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#13 CeFi and DeFi with OKX's Chief Innovation Officer Jason Lau | POT: The Cryptocurrency Podcast
102 Plays1 year ago
Jason's adventure into cryptocurrency began back in 2013, during his time in the Bay Area. What started with attending local Bitcoin meetups blossomed into a full-blown passion, eventually leading him to his current role as Chief Innovation Officer at OKX.
His background in traditional finance coupled with a fascination for the intersection of finance and technology drove him towards the cryptocurrency, marking the beginning of an exciting journey in the industry.
OKXs Work in DeFi
OKX is making significant strides in simplifying the crypto experience for its users through its Web3 wallet. The wallet's multi-chain support, which currently accommodates over 85 different networks and protocols signals the direction where this industry is heading.
Across different products and teams, I see the same trend emerging. Abstracting away from the complexity of having to deal with multiple chains. In the future, we may very well be looking at "The Web3" or whatever its name will be as a whole, interconnected network of chains.
One wallet and one gateway to the entirety of web3 - at least that's the vision, but there's certainly still a long way to go to get there.
Community and Support
The team at OKX are also involved in contributing to the wider ecosystem in a number of ways. Jason points out for instance that OKX is, wherever possible relying on existing, open-source solutions rather than rolling our their own proprietary code.
This means that the team is putting time in developing and growing existing code bases.
Where that is not a possibility, OKX is offering grants and other incentives for developers in the space to build solutions for the Bitcoin ecosystem for instance.
Looking ahead, OKX is set to launch a Layer 2 solution, further enhancing the connectivity and efficiency of transactions across different blockchain protocols. This move is expected to contribute significantly to the ongoing evolution of the crypto ecosystem, making it more cohesive and user-friendly.
This podcast is fueled by Aesir, an Algorithmic cryptocurrency Trading Platform that I helped develop over the last 2 years that offers a unique set of features.
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Transcript
The Benefits of Off-Market Pricing
00:00:00
Speaker
And you get off-market pricing, which allows you to, again, have less slippage and hopefully a better price and better execution. So it's a very powerful tool for institutions and power traders.
00:00:12
Speaker
Oh yeah, no, it sounds fascinating. Is that available through the UI and also the API? Available on both. We've built a very powerful API stack so that you can do all these trades also algorithmically. So maybe that's something, you know, maybe your bots and algos can take a look at. I'm ironically asking, yeah, a hundred percent.
Introduction to 'Proof of Talk' Podcast
00:00:44
Speaker
What's up, everyone? Welcome to Proof of Talk. I'm your host, Andre, and I'm here today with Jason, who's the Chief Innovation Officer at OKX. Nice to meet you, Jason. How are you doing? It's great to meet you, Andre. Thanks for having me here. Oh, no, my pleasure. I thought it would be really interesting to kind of get a bit of an understanding on your background and kind of how you got into crypto to begin with.
Jason's Crypto Journey
00:01:06
Speaker
I think that would be very fascinating to learn more about.
00:01:09
Speaker
Yeah, I mean, I'll start with a little bit about my journey and how I ended up at OKX. I've been at OKX for eight years now.
00:01:20
Speaker
And so I've done quite a bit here in various roles and shapes. But today I'm Chief Innovation Officer and really excited to talk about some of our efforts to really push the industry forward, both on our Web3 wallet side, so some of the DeFi stuff that we're working on, but also some of our exchange products.
00:01:45
Speaker
that I'm sure we'll dive into deeper later. So my crypto journey started in 2013 when I was in the Bay Area doing my previous startup. In our free time, we actually went to these local Bitcoin meetups in the Bay Area.
00:02:06
Speaker
and got to learn about all the possibilities that Bitcoin held and all the dreams that everyone had for what this technology could do. So fast forward today, it's amazing to see how, you know, years later, 15 years later, basically, or 14 years, sorry, since Satoshi and all that with the white paper, you know, how far along we've come.
The Intersection of Finance and Technology
00:02:30
Speaker
But yet, you know, there's still so much work that needs to be done. My previous
00:02:37
Speaker
career was in traditional finance. And so just this intersection of finance technology was just fascinating for me and really sucked me in once I learned more about Bitcoin and crypto.
00:02:51
Speaker
Right. Yeah, it is fascinating, right, to think that you can effectively create value through like internet protocols. It's fascinating. I don't think there was a time before this where we had this much of a shift in how money and finance and global finance works as we do today. And like you've just rightly pointed out, we're still
00:03:14
Speaker
kind of at the beginning stage of this, so that's what makes it super interesting and super fascinating in the world of, well, both CFI and DeFi, because you guys kind of do both, right? You're trying to, I'm guessing, merge the convenience of CFI with the self-sovereignty and freedom of DeFi, which is where I think a lot of the products are going to go in the future.
Understanding Digital Value and OKX's Role
00:03:39
Speaker
People love the convenience, but they also like the freedom, so how do you give both, right?
00:03:44
Speaker
Yeah, I mean, to your point about how early we are, I think just the fact that if you go to any random person on the street and ask them what they find valuable, digital items or digital artifacts or collectibles or whatever it is you want to call these things is not high on that list. I think people still don't innately understand that digital items can be valuable at all.
00:04:14
Speaker
And I think that's part of why it's going to take a while, whether it's just a generational thing or it's an educational thing. People have a hard time ascribing value to digital. And that's why this trend is early, is precisely because
00:04:32
Speaker
If you don't think digital items can have value, you're going to have a hard time understanding why you want to secure it, why you want to have a wallet to hold it, why you want to interact and build and do things with it. And that's where we come into play. Like you said, we're trying to bring that web to simplicity and ease of use on our exchange side to educate and also onboard users into the space, but also give them those tools when they are ready
00:04:57
Speaker
to self-custody and be self-sovereign.
Challenges in Crypto Adoption and OKX's Strategy
00:05:01
Speaker
I think it's very powerful, and we have a lot of work to do, and I think the industry has a lot of work to do, but it's just such a fascinating place that we're heading towards.
00:05:12
Speaker
Oh yeah, definitely. I completely agree with that sentiment and the fact that users need to first kind of understand the value that this technology holds before understanding how to best make use of that. There has been, well, since 2008, my math is really failing me right now, but that's, what, 16 years? Yeah, about that. Yeah, my math failed me earlier too, but yeah, 16, wow.
00:05:41
Speaker
It's 16 years and we've come a long way. I feel it's 2 trillion market cap. There's ETFs being approved. It feels like everything is moving in the right direction. Bitcoin is concerned to be as environmentally friendly as possible when it comes to proof of work. And I feel like people have some understanding of it, but there's still more
00:06:02
Speaker
That's just, I feel like, the top level. And then once you get into DeFi, then that's where it becomes confusing sometimes, even for people that have been in crypto for a while, because DeFi can be a wild, wild space. And I know that you guys are planning to get more into DeFi and work on or on advancing DeFi as an industry. What are your guys' plans on DeFi? Yeah, so when we think about DeFi, it's really
00:06:31
Speaker
helping our users sort of be educated and have access to all the stuff that's happening in the, I'll just call it the wider world of Web3.
OKX's Web3 Wallet Overview
00:06:45
Speaker
And that starts really with the wallet that we have, our OKX Web3 wallet. And what that is, is a multi-chain wallet that we've built, supports almost any, I think 85 plus today, different networks and protocols.
00:06:59
Speaker
And in one place, users can jump between protocols to explore all the various use cases out there. And an example of that would be someone that Bitcoin and Bitcoin ordinals and inscriptions are very popular over the past few months. And some can very easily access those, mint those, trade those on our wallet. But also with a in the same interface and user experience, go and
00:07:28
Speaker
you know, participate in all the cool stuff that's happening on the Solana ecosystem. So what we're trying to build is just this one stop for users to just, you know, when they discover something and they learn about something, they're easily able to participate all while of course storing assets, you know, self-custing their own assets. So that's really our vision.
Layer 2 Solutions for Better User Experience
00:07:51
Speaker
And then to layer on top of that, we have a few things that were
00:07:55
Speaker
really excited about this year, one of which is our layer two that we're going to be launching later. And our thinking here is that we want to help protocols and our community connect with each other. And we want to help bring a sort of cohesive user experience as users experience going on chain for the first time or their
00:08:23
Speaker
you know, 100th time. And part of that is making sure that there's good liquidity bridges, there's good collaboration and interoperability. We're working really hard with the community and developers around to make sure that that's going to happen. And even now, the network is in testnet and there's over 170, I think I checked earlier, different protocols and applications that are going to be deployed or planning to deploy on mainnet.
00:08:53
Speaker
We're excited about that. I think there's a lot of momentum there. And absolutely, I would encourage people to stay tuned as we bring that to market.
00:09:01
Speaker
That's incredible. Let me unpack that for a second because that's huge. First of all, you've mentioned the wallet that basically allows you to connect to 80. Was it 84? 85 plus is what I learned this morning. 85 plus different chains. That is huge because as a Web3 user myself, I have several wallets and sometimes I have multiple of the same wallet across different devices.
00:09:29
Speaker
That's definitely going to save a lot of a lot of headache. I just wanted to ask your kind of implementation of this wallet. I was actually speaking to the people heading the Cosmos development in my last episode and kind of that's where I come from. My head is all into like interconnectedness right now. Have you guys leveraged any kind of protocols that help communicate cross chains or have you built your own or is it like a mix of both of these things?
Cross-Chain Compatibility and Public Protocols
00:09:59
Speaker
I think just before we dive into that part specifically, I think it's not just a, I think the wallet supporting multiple chains is very cool in itself, but one unique thing that we've done is the wallet, sorry, the application to access your Exchange account, so this is the C5 side, and the D5, the Web3 wallet,
00:10:24
Speaker
It's in one app. So you don't even need to go download a separate app to do so. And I think that's where the simplicity and the user experience that we're trying to bring.
00:10:34
Speaker
really is shown because we're trying to show users that when you're ready to learn and explore about Web3, you can really simply do so in the same application that you already have. And so that's our approach, is trying to make it as easy as possible for users to do that. To your specific question about interoperability, it's obviously super important when we're interacting with so many different protocols and networks.
00:11:04
Speaker
I think what we try to do is to make sure we engage with all the various protocols and networks and communities out there. And the developers work to, whether it's a, we have not developed anything specific. We're leveraging and connecting to all the protocols that are publicly available. But whether there are protocols that help interchange messaging and things like that, or cross-chain swaps,
00:11:33
Speaker
you know, for cross-chain liquidity, we are connecting to those as users, as we see the user demand occur. So what one example is more specific to actual liquidity and use cases is, you know, when someone has a USDC on Solana and they want to go do something on Arbitrum or ETH or whatever, we've connected to circles, you know, cross-chain transfer protocol to allow for sort of really seamless and instantaneous
00:12:03
Speaker
USDC swaps, right? So it's things like these. It's more built around use cases that we're really focused on, really trying to help and elevate that user experience to something that users really feel good about.
00:12:19
Speaker
Yeah. That's fantastic. And it's always like, it's the idea, I think like the paradigm for, um, uh, cross chain compatibility is kind of shift a little bit. I think for a while you have the, Oh, it's EVM. Everything's EVM, but now you have EVM plus some of the others, more specifically Solana, like Solana has been coming in hot. They had their, uh, Solana chapter one release together to chapter two, they're teasing it in 2025.
00:12:45
Speaker
They're not going anywhere. They're going to keep growing. And I think it's fantastic to be able to bridge to Solana and other projects. Yeah. And another example, you're referencing that Solana thing is Solana and NFTs have come and are popular again. And part of our approach is
00:13:10
Speaker
Just for NFTs, for example, our NFT marketplace that's built in is an aggregator across chains. If you were to search for a specific NFT collection that you've heard of, but you don't know necessarily which chain it's on,
00:13:28
Speaker
Or you want to swap between different collections between chains. That's all built in natively, so you could experience that. And it's utilizing some of the technologies I mentioned earlier, where we have, again, built-in cross-chain swaps and things like that. So that's the kind of experience that we're going for. We've got work to do.
00:13:50
Speaker
And cross-chain bridges, as you know, are sometimes not reliable or they have issues and things like that. But we're trying to find that decentralized way that brings the reliability that CFI users would tend to expect. But that's the approach that we're going for.
00:14:12
Speaker
So it's in a nutshell, it's a, it's a gateway towards the decentralized web without any other level of complexity. It's abstracting away from the idea of chains and, and different wallets and different protocols. It's just one gateway. Here's your whole web three. That's our vision. And, uh, we like that word gateway a lot also. Um, that's what we think. Uh, but again, you know, it's, it's as the,
00:14:42
Speaker
I think it is still very early, right? There are so many new use cases and protocols and standards that even today are still coming to market. I mentioned the ordinals and inscriptions earlier, but I was just reading and learning just like you are about ERC 404, right? 404. And these are just new things that our team is really spending a lot of time on the ground
00:15:08
Speaker
talking and listening with the community to see how do we bring these new cutting edge protocols into the wallet to make sure that they're supportive, but also in a safe and reliable way. And so that's the balancing act that we have to do. But like you said, it is that gateway approach that we're taking. We want users to come to our wallet and feel confident that if there's something that they want to do, our wallet will be able to support that.
00:15:38
Speaker
Right. Yeah. And I feel that is where the ecosystem itself ends up bringing that much more value to the users because again, if you're looking to get users who are maybe not super into web3, you're going to get them into web3, you want to abstract away from the complexity. That often means that you're going to have to build
00:16:02
Speaker
software or protocols for developers to make it easier for them to build the end product. Are there any DeFi protocols or projects or GitHub repos or anything that you guys are putting out, hoping to get some community momentum around?
Engaging the Developer Community
00:16:20
Speaker
Absolutely. I think the way we think about building is to make sure
00:16:26
Speaker
Developers that want to interact and integrate our wallet first and foremost have the tools and documentation so they can do so in a way that works, obviously. But two also is we're spending time contributing to the broader communities with code and also education.
00:16:44
Speaker
Um, one example, I guess I can give two examples. One is, um, you know, I mentioned our layer two that is going to be, we're working with polygon to do that. We're going to be using their, uh, CDK it's a Z K EVM. And that, that may not mean much, but I think it's important to know that as part of that collaboration, we are, our engineers ourselves are contributing time and code, uh, an effort to develop code so that this can continue to improve.
00:17:13
Speaker
I think that's one. We've also been working with the Ethereum Foundation and community to propose new standards in things like account abstraction. I think we're going to be putting out some new proposed standards on how we can make modular
00:17:39
Speaker
I don't know how to describe it without being too technical, but trying to make the smart account and account abstraction standard be a little bit more usable and be a little bit more interoperable. So stay tuned for that. And then broadly, even beyond that, if you look across ecosystems to Bitcoin, we have a grants program that we instead of ourselves contributing code, we provide funding for Bitcoin core developers and Lightning developers to really advance open source
00:18:08
Speaker
development, right? So that's the type of support we want to do and sort of participate in among the developer community. But if there's feedback on how better we can do that, I mean, we're also all yours.
00:18:24
Speaker
No, I think that's fantastic. And I think that's the beauty of Web3. You see communities coming around, you see organizations contributing to repositories because the technology is amazing and it's scalable. It makes sense for organizations to contribute to that code base rather than roll out the
00:18:46
Speaker
own version. It's great to see that happen. It's great to see that collaboration going.
Technical Insights into Layer 2 Solutions
00:18:51
Speaker
You've mentioned you're building your own L2 solution. You're using Polygon. You're using a ZKE VM for that. Are there any technical specs at the moment that you'd be willing to share?
00:19:05
Speaker
Again, I'm not super, super technical, but the documentation is out there and I'd encourage any developers that are interested to learn more to reach out or just go to our page on our website to learn more about the technical aspects. We are hoping that
00:19:22
Speaker
A lot of this stuff is already open source and parts of our wallet are already open source and we're hoping to continue that momentum to open source even more of our code so people can build on top of it and also battle test it. I think that's the key. It's more so the mindset of how we work in Web3, I think you highlighted, is what we want to be a part of and also reinforce.
00:19:48
Speaker
Right. Yeah. No, that's fantastic. Tell me a little bit about what you think the role of layer two solutions are for the growth of the EVM ecosystem.
Scalability and Ethereum Enhancements
00:20:03
Speaker
Yeah, I think at its core, it really opens up some of the use cases that people are dreaming of. I think in previous cycles, we quickly learned that ETH layer one is just not feasible for multiple sort of, if there's something going on on-chain, whether there's an NFT drop or a game or something,
00:20:27
Speaker
It's just not, it doesn't work, right? And I think it is the layer two aspect, and now part of the reason why you're seeing so many layer twos is that some of these scalability issues that we face in the past are now being solved and being put to the market. Still early, we think, and how it exactly plays out in terms of how many layer twos do we need? What is the differentiator between them? I think the market will figure that out. But I think the capacity
00:20:56
Speaker
for these layer twos to provide cheaper transactions faster. All those good things about solving scalability is going to open up use cases. And I think ultimately boils down to use cases, right? When we come down to applications and users using those applications, they expect
00:21:17
Speaker
a certain level of user experience where it's not paying $30 for a transaction as an example, right? Ideally not, yeah. Exactly. And that's where we are particularly excited about. It's just that some of these scalability issues in the past are being solved right now.
00:21:40
Speaker
And we're happy to see how we can contribute to building things once we have those solved.
00:21:50
Speaker
Yeah. I was talking to this guy that's built an open source token gating mechanism for WordPress websites. So you'd be able to token gate pages and stuff like that. He called it Loop Press and it's built on top of Loop Ring. And I didn't know at the time, he explained it to me that the long-term vision for Loop Press is that
00:22:14
Speaker
Loopress is going to be the layer two for Ethereum and they're going to have another layer on top of that, I think called Tyco. So then you're going to have layer three rolling up the transactions that are already rolled up from layer one and then sending them all the way over. So you have another, I guess, degree of scalability, which is probably, we're talking again, I don't know, 100, 200,000 TPS or like something really crazy that would be more than Visa transactions at the moment.
00:22:44
Speaker
Yeah, that would be amazing, right? And if we expect applications like, what was that, LoopPress? What was the name? LoopPress, yeah. LoopPress, yeah. To scale and to grow, these are not just merely financial transactions, right? Every page you look at, article you look at, is potentially multiple transactions. And so I think that's where we need to go. Obviously, we'll need to figure out
00:23:10
Speaker
security implications of having an L3 and things like that. But I think we'll get there. I think there's just a lot of focus and really smart people working on this. So it's just an exciting time, I think, right now for crypto in general.
00:23:27
Speaker
Yeah, it's so exciting. It's so exciting. We're literally talking over a 10% bump in the market right now. So that's good. Perfect timing. And I was just in Dubai and meeting with a lot of people and there's also a lot of momentum about layer twos and scalability on Bitcoin also. I think this year is going to be very fascinating because
00:23:53
Speaker
with the ordinals boom last year, there's now a lot of new developers and a lot of new capital coming into the Bitcoin ecosystem. So while the base chains are very different, I think you can expect to see a lot of momentum and a lot of excitement coming out from there also. So again, just broadly agreeing with you, there's just so much cool stuff that's about to happen in 2024.
Impact of Ordinals in Bitcoin Mining
00:24:21
Speaker
It's a good time.
00:24:23
Speaker
Yeah, with ordinals, I've recently kind of had my mind changed on ordinals. I used to think, look, Bitcoin is already at its capacity most of the time, right? It's not a fast chain. It never was supposed to be.
00:24:39
Speaker
So for a long time, I thought, okay, well, ordinals are kind of just, you know, adding to the transactions and to the clutter on the chain. So what's really the purpose of that? But then I was speaking to this guy that's running a kind of like a mining, ASIC mining business.
00:24:57
Speaker
on Bitcoin. And he's been a miner, he's got experience with mining himself. And he's saying that from the perspective of the miners, it actually incentivizes them quite a lot because you're making up in transactions what you wouldn't when the halving happens. So that's going to be in April. Well, we expect it to be 20th of April, 4.20, right? There's going to be 3.125
00:25:25
Speaker
And then he's going to have from there. And that's the point where miners in Bitcoin expect that rewards from processing, you know, ordinal transactions is going to overtake the amount they make by confirming blocks, which is huge because this was not the case three years ago. Yeah, I mean, the implications for Bitcoin's security budget due to all these all this additional activity on the Bitcoin network is it's huge. Right. I think I think the
00:25:55
Speaker
We had always expected there to be a fee-based security budget, and now we're starting to see what that might look like. We don't know if this is the model forever, but to see more Bitcoin activity,
00:26:11
Speaker
is just tremendously positive for the entire ecosystem. We're at OKX, we're pretty bullish and very excited for what Ordinals opens up. It's just a entirely new, just the way of thinking about these meta protocols and using techniques like that to expand Bitcoin's design space.
00:26:35
Speaker
It's phenomenal. And I think we will see a lot of new stuff come out this year that is going to really, I wouldn't say validate, but at least the experimentation is going to be immense. And we're proud to be that wallet that supports all that upfront. Again, I mentioned Bitcoin and all the Bitcoin ecosystem stuff is already in the wallet. So you can, again, not just Solana and ETH, but also jump back into Bitcoin if you want to also.
00:27:05
Speaker
That's so cool.
Transitioning from CFI to DeFi with OKX Wallet
00:27:07
Speaker
I actually wanted to go a little bit back on the wallet and explore the connectivity between your DeFi and CFI side of things, because there's a lot of value in that. I think right now, what the workflow is, if you're looking to go from CFI into DeFi, you're going to go to an exchange, you're going to go to OKX, what you would have before the wallet, right?
00:27:27
Speaker
withdraw some funds onto your wallet, pay the gas fee, and then you'd be done with that. So how does your wallet change that workflow and how does it make it easier for people to connect between CFI and DeFi? Yeah, so I think our vision, as you articulated actually, is to make that process as seamless as possible. I think users that connect and load up their wallet, or sorry,
00:27:53
Speaker
Sorry, if they log into their exchange account and also set up their wallet account, again, it's in the same app, and link the two, I think offers them really more seamless abilities to do exactly what you said. For example, if a user wants to withdraw from their exchange account, they might have bought some crypto, withdraw and send it to their wallet.
00:28:21
Speaker
Because you've linked your accounts, you can do that seamlessly in very few clicks without copying, pasting addresses, not have to worry about, um, you know, sending it to the, you know, typos or anything like that. That in its sense is, is already a huge hurdle that users have, um, sort of hesitations around. Um, and then furthermore,
00:28:44
Speaker
In the exchange itself, we allow you to pick and choose what layer 2s you want to withdraw into and what type of networks you want to use. And so that also helps smooth out some of the issues. If you, let's say, start with ETH and it's on Ethereum, but you want to go into a layer 2,
00:29:08
Speaker
The exchange linkage allows you to bypass some of that friction and go straight into the application you're using, for example, on a layer two. And again, that's all connected, right? Like we don't need to have you copy and paste and do another swap and things like that. So those are some of the things that we're thinking about. Further down the road though, I think we have some, the product team has some pretty interesting thought on how to make that even more connected.
00:29:35
Speaker
nothing specific to announce right now, but we are absolutely thinking about how DeFi and CFI, they offer different benefits and trade-offs, right? And so we want to bring the benefits to the user while sort of abstracting away some of those trade-offs. And so if we can offer this sort of seamless DeFi CFI experience, that's what we're going to be pushing
00:30:05
Speaker
forward to so that users can also get educated. I think the key part is not just the transactional friction, but there's a lot of hesitation around, am I going to mess up once I'm self-custeeding assets? There's this fear that I don't know what I'm doing or I'm going to lose my whatever assets or private keys and things like that.
00:30:34
Speaker
So I think new technologies or newer technologies like MPC and things like that where you shard the keys and provide users way to back them up. These are ways where we can seamlessly build into the CFI experience so users can have a wallet very quickly without risk or less risk of being without their funds. So these are things that we're exploring. I think it's, again, also a very open and interesting space.
00:31:03
Speaker
Oh yeah. And that's super exciting. I'm really going to keep an eye out for that. I personally really like the idea of no longer having to confirm that this is the correct wallet to send to, not dealing with that level of abstraction. I think a lot of people will definitely go on board with that. And I think to the bigger
00:31:23
Speaker
It really plays into bigger adoption. It's not just people who are hardcore into crypto that were here when Bitcoin happened. It expands to people and makes it easy to onboard people that were not here from the start. And I feel like this has been always one of the biggest challenges with cryptocurrency. A lot of the times you have developers building for developers.
00:31:46
Speaker
And then you have people in the space kind of very clicky about things and not really into that much adoption, which is it will definitely change. And I think that's kind of the tools in the processes that you're building right now are driving that change. And I think that's fantastic. One other thing to add on that is
00:32:09
Speaker
I talked about account abstraction earlier, and really, it provides for new ways to interact with on-chain wallets. And one thing that we're particularly excited about is the ability to do on-chain social recovery, really trying to take away some of that risk or fear that you may lose access to your wallet and your funds.
00:32:35
Speaker
I think that that's yet to come and we're spending a lot of time looking at it. I think later this year, we'll start to see sort of prototypes and first attempts at that. And that's another way where to your point about making sure when users onboard and try these things out for the first time, they can overcome that fear that they have. And we hope it will make that impact to make it easier.
00:33:01
Speaker
Right. Yeah, no, it definitely will. You won't be just running on adrenaline every time you send a transaction. Even though that is fun sometimes, it does get old. Absolutely. Double checking all those, every single letter and it's tough.
00:33:17
Speaker
sending it right the first time to confirm sending it wrong the second time around with a real amount. Oh, man. Yeah, definitely. So I wanted to get a little bit into the CFI things that you guys do because I know you do a lot of things.
OKX's Copy Trading Feature
00:33:31
Speaker
I'm also deeply
00:33:35
Speaker
involved in CFI. I've helped co-found an algorithmic crypto trading platform. And we've actually integrated with a few exchanges, OKX being one of them. So we allow people to use our application to programmatically place trades on OKX. And I wanted to get kind of like your understanding into what are some of the new things that people in CFI can expect
00:34:02
Speaker
Yeah, I mean, we on the CFI, sort of the exchange side of our business, we've got a lot of cool stuff that's coming this year. You mentioned being able to, what's the name of your platform? I don't want to miss it now. It's called ACIR. ACIR as the bunch of Asgard gods, northern gods, the ACIR. Awesome, awesome. Yeah, I mean, look, we encourage
00:34:27
Speaker
integrations like that. As long as it's safe, users understand what they're doing. This is something that we work with across multiple partners and providers across the space. One thing I think the team was pretty proud of was
00:34:44
Speaker
We have a trading view integration also, not as sophisticated as your algorithmic bots, but it allows users to be able to hopefully make better trading decisions with their charting and in other tools, and also place those orders via the trading view interface and not have to log in directly to their OKX account. So again, it's a seamless way of
00:35:10
Speaker
Uh, you know, we have the liquidity, we obviously have the platform and execution and all that, but different, we're providing different ways for users to engage with that. And, and how do they make a trade, um, is what we explore. Um, and so onto the copy trading feature that you mentioned, that's also, we launched that about a year ago now. Um, and that's something that's gotten pretty good traction. I think it brings a, again, a different and new way of, um,
00:35:41
Speaker
being able to be involved, I think first and foremost, but also hopefully make smart trades. The way it works is users or there's two sets of
00:35:54
Speaker
users. One is a user that we call it a lead trader, basically someone that is willing to share their trading strategies to others. And the other set is users that want to copy, which is why it's called copy trading, basically copy and execute on the trading strategies that the lead trader has provided. And there's a, you know, if the trades go well, there's a profit sharing arrangement built into the system.
00:36:21
Speaker
I think what's coolest about this is crypto is very much about community and about sort of that information sharing and really that community aspect. And the social aspects of this copy trading is what we've seen really, really be powerful. It's a great way to connect with others that you think
00:36:48
Speaker
you want to connect with and participate in their trading activity. We also try to make it as transparent and provide as much data for users to make those right decisions when they decide to copy someone's trade, where we show things like what percentage of trades, the hit rate, what percentage of trades were profitable, what type of instruments they're engaging in, what type of leverage they're using, perhaps,
00:37:16
Speaker
if they are. So that's sort of the approach that we're taking. I think it's been a pretty fun but also well-received product.
00:37:27
Speaker
Yeah, no, it is. It is amazing. Copy trading is always one of these tools that people are almost kind of magical. But people have to understand some of the limitations, I guess, around tools like this. For instance, if I were to copy another trader, would I be able to copy their positions or would I be able to start from new positions going forward?
00:37:53
Speaker
I need to check with us specifically on that feature. I'm not sure, I'm not sure.
00:37:58
Speaker
Okay, because that's what a lot of times people go into copy trading and there's a certain hit rate or profitability rate, but that is with historical trades that have already accrued the profit. You're right. Going forward, you have to kind of, okay, well, this is proven to work historically. It may very well work going forward, but it is the same profitability for my trades from this point onward is not necessarily guaranteed. You're absolutely right. And I think it's very important
00:38:28
Speaker
for a platform like us to make sure that users are very aware of what they're engaging with and what they're committing to. Again, we try to be as transparent as we can about the metrics and the activity, but also make sure that users have the contextual and educational information that they need to go into these products. And this goes for every single product offering that we have.
00:38:58
Speaker
The educational part is making sure users are aware of the risks are super important. And that's fundamental to how we build and design our products.
00:39:12
Speaker
Yeah, I think that is exactly the point is the education aspect of it. I think educating people creates better users and then creates better products and it kind of feeds from one to another. You create a certain synergistic way of these two improving each other and feeding back, which is also fantastic because in crypto you have
00:39:40
Speaker
Yeah, you have the ability to also communicate more than you ever did in any other line of business in crypto. So that even feeds the whole machine even more, which again creates better products that create better users and so on. The community aspect of crypto, I think, cannot be understated.
00:40:00
Speaker
I think we very much rely on that feedback loop that you described also to improve our products. We're very active, I would hope, we're very active that even on Twitter or on our other social channels or via customer support where user feedback about features and anything really, we're super happy to take that and respond to it.
00:40:28
Speaker
Yeah, no, I can definitely confirm you're super active on Twitter. And I do like your Twitter persona. I think it's pretty cool. Thank you. I wanted to get a little bit into nitro spreads and what they are and how you guys are offering with the tighter spreads and the execution speeds, how all of that works a little bit in detail if you want.
Nitro Spreads for Institutional Traders
00:40:52
Speaker
Absolutely. Nitro spreads and nitro spreads is a type of
00:40:57
Speaker
trade that you can make on our liquidity marketplace. And liquidity marketplace is something that we've built really more for the institutional and sophisticated traders. It allows for the packaging and execution of multi-legged sort of, again, more sophisticated trades. I think that's
00:41:23
Speaker
what that tool does, and it's very powerful. And I don't know if we have time to dive really deep into it, but it's a tool that...
00:41:33
Speaker
you can use to make extremely large block trades if you wish to minimize execution risk and slippage and things like that. Or you could use it to do things like nitro spreads, which is what you asked about. And nitro spreads is really a fancy term for basis trading or spread trading, which is taking two products that you think have some arbitrage gap and
00:41:59
Speaker
you want to execute them together and capture that spread or that base difference. It's fairly common in crypto as a strategy, mostly because crypto has sort of this unique market structure of having perpetuals and futures and spot and all these different sort of explorations on futures. So you can get creative
00:42:27
Speaker
and also put multi leg trades together on your own. You could do that today without the liquidity marketplace, but you run into some of the issues that I had highlighted where you may not be able to get the pricing that you expected when you initially identified the opportunity. That's due to slippage or just pure execution timing or liquidity issues, and that's all solved
00:42:55
Speaker
via this Nitro spread product within liquidity marketplace. It's really a one-click, hey, this is what I want to do. I click and it executes both legs atomically. So you either you get it or you don't. And you get sort of off-market pricing, which allows you to again have less slippage and hopefully a better price and better execution. So it's a very powerful tool for institutions and power traders.
00:43:21
Speaker
Oh yeah, no, it sounds fascinating. Is that available through the UI and also the API? Both, yes, available on both. We've built a very powerful API stack so that you can do all these trades also algorithmically. So maybe that's something, you know, maybe your bots and algos can take a look at.
00:43:42
Speaker
I'm ironically asking, yeah, 100%. I see where you're going. And I think the one thing is, I do believe you need as a user, you need to apply for access to the liquidity marketplace for specific products. And not obviously not all products are available in all jurisdictions, depending on where the user is. But absolutely, I think if that's something your bots can consume, and build trading strategies on, I think that'd be very cool.
00:44:13
Speaker
Yeah, well, we are quite like our back end is quite robust and flexible so we can easily add new working parts together, change the kind of orders we have, uh, type of orders and all that. So it's definitely something I'll look into. Uh, that does sound very interesting. Okay. Yeah. And the documentation for the API is, is also on the website and I can point you to that if you need it.
00:44:35
Speaker
Sweet. Yes, definitely. I'll definitely shoot you guys an email after this. Nice.
The Future of Crypto and Global Expansion
00:44:41
Speaker
I also wanted to ask you, what do you think lies ahead in the future? What are some of your plans at OKX and also where do you think the crypto industry as a whole is going to go within the next couple of years, five years from now?
00:44:59
Speaker
Five years in crypto is a very, very long time, as you know. So I will respectfully pass on that. But I think if you zoom out and take a look at the trend, I think we can all agree on this increasing, one, awareness. I think awareness is done, right? Like everyone knows about crypto, everyone knows what it is, what it can do. Two is now this sort of adoption where
00:45:27
Speaker
Even a few years ago, you had people that were skeptical whether crypto will be around in five years or three years, whatever. And now I think that's also gone. I think people have accepted that there will be crypto and it will be around for a very, very long time with the ETF, with regulatory clarity, with again, some of these scalability issues that are being resolved and also new use cases that are being developed on chain, like the Bitcoin stuff that we talked about.
00:45:57
Speaker
Tremendous momentum, I think, heading into this year and the years to come where we're kind of bouncing off of a maybe a rough year where certain bad actors are now being flushed out of the system. You know, the people that came for a quick buck or for, you know, just I guess tourists have also left. And so what you've been left with is a really core set of builders and
00:46:27
Speaker
and businesses and developers and all that, that really understand what we're aiming towards here and building towards here. And I think you'll see a lot of those things come to market now. I think you kind of already feel that the momentum has shifted quite a bit from even six months ago.
00:46:48
Speaker
And for us at OKX, we're really leveraging on that broad trend, right? We are, I think earlier just last month, we announced our, we just got a license and I'll start with the C5 side first. We've got our license in Dubai with Vara over there. We're expanding into the UAE as a result. We are going to be launching a new markets in Latin America, Brazil, Argentina,
00:47:18
Speaker
Turkey, we've got some cool other locations that we're going to be launching in. So very much an expansion of our products and services to a wider audience. And then on the Web3 wallet side, we're building on a lot of the momentum that we've seen over the past year about
00:47:37
Speaker
We've been jam-packing our wallet with a lot of these features that we discussed earlier, this multi-chain support. But I think we have a lot of work to do in terms of making even more easy for users to onboard and understand all the things that are happening. We're working hard to support, most importantly support and make sure that all these new use cases that are coming to
00:48:02
Speaker
Market this year are going to work seamlessly in our wallet. So interoperability, building those connections with the developer community, super important for us.
00:48:11
Speaker
And then the layer two we discussed also, that's going to open up some, hopefully some new use cases and new user experiences. So there's just, there's a lot. And that's just, I think in my mind, I only told you about what's happening in the next few months. So I don't know how to get to five years or even three years. We're just got so much planned just for the next three to six months. And I'd love to keep you guys posted as we continue on that journey.
00:48:38
Speaker
Oh yeah, no, that would be fantastic. And I completely understand five years in crypto is a hundred years in real life at least. It's nuts. Yeah. Also to your point of flushing out bad actors, I feel like that is one of the best things that a bear market can do.
00:48:57
Speaker
Because all of those unsustainable business models in crypto that come out during the bull run, then they get flashed out in the bear market or all these high yield farming, all these, you know, like really unsustainable, unsustainable unless the numbers keep going up.
00:49:14
Speaker
they have to fold because there's no other way. And that just doesn't include the flat out fraudulent ones that we've seen before. So it feels like it's kind of like springtime in crypto, you know, like the old gone the news in the things that we know and love for a few years ago, they're still kind of going strong, so they've proven to work. So I think it's a very positive year in crypto. I think it's going to be a very positive year next year as well.
00:49:40
Speaker
And I think adoption will spread from institutional into more globalized country level adoption. We've seen it with El Salvador. They broke, I think they broke even like a couple of months ago. I think they finally, they're finally in profit and it can only go up from here, which is fantastic to see that. And it's fantastic to see the guy, you know, sticking to his guns for so long, Naibukkale. And he got reelected, so he's going to continue his strategy. With 90% approval rates, yeah.
00:50:09
Speaker
Pretty amazing. I think some of the efforts that they make on the volcano stuff and the mining, it's going to take time, but it's just great to see that level of experimentation. El Salvador is, I think, a great example. But you look just slightly across, you see Argentina also having just this really innate understanding of the value of Bitcoin and crypto.
00:50:39
Speaker
And that's why we're expanding into Argentina also. And this is happening in pockets with various differences
00:50:50
Speaker
globally too, right? We're working on our license in Hong Kong and we hope to be successful there. Hong Kong's becoming a real hub for crypto activity in Asia. And there's already existing hubs in Singapore and Japan and others. So, you know, we can go around the world and it's just gonna be a very good year. I think the one place where we'd love to see more progress is the US, but it's an election year this year, so we'll have to stay tuned.
00:51:20
Speaker
Right. Yeah. Well, I mean, if RFK gets elected and you know, there's going to be a very crypto friend friendly environment. If that happens, the guy's very bullish on Bitcoin.
00:51:29
Speaker
We will have to wait and see, yeah. Yeah, 100%. You can never know until it actually happens, totally. Well, look, I'm really excited about this. I think you guys are building some really, really amazing products. I can't wait to see what are the new things that you're going to come up with, and I'll be closely following your guys' progress in the months and years to come.
00:51:52
Speaker
I wish you all the best with the approval in Hong Kong because I know Hong Kong is like rightly pointed out is going to be a massive crypto hub the way it's it's planning out right now at least so that's fantastic to see. Do you have anything else that you'd like to announce or anything else you'd like to let the listeners know anything at all?
00:52:14
Speaker
I think just one, which is the community aspect that I talked about, we truly mean it. And so I'm on Twitter or X at Jason KLAU. You can ping us and give us feedback on our products. I think that's super, super important. Our product and engineering teams crave feedback. And we want to know how we can improve our products for you, for our users. And if you're a developer, if you're any other
00:52:43
Speaker
you know, contributed in the space. We're also like happy to talk, right? We want to work and engage to really collaboratively build towards this sort of this exciting years to come. So please do reach out.
00:53:00
Speaker
Awesome. Well, it's been a pleasure, Jason. Honestly, I had a lot of fun and I feel like I've learned a lot and I'm totally going to ping you about the nitrous spreads post conversation. Please. Thank you. Thanks for having me. Thank you. No, it's been great. Thank you. Thanks everyone.