland, so part of it is that. But when you think about the model of Switzerland or the internet, it's actually a federation of networks that all give you a user experience as if you're on one network. We call the internet as a singular thing, but the internet is not a singular network. It's actually many networks that can talk to one another and give you a user experience as if you're on one network.
There's really good properties for that. One is you can horizontally scale that network. When Netflix showed up on the internet, they didn't go to the internet foundation and say, 'Hey, can you make it faster and bigger?' No, they just put more servers. They made it bigger and faster. When you look at Switzerland, you have all the different cantons. They don't even spell Canton the same way. One is with a C, one is with a K. They speak different languages, different taxes. Yet, when you go from one canton to another, you don't go like, 'Oh, I'm moving from one country to another.' No, you're just moving between cantons. So, the view was that we really want to give the builders the ability to design their governance structure, their access model. Do I have privacy? Do I not have privacy? Does some of my application have privacy, some doesn't?
And again, I think that if the internet didn't have similar properties, like if you had to go to chase.com and be able to see everyone's account balances, probably Chase wouldn't be using the internet. But you can have CNN.com next to chase.com coexist on the same protocol. And that's just kind of at a very high level the architecture of Canton.
So we'll talk, these are some of the areas that we think that Canton is different, but we'll finish with aligned incentives. A lot of times people will say that L2s have been a solution for scaling. I think that that's a very convenient story. I think that L2s is a wrong incentive structure. And what I mean by that is when you think about when the internet got created, Cisco was the most important company in the world. Why? Because they were making the internet. There was no internet and suddenly there's a company that you need to buy a lot of switches and routers and they were the hottest thing. But once the internet was a thing, Cisco is still a very important company, but it's definitely not Google. It's definitely not Anthropic. It's not those type of companies that actually own the clients. They actually make value out of the internet.
So if Cisco were to build an internet and then nothing were to happen on the internet, who cares? In crypto, apparently it's okay. Take Cardano, or Near. Near is actually a super impressive technology, but what does it matter if no one is using it? Actually, Near are using for interop, but you get my gist. There's enough examples of pretty impressive technologies that have been brought to market, but no one is using them. And I think what happened in the EVM world is everybody just said, 'Wait, I can just copy-paste this, give the same user experience, and if I'm Coinbase, I own the clients. I can give them USDC. I can give them DEXs. I can give them whatever.' Do they really care if it runs on Ethereum or not? No, I don't think so. At the end of the day, the investor, in my opinion, the users do not. So why would I route all of these sequencer fees to a bunch of third parties that I don't have any relationship with? I'll just create a centralized sequencer, and you can look on their earnings. They make a decent amount of money from that. And I think that that is a result of very bad incentives.
So when we built Canton, and again, I cannot take credit. This is after being in the space for a long time and looking. We thought that at the end of the day, those that generate the value are the people that are here, are the people that build businesses that use these networks. It's the people that actually drive traffic. And if you align your incentives with them, they will stick around and they will continue to build. And if you look at Visa and Mastercard, if you look at their business model, interchange, right? When we hear that 3%, the reason why your credit cards have cash back, points, hotels, it's not because your credit card company gives you free money. It's because they get money from these networks. Most of the money that comes from credit card networks does not go to Visa and Mastercard. Now, Visa and Mastercard are very large companies because they get to participate in every transaction. But actually most of the economics go to the card issuers, the card distributors, or the points of sale. They are the ones that actually make most of the economics per transaction.
So when we built Canton, we felt that the users, the validators, and the applications should get the lion's share of the economics. Meaning if you come and you build an application on Canton and you have been able to have a product with product-market fit and you actually generate utility on the network, our view is you should make more money than the miners. That's our view. And at the end of the day, this is no disrespect to the miners. We call them the super validators. But at the end of the day, they run servers. They don't go to conferences. They don't raise money from VCs. They don't come up with new business models. They don't need to do marketing. They run servers. So for us, a lot of respect, make money, just not as much as those that do the hard work. And I think that that together with privacy have created a pretty vibrant ecosystem. I could talk about the token structure, but maybe just given time for questions. That's it.
