NEAR’s AI Money Thesis: Intents, Privacy, and Tokenomics | Sal Ternullo

0:00 Bankless Nation, there's been pockets of growth in different corners of the crypto industry. The improved UX of the Zodol wallet has been a main driver of Zcash adoption and the growth of the ZEC is shielded pool. Venice AI user growth is accelerating as more people want private access to self-sovereign AI inference.

0:19 I've personally been using infinex as my dominant crypto wallet, simply because it has solved all the major UX issues as plagued Ethereum for years. Go to all of these different platforms, have in common. They're all using near intents. Near intents appear to be a breakout use case for the near layer one, a layer one that has seemingly struggled to define and differentiate itself throughout the years, has finally found product market fit supporting some of the fastest growing ecosystems in the industry.

0:46 So go to the chat to BT or cloud whatever you use or Venice for that matter and ask your chatbot about all the projects that have integrated near intents in 2026. Go do it for yourself, it's a long list. So naturally this peaked my curiosity. What does near have to do with these pockets of growth in crypto and is near itself its own pocket of growth?

1:07 In order to get more clarity on the state of near and what's going on, I went and I found today's guest as perhaps the most articulate person and near investor circles to fill me in and what's going on with near and what the future may hold for the protocol if the near team executes. Al Ternello is the CEO of sovereign and NASA listed AI infrastructure company built around a near treasury strategy.

1:29 It's one part near treasury company, but also a commercialization partner for the near ecosystem. A for profit entity focus on helping the near ecosystem establish and grow its commercialization efforts. Sal is an expert at articulating the growth story for near. So that's what you're going to hear today on the podcast.

1:46 I like bullish content. So that's your disclaimer. I'm sure that there is a bear case for near to one might be that crypto native infrastructure that is simply infrastructure for other crypto projects is just not a hot category at the moment. And some people fear it may never be maybe it may be another bear case is that near iron claw is a very distant third behind Hermes and open claw in the race for AI agent frameworks.

2:10 Now all of this is to say is that maybe there's a bear case for near to, but that's not what you're going to hear on the podcast today because the bulk case I think is pretty good too. So let's go ahead and hear that bulk case for near from my guest, Sal, Ternello, Sal welcome to the bank list. Thanks, man.

2:24 Appreciate you having me. Sal, everywhere I go lately, there are, I'm poking around in different corners of the crypto industry. There seems to be near there somehow. And here's what I mean by that, infinex is using near intense and chain signatures to do their whole unified cross chain experiencing in the wallet.

2:42 Zashi is using near for cross chain swaps and on ramping assets from other chains into the Zashi wallet, Venice, the AI platform is using the near AI cloud to do their provably verifiably private AI inference. These are just some of the top, these are the apps that I use and have gotten a lot of attention lately and near is in every single one, there's more I could go down the list.

3:04 What's going on? How come near is in all of these little corners? Yeah, I think this is the result of five years of really top notch engineering and delivery now on the product side as well with near intense proving product market fit over the last year, rapidly scaling, near AI and iron claw now coming to the fore to really show the thinking that's been part of the ecosystem and design of the system over the past five years and really coming to light now with the focus of the crypto AI narrative, but more importantly, how near shines in the context of agenda commerce.

3:38 We could talk about these specific kind of verticals in their own regards, but I think it's the result really of the technology now reaching product market fit with intense and iron claw quickly following on a similar trajectory to what we saw with intense over the past 12 months. There's been maybe a branding thing that near needs to pierce through because it's got, it's had this like series of pivots of like a strategy pivots.

4:06 There's been the most recent one, which is a year is pivoting to being like AI, AI infrastructure and I think maybe the crypto community and people understanding watching these pivots is just like, oh, this is just the next pivot, this is just what they do. Is this, talk to me a little bit about that and granted pivoting shouldn't be frowned upon, is this the final pivot in the sense that this is working out and we're going to go forward here?

4:34 Yeah, I mean, I don't contest the point in terms of narrative changes in the ecosystem I've been on the ground floor since pre-made net launch where investors out of two venture funds, A100X being the most recent in the native token, but also in projects in the ecosystem. I would describe this not as a pivot, but as a returning to roots in the context of why near was actually built with Ilya Leven Google research, looking at how to build distributed training systems and distributed compute systems and ultimately realizing that there was a missing back end infrastructure where which became their protocol.

5:11 I think now they've winded on, you know, kind of what you'll describe as the final pivot with real product market tip behind these verticals and you'll see that continue to take up throughout the 26 year, but I kind of describe it coming back to the roots and realizing the vision that Ilya and Alex and team have always painted around the protocol.

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7:24 If you think you can out trade everyone else, this is your chance to prove it from now until June 18th. Click the link in the description below and opt in on Metamask mobile. Trade RWA's on mobile or desktop to compete, not investment advice. How do you articulate what that vision is if you could just articulate what near is trying to do like the grand vision?

7:43 How would you explain that just simply? Yeah, near the token is really like AI money. It's like how do agents in a self-sovere and user controlled fashion actually transact on our behalf in the real economy. And so in this broader frame that crosses Web 2, Web 3 of Agenda Commerce, I look at near as a token as AI money and these components and verticals that we're talking about around near intense near AI, private cloud and iron claw are really the embodiment of how do you build private user-owned AI and have a native asset in near token.

8:16 That is the mechanism of settlement and value exchange in an abstracted way. You don't need to know how you're interacting across chain using intense. It's just the seamless user experience, unified liquidity and so that's how I would describe near and kind of a simple, simple form. So you're really putting AI near is putting AI as like the first class dominant use case that it's going after things like near intense, which is like we've established finding product market fit.

8:46 Near intense is a means to an end to service this larger vision, which is AI, is that correct? Yeah, absolutely. I mean, the common narrative in chop-dreck in the market is we're going to have billions of agents that will do transactions at a frequency and velocity that is inconsistent with how humans interact with software and financial systems today.

9:07 I think that's absolutely true. And near has delivered the first building block of this through intense, which is how do those agents actually transact seamlessly across any surface, whether it's web three rails, public networks, or in the context of some features that will come on the intense side to integrate into traditional payment systems or RWAs, as you saw with the tether gold announcement recently.

9:28 So it's really this ubiquitous transaction settlement layer and unified liquidity with intense enabling agents to operate across any surface and doing that in a manner that's private and secure, which is really where iron calls differentiating in this kind of secure harness category. So Zashi uses near intense and to great effect has grown a lot of the Zashi wallet adoptions same thing with Infinix.

9:55 But this is maybe kind of like a happy byproduct according to your framework of humans and human forward apps can use near intense to do some of the same things, but that's actually kind of just an accidental, maybe not accidental, but just like a happy circumstantial byproduct of what Nier is really trying to do, which is do exactly what you said, which is provide this cross-training communication layer for agents.

10:16 Yeah, exactly. And like Zashi and kind of the Z Cash moment in October, maybe even early September, October November of 2025, was a demonstration of human interactions leveraging intense for these seamless cross-tank swaps and opening up access to Z Cash at a moment where the privacy narrative and private money was extremely hot.

10:35 I think you saw, you know, incredible volume, Zashi has done more than three million of these are generated on top of intense today, and it has become the primary mechanic for anyone in the retail context to interact with Z Cash and swap between Z Cash Bitcoin, etc. But those are all human interactions.

10:52 The whole vision that Ilya and the team have been building towards is towards this agentic future. And so I look at it as the proving ground to show product market fit, which absolutely is the case where almost 20 billion in total volume that's been processed through intense 30 plus million in fees to date, and that's going to explode as we start to see the realization of these production use cases using your AI and IronCaw of which there have been a couple announcements the past week, government of Pneuda, a bound which is effectively like the times of India all using the combination of IronCaw plus intense, and that motion will continue to scale.

11:29 Our intents, the core value driver for near, as I understand it, there's a pretty similar mechanism that Ethereum has with the burn, the IP1559, and near intents also burns near, is just intent consumption, is consumption the right word? Is it intent consumption, like the core value driver of the near token, or are there other things to talk about as well?

11:51 Yeah, it's a good point. It's a conversation I've been having with a lot of buy side investors to your point. It's not just in kind of the media side that near has had a spotlight on it. It's also been across the investor buy side community, a lot of liquid funds, kind of a lot of family offices looking at taking positions and seeing the points that I've been making around the asset being mispriced based on fundamentals and tokenomics.

12:13 So over the past 12 months, near has had a revolution in tokenomics starting in October. We have the protocol emissions, all the validators voted in favor of doing this. We're down to 2.5% annualized emissions on the inflation side. And near intents in February flip the switch where all of the fees that are being generated through near intents are now a buy force on near token.

12:36 The analogy to EIP1559, I would put it like the protocol layer, and I think about near intents is kind of a hyper-liquid-esque vertical integration where the fees that are being generated at the app and middleware layer are now also driving buying demand and ultimately permanent removal of near-from-supply.

12:58 And I think there's a dashboard like now revenue.mir.org that is tracking this in real time that you can take a look at. But it's about 3 million near that has been removed from circulation from the higher levels of the stack, not contemplating the protocol level burn. Maybe you could go into that a little bit more because this breaks my brain coming from Ethereum land where the burn happens in the protocol.

13:19 What do you mean it happens higher in the stack? So you're positioning near intents closer to the app layer, not actually part of the core protocol. Maybe you can go into that a little bit more. Yeah, it's this conscious strategic approach that near took over the past 18 months, which was to build these vertical products.

13:38 So near intents being the first, near AI and iron claw being the second, which were core and intentional bets to facilitate value accrual across the entire stack to near token, which varies in some regards to how you look at the Ethereum world. On the Ethereum side, you would contemplate kind of the DEX exchange feature and the Uniswap context as well soon, if not today, being the mechanism that accrues value to you token in the near land as you're describing it.

14:05 The value accrual from that vertical product integration, the middleware that near intents provides and the flow from the applications using it are all accruing to near. And so when I look at this from an investor and buy side perspective, having these vertically integrated products that are all accruing value to near token presents a really, really compelling upside case as these things scale past human interactions using intents towards agentic interactions at higher scale and higher volume.

14:32 So one thing you're articulating is there's a philosophy difference with the near term versus the Ethereum ecosystem. Like the Ethereum team as a concept doesn't even make sense, but there is a near team. And the near team is interested in building first party apps that are opinionated about a particular future that they want to manifest.

14:53 It's actually worked out as well in addition to that judging by the actual burn rates. And maybe that's just like a philosophical difference between near and Ethereum if we're using Ethereum as a benchmark. Yeah, I think it is a philosophical difference. And the design looks more like hyperlegroid in my opinion, where you have in the hyperlegic context, you know, the where one protocol that is bundling consensus and execution together with perps being the primary use case on it, creating incredible value accrual type token.

15:22 Near intents as a vertical is the same thing in the context of near and armquad near AI present kind of the next wave of consumption and buy side pressure on near token. So to your point, very conscious and different design approach than what we see in Ethereum. And thus far proving product market date and continue to go that direction, even in a candidly challenging market of the last six months.

15:44 Aside from your opinion that near is an underpriced layer one token, as an investor, how does that make you feel about the near token? And I'll just ask, I'll have more context. Here's an episode I'm working on with Jake Stravinsky in the future. He's now doing policy at hyperliquid. A lot of the successful modern crypto platforms, hyperliquid, Venice AI, mega east as well.

16:10 It's a centralized equity team in the back with a protocol in the front. This pattern is kind of emerging as like the dominant building pattern where if you want to get something done and succeed in the world of crypto, you need a centralized equity team building a protocol in the front. And so is mega east decentralized?

16:30 No. And that's the point. Is polymarket decentralized? No, there's a team in the back and a protocol in the front seems to be that near is kind of fitting that mold that I'm identifying. And as an investor, how does that make you feel? I mean, it makes you feel quite good. And it's even almost more aligned in that there is no equity corporation here, right?

16:50 We're talking about near foundation and the other nodes of the ecosystem being the AI, being diffuse labs who is the primary developer of near intense driving towards equity was the wrong word, but legal corp in the back. Yeah. And there are adjacent nodes and legal corporations that are driving these different development verticals that we're talking about.

17:12 But it makes me feel that there is a cohesive effort around value accrual to near. And so I think that's been one of the pieces in the industry that we missed on through the period of kind of regulatory grace, base and challenges was trying to decentralize so far that we ended up creating coordination challenges and capital investment or grant allocation issues.

17:34 And that has really been resolved, by the way, that near is approaching the last 12 months intense near AI and iron clock. What would you say is the near philosophy on fees? Because if you look at the smart contract platforms that I've come before, like Salona, Ethereum, fees are a bug. Fee's actually want to be eliminated.

17:52 It's an anti spam mechanism, not a value accrual mechanism. You know, once upon a time, the Ethereum fee burn was phenomenal, but we've fixed that. Now it's now it's at zero. And that's actually good because more people can transact on the Ethereum, but like as at Ether, the asset holder, the burn was correlated with an Ether, higher Ether price.

18:13 Is there a philosophy around near fees? Yeah, that's a good point. It kind of gives me a segue to like a broader view. I know you've been in the Ethereum ecosystem for a long time. When I first started underwriting and diving deep into near back in 21 and 22, in many ways, it was the embodiment in a cohesive system architecture from day one of a lot of the thinking of Ethereum to back in 2016, 17, 18, right?

18:38 We talk about account abstraction as a hot topic in 21 and 22. Account abstraction has been embedded in your protocol since day one, which has allowed for them to implement and integrate quantum resisting cryptography with accounts that can migrate signature schemes, so you're not losing your accounts.

18:55 There's no massive upgrade process to quantum resisting cryptography at the Lairone protocol itself, dynamic resharding. So if you remember back in the days before the two roll up syndrome map came to play, it was always a focus on how do we get to synchronous sharding, which near is not at today. They are still an asynchronous sharding system, but allows for horizontal scalability that has proven out with nine shards live today, interacting with 100% uptime.

19:21 So behind all of that, the fees question that you're asking, this is not necessarily a bug, but it is not the predominant source of value of cruel. There has 1.2 second finality, fractions of a penny cost to transact, but the core value of cruel mechanics are from these vertically inscribed products.

19:39 So I would compare that and think about it in the Ethereum context up. Imagine if all fee revenue generated from Ave and Uniswap were growing down to East as token and all the East L2s were, didn't have their own native tokens, but ultimately were consuming East, which some have done with a stronger alignment to the L1.

19:57 Generally, I like that pattern, but that's how I look at FDs in the protocol side. It's similar, but it's not a source of massive value of cruel given how performant and low cost the system is to threats act on. Okay. So what I'm hearing is that there's actually a similar philosophy towards fees in the near ecosystem where we actually want scalability and therefore congestion fees, contention fees, trend towards zero, but the core difference is that near is far more into building first party applications that create fundamental drivers towards near.

20:33 Exactly. Yep. If you take a look at near.com, they just launched confidential transactions at near con back at the end of February, but from a user experience perspective, it's one of the most seamless kind of retail self-cost city solutions that you can use today. And it allows for privacy to be embedded across every transaction if you toggle to confidential mode.

20:54 The first party app side, it's demonstrated live in production today, and it's a genuinely great user experience. It does not feel like you're interacting with clunky web 2 from 2021 and 2. Is the philosophy of value capture at the app level, the first party app level really any different though? Because ultimately it's just because near intense isn't that just a fee burn?

21:16 And so maybe we're not doing it out of the protocol, but the app philosophy or structure of the fees is still the same. How is the nature of the fee capture any different if it's the first party app? Yeah, it's a good question. So the difference is that in the context of the third party integration, like the infinex and the zashes of the world, swap kits, et cetera, those are negotiated bilateral agreements where there is a fee share between the third party integration surface and near itself.

21:42 The first party applications don't have any type of distribution agreement or partnership revenue share. 100% of the use generated through near.com are consuming near. And so it's a better take rate for near consumption than you would see through these third party integrations. But to your point, it is the same kind of waterfall of value capture.

22:02 Right. Do you expect these fees to trend toward zero then over time or do you expect them to actually grow? At the protocol level, I think over time we'll see this continued pressure block spaces of commodity common kind of frame. I don't think that's going to be any different here. But on the functions and features that near.com shows on cross chance swaps and soon other features like lending, there will still be proper spreads and fees there.

22:27 Even as we start to see compression on the centralized side from competition to coinbase and other major centralized venues with Schwab and Fidelity coming in and pushing fees down. Why will there be a rich robust like DeFi app ecosystem or like, you know, an Ave equivalent or a Uniswap equivalent? Why will that happen on near uniquely when that is already pretty well serviced in the rest of the ecosystem?

22:52 Yeah. I don't think it's about emulating having a robust ecosystem of those features and primitive natively to near. It's about leveraging the foundational technology behind intents, chain signatures as a mechanism to tap cross chain settlement and liquidity across any venue and platform. So in order for me to ultimately get to a place where I can take a loan out through near.com, I don't need to have the lending pool with the best pricing and the best rates available on near.

23:19 I'm able to tap into Ethereum and Optate to do that if I choose. Ah, okay. I see. The rest of the ecosystem produces a lot of the value near cross links everything and makes everything seamless. That's its fee capture, moat. That's the service that it provides. And so to actually when there is fantastic utility built elsewhere, that's actually really good for near because near just connects it to everything else.

23:47 100%. And this was the narrative that I think they pushed in 23 and 24 around chain abstraction. It was like you should have to know as a user where this liquidity pool sits that's going to give me the best rate. You should say, I need to borrow $20 with the best rate possible. One click interaction make that happen and that's when you look near.com is doing today and with privacy embedded on confidential transactions.

24:09 I'm still kind of getting hung up on the volume of the fee burn that happens because everything that you're saying still kind of collapses down to the idea that like it's not the magnitude of the fee burn is still under the influence of scaling loss where we're going to scale and then the fees are going to approach zero.

24:30 And the fact that it's a first party app doesn't it hasn't really changed that for me. I'm missing here. Yeah. I think it's the difference between the way that we look at fees and Ethereum at the protocol layer versus at the middleware layer in the app layer. So in your world and universe, do you imagine a future where there are no fees generated to Ave for loans and no fees generated to Uniswap for exchange, right?

24:54 They're always going to have some spread on the back end and this is the same case with near intense and on the iron call side as well. And so it's not necessarily that the fee burn is fully derived from the protocol and smart contracts running out of network, it's from the vertical stack. So is the idea here that near intense, you know, dominates the market of cross-trained swaps and cross-trained communication and that its margins are immune to this properties of like block space scaling because it is a has like a monopoly and 80, 90% ownership of the cross-trained swap market.

25:26 And so we can actually have margins strong fee, command strong fee margins because it's just one that market share, is that correct? Yeah, to some extent, I would never call anything immune like we live in a highly competitive marketplace, so nothing is immune. I think you will see fee compression from the exchange feature be a competitive surface to near intense and the take rates that can be realized through the system.

25:52 But I wouldn't look at it as purely a direct competitor to the protocol and these topics that we're talking about scaling laws and block space costs. I see. In fact, scaling laws actually benefit the near cross-trained swaps, assuming I actually don't really know of any other ecosystem that is doing this, the cross-trained stuff.

26:07 Who else is near competing with to do some of this cross-trained chain abstraction stuff? Yeah, I mean, I think the biggest kind of like popular project in the category that people perceive as direct competitor, which I have different views on, is layer zero. And so layer zero has done a great job and in many regards, obviously had issues recently in certain specific examples, but they would probably be like the largest competitor as we go to market on the near intense, go to market motion, the most commonly discussed competitor.

26:38 And I even look at that where like it's not direct, it's not feature parity on both sides. They offer slightly different trade-offs. And I think near intense, just on a market capture basis, has proven its worth in the design choices that were made. Hey, Big Inclusionation, a quick pause in the conversation with Sal.

26:54 Don't worry. Back there, we still need to hear from Sal about how he thinks near price is moderately dislocated from the human usage fundamentals of near, but potentially massively dislocated under the condition of AI agent adoption of near. That's probably the most exciting part in this conversation.

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27:44 Users who deposit and make their first trade through the bank list link in the show notes can earn up to $500 in Bitcoin. So try out OKX and the new money app and exchange of decks, a self-custodial wallet, all in one place. And now let's get back to my conversation with Sal. OK, so I can take the argument that near as a layer one is materially underpriced.

28:04 And I'll look at things like Venice and Infinix and Zashi and be like, oh, yeah, there's actually more demand and maybe near 10 pivots has made it, made a current against it in from a branding and narrative perspective and maybe near as underpriced because it's actually getting adoption. There's a fever and that's pretty great.

28:23 There's a difference between being underpriced by a few billion dollars because near as that two billion. So maybe one somebody could argue, yeah, it should be four or six. But I think what people in crypto are really looking for is they're not going for the two X or three X or four X, they're going for the 20 X and the 50 X.

28:40 And I think the way that near gets there understanding your arguments is AI. Can you talk about, talk about this like, well, how is AI, the 50 X opportunity rather than the two or four X opportunity? Yeah, it's a great point. And I completely agree to do like the structural change that near has gone through the past two years has led to a place where right now today I view the asset network as misvalued and probably as a multiple towards the four to six billion FDV range that you're describing.

29:07 Token's fully unlocked. There's no more besting cliffs. So I feel like today right now just based on fundamentals from intense with human interactions, we should be at that type of price point. When you contemplate the scale of a billion or billions of agents interacting and this system being the most robust to serve that market as it grows and adoption scales, I think that's where you start to get the force multiplier on top of, okay, this is what the economics look like behind the token today with just human interactions and just the intense product vertical proving product market fit.

29:40 Now look towards the lead indicators that show you the opportunity around private, secure, user-owned AI and agents that will operate and transact at scale is when you start to get that force multiplier of, okay, if we have 20 billion of volume that's been processed today unintense and we now have billions of agents interacting and this is one of the top platforms to interact on, you can see a world where even just intense volume starts to scale towards the point that we described in a research piece we published back in, I believe March, that looks at 175 million effectively of daily volume through intense at the current tick rates being the point at which the buyback pressure through just intense exceeds the total issuance from the protocol over time.

30:26 That doesn't even contemplate mechanic design around iron, quad, and near AI, which are also looking at similar types of valuable cruel mechanics to near token. So I think when you're contemplating how do I underwrite this and think about a 20X or 50X opportunity, it's extrapolating from the fundamentals that we already see why right now you can check yourself to what does the future look like and where is near positioned in context of competitors to capture these agentic interactions at scale and obviously given my role and job, I do that as they are the leader in that category and the opportunity is huge.

31:00 What gives you confidence that there's actually there there and what I mean by that is, I think no one's really in doubt that the agentic future is a thing, why are memory stocks up? Well because agents need a lot of memory, open AI, anthropic, there's everyone's kind of betting on agents and there's this perceived future, not distant future, but somewhat close future of agents running around semi-autonomously on the internet doing things.

31:30 What gives you confidence that near can actually penetrate that market share? Why do we know agents will use near intents? Why do we know it'll use the chain abstraction? Why do we know even as a crypto industry, will we even be able to claim some of that market share? What gives you confidence here?

31:48 Yeah, it's a really good question. An analogy to kind of the public cloud adoption era that I like to use is I'm describing this. If you go back, AWS 2008-2009, we started to see the emergence of cloud service providers. I was working at the time at stage street and the mid 2010s regulated in tier one financial institution, systemically important bank, all sorts of regulatory guardrails in overhead.

32:12 And in the early days even in 2014-15, there was a massive hesitation to embrace public cloud and shared infrastructure, specifically because of data compliance requirements and data security, confidentiality, and intellectual property, there are all sorts of concerns that prevented highly regulated institutions from actually adopting cloud infrastructure.

32:34 Fast forward to where we are today in 2026, cloud infrastructure is by far the predominant infrastructure platform for all regulated institutions and it's the reason that we got here is because ultimately the controls that focused on security and compliance and data management got to a place inside these cloud environments where you actually have a greater degree of assurance over issues related to compromise or exfiltration of data than you would if you were running private data center footprints yourself.

33:04 And so we're in that similar adoption curve now on the AI side where I believe that we will ultimately end up with shared surfaces infrastructure that allows for the same attributes of security and privacy and confidentiality to be expressed to users and businesses who are using elements that I if you look at the enterprise market, a common pattern for organizations that can't get comfortable with anthropic or open AI is to actually roll their own infrastructure inside their own AWS environment and deploy open source models that they control that's their boundaries around this.

33:36 Near AI is doing is providing the shared services infrastructure that abuse security, confidentiality privacy by design into the system and allows you to use a cohesive tool set that also allows for agents to transact and so it's really the coming together of a trend that we've seen in the past and cloud adoption with the modern AI era and then wearing on top of that the ability to transact seamlessly across any web three and any web two service soon.

34:04 Is near a privacy token? This is a good good question. I feel like that was what your answer was just there like if I wanted to that what you just said is pretty brainy. I feel like the the left side of the bell curve is saying that nearest is a privacy token. Yeah, I wouldn't just describe near as a privacy token, but near certainly allows for privacy to confidential transactions and privacy and how you interact with models.

34:26 So it's one of the key value attributes that near provides, but I wouldn't put it directly in the same category. Yeah, yeah. Right. Yeah, I'm being a little bit fissitious here. I want to try and understand what you said, because like I said, it's pretty smart. There is a demand for enterprises, institutions, anyone, companies just having more control and sovereignty over their data and data centers and wrestle like rather than putting too much data on the cloud, they just need a little bit more control, a little bit more assurances.

34:57 We can even talk about things like HIPAA laws, which actually puts like restrictions on where data goes. And one of the one potential driver of Venice, we don't really know if this is actually showing up in in in reality or not, but like a perceived driver of Venice and its its confidential compute is like HIPAA laws is we need to protect patient confidentiality.

35:19 You know, doctors can't just go typing into, you know, chat GPT consumer interface. I've got this patient named this person and here's all their medical history because if I like HIPAA and so they need to have stronger protections around the data. And what you're saying is like near as a and it's the crypto ethos that comes with being a blockchain, which is more sovereignty, more control is highly conducive towards companies and enterprises being able to manipulate data, you know, interact with data, having agents do the same under certain compliance requirements or like internal rules of the company compliance about how data is managed and allows people to just have more control, but also in an

36:06 agentic world. Yeah. I think there's a spot on synthesis and analysis of what I was just wrapping. And I think we're seeing this as well. Like the retail bid privacy as an narrative has been clearly expressed with ZGash, right? We've seen that. I've had this to be over and over and over again, which is like does retail do retail consumers and markets generally care about privacy?

36:25 And I think all of you from a 16 Z just put out this point where like, you know, people don't actually care about privacy, but I do feel like and maybe I'm wrong, maybe we look back and I'm wrong in this point with the current kind of social consensus with negative viewpoints towards centralized LLMs and concerns over, you know, private information being stored inside of centralized servers, not just API keys like Ilya likes to talk about but like your most sensitive information at life, you know, the status of your relationship, mental health concerns, physical health concerns, all of that sitting inside of central databases.

36:59 You know, there is this kind of collective awakening towards do we want a future where all of our most sensitive information sits inside the servers of three or four large companies or do we want to realize the power of AI as a technology and still have control and privacy as we do so. And so I do think we're at this inflection point where privacy actually matters more to retail consumers than it has over the previous two decades and I think AI is driving a lot of that kind of wake up call.

37:27 Yeah. Yeah. There was the grayscale privacy report on Zcash made a very good point, which was every time there is a leap forward in internet communication technology, there has also been an equal and opposite reaction towards a greater need to privacy and I can't articulate it off the top of my head, but I just thought it was a very interesting kind of counter argument to the idea that retail doesn't care about privacy, which I think is true.

37:56 Like I think if you already start up and you are a cute problem is privacy, that's a hard sell. But if you are kind of riding a trend while doing some other things and the trend is bending towards, I kind of really want privacy and you're putting your not going privacy as like a first class product, I think that's probably the safer bet where there is just a slow shift in consumer appetite towards privacy and there are going to be some ecosystems that benefit from that more than others.

38:28 Yeah. Totally agree. And I would put in here very much in the category of will benefit from this and generally is already benefiting from this, but I do think we're going to pass that inflection point now where consumers will increasingly care and I do think the grayscale report that they pushed had a great analogy there to say that I think you put it well, but it's spot on and I think that's what's happening right now with the modern AI era.

38:51 So talk to me about what you do at SVRN, is that how you pronounce it, do you just sovereign? Yes, sovereign. Okay. Yeah. Talk to me about what sovereign is and what you do there. Yeah. Happy to. So on the CEO of sovereign, it's a near focused treasury company and commercialization partner. I put a bunch of things on the second part because I think over time, despite the negative sentiment you've seen on companies in the treasury category at large, there will be some segmentation in this category based on the nature of business activities that these vehicles are actually doing.

39:22 You know, it put us squarely where 80% of our efforts are actually on the second side of this driving commercialization and adoption of near. What that means in practice for us is active governance participation that we pushed the first governance proposal for an economic incentive designed around MPC notes, which are the foundational infrastructure behind chain signatures and intense.

39:43 We're also driving the go-to-market motion to bring tier one institutional validators or MPC note operators into the system to scale the core owns and increase the security and resilience of the foundational primitive behind intense. And also doing work as it relates to kind of treasury accumulation of near as well.

40:03 So I do think this kind of segmentation framework of companies in this category will get more crystallized this year. And I do think for those that are playing in not the Bitcoin and ETH treasury company space, but those that are playing in further down the ladder ecosystems, success will be defined by the second part with good execution on the first part.

40:24 Right. So how did you describe it commercial commercialization partner commercialization partner? It sounds like it's kind of like the opposite of a nonprofit where you are a for for profit. Your profit is being a near treasury company and your alpha is being is commercializing the thing that you have invested in making you an active participant, not like a steward but still like still stewarding the actual like commercial success of the thing that you've invested in.

40:57 100%. Like at the end of the day, we're talking all about tokenomics and demand building demand for near which drives value curl to near which circles back to expression and the balance you value that we have in the business. And you made an interesting point between nonprofit and kind of commercial entity.

41:12 This was something that Billy and I in the management team on the foundation side discussed that length, which was if we didn't have such lack of clarity on the regulatory side in 2015, 16, 17 as a lot of the alternative L one thinking was coming to the floor, would we actually have had foundations or would we have had for profit centralized companies that were driving the court development of these protocols?

41:36 I don't know the answer to that question, but I do know that we found really good harmony with the foundation focused on kind of these core product and protocol development verticals with us driving go to market motions and participating in governance from a different platform, which is a for profit commercial entity.

41:54 I think this just aligns with also what sailor is doing at strategy. Maybe he wouldn't call it commercial, but he would call it the capitalization partner of Bitcoin. Like what is he trying to do? He's trying to he doesn't say Bitcoin is digital gold. He calls it digital capital and then strategy is like the credit layer.

42:13 So what's he trying to do as a, you know, a debt, a treasury company? He's being a for profit steward of the whole Bitcoin effort. The way that it works for Bitcoin because Bitcoin is like money, it's he's capitalizing it. Near is more of a commercial platform with products and services and so commercial is the better word for this.

42:36 It makes sense as like the role of the debt is to do something a little bit more than just buy the asset and put it on the public stock market, but actually, you know, juicing the effort of the whole structure makes sense to me. Yep. I mean, great comparison analysis. And candidly like this role would not have been interesting to me if there was not this second component.

42:56 You know, all the work on the capital market side is interesting and I've learned a ton about public markets, challenges and successes thus far, but the second piece would actually attracted me to say, okay, maybe this is the next chapter, despite the fact I knew inevitably there would be a negative sentiment fallout on treasury companies.

43:13 I've been around enough cycles and hot narratives in this space to know better and I consciously chose to do this because I believe in the vision that near is going after I believe it's the right team to execute and I saw the gap of a commercialization partner and a figure had to come and speak on its behalf in a more public context from the capital markets and commercial point of view.

43:35 And so it was kind of the perfect harmony. Candidly, I don't think my COO, Dave Schwad would be here either if you didn't see that second piece is so compelling. And so really was kind of a different view and different vision of what a treasury company would become. And it was that commercialization piece that got us all excited.

43:51 How do you have KPIs or goals or objectives? How do you define that for yourself? Because well, the philosophy makes total sense, commercialize what you've invested in. The strategy and implementation details, I think I could use some help luck with. Yeah. And I know you don't love this, but we'll be thoughtful in terms of MMPI, obviously everything that I'm sharing with you today is public information.

44:13 And so in that same context of the two pieces of our mandate, there are clear KPIs that management is driving towards that traverse both elements of what does it mean to operate in capital markets, form capital accrue near in terms of accumulation on the balance but also a large skewed towards KPIs and measurement on the commercialization side.

44:32 And some of those things that are public again, like MPC notes, we started off with a mandate where there was no clear incentive system. There were nine MPC note operators to date. We wanted to scale that to 21. We took an active governance role in delivering through the House of State decentralized governance forum and approval of an incentive system.

44:51 And then we ran the go-to-market motion to bring new MPC note operators on board, a number of which are coming on board today, okay, literally actually today. So that's kind of how we think about it, but the KPIs put us across both the treasury and kind of capital markets piece as well as commercial and go-to-market motion.

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46:56 You alluded to this at the very beginning, but is there like activity from the investor circles around near are people excited, what's it like to be in that world? Yeah, I mean, generally more excitement than I've ever seen, a number of liquid funds have taken positions directly through spot. Some of them did so very advantageously when the year was around a dollar, which obviously was taking risk, but it was uncertain where we would go from there at the time.

47:20 But since a bunch of liquid funds already take positions, we've also seen flows. I think you probably saw hunters piece yesterday. This was the largest inflow week to the European ETP that they have for near staking. I think there were three million of flows just this week. And so the way that I would put the archetypes of investors that have interest today are family offices, liquid funds, and scaling into institutional capital.

47:45 And as VRN represents one of the best public markets exposure patterns that you can get absent in ETF today, given that they're still pending approvals. But the sentiment has never been higher on near as an asset, largely as a result of all the things we've been talking about today. Cool. Are there any things that we haven't talked about today that are worth exploring any questions that I haven't asked any stone I haven't turned over?

48:06 Honestly, man, into actually honest, great debate, good questions, good grounding. So always here, if you have further questions, happy to revisit in a period of time. But I think you will continue to see and hear near in the center of all conversations that cover these fundamentally driven assets in the cycle.

48:24 Well, Sal, if people want to follow you or follow what you do at Sovereign, where should they go? Sal, underscore canelo on X, SVRN, underscore AI for the business, and obviously doing a bunch of work through our website at SVRN.net as well. There are newsroom. You can follow us there. Thanks for coming on, Sal.

48:40 I appreciate it. I know the deal crypto is risky. You can lose what you put in. But we are headed west. This is frontier. It's not for everyone, but we're glad you were with us on the bank in the journey. Thanks a lot.