 Hello everyone and welcome to the July financial markets mortgage subgroup meeting before we get started. I like to express our appreciation to the financial markets special industry group and we'll talk a bit more detail about that and the hyper ledger foundation for their ongoing support. They really helped us out and get this group off the ground and provide continuing support. So I always want to express our appreciation at the beginning. Hey, as always, please note that this meeting is being recorded and is under the umbrella of the hyper ledger foundation. So we asked that everyone abide by the antitrust policy and code of contract. Excuse me conduct the antitrust policy states that we will avoid discussions of companies specific pricing products and projects, and we won't make negative comments about other companies or products. The code of conduct means that we trust, excuse me, we treat each other with respect. We don't discriminate, we can, and we communicate constructively. We fully support hyper ledger's policy of openness, equity and inclusion, and for new, your new participants, we welcome you and if you'd like to introduce yourself, please do so in the chat if there's anything that you're interested in hearing about or discussing. Please do so in the chat. We want to make this as open a forum as possible. Here's our agenda for today. Again, please feel free to ask questions or submit questions to the chat. This is an open forum and the more discussion that we have the better and really everyone benefits from the interaction. This slide we always cover at the beginning of each slide because really this slide underscores the purpose of this group. This is to reinforce that we're all on the same blockchain path, although we may be at different points along the path. The next approach that we've followed it is to demonstrate number one the feasibility of blockchain through mortgage and street use cases and define potential implementation paths for the mortgage industry. We're all on the same path, we just may be at different points in the path so one of this is one of our basic tenants. I wanted to have or just do a brief PSA from the hyper ledger community. I'm sure you guys noticed in the slides that we have been the way we've been mentioning our special interest group the capital markets special interest group has changed its name to the financial markets, the capital markets special interest group the wiki's been updated the capital markets mailing list has been migrated. If you have not moved your email address to the financial markets mailing list, please do so. We also have the discord and the LinkedIn so all of those items have been changed. And if we do miss anything that still says capital markets, please let us know. And this change is really intended to underscore the word, a much broader special interest group, although capital markets is still a key area. We're now the financial markets special interest group. Okay, the next three slides I always mention, but I go through very quickly. These slides are intended to help new people out, get an introduction to who we are, and to provide them more information. So, this slide provides the different resources that are available from the Linux Foundation, all the way down there to the arrow that shows our wiki. So that information is available. And these are great resources. But if you would like to avail yourself of those resources, this is how you get an LF ID and how to join our group. Then we have the blockchain training slides. These resources are free and they're actually fantastic. I've taken this training so I highly recommend them. Okay, with that, why don't we dive into the next major section, and James will walk us through the state of the blockchain and the global mortgage industry. Thank you Marvin. Let's go ahead and advance on to the next slide. So yeah, here is our global market blockchain activity again this is updated showing the various articles we've talked about in the previous meetings along with the two new ones down in the bottom in the lower right. You know the theme for today's presentation is on consortiums. We've talked about it a bit before and you know just a level set for everybody if you're not familiar with it so consortiums are an association of two or more entities. They may be companies organizations or government agencies with a common objective of participating in activities or pooling their resources for achieving a specific goal. Go ahead and move on to the next slide Marvin. So as we talk about consortiums, you know, one of the big things I wanted to open up with is, you know, what are the different considerations that you should think about. Mayor Brown put out a great article relevant to this and I thought their opening actually was a great catch statement that most blockchain technologies are developed by foundations or consortia. Which are often representatives of the industry hoping to create and successfully deploy the technology. The article goes into for consortiums. What are some of those critical aspects that you need to you know pay attention to as companies come together to collectively play a part. We talk about governance, the importance of it to define the goals the number of participants, the levels of interest and roles that each of the members of the consortia will play intellectual property agreeing who will own or be able to utilize the develop technology is critical to the, the success of a consortia, and they frequently require members to contribute their own software materials and know how to the project. There's also antitrust consideration so to avoid information being shared that may give rise to antitrust claims. It's critical to ensure that antitrust rules of the roads are documented. They're prepared they're explained at regular intervals for each of the representatives. And after this article there's a number of components that businesses involved in a consortia will need to determine to successfully develop and implement within any industry. So as we look at the second article this is a great example coming out of Australia. There's a new platform called Ligon. It started as a pilot back in 2019 by Westpac and ANZ. And over time they were joined by Commonwealth Bank center group, along with IBM over the last three years. Ligon digitizes previously manual paper based bank guarantee processes. It enable its enabling processes that traditionally would take a month to complete. They can now complete within a 24 hour period. In Australia bank guarantees are used to secure contracts as part of retail property lease, and as an alternative to a deposit or a bond. The bank provides an unconditional undertaking to pay one party in the event of another's default. It runs on IBM's public cloud and significantly reduces the risk of fraud, but fraud and potential for errors throughout this process. You know as an additional note the Ligon platform is garnering more and more attention across Australia, not only within the finance industry but within the retail industries as well. So you know here's the US mortgage blockchain activity that we've discussed before. If you look at there at the top of 2022 back in our January meeting. It was within days before that meeting the USTF consortium was announced, and we had the opportunity to, you know, talk about what is their purpose and their goal and what were they looking to achieve. In the next articles we're going to talk about there at the bottom actually both wrap around the USTF consortium. Let's go ahead and flip to the next slide Marvin. So, you know, as mentioned we talked about this in January the goal of the USTF group is to have a stable coin as an on ramp to facilitate real time payments loan and security processings on a blockchain platform. Working bank members of this consortium included New York Community Bank, NBH Bank, First Bank, Sterling National Bank and Sinovus Bank. Working in conjunction with Fintech companies from Figure Technologies and Jam Fintop. In January on the 19th post our meeting they actually completed the first transaction on the Providence blockchain where NBH banks sent self minted USTF to a consumer a customer of New York Community Bank. The launch of the USTF consortium is one of the latest examples of community banks proactively exploring technologies to strengthen their competitiveness. We've also discussed the costs and benefits of these endeavors. So if you're interesting and what's if you're interested in what's going on in this area or you'd like to learn more about the USTF consortium. Take a look at this article or just Google USTF consortium and you can go directly to their website. We are actively making progress and it's a great example here in the US of community banks that are getting together and actually developing blockchains that will have an impact for the mortgage industry. And then the last article that I've got on here from Yahoo Finance. You know last month we had a variety of podcasts that we shared with the group. And then there's a few that are more into, you know, getting your information through video I wanted to do include this one. It continues on with the USTF consortium discussion. It's a seven minute video interview done by coin decks or coin desk TV with first bank chief administrator, administrative officer Wade Perry. And then he goes from one site into the consortium and the state of stable coins. He discusses how stable coins are designed to be a one to one digital marker for a US dollar, and how these digital markers will be insured by FDIC and consumer protection laws. There are technologies bankers and regulators including the OCC FDIC Federal Reserve, who are actively contributing feedback to the USTF so it's a great interview I highly recommend taking the time it's only seven minutes long, highly recommend taking the time to take a look. All of these articles are available on the mortgage subgroup page in fact Marvin if you'll move to the next slide on that one. And I'm going to drop into it looks like all my actually dropped into chat the new link for the FMS IG mortgage industry subgroup page what you're seeing here on this current slide. I'm going to open it up to chat clicking on that link. Making it a favorite. You'll see we've got the new articles that we've discussed here there's links to them you can get to the video that I mentioned. In addition, for all the information Marvin covered up front with those various links how to set up your LF ID, etc. You'll include those monthly in each one of these presentations, and over on the far left there you'll see the various meeting notes from each of our presentations so if you ever need those links. You know just follow one of those pages, you'll be able to get to the presentation and within the presentation it will encapsulate all these links for you. And that is the state of the industry for the month of July. I'll pass it back over to you Marvin unless anyone has any questions. James I did have a question I attended presentation by the hyper ledger foundation yesterday where I was talking about stable coins and and one of the key concerns that was raised by several people in the audience was interoperability of those stable coins, especially when they were being advocated by a particular consortium. So one of the questions asked and I'm going to pose it to you is, do you see any issues with with interoperability across these consortiums, and do you see any type of of convergence migration towards commonality or interoperability, for example, were part of the hyper ledger foundation, but stellar a different blockchain they have their own foundation and I know we try to work interoperable interoperable if that's work with them. So I wanted to get your thoughts on that. I know great question Marvin and you know in particular watching what's going on with the crypto markets and how they're being impacted by what's going on and you know the financial industries. It's really too hard to tell at this point, you know usdf it is tying itself to the US dollar and usdf is only being traded amongst the member associations within the usdf consortia. I think as that continues to build I think as we continue to see what happens with the markets and with other you know crypto sources, it will be interesting to see if you know stable coin is the long term lasting that's going to you know outlive Bitcoin and other things, or whether or not that crypto market is really going to start picking back up again as we get through some of these inflation risks and concerns. And whether or not they'll be able to tie together or have any sort of you know meaningful relationship with the stable coin markets. Yeah, excellent. Yeah, the new stable coin that they're advocating yesterday is usdf plus. So when you and I get a chance. I'll give you some of the more details about it. I don't report to understand anything about it. All I know is the acronym. Now that's great Marvin thanks for sharing. Thanks James. Okay, the next group that I would like to introduce I'd like to introduce you guys to James Shoning and Casey rock. These are two individuals from the I am project the I am project is a hyper ledger fabric project whose charter is to develop a verifiable data registry solution that will provide individuals with decentralized identity, including a digital wallet so James Casey welcome to the group. Thanks for having us. And let me just tell you where what our sweet spot is, you know, not trying to reinvent a lot of people are working on digital identity things like that and we're using some of that but but our sweet spot is in the area of what could be called a personal data store. Okay, so, so we heard your terms like digital wallet. Some people can have different opinions on what that really means sometimes it could be called a cloud agent. But it's basically what a person keeps their digital assets, you know whether it be credentials for data, things like that, or even you know maybe even bitcoins. So that is our sweet spot and, and we do think that that has an application within the mortgage industry. Because the individual is obviously an important part of the that ecosystem. And if the individual can collect all their key data and credentials in a standard format that could facilitate the process of granting mortgages and reselling mortgages, things like that. And I'm glad you put up that slide on the roadmap, starting with ideation, and then the proof of concept and pilot and production. So this topic we're discussing we're discussing the idea. And at an upcoming meeting, perhaps in a couple weeks. I believe Casey Casey who is developing the our test pad. You know, we will be giving a technology demonstration. I don't know that that would be rise to the level of proof of concept, but it's on the path it's on that path on that roadmap, and our goal is to get some other collaborators within this mortgage and within this mortgage use case, and to, you know, work towards a proof of concept and then maybe even a pilot. So so that that is going to be our goal. To say a bit more about personal data systems that there's actually a consortium mostly in Europe, called the my data global. I believe I believe they have 37 startup companies. Most of them are building personal data systems, but our approach we feel is unique and more viable than the other 37 players because data, you can have data from 100 different sources but you bring it together. It doesn't fit as different meaning you can't automatically bring data together and have it work together. Each has its own unique schema, and it has different semantics. And the semantics usually aren't even defined little documented. But what we use to integrate data are standard ontologies that might that word might be foreign to many people here, but it's the, it's a new form of a data model. We and some of our colleagues have have passed an ISO standard for a top level ontology. We have a very mature mid level ontology, and we're ready, and we are now building out a what we call a my data ontology and that that is going to include many of the key pieces of information that an individual needs to have to apply for a data model. So, I think one of the strongest cases in the mortgage field is if a person can collect all their own data in a standard format, then they can, they can take bids from mortgage lenders, and they may be able to, you know, have a need for mortgage brokers. I'm not sure if there's any mortgage brokers on this call but I mean, we all know what happened to travel agents. You know when the internet came about so that same thing couldn't work in the mortgage area so we so we'll be doing a demonstration, coming up, you know when we can get on your next agenda. And we'll be looking for cloud that's where we really need is collaborators because we have key parts of the puzzle, but not all the parts. So we couldn't do it completely on our own so case did you fill in any gaps I may have missed. Yeah absolutely I'll talk about the data so one thing that you mentioned is if people could collect their own data then present it to a bank who could offer them a mortgage. That sounds great but one of the problems is is what if somebody for forges their data spoof their data they write incorrect information. Well, one of the things that we've realized is with this verifiable credential model. We're allowing other organizations a third party organization to digitally sign this piece of information, and we would store that in our personal data store. So now when we go to present the data to the bank or whoever is issuing out the loan, they'd be able to reference that verifiable data and prove who the owner of that data was or who the creator issuer of that data. So now there's this trust established because a lot of the stuff hyper ledger does is from what we looked at an R and is, you use the blockchain to distribute out these keys, this rotation processes but ultimately, it establishes a root of trust where we can prove that the data is authentic and it has been created by a certain issuer. In our case, we're working with the holder, this personal data store will facilitate the process a holder will use when storing their data. Now when somebody wants to verify the data, such as the bank, they would select claims to the holder, and we present these verifiable data. So when James Jim show me says we're collecting data. This is verifiable data that somebody could then use to check the authenticity of it so that's kind of our claim and since it's a standard model, and we're trying to keep interoperability at mind at first. The goal is that more and more people start to conform to our data models and our standards. This is going to allow the interoperability of data to flow from one system to the other. So now we start to integrate data from third party vendors, it's going to fit really nice into the models that we're creating. James, Casey, one of the things that we've already done is I've shared with you the MISMO data model or list of all of the MISMO data fields. So when you guys take a look at that, I've highlighted for you guys the fields that I thought would be most important. Is that a sufficient starting point for your project to start to identify the common data fields because I only highlighted personal information, not property information, employment information, anything like that. When you guys start talking about data that's unique to an individual, how far or what are some of those common data fields that you guys are utilizing? And the second question, what are you guys looking for in terms of collaboration? I think volunteers, you guys mentioned that companies, speak a little bit about that because this is going to be the group of people that I think would ideally be able to collaborate with. Okay. The answer to as to which data fields are needed. And I think that would, the bank who wants to issue a mortgage is going to tell you what data they need. And we, whatever that is, we can build it into our standard ontologies. And then the MISMO model would not need to change. We can map to any other, you know, data. That's what the, you know, big benefit of ontologies are we can do a mapping between them. So if some bank is using the MISMO model for some internal application, that's how they run their assessments using MISMO. Then our standard ontologies would just do a mapping and the data would be transformed and it would speak the MISMO language. Because our models will be user centric. So when we do this, we're not doing it just for the mortgage use case. For, you know, buying insurance or, you know, you buy a new car, you get all the data about your car and then it tells you when you need to get an oil change or whatever. So, it can work with MISMO. But now to your other as far as collaborators go, subject matter experts, be people who understand the mortgage ecosystem. We are not mortgage experts. I've had a few in my lifetime, but that's my level of expertise. So just subject matter experts that may not be, not understand our technology at all. To understand the data. To have a bank that would be, you know, willing to review an application that was in a, a, a different format, you know, or, or that, you know, maybe a bank shows us their data model and then we map our data and then transform. That would be a good proof of concept where we can transform our data into their, their model and see if they can then automatically assess a mortgage application. That I think would be a great proof of concept and it would only take one, one person to test it with. And it could lead to a, you know, a larger pilot. So, I hope that answered some of your questions. Casey, did you want to. And I think you definitely hit the nail on the head when you talked about the different models that we can integrate to essentially what the anthologies facilitate is, you have one data model, we transform it into an anthology. And then when you need to take that data out, you can use the previous mapping to turn it back into the proper format. So if you can imagine there's 10 different data models that all have been mapped to our anthology that data that we store would be in the anthology However, as we want to, you know, give it back out or transform it back out, it'll then be set to the standard or the mapping version of it so that's pretty much the biggest thing that we advocate with anthologies. Okay, great. Thank you. And as I said, this is the audience that I think would definitely be able to help you and collaborate with you and serve as test cases. So to do the rest of the team. One of the things that I'm trying to do with James and Casey is get them on one of our future meetings so that they can do the actual technical demonstration that they were talking about we already have someone slated for August so maybe if you guys think you'll be ready for September or October, let me know, and we'll get you on to our calendar. I think I'm excited to see what you guys are doing and I think the rest of the audiences as well. Perfect. I'm going to, I'm going to send a link in the chat this is going to be to our discord. If anybody wants to join and feel free to contact us this is probably the best way to do it. I'm going to send a link into our GitHub page so this is where Linux foundation project as well so anybody can go on view it and join us as you'd like so these will all be in the chat. Casey James I too want to you know thank you guys for joining us today and we are definitely looking forward to that presentation. You know I'm curious. As James you kind of called out Marvin talked about that roadmap and you know where people are at. As you guys have been going along with your journey. Obviously industry expertise is going to be critical for your needs, but I'm curious if you can share with the group what are one or two of the other biggest challenges you guys have faced and how did you go about you know overcoming those hurdles. The biggest thing that we've faced is learning the, the Aries in the stack I mean that's what a lot of the blockchain technology was based off. We came in this new to it I mean our claim to fame was standard ontologies. So we tried to figure out more use cases for it. We had to learn a whole new stack to do so. That's something that we're still learning and if anybody is an expert in Aries, specifically their cloud occupy it was the cloud Python areas cloud Python control or agent. We definitely be interested in doing that because ultimately, all of these transactions that we take place are going to be using Aries and either India is the blockchain or some other layer one technology. What we foresee in the future is a subject matter expert that we're needing. Now, ultimately, like I said we are standard ontologies that's our bread and butter. So anybody else who's dabbled with this field or has worked with other organizations that built tech demos we'd love to figure out how we can collaborate in that sense. James any additional thoughts to add to that. I think you might. Yeah. I think I think Casey gave you a pretty good example there I mean, I mean I've been dealing with standard ontologies for 25 years so we've overcome. So just getting the top level ontology approved as an ISO standard that that took years in this in the process, and we and we now have a very mature mid level ontology, and we're in the standardization process there and we will. You know, we will be building out this my data ontology and plan to standardize it also. So that's, that's always a challenge. So I think that's those are a couple of good examples. Excellent. Fantastic. I appreciate you guys sharing your discord channel because that's definitely becoming a, you know, much more collaborative tool with people are using I've also dropped in chat the mortgage sg discord channel as well for everybody to grab that link. Any other questions for James and Casey before we move on to the next topic. Thanks Casey. Thank you very much for attending we definitely appreciate it. I'll reach out to some people that I know that do have areas skill sets and I'll let you know if they're able to help you out. Perfect, let's do that we'll love looking forward to that introduction. Hey, thank you guys. And we will be ready for your whenever you're having room on your agenda. I think Casey could do that demo. Okay, awesome. We'll coordinate offline. Thank you guys. Okay. Thank you. Okay, our next speaker is Mike McCoy. I see him online. He is the senior product manager for defy for block them on. He is starting a new subgroup in the, the financial markets sake, focused on distributed finance or defy. I saw his initial proposal to the financial markets sake, and I immediately saw the value in this new subgroup and the synergies with our mortgage subgroup. So with that, Mike, take it away. Welcome to our group. Hey everyone Marvel thanks for the great intro and pleasure to be here pleasure to be here. This is my first mortgage subgroup meeting unfortunately but hopefully it could be the first of many more in the future. So yeah, a little bit about myself before I show my screen. I'm a worker block David have been here since March 1. I'm a product manager for defy and our staking components so we do two things at the company I work at we run nodes for large institutions and large companies. We also create a staking and financial component that think of it as more like a commodities component and ability to trade and be able to earn yield on staking and blockchain infrastructure. But I really wanted to, I for years I actually prior to proposing for this defy subgroup, I actually ran the hyper ledger healthcare special interest group for about two years, working at previous healthcare institutions and, and other businesses. So there was a lot of similarities in healthcare and finance and these type of applications. And right now more than ever in kind of my presentation I want to prove out why defy is kind of a more promising component than centralized finances today for our traditional financial systems and how I can see the macro and everything shaping up there. So I will share my screen, give me one moment. I need to be considered a host. Oh no, never mind. I'm good. There you go. All right I'm just going to put it in presentation mode. All right, can you guys see my screen. Yep. Loading. It is loading. There you go. You guys can see it or in the presenter view. Yeah you're just starting the slideshow view. I'm going to try to get in presenter mode so I can see my notes things on the side. There you go. Awesome. All right, crypto macro and defy subgroup presentation for you all. Awesome. So, where are we coming from right so right now in defy today right we had a lot of really unfortunate steps that came to the process this past spring and summer. We were aware of Tara and their collapse in the lunapag and anchor and everything that went there. And then recently we're seeing a lot of centralized finance companies really collapse and go into bankruptcy or insolvency, such as three arrows capital block or insolvency as a voyager and a lot of all four of these companies other than Tara have a lot in common. And the thing they have in common is they are a centralized third party that are then taking in crypto finances and then distributing and putting them to the necessary means they believe are most valuable, not following a protocol not necessarily following a governance board or even a board of directors at all. They are more so just managing funds and shifting and sending them to other entities. And so that is kind of the recent events that have made people a little bit scared of defy that have made them a little bit more cautious of it and may not want to step their toes into it as much into the future. But crypto is more than just those centralized components crypto is a or and defy is a large ecosystem and this is just the ecosystem on Ethereum itself on the EVM cluster. There's cosmos. It's a benefit and tendering clusters that are coming out as beneficial protocol polygon Solana and all these are becoming very other valuable clusters beyond just the Ethereum space. And so, one personally I believe in a multi chain world, but I also believe that we're shifting in a crypto and a defy system into an oligopy, where it is the winner of its winner take most, not winner take all, where there's about four to maybe five large companies that will be able to dominate in certain services, but then decentralized access so that there's not one just dominant player in the marketplace there. And so you're seeing some of these things like in the Lido liquid staking where they have about 85% of dominance, some would say publicly they they announced they have about 33% of all Ethereum liquid staking, but when it comes to all liquid staking across tokens across clusters, they have about 85%. And so, you know, talking about this dominance feature and talking about decentralization as much as possible. I think we need to get a little bit more granular on how and what we're trying to promote in that space. I want to show a couple things about how we got here and why. So defy was just very quick. I mean, I remember like around summer of 18 and even in the spring of 2019. People were talking about decentralized finance and it was coming around the bend, but it really didn't take off until the pandemic and people were a little bit more focused online they probably read a little bit more about these very dense topics. And so we got to about a value of nearly 300 billion in a matter of about a year. And then now in the recent downturn we're hovering around 100 billion to 111 billion crypto assets. But that is a really quick turnaround. And of course you're going to see up and down in volatility over time, but that's kind of why I think we're really an immature state right now in this space. So around this time though we had peak kind of crypto assets and defined numbers coming around the end of 2021, as you can see here. And then when the terror Luna crash happened, you know a bunch of people took their money out. But then also you see around week 18 and week 20, you see a lot more institutions buying the dip kind of almost mirroring some of the charts and the prices from the end of 2021. And as you see here around week 2526 27. That's when a lot more people are taking their money out and maybe trusting defy a little bit less, or is this defy, because I would argue that's more the central as finance components, the block buys the Celsius the voyagers of the world that really unfortunately failed our, our ecosystem a little bit. So from a recent macro perspective we're seeing numbers such as stable coins are getting more adoption today, and then NFTs and fortunately going down I just showed two examples and this isn't. I'm just trying to generalize like briefly and the type of ecosystems people, especially you that are managing large amounts of crypto assets and crypto finances wanted to be able to go into a stable type of yield. So, after the USD collapse most people went into a USDC or in circles, stable coin, whereas the board API club, the famous NFT community saw a large portion of their community take out their funds to get out their gains, and they are not holding as many entities and, and for the most part ever since then NFTs are kind of going down, even coin based NFT numbers in the week of the week before 4th, 4th of July, I believe they only had seven new sign ups, which is very, very bad for an enterprise that is at that scale to be able to be with their numbers. But then I think a lot of times this next bearable run will be very different. There has to be a massive increase in VC money relative to the prior cycle of money coming in before, and the recent and the prior crashes of Ethereum and crypto in general. You see here around 2018 2019 that was when, you know, there wasn't as much VC money and there wasn't as much support to keep some of these companies alive. So when the VC money invested the oranges Bitcoin USD that is protein by retailers or, or traders, etc. And so this time around though we're having billions and billions of dollars more coming into the space, including the recent horror wits with a $4.5 billion fund. Recently, we just saw I believe multi-colon with 400 million, 450 million dollar fund coming into the space, and a bunch of others that are really trying to support these startups, looking at this next build season, and one of the tools and applications and automation features that are really going to make this possible for us to onboard everyone into this space. And DeFi and crypto to me at least in my opinion is not going to go away. One, the Bank of International Sentiments. This past spring, released some features about how DeFi actually brings a lot of operational value at now as I have here imagine using DeFi to operate a global 24 seven infrastructure with almost no marginal and operational labor costs. A lot of financial institutions are really getting into these type of mechanisms, and it's going to save the space a ton of money, and also bring a ton of earnings to the space as well. But with that you're going to see a little bit more survivor like tactics. One, so in centralized finance companies we see their money go away as they've, you know, they didn't have a proper protocol and method to do this. We've seen the DeFi protocols, the makers the obvious the compounds and native true decentralized finance protocols that are actually succeeding in this market, and somewhat flatlining but not going down to the bottom where a lot of people would project it would be. And so this is part of the value as you need to, you need to tell people why DeFi is actually use a valuable and a lot of enterprises and a lot of traditional finance institutions may not be fully aware of this yet. What's the differences between DeFi and C5. Well, one, are the financial assets controlled by the user non custodial. If not, that's definitely centralized finance. Can someone single handedly sensor transaction or execution, can a third party be able to stop that stop withdrawal withdrawal opportunities, stop deposit opportunities. That's centralized finance intermediary, they do DeFi settlement. And can someone single handedly sensor the protocol execution, like can someone just stop the bank. Rather than the actual individual can they stop the actual bank. If so, then that's essentially covered DeFi protocol, such as BlockFi such as Celsius such as Voyager. It's a truly DeFi component, and we need a lot more education in the space, but we also need a lot more examples of how people are using it today, and when what it's good for. So I give some more examples of how it's beneficial for fund transfer and some companies are doing that asset trading derivatives trading, a secured lending and unsecured lending and and really like crypto I think of is crypto as an asset class, like, we have to compare crypto to then traditional financial markets such as cash is like a money market or bonds fixed income. And what you all are probably familiar with is real assets and and public equities and private equity. And so we need to be able to get real world assets on board and actually traditional financial assets into this type of decentralized world to really see if this brings meaningful value. And at first it's a little bit scary because we're world assets into decentralized environments. That can be a big question mark for a lot of people. Why would I want volatility of crypto just to have a risk of making money and not have the security there. So I wanted to show kind of a little bit under the hood of when DeFi is done right. And to make it down specifically. This is as of July 2022, they have about 3.5 billion assets in crypto assets specifically in their price stability mechanism vaults. This is when, if you ever proposal and you are a user in the maker down you propose to join the DAO, your money and your funds and your assets get gets keep get get stored sorry into the price stability mechanism vaults. And in here, this is how they do it under the hood, they have a claim on stables. They have a claim on crypto stables and stablecoin. And then they also have a crude surplus the fees it costs to actually be part of the network and be part of the, the DAO, but they also have a separate amount of tokens that come there. They have a separate fee structure if you want to think of it that are trading on crypto in in their own type of fund, the base strategically have to get approval from the rest of the group to actually put into. And then they also have liability such as minting and providing security for the theory of network, and the more meant you have the more secure your network is generally speaking. And they also have system surplus for there as well for the staff that's part of there as well. If you want to think about the staff that supports maker down. It's in the hundreds of people, I think there may be 100 to maybe 250 300 active developers and active users that are keeping this afloat, and they have a positive room rate of 3.5 billion. So, that's nothing to sneeze at that's less people, more power. And I think a lot of people in finance are really going to take note of this. Yeah, I'm sorry, before I proceed to the next slide. I think that was a great use case. Can you define what a DAO is for some people in the audience that that aren't familiar with doubt. Yeah, of course, so it doesn't centralize autonomous organization, that is the definition of it, but a DAO is really just like an online community of people that the criteria to join to the style is you have to have an internet connection. You can be able to review proposals and you'd have a certain amount of crypto, and you can be accepted into the DAO. So it's a group of community individuals that if you want to be part of the DAO you propose to this governance board which is hundreds of people on the internet. They accept you, you connect your crypto wallet and some of the crypto assets you have to be kept in the price stability mechanism as I just mentioned here. And then that verifies that you are part of there you have certain dues and certain fees like you do with any club or any asset group, any bank, and then, but the one of the differences in the DAO too, is that in order to vote on proposals, you vote with with your money. So, if I'm a maker doll and I see a proposal and I definitely disagree with it, I vote yay or nay on to that and I put X amount of capital, the people who have the most amount of capital in the yay or nay, actually move on for the proposal to either goes yes or no. And so you actually vote with your money, which is a very interesting concept and some can think of that as, you know, there's a lot of behavior economic theories according to it. But generally, I think it makes you a little bit more truthful and a little bit more honest when it comes to your true intentions and how and what you want the DAO and the network to to perform in the future. So, yeah, that's a good example of it. Excellent. Thank you. And then one thing because we talked about Tara earlier right, and here's more things under the hood of what I'll go stable coins are compared to right so there's maker down the one I just mentioned earlier. There's cracks, which goes in this function called a curve pool, a curve pool is when you take about three to four, sometimes more cryptos into this, this pool, and then they average out the the price of the curve to be able to allow you to lend or borrow the different crypto assets you have as an individual group. So, frax does this with the curve pool and be able to lend and borrow and hold it within frax, they've other liquidity but then they have a lot of attendable assets. Part of the reason that Tara actually really fell and really collapse was because they had way too many intangible assets. They were giving people 20% API and anchor anchor was this protocol where you can just park your money. You have 20% API, I think the, you only had to lock up your tokens for about 28 days, something like that 30 days, and then you get your 20% API, which was very concerning sometimes if you had enough crypto I believe you can get these automatically out of anchor as well. So, Tara just like was borrowing all this money without actually having a collateralized, and that's kind of what screwed them in the end because they didn't actually have reserves to keep the party going. And they had some L1 reserves, which was mostly Bitcoin, some Ethereum, but that's kind of what came to their fall. So on here on the top right you see Fiat backed crypto backed algorithmic stable coins. Here's some of the key differences between them and Fiat backed stable coins as you can imagine have stability and capital efficiency. But crypto backed ones have some sorts of the test decentralization. And if they're stable coins, they create stability for you as well. Algorithmic though it's kind of like using a bot to try and predict human behavior when it comes to trading. And as we saw in this last run, it's never perfect. I still think that there is room in research and examples where algorithm stable coins can be truly valuable, maybe an administrative functions and of swapping agreements and assets via smart contracts, but we still have a long way to go in that field. And on the bottom right, we just have seven examples of how an algorithmic stable coins can be successful, they can be reflective, they can be anchored into money. And I think generally speaking, most people would say that the most successful version of algorithm stable coins is die as a particular method here. Generally, like, I'm not a financial father, you know, this is not financial bias, but generally this is where people tend to see most success within these marketplaces but definitely when you have an algorithmic stable coin that's very reflexive and can automatically like transfer funds, whatever they want to, it's a little bit of a problem there. So, what I'm just trying to get as we need to do a lot more research in spaces, more things run to the hood of D five versus tried fi is the Fed, and how they create their assets and their liabilities, as well as five I know the protocol that's similar to and similar to Tara, but has a lot more each investments that bring real world value and like mint in mind to the actual network and bring actual value to it rather than some of these other projects. And so, what I'm just trying to get again is research needs to be done we need to take more time and find the best examples and angles here. And part of like what I want to do within defy subgroup in hyper ledger is create models similar to this of what can we think of a better model for algorithmic stable coins. When we're thinking about, you know, what, you know, what makes an August table coin successful, I think it is velocity how easy easy is it to set a stable. How easy is it for a stable to scale up solvency, how reliable is the value backing the currency. What's a peg to what's it actually what's the main storage value is it in mining it is it in building up the network is the security is it in holding real it's isn't holding mortgages holding equities, things like that and then liquidity as well. What how many times is transfer is there a transfer fee, what are those fees look like are they. Is it mercenary capital where you're just taking it from retailers, is it more institutional, is it you know this or that, and the Holy Grail is getting all three of these right but as of today in crypto and defy we don't have a perfect system for this. And I don't know if we will, but we want to get somewhere close to the center when it comes to creating the next next next mechanism for this. And as I said before, try flies getting into these products. And as you can see here with recent research that came out this past May, a lot of banks are actually using crypto, when it comes to every day. They're using crypto products for their traditional uses, or sorry, traditional use cases, such as one tokenization of real assets, like potentially mortgages, P&B Perry bus, Deutsche Bank, Northern Trust, and so, and SG are all working on tokenizing real assets. So if you considered it and working in POCs for it. These ones that are fully black are the ones that are actually functional. And so you could think about all the use cases within mortgages that could really be useful here. Real time payments for net worth using crypto, maybe real time payment on your mortgage real time payment with your, your renters and things like that. So issuance of stable coins, ton of use cases that are definitely beneficial for the group. So my last slide here is that DeFi is moving towards legitimacy. Right now we have compounds enterprise arm received an S&P credit score. It was a B minus grade, which is not great overall but I think some of the measuring characteristics when it came to DeFi in this example, we're a little bit too early and may not get the full picture. It's a little bit risky, but that's because decentralized and you're, you're interacting with anonymous users, but with those anonymous users comes a governance board and a consortium like that. Also, MakerDAO approved $100 million stable coin loan for 151 year old US bank. This bank is actually right down the street from me where I live in the Philadelphia suburbs. It's called Huntington Valley Bank. And they're going to use it for a bunch of use cases, including holding mortgages and holding other type of real world assets. And then JP Morgan is bringing trillions of dollars to tokenize assets to DeFi specifically through their Onyx platform. And some of their customers include BlackRock, as well as the monetary authority of Singapore. And like I mentioned before, I ran a healthcare hyperledger special interest group. The way I ran it was mostly kind of like this in this format, where we went over industry news research action items on a bi-weekly basis. And then I showed educational videos and links so that people could learn on these type of concepts on the fly. And these are more like newer articles, research papers, et cetera, that really brought up more education, brought up more adoption. And so I proposed this to the financial market SIG. It has been technically approved by Hyperledger and the different groups. We're still looking to work out exactly what days we would do this and what audiences are most interested in this, whether it's America's EMEA or it's APEC. And if we have an APEC representative who wants to run meetings there for this as well. But Hyperledger definitely is aware that they need to do more in DeFi. And they want to create more tools and open source technologies to connect DeFi into the hands of everyday people. And this is something I work on on a daily basis with my employer. And sorry for the branded deck here. I just, these are slides I had from other presentations. So I put it on there. I don't mean to shill anything block-dain me. But I would love to have the Morgan subgroup and other people that are part of this community as members of the DeFi subgroup. If anything, if you follow the financial market SIG, you'll be able to see updates on when this comes around. Hopefully we have our first meeting in August. But love to see you all there. If there's any questions, I'm open for. Thanks. Like that was a fantastic presentation. I love the information that you're talking about. I love the way that you want to run the DeFi subgroup. It mimics a lot of things that we're trying to do within the mortgage subgroup and definitely see the overlaps between the two. So any way that we can collaborate, any way that we can support your group, please let us know. I think this is a fantastic idea. And then there are a ton of questions going through my mind in that velocity solvency, liquidity slide. I think you definitely need to expand the solvency circle. It's not equal. I just have all these thoughts going in my mind, but I don't want to monopolize this. So let's turn it over to the rest of the team and see if there are any questions or feedback for you. If there aren't any questions from the team, I know some of the questions that I had that I wrote down while you were going through it is a lot of the information that you're walking through a lot of the use cases are US centric. There's a ton of stuff going on in DeFi in Europe in Asia. And in fact, if you take a look at what's going on from an overall blockchain perspective, oftentimes they're further ahead than we are. To what extent are you taking a look at that at those geographical areas for any guidance or points of collaboration. Yeah, 100% definitely a pack Singapore, Australia, and parts of Southeast Asia are somewhat like years ahead when it comes to tokenizing assets, but they they do it for somewhat of a. It's like what you give up for ease of convenience of service and speed of that service is your security and your, you know, privacy when it comes to those services. And so in Asia, like also in China specifically, they are able to tokenize mortgages are able to tokenize like digital assets, but you have to give up every single detail and number and information into that to the government. And then, you know, the government has the control to turn the honor off so it's when it comes to your tokenized digital assets. And so those are some of the comparisons I'm seeing. I think the United States is right now in the regulatory headwinds when it comes to other rest of the world, especially because you know you have multiple states that have different laws and trying to create a federal mandate for this is going to be very tough for the United States to do, I think any interim. But yeah, I would say looking at the global view of this like yeah you can go into something the, you know, the east part of the world, and do these things fairly easily with partners. But at what cost do you do it at is the question that you always should think about. Yeah, yeah. That's a good point. Then one of the question, and then, and we're at the, the end of our time. What do you think is going to happen because a lot of deep by right now is Ethereum base. So what happens when they go from proof of work to proof of state. It's going to mean the validators of the network are a lot more important than just the minors. So, I think MEV minor extractable value is going to be very key in. So, here's the thing like Lido as I mentioned before is one of the largest liquid staking providers. They have about 33% of the ETH market but then 85% of overall crypto liquid staking across protocols. And so they also are partnered with this group very closely their investors and they know them in flashbacks, which creates a lot of MEV research. And within minor extractable value it's either you're part of the team that's showcasing an understanding where the extractable values coming from, or it's either you're the hunter or the hunted. And so a lot of times, people are creating the tools to become the hunter. And you may have to go to a certain protocol and work with a certain group. So you aren't the hunted in these dark forest of Ethereum or even other protocols such as Cosmos, Tender Man, Polkadot, etc. So, I believe that MEV now is the big difference between proof of work and proof of stake. And if you don't want your transactions to be taken by a bot or taken by very sophisticated traders and individuals in the dark forest of crypto, you need to learn and understand MEV very, very deeply. Okay, great. I love your analogy of the dark forest so that that was fantastic. So, I want to turn it over to the group because we're past the hour now. Any other questions for Mike on DeFi. I think this is a fantastic idea for a subgroup so any other questions or comments. Mike, just thanks for coming today and Sharon I think this is great information for a group. Yeah, thank you Mike. It's very useful. Yeah, it's fantastic. Okay, so the last thing that I wanted to cover and let's see if I can go back to our slide. There you go. Okay, the last thing I wanted to mention is our next meeting is going to be on August 11. We have Karen, and I apologize if I mispronounced her last name. I'm from the Rennerie Solutions Group. She's going to be speaking about blockchain and mortgage servicing. I'm really excited about this presentation. They're going to demo their new solution called mentor so I highly encourage everyone to participate or to attend the August 11 meeting. I think that's going to be fantastic and really insightful. I don't know if Karen is still on. I thought I saw her as a participant. I don't want to put you on the spot Karen but if you wanted to just say hi or mention anything that'd be great. If not, we can just go ahead and end the session. I'm very happy to say hi. I'll have support from some of my other team members who are on the call right now. Super excited to present to this group and let you know we've been in the closet behind the curtain, building this thing for a couple of years and we're ready now to show it to the industry so looking forward to it. Thank you. Thank you Karen. I know we've gone past the hour so apologies to everyone for running long but I think this was a great series of presentations. We will be making the recording for this and the presentation available to everyone on our subgroup wiki. With that, thank you to everyone for attending and have a great day.