 to Adventures of Commercialization. Today, we have Bradley Allgood. I'm really excited. At first of all, I'd like to thank Erica Lill, if you remember from previous episodes who has connected us to Bradley today. So welcome Bradley. Hi to be here. So tell us a little bit about yourself and what you're up to these days. Yeah, so my name's Bradley Allgood. I'm currently Chief Executive Officer of Fluent Finance, which is a bank-led federated stablecoin, so largely focusing on federating the custodies between multiple institutions and minting a stablecoin and having a level of transparency on the collateral and real-time monitoring that can inhibit trust within stablecoins. Largely my career in the past seven years has been focusing on transforming legacies and governments, first started with founding the Startup Society's network, which is the largest think tank for special economic zones that focus on innovations and policy, distributed governance, things of that nature, has a peer-reviewed journal, Research Institute and really helps to provide real-world education to people that are looking to set up special jurisdictions and special economic zones around the world. People that aren't super familiar with what those are, you know, Hong Kong to China, it's a good example of them, Singapore to Malaysia, DIFC in Dubai, there are essentially plots of land that have different economic policies to create greater development or economic development within the host country. Move to the board there, still serve them the board there and quickly got into the for-profit side, seeing that the gap to reach citizens wasn't just policy, but there's a huge gap in technology. So service a lot of governments around the world and designing better systems for people registries, property registries, early sovereign and autonomous digital identities, using blockchain technology, both public and private, even tokenization of carbon credits to tokenization of real estates using non-fungible and fungible tokens. So very broad range, governments move quite slow and this was quite a bit ago and they weren't really ready to take the leap in implementing a lot of these blockchain technologies that we designed. So I moved to something that's a little bit faster, not a ton and that's commercial banking. So about three years ago, set out and traveled through Asia, Latin America, the US and spent a lot of time talking to central banks, regulators and tier one financial institutions, understanding why the unbanked problem exists and the underbanked problem existed. Given that we had such a wide range of technology and I knew what cryptocurrency could do to solve last mile as they call it to reach the end consumer. And what I figured out is there was a whole bunch more than just technology risk for these institutions. There was lack of regulatory clarity. There is not understanding how to do the accounting. There was risk departments that are adversely incentivized to say yes. And then there was lastly obviously bureaucracy, the bigger the organization, the more groups it has to go through to get out. So from there, I built a team of senior bankers from tier one financial institutions, educated them on blockchain technology and quantum computing and better custody. We went out into the market and started servicing the space and helping innovative companies find homes and large core banking systems and tier one financial institutions. And that's actually when I met my co-founder in Fluent, his name's Oliver Gale. He is the founder of central bank digital currency and did the first one in the Eastern Caribbean and the company he founded has gone on to do them in Nigeria and other places. And that's, you know, we really saw a big gap when we were talking to a lot of these large institutions, finding a way to bridge from traditional finance to DeFi, giving them a solution that can really help them, help them onboard and access the massive yields and economic opportunity and the ability to kind of reach their consumers in new ways. So that was the founding of Fluent. That's wonderful, finding solutions in all different ways. So you sound like a real serial entrepreneur to me, for all the steps that you've taken to get to where you are today. What would you say? So we're talking about stablecoin. There's a lot of people out there that are a little bit hesitant to get into this market of cryptocurrency, blockchain. What is the stablecoin and how does that set this apart? Yeah, I mean, so stablecoins is something that has been around for some time. Tether was one of the very first ones, which was a version that we call institutional stablecoins. And largely they were driven as a means to settle out, a more seamless means to settle out of highly volatile assets like Ethereum and Bitcoin into something that's stable. So when the market goes up and down, you have something that you can kind of hedge yourself with that then quickly grew to various different forms of institutional stablecoins with everything from like PAXOS where they have a banking charter circle, which their custody is managed by BlackRock, Tether, obviously an offshore kind of depository opportunity there. There's also algorithmic stablecoins which has been really hot on the news and that focuses on using math and some sort of price stabilizing mechanism and often a volatile collateral to be able to create stability. But ultimately the goal is to try to have something that is 100% stable as much of the time, right? If not all the time that you can trade out of and enter into the crypto market, launch on exchanges. It's largely meant for the hedge funds, the traders and other participants. And then recently in the DeFi craze, it's been a mechanism of yield because you can essentially stake stablecoins into different protocols and you generate a yield. So people that hold stablecoins, in the case of holding a bank account, you're looking at, I don't know, 1% interest rate in a savings account, it's very minimal. But in stablecoin, regular consumers in retail we're seeing anywhere from seven to 14% and in some cases even 20% yield on their money. So helping the lowest income classes in many ways build more wealth. That's great. We'll definitely help all different sectors of business. But what about current events that are happening right now? So we have seen a lot in the news about the market being very volatile. How can stablecoin help this? Or how is it affected by it? Well, to be quite honest, it's a stablecoin's fault is why the market got so volatile. There was a stablecoin called Terra, well, UST, so Terra Luna. It was a protocol based stablecoin. It was an algorithmic stablecoin. It had a means to stake and generate yield and what it had done is largely said that, in the case of buying up a whole bunch of Bitcoin in the case of a market crash, that it would liquidate Bitcoin as well as its Luna token and receive another dollar. In which case, the actors in the market had a lot of liquidity pushed down the price. There's still a lot of speculation to exactly what caused it. But at the end of the day, the price of Bitcoin heavily affected what their collateral and their collateral reserves are, or so to say, what is backing the stablecoin or what can restore the peg? And in the case of a market downturn, they're forced to sell off a market downturn of Bitcoin, which creates concern and cryptocurrency and creates a requirement for a redemption of their stablecoin. And then their only other option is to sell their existing governance token, which took about a 95% dive or Bitcoin to restore the peg and if Bitcoin's already going down, it's essentially a downward spiral, right? You're selling into a lot of sell pressure in billions of dollars and that's what we saw. We saw a collapse of the market. And this was largely a validation of algorithmic stablecoins having huge issues because for the sake of not wanting to do KYC and AML in many cases, and in some other stakes, there's other use cases, but that's largely the reason you saw a need to try to predict everything that can happen, which is really impossible. So a lot of the principles that I focus on and particularly with stablecoins is making sure the collateral is as secure as possible and less targetable, because if someone targets takes a billion dollars and targets the price of Bitcoin that can affect, that affected Terra Luna's underlining reserves. And so there's countries personally, this touches my heart because I have grew up in El Salvador for eight years, but I have seen recently that countries are taking up Bitcoin as a national currency. How does that work and can stablecoin, do they play a role in that? Yeah, definitely. So in the case of El Salvador, they never had a currency, right? They always had used US dollars and they made the determination to use US dollars in Bitcoin. So now they have a fiat currency and a Bitcoin and bridging between the two is often taken, requires a lot of patchwork services and you're always doing a constant kind of spread analysis. So if someone wants to unwrap US dollars into Bitcoin and grow their Bitcoin treasuries or vice versa, there's constant price oracles and there's volatility that people have to be concerned about. What is really interesting in the case of like an adoption of stablecoin, it makes it much easier for that bridge to happen because rather than having to take the fiat which is held in a core banking system and tied to a central bank somewhere, held at a large commercial bank, taking that and then bridging it into a public network through an exchange into USD to Bitcoin pair. In the case of having already a stablecoin minted off of that underlining collateral, you would be able to much more seamlessly transact between the two. So having something that is minted to a public network like Ethereum or, you know, if you do Solano or Polygon or, you know, there's quite a few near having liquidity on those platforms and also having the stablecoin on those platforms allows a really seamless switch between them. So I think it's really important. I think that any non-central banking currency country like the Eastern Caribbean, like what they're doing in El Salvador, really if they're gonna be digitally transforming, they need to digitally transform both the fiat side and the stablecoin with their commercial banking ecosystem as well as the cryptocurrency and the Bitcoin if they're gonna start accepting more legal tenders. And our, so we talked about platforms for trading and I know that that's probably the biggest way that people are working with this type of currency but are we gonna have like ATMs where you can trade this in now that we're getting banks involved, how does that work? Yeah, I mean, ultimately that one of the biggest use cases for stablecoins and like on the institutional side is Visa and MasterCard settling card schemes. So normally the way you have to settle card schemes is you're gonna have, you know, very kind of, you're gonna have merchants that are accepting the card, you're gonna have banks that are issuing cards, they're gonna have banks that they're settling to and there's this big amount of liquidity that has to move constantly. Well, in the case of a stablecoin, it can settle immediately across public networks rather than having to go from one bank into another bank through a traditional transfer system. And you can focus on end-to-day settlements which Visa Connect does a really good job of. They're one of like the largest kind of real-time settlement systems that have like a trillion dollars in some days moving liquidity on the system. So when you have that big of a pool of liquidity it makes it much easier to kind of settle these cards and these debit cards and pull things out and transact from stablecoin. And then it have enter back into the real banking system, enter back into card schemes and, you know, Visa and debit cards and credit cards and things like that. So it is a stablecoins are a key component for these institutions to be able to adopt and use crypto because what an institution can't do like Visa is accept Bitcoin as a means of payment again because of the volatility, but also because the regulatory clarity and the internal general venture accounting that they would have to do, it's just not developed yet. And if you use a stablecoin it's literally the same thing as a US dollar. So it's the closest analog that they've currently operated just in the case, this case rather than having a closed database it is a distributed database on a public blockchain. There's a lot of businesses I've seen popping up recently that have they check out systems that are normally cash only businesses but they are allowing cards to be used if they are purchasing some sort of like a cryptocurrency could be really volatile such as a Bitcoin is it possible that we could be using like some sort of a stablecoin at this level of business? Yeah, yeah stablecoins ultimately will provide merchants less fees than their current options, right? So when they go through card networks they're leveraged with fees pretty like two to 3% in some cases in this case you can settle with a stablecoin. Also, when you look at the way that cards came into the ecosystem it really was focused on building networks, right? It was building like expanding your network to have more merchants accept your card to have more banking access and so on and so forth and what's public networks and public blockchains do means you don't have to expand your network it's already global. As long as someone has a public private key bear an ability to store it an occasional ability to access internet then they can start to transact. So rather than having to expand your existing system you just have to give them the essentially the capabilities to transact in the cryptocurrency and then it's borderless and global. That's great. So taking a step back now let's talk about you a little bit Bradley and the journey that you it sounds like you did really great job at pivoting when you thought that like technology was really the next step. What other types of hurdles have you experienced as an entrepreneur that we can let other entrepreneurs know about? Well, in my particular case my hurdles have always been that investors don't really know what I'm talking about when I'm first working on stuff because special economic zones have not been in venture capital. They were not in venture capital five years ago six years ago. It was a really long road to educate people and then I did blockchain really early on and again venture capitalists at that point where like I don't understand how this blockchain thing is going to be effective I don't understand why a government would want a better identity system. So my hurdles have been largely around education and doing things a little bit ahead of larger adoption and an understanding even now when I'm trying to put like propel this stable coin it is a significant amount of education to just get people to understand and institutions to understand the benefits that stable coins can offer them and then to help them also understand what are the differences? How does this stable coin better fit their needs than Paxos or Circle or so on and so forth. So a lot of the hurdles in my case are related to education and getting the right people to understand the vision that you're trying to execute. And what kind of funding have you received? So are you just up from your board or have you crowdsourced funding for this? Are there other people backing you from the general public? Yeah, so I went through a process when my previous company once I identified a need here my previous company, which I still have but it's largely on hold as we're kind of working on this invested the first check we brought together a team started getting everyone to work together building, designing everything we're gonna do we went out and did a pre-seed we had like a block wall big brain holdings and master ventures and a few other kind of influential people from MakerDAO and other parts within the ecosystem Solana so on and so forth that parts participated on an individual basis and we did a pre-seed, $3 million pre-seed and since then have moved into our seed round and we have a lot of really great partnerships all of them with strategic partnerships with people that are looking to mint more institutional stablecoin so these are typically large institutions anywhere from billion dollar to hundreds of billions and trillion dollar balance sheets that see value in having a more regulated stablecoin that they can interface with the way that the collateral is managed fits their needs and also the way that they get to manage their customers and their clientele within that ecosystem also fits their needs. That's great strategic relationships are networking is key and I think that that's come up very frequently on this show is that getting yourself out there and really networking your cause education in your case so with everything that's happening in the current market are people hesitant to invest in something like this? Is it? They're hesitant to invest. Oh, sorry. No, no, no, just in just in, you know, just the space that it's in and not necessarily, you know once they've learned about what it is is these current events are these affecting you greatly? So within the crypto space and within traditional equities both have constricted quite significantly. It's a hard market to raise in we're facing a recession that's relatively imminent. It is the people like are taking and tightening their valuations the valuation you were raising in cryptos two months ago should be different than it is currently if your business is relatively the same, right? So if you started to raise two months ago and you need to like sit down talk to the investors that you trust and that are close to you and get a scum insight into a valuation that's gonna be a little bit better. So entrepreneurs really need to consider capital runway as the priorities and I'm finding investors at whatever price you need to to get the money in to live out the recession once you kind of get that liquidity in to live out the recession it's really just focus on generating revenue and delivering your product because anyone in the crypto space that is surviving this shed this winter as they call it I mean, hardly the same as the last winter we're still at $30,000 Bitcoin price maybe more today but the ones that survive that will be the next generation that will take adoption to a greater level because now that we're we've gone through this whole attempt at having no KYC, no AML everything's distributed algorithmic stablecoins that's all that's gone DeFi is never gonna be the way that we perceived it in the past it is all gonna have KYC interactions there's gonna be different types of correct places to onboard and offboard the ecosystems everyone's a citizen of a country they're not gonna be able to circumvent their taxes or anything like that but with that we're gonna get the inflow of real institutional liquidity now, if you think about Bitcoin at $2 trillion or crypto markets at $2 trillion full market cap it seems like a lot well, if you look at an organization like State Street they have 38 trillion in assets and are costing now that's not all fiat there's a broad range of securities and other things that are in there but at the end of the day these institutions drastically overshadow what we think we are in crypto and bringing that liquidity in is going to be a massive, massive, massive growth because there's a lot of technical compliance benefits there's a lot of really good things about what crypto is that services what these institutions need and furthermore once these institutions kind of go in and you can access a stablecoin from your bank account then it becomes retail adoption at a whole new scale so the next generation of crypto is going to be regulated DeFi and it's going to be drastically impactful it's they're going to be businesses that you know, trillion dollar values very quickly and easily they're going to be competing with the likes of Apple and others let's take a look at your product here so let's pull up fluent website so our audience wants to take a look even further this is what the website looks like how many people are on your team Bradley? about 30, 35 30, that's great the majority of that is developers really, really good developers that assorts the great talent yeah, we're really fortunate our C-suite my chief financial officer was the CFO of city of all of Latin America my COO is one of the senior most senior managing directors from city we also have team members that, you know, my CTO did the the core banking integrations at the Eastern Caribbean Central Bank for their digital currency as well as the Costa Rica Stock Exchange and a few others so we have this team of people that have really executed things like this before and also come from a traditional finance background and then we have another side of our team which is, you know, heavy DeFi leaders once one that brought DeFi to General Electric she was the chief innovation officer there another one was, you know, early early board member at Celsius and helped them get to market so we really kind of straddle both worlds in terms of our skills and our experience and it really helps us get a balanced and focused look on how to take this to market that's great, that's your team sounds very incredible so I know we only have a few minutes left and I did see in your background that you have some NFT experience and so I'm curious just because in the blockchain and as we're tracking things and creating labels for things a lot of these things are let's say art art was bought or sold at some point in time and gains value by based on like who owned it or who created it it's timeline and as we're seeing that on the blockchain how are NFTs really playing into this market as well because it's all that the art is in the eye of the beholder, right? Yeah, so NFTs have largely been underutilized a lot of my experience with NFTs was using them for like to dictate things that are non-divisible so like let's say a housing title or real estate property real estate or a corporation you would have a non-fungible token that would have metadata that relates to their like what that corporation is what that piece of property is and then that NFT can be owned by an individual also you can kind of from there kind of take the opportunity to create a whole bunch of fungible tokens that relate to a percentage ownership of that NFT so there's a lot of different things that when I was doing NFTs weren't related to art but I do think NFTs have taken off as a means to validate and create scarcity within art projects that are digital, right? Cause usually it was you create a GIF and that GIF can be repurposed and downloaded and used again and so on and so forth but now you can have just one version of that one GIF and that created value because people wanted the scarcity and people saw it as a means that are gonna upgrade where I think NFTs are going to have to go to really stay viable is they all have to be gamified they have to have some sort of gamification some sort of benefit excitement that can be done by merging certain NFTs together or giving them properties but furthermore implementing them in games so again when I was talking about people building their networks with games it's been the same way so if you think of wow it's a closed network, right? But imagine you go into wow and you go through this process and you get this piece of armor and that piece of armor is written to an NFT on a public network now it can be taken off that wow network and can be traded seamlessly and actually accrue much more value for the participants so really gaming is probably one of the best use cases for NFTs and will be one of the best use cases when implemented, right? Largely hasn't seen its place to market yet. That's so great, thank you so much I just knew that was a part of your background and I've had a lot of people asking me to get some information for them so I really appreciate that. So I know we're at time Bradley if you had one piece of advice for entrepreneurs today you've already given us a great load of it but just one last note to take on this what would you give them today? Remain tenacious, just do not give up like it's always going to be hard it's never easy, it's never comes to you quickly just wake up every morning and some days are harder than others and you have to go back to sleep and wake up the next day and try again so just never give up. Thank you so much and thank you audience for joining us for another week of Adventures of Commercialization we are here to talk about ways of making money and business every other week at 1pm Hawaii Standard Time so thank you so much and we'll see you in two weeks. Mahalo.