How to Grow Your Bitcoin Without Risk 💥 - Interview with CEO of CoVault

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Welcome to the chain stories podcast, the podcast that celebrates disruptors who defy convention here.

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Hey Ely, pleasure to meet you at this past event in Lisbon at Crypto AI Con.

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It was definitely a random encounter, but I thought your story in this space and what you're building is pretty interesting.

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For our listeners, why don't you start with the intro about yourself and tell us a little bit about how you got into crypto.

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Great, thanks so much for having me on.

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Always love to meet fellow passionate people and supporters of the builders and the entrepreneurs, the visionaries.

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So yeah, really glad to be here.

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My background originally is in architecture.

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I've had kind of a, you could say a meandering journey.

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To get to this point of crypto, which although it has spanned a few different industries, I feel like has given me a really sufficient kind of background and understanding the core principles around not just building, but like building with structure and building with intention and how to actually create environments where relationships can carry projects forward.

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My background originally is in architecture.

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Also even before that in the realm of music and production, I've always been extremely fascinated by culture, but with a background in architecture, learning about how the built environment can actually inspire identity and how that identity can actually mature into behaviors and mindsets and how that actually really does fundamentally shift the way humans interact and relate to each other.

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And I have to say in the early days of learning those kinds of concepts, it just seemed like such a far off.

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Like I was, how are those two things even related?

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But after two decade career as an entrepreneur across architecture, fashion, design and economic development, I can say those things are absolutely fundamental and certainly true and underpinning the way humans interact with each other.

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So whether it be in the realm of fashion and how we express ourselves with the, what we're wearing, or whether it be in the cultural kind of unspoken, but all followed social contracts of like, how do we actually interact with each other?

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How do we treat, what are the social norms?

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How do we treat each other?

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How do we treat new ideas, right?

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How do we treat potentially threatening new concepts, right?

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Are they welcomed and we can have these kind of like intelligent discourses?

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Or is it a culture where, no, those are new ideas, they need to be attacked, right?

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That needs to be taken down.

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So these kinds of cultural behaviors that evolve around what we're doing.

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But all around, I think, understanding how structure and design and systems actually affect the way humans interact has been a consistent element and what I've been learning about and experimenting with.

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And I think all of those ideals are expressed extremely clearly in the realm of web3 when we're looking at economic systems, and when we're looking at tokenomics, and collectibles, and speculation, that all of these key elements are almost like, rapid experiments that are happening, in the span of one bull market, or a few year span, that we're seeing even new narratives take hold, and billion dollar economies form behind them, sometimes even larger than that.

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So with these kinds of areas, I think it's just incredible to watch the design choices we make actually have immediate effect and a measurable effect when it comes to the economy that comes in to these types of communities, projects, tokens, whatever it might be.

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That sounds fascinating, Ely.

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And let's dive a bit into your background before crypto.

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I know you are an architect from professional, from graduating college.

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How did you took a dive into the crypto world?

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What and how was this journey for our listeners that are just trying to understand how can they even get involved and maybe change their careers?

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Yeah, it's a weird thing.

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Changing your career is like a two edged sword.

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But my journey took me from architecture where I was extremely passionate around the built environment.

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And then into a job where I was working, what felt like more like a lawyer than this incredible starry eyed designer and looking at zoning analysis and working in New York City.

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Felt like my creative spirit was just getting crushed in this architecture office, even though I was designing buildings that were getting built and dealing with clients and dealing with the city and it was a great experience, a wealth of experience, but I left the firm to start my own fashion company thinking, Hey, I want to put this design, degree to better use something more exciting, more close to the culture.

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And so I launched a fashion company and thinking, Hey, I'm in New York city.

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We have New York fashion week.

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This is going to be easy.

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We'll get some designers.

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We'll make some designs and we'll jump in.

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And with all the enthusiasm and excitement and naivete that was the beginning of my entrepreneurial career.

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And from there, I just never looked back.

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It was just always exciting to be building products and taking ideas all the way through the journey from something that was in your head to something that could make it onto a napkin, to something that could make its way into tech sheets or into some kind of actual draft and making prototypes.

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So I was really fascinated with building from buildings to clothing.

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And then from there around 2008 went into more of a design heavy focus.

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And that led me into economic development.

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We were working with some different state governments.

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We were working in the realm of building complimentary currencies and finding ways of using communication campaigns to drive awareness of reasons a business should relocate or reasons a business should take advantage of certain resources and then you could say like really boots on the ground community building.

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And this was essentially the backdrop before getting into crypto hardcore, this realm of even reading the white paper around 2012 or so for Bitcoin, but not because I was thinking, Oh, I need to, I have an investment strategy built around this, but more how, what makes a currency?

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How did these currencies come about?

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Who designed the dollar?

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Who designed the euro?

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And really getting really deep into economic design.

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And that translated perfectly to learning about NFTs in that realm around 2020, this fascination of NFTs and this incredible creativity that was unleashed by smart contracts, became to take hold.

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And we built a giant community on the app called Clubhouse around educating and onboarding people into crypto.

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And this was an endless abyss of learning and education.

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And we were running these open audio spaces and having thousands of people come through them.

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And over the course of about a year and a half, our tally is that we onboarded about a half a million people into the space.

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Oh, fascinating.

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And going back to 2012, did it click on your mind right away that Bitcoin was here as an alternative form of currency, money, as you probably lived through the recession in 2008?

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And you're like, this potentially makes sense.

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I have to say it took a really long time for that to sink in.

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It took almost like 10 years for that to sink in.

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But it was around 2020 where I started building habits of saving in Bitcoin.

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It was almost insane to know that much about it and the theory and the concept of Ethereum before it was anything.

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But I had no mentality around saving.

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I had no mentality around, I was so driven in building businesses.

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I wasn't thinking Oh, let me build a portfolio.

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Let me also add these alternative asset classes to a portfolio.

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I didn't have the maturity of mind at the time.

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But then going into 2020, it started to just become like, Okay, yeah, we're saving in Bitcoin.

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This is what we're doing.

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If anything, it started building those habits of saving and of building towards having a portfolio and having some early wins in the NFT space to see oh my goodness, this could be a life changing money even just in terms of the mindset that it inspires of how that can be life changing, cause it's building different habits, building different awareness, building different social groups.

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And with all of those things like the sum total of that is now being firmly rooted, and having a venture studio and building companies and building towards, having a fund as well that to support builders and build this ecosystem.

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Yeah, for sure.

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But yeah, so I would say like it took that long for those seeds to grow, but they grew into something extremely substantial, like in my mind at this point now, people are like, Oh, yeah, Glassy, the Bitcoin guy, which I hold, proudly.

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I'm like, okay, that's right.

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I'm the Bitcoin guy.

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And I think it takes everyone some time to click in and go down the rabbit hole.

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And there's this term around the Bitcoin community that we can take a deep dive as you also mentioned, the financial sovereignty term.

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And I don't think a lot of people get this.

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And we're in 2025.

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It's been almost 100 years since actually, the US government confiscated or forced Americans to surrender their gold for multiple reasons.

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But maybe we can take a deep dive into this, why Bitcoin enables this and why it's so important.

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The idea of sovereignty is, it's like one of those words that's sounds like a shiny word.

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Like it sounds like the kind of thing we should like, but it's also complex and isn't necessarily so like easily graspable.

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Maybe like even if you start thinking about words like freedom, you're like, okay, freedom, like I get to choose.

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I'm the one that gets to be in control of my savings, for example.

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Am I allowed to save?

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And if I hold those savings, are they just going to, the value of those savings going to be eroded because of inflation?

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Because the government, that controls that currency continues to print more of the currency?

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That's out of my control.

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So if I'm saving in U.S.

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dollars, but the U.S.

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government is printing more U.S.

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dollars all the time, the value of my dollars is actually decreasing every year.

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So that's like maybe a force against my financial sovereignty.

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Because it's a factor that's weighing against my ability to simply hold and control the value of something that I've accrued.

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So Bitcoin is like a counter, you could say like a counterbalance or a counter force, where just by having a fixed supply, we are feeling really great about holding this as a reserve of our value as a holder of our value.

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I know we're seeing a lot of volatility, goes up, goes down, everyone's celebrating, we're seeing all time highs lately.

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We were all crying for a few years as we were going through the bear market, so there's volatility.

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But if you look in the longer term, it's a volatility that is moving in an upward direction.

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And there's a lot of reasons for that.

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Certainly the fixed supply being maybe the easiest thing to point to, to say, there's an impossibility for someone to just jump in and say, we're going to print more Bitcoin.

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Yes, more Bitcoin is being mined into existence.

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That is the incentive for people to run their various miners and to do their part in upkeeping this decentralized ledger.

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But at the end of the day, it's a fixed supply of 21 million.

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And because of that, it feels like a great place to store our assets because not only is it not going to be eroded by inflation, but in fact, because of the increasing demand, and we're seeing this certainly lately, with Trump presidency and with now other nations looking at moving towards a strategic reserve and keeping a strategic reserve of Bitcoin as part of their economic policies, that we're seeing this massive adoption, but it's going to still be contending over the same 21 million Bitcoin.

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So that fixed supply, we can expect that the value of these Bitcoin, of these 21 million Bitcoin is going to sum total, be either steady or increase in value.

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And for these reasons, it's a great foundational layer of what you could say building blocks towards our financial sovereignty.

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And I'm going to talk about just two other components of it.

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I mentioned briefly the decentralized nature.

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The fact that it is running, it's run as a protocol and it's run not just by one server, but by all this whole multitude, in excess of a hundred thousand different instances of the Bitcoin ledger being kept in all these different computers across the world.

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It's decentralized.

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There's not one entity that is controlling the future or nature or whatever.

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There's no individual that has decision making power over the entire network.

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So it's decentralized.

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We love that.

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That's another element that adds to this building blocks of sovereignty or, financial freedom tools.

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The other element is that, it operates in a trustless and a permissionless way.

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And we'll just speak briefly on each of those.

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Trustless meaning I don't need to trust an intermediary because there's so much duplication and redundancy on a protocol level.

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I can trust the network.

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I trust Bitcoin as a whole.

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It's had 100% uptime since it started.

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We're seeing trends that are extremely, you could say close to predictable that we're seeing in these four year cycles, in terms of how it was programmed.

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And so with a semi predictability, plenty of volatility, decentralization, and a trustless architecture where we don't have to trust intermediaries because the protocol is doing all the hard work of keeping track of who owns what and who's sending how much Bitcoin to the other person.

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So everyone's Bitcoin ledger is kept in this way.

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And the last thing is that it's permissionless.

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We don't have to ask for permission to withdraw that money or to send or to transact or to deal with protocols.

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And these are, I would say the pillars of financial sovereignty.

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Let's talk a bit about storage.

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I know you're building something related to this.

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But before we take a deep dive, what is the proof of keys event in the Bitcoin community?

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How important it is for the listener to know, should I own my Bitcoin keys and store them in XYZ way?

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Should I use maybe a centralized party to hold those coins?

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What are your thoughts and advice here?

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I would answer with some statistics from this year.

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Within the first two quarters, within the first six months of 2024, we saw more than$2 billion in hacks from crypto that was stolen that was managed or in a custodial service, generally centralized exchanges being the main target of these hacks.

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Sure, you could store your crypto with a custodian.

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That's an option.

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And I think a lot of people's journey and either buying crypto or somewhere out along the lines is likely having to interact with a custodian.

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That's like part of the landscape.

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So I can't say like never ever touch them.

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But I would say, generally speaking, you don't want to store your assets with the custodian because that's immediately relinquishing that sovereignty that we were just talking about.

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Instead of you being the one that's in control of your assets, by having a custodian hold your Bitcoin for you, you're immediately relinquishing that control and putting that in their hands.

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So now you don't have a permissionless environment.

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You don't have a trustless environment because now you're forced to trust the intermediary.

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You're forced to ask for permission when you want to send those transactions.

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And if it's in their control and they're the ones that are technically in control of the keys, the seed phrase of this account that's holding the Bitcoin, then they're technically the ones that can send it, that can transfer it, or can block you from sending it.

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So that pretty much goes directly against all of these fundamental tenets of Bitcoin.

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And though it might come with some convenience, I would say, generally speaking, you want to avoid that for any amount of time besides maybe you're going to do some trading.

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Okay, do some trading.

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You're going to buy some crypto.

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You have to, go through those channels.

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And then I would highly suggest moving directly, moving those assets directly into a multisig.

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That would be the highest level security as far as being able to have not just one point of potential failure, but having a layered approach to your security where you have, two or three or four more different wallets that would have to sign off in order to allow a transaction to be sent off.

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Yeah.

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That sounds pretty interesting.

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I have always learned that since day one, not your keys, not your coins, I think is really an important step.

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Yeah, it's something like a mantra.

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They're like, not your keys, not your crypto.

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oh, something happened with an exchange.

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They're like, Sorry, bud, not your keys, not your crypto.

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You shouldn't have done that.

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Oh, someone took my phone out of my car.

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Homie, you forgot, you didn't even lock your door.

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Like you had all your doors wide open.

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You had your windows open.

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They just came in and took it.

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Yeah.

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And I understand it can be hard for retail that comes in for the first time to understand this concept as we come from a world that, Hey, let's call customer support and fix the transaction or revert it.

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And in Bitcoin or crypto, there is no customer service.

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You can't revert money once you send it.

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And a lot of people forget about this concept.

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And yeah, it's true.

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Yeah.

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We probably skipped like two of the pillars of financial sovereignty, one of those being responsibility, because now you're taking like, okay, great, we have this freedom, but with that comes the responsibility.

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And that means if you're going to be a self custodian, then you certainly need to be able to keep those keys very safe.

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You're going to need to be able to keep them in a place where you have access to them, where you're not putting them in a place where someone else might have access because you saved it on iCloud.

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And then the iCloud got hacked, or you saved them in some other place that, someone could get access to.

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So it's a bizarre, it's like the most cutting edge technology.

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And at the same time it involves instructions like, Oh, by the way, get out a pencil and a paper, or get out a permanent marker and a paper and write down these 12 words.

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So yeah, that's very, clunky in my opinion.

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It's like hard to say, like maybe to teach it your grandmother or auntie, like how, why is this so important to write down these 12 words?

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But I think that it's important, and this is maybe the other pillar of education and community and having other human beings that are helping teach each other and reinforce these elements of what does it look like to move towards sovereignty.

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It certainly involves a lot of awareness building, and it certainly involves a lot of us teaching each other, our family members included, to reinforce these different habits and these different mindsets.

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And I would say this comes all the way back around to what we were talking about right at the beginning of the identity.

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The identity that you take on and say, no, I am going to be financially sovereign, right?

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This is being a financially sovereign being is important to me.

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And as that being part of my identity, I'm willing to go the extra mile for responsibility and different types of best practices and writing down my seed phrase and not sharing it and understanding the importance of having that in multiple places, maybe even going so far as to etch it in metal and have that in some indelible place so that almost under any circumstance, I would be able to get access and not be in a situation where I'm not in control of my own assets.

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There's actually some really interesting stories on how people store their crypto.

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There's a book out there, called Bitcoin Billionaires.

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I highly recommend the listener to read that, but it's how the Winklevoss store their crypto, where they bought new computers, printers, and got the seed phrase in a locked room with no light from the outside or something like that.

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And they're super diligent and they cut the paper into pieces and fly across the U.S.

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and put it.

00:20:15.826 --> 00:20:16.605
That's exciting.

00:20:16.645 --> 00:20:18.326
It's like you make yourself a treasure hunt.

00:20:18.685 --> 00:20:25.175
I heard that about Vitalik as well, that like he has like different parts of seed phrases like hidden in different cities in different places.

00:20:25.226 --> 00:20:27.215
I think that's exciting personally.

00:20:27.756 --> 00:20:32.115
I can't even imagine, why people go and do, there's a lot of resources out there.

00:20:32.125 --> 00:20:35.046
If you would like to learn that listening to these podcasts.

00:20:35.675 --> 00:20:43.036
Regarding investing, shifting topics here, I always learned that we should never hold our eggs in one basket.

00:20:43.125 --> 00:20:45.855
And I think this relates to what you're building.

00:20:45.855 --> 00:20:59.615
And actually, I'm a very big fan of indexes in traditional finance as it gives us exposed to the entire market, but we can diversify our portfolio and get XYZ returns instead of just holding all in one stock.

00:21:00.115 --> 00:21:08.066
How does, what are you building at Covalt translating to these and to empower the next generation of DeFi products?

00:21:08.506 --> 00:21:09.756
On Bitcoin, I would say.

00:21:10.826 --> 00:21:23.256
I would say the next, like layer of evolution, DeFi has been around for quite a while, mainly on Ethereum and certainly getting very popular on various L2s and other chains.

00:21:23.546 --> 00:21:38.820
But I would say the next evolution is right in line with what we've been discussing, our self custody based DeFi tools, ones where I don't have to sacrifice custody to an intermediary, one where I can understand exactly on a product, what is happening to my money?

00:21:39.101 --> 00:21:44.171
What levels of trustless infrastructure are being put into place?

00:21:44.471 --> 00:21:48.381
And I think this is the next generation self custody based tools.

00:21:48.691 --> 00:21:56.121
So one of the key things we built at CoVault is a series of vault primitives to empower this next evolution within the space.

00:21:56.361 --> 00:21:58.401
All of which are self custody based.

00:21:58.750 --> 00:22:05.010
I won't go through every single one, but I'll say it starts with the vault primitive of a multisig, just like we were describing.

00:22:05.351 --> 00:22:20.480
And then adding more layers to it that include a vault position token that can connect the multisig, treating the multisig as a vault that can hold many different types of assets that we can start automating processes of things like staking.

00:22:20.746 --> 00:22:24.945
So that I, maybe I want to lock my Bitcoin in order to gain a yield, right?

00:22:24.945 --> 00:22:29.016
I think this is one of the more exciting use cases and builds, that we're doing.

00:22:29.215 --> 00:22:35.135
So I want to lock my Bitcoin, I want to get a yield, but maybe it's so complex to choose between the different yield opportunities.

00:22:35.155 --> 00:22:36.455
Do I want to go into lending?

00:22:36.635 --> 00:22:38.296
Do I want to go into liquidity pools?

00:22:38.576 --> 00:22:41.625
Do I want to go into some other type of volatility harvesting?

00:22:41.865 --> 00:22:44.385
Do I want to invest in stable coins or LSTs?

00:22:44.615 --> 00:22:53.496
There's so many different genres of token and of yield opportunities that our mission at CoValt is to make that as simple as possible.

00:22:53.746 --> 00:22:55.546
And we're doing two things in that regard.

00:22:56.340 --> 00:23:01.691
One is making vaults that you can just activate and get benefit from the yield with a single click.

00:23:02.171 --> 00:23:08.601
So these yield vaults make it super easy to put your Bitcoin to work for you without actually sacrificing any custody.

00:23:08.980 --> 00:23:15.371
The other product that we're developing and extremely excited about is something we call our curated token index vaults.

00:23:15.671 --> 00:23:25.250
And what this is empowering us to do is to build token indexes based on a ton of research and bundling these assets together.

00:23:25.500 --> 00:23:30.840
And then co marketing these projects, and in some cases, is even pre TGE.

00:23:31.181 --> 00:23:36.500
So it's like a pre sale mechanism for vetted, researched projects.

00:23:36.711 --> 00:23:42.141
And it gives investors the opportunity to get exposure to a whole basket of tokens with a single purchase.

00:23:42.441 --> 00:23:47.911
And after making that purchase, then they're airdropped their portion of tokens that relate to that index.

00:23:47.961 --> 00:23:57.631
So we're doing these things aligned with different ecosystems, as well as different genres like AI, RWA, gaming and, LSTs and the like.

00:23:57.760 --> 00:24:03.441
LST stands for liquid staking token, which is a whole genre of tokens unto itself.

00:24:04.401 --> 00:24:04.980
Amazing.

00:24:05.040 --> 00:24:15.361
And does this yield or the exposure I have on these indexes comes from any token out in the market or only Bitcoin specific tokens?

00:24:15.691 --> 00:24:16.101
Is it?

00:24:16.746 --> 00:24:18.915
Right now, it's Bitcoin.

00:24:19.096 --> 00:24:20.145
Right now, it's Bitcoin.

00:24:20.296 --> 00:24:36.215
And I'm actually really glad you asked that question because we came originally from an EVM background, more from the Ethereum side, building there and the community that we built, that was much more the narrative where NFTs were happening, certainly along with Solana, Tezos, and a few others.

00:24:36.816 --> 00:24:49.236
But our platform powers yes, the Bitcoin native tokens, including RUNES and BRC20 and TAP, but we also power EVM.

00:24:49.236 --> 00:24:54.746
90 percent of the development that has happened to date has been in the realm of Ethereum virtual machine.

00:24:55.096 --> 00:24:59.806
So we have built or I should say we integrated an Embedded EVM wallet.

00:24:59.895 --> 00:25:04.506
So even within our multisig that we're able to hold ERC 20s.

00:25:04.846 --> 00:25:08.576
And so much of our token indexes will be built on those types of tokens.

00:25:08.865 --> 00:25:17.990
And in the relatively near future, we'll also add SUI and, with one of our key partners, IKA we'll be integrating, essentially almost every chain.

00:25:18.121 --> 00:25:21.330
Yeah, essentially every chain through the orchestration with IKA.

00:25:22.230 --> 00:25:22.861
I K A.

00:25:23.351 --> 00:25:24.480
That's really fascinating.

00:25:24.510 --> 00:25:28.421
And let's dive into two things that caught my interest about Covalt.

00:25:28.830 --> 00:25:32.530
The number one was the sort of the age of intelligence custody.

00:25:32.540 --> 00:25:35.790
Are you applying your AI agents?

00:25:36.171 --> 00:25:45.310
mechanisms that allow us to rebalance a portfolio to see the XYZ APY that I might have on XYZ coin.

00:25:45.931 --> 00:25:46.840
what is the plan there?

00:25:47.161 --> 00:25:50.500
And then also what is this RWA marketplace?

00:25:51.721 --> 00:25:56.510
These are, you could say, some future roadmap, not too distant future roadmap items.

00:25:56.881 --> 00:26:00.361
Initially we were thinking, taking, inspiration from Steve Jobs.

00:26:00.361 --> 00:26:02.131
We're like, we need a one button interface.

00:26:02.351 --> 00:26:03.931
We need the elegant DeFi.

00:26:03.980 --> 00:26:12.655
DeFi's so complex, even people that know about it, they're like, It breaks your brain how many choices there are, how many gas tokens you might need, how many times you might need to swap.

00:26:12.955 --> 00:26:17.006
There's so many nuances to the engineering and the interface.

00:26:17.036 --> 00:26:18.895
We were like, we need an elegant interface.

00:26:19.185 --> 00:26:21.155
So that's initially what we set ourselves to.

00:26:21.665 --> 00:26:38.655
And after attending the Crypto AI Con, a different light bulb went on in my head, which is clearly in a year from now, I'm pretty convinced that within a year, maybe a couple years, probably one year, that no one's dealing with their DeFi vaults.

00:26:38.865 --> 00:26:45.355
No one's dealing with this ugly complexity and all these hard decisions and what am I going to do and how many gas tokens do I need.

00:26:45.776 --> 00:26:46.976
No, it doesn't make any sense.

00:26:46.976 --> 00:26:48.596
That's not even a future I would predict.

00:26:48.861 --> 00:26:54.750
The future is going to be AI agents are going to be dealing with all of that on behalf of the users.

00:26:55.161 --> 00:26:56.800
And so yes, absolutely.

00:26:56.800 --> 00:27:02.651
We see that we're, first of all, we're making easy to use DeFi vaults that humans can use.

00:27:03.111 --> 00:27:10.861
But we're immediately building in mind that these humans are most likely going to be the, you could say the tip of the iceberg.

00:27:11.230 --> 00:27:25.181
And for a much larger retail adoption, agents will be a far better and more suitable interface, where the agents are operating on behalf of the user, where the agents have the ability to spend and to build yield strategies.

00:27:25.500 --> 00:27:30.401
And at the end of the day, be able to earn additional Bitcoin on behalf of their users.

00:27:30.461 --> 00:27:38.651
And so ultimately that's the framework that we're building towards and to empower for, AI to be, yeah, to be in charge of making a lot of these decisions.

00:27:40.280 --> 00:27:49.990
Let's take a deep dive into the fact that we'll have, or very close to a future where AI agents will be balancing our portfolios and doing all the automated work.

00:27:50.461 --> 00:27:58.550
What can be the potential impact in capital markets when humans are no longer trading based on emotions or sentiment?

00:27:58.580 --> 00:28:03.570
Is this going to potentially change the way markets completely react in the future?

00:28:04.270 --> 00:28:05.111
Is it a new renaissance?

00:28:05.111 --> 00:28:05.770
Hard to say.

00:28:06.050 --> 00:28:10.961
In my opinion, where we're moving to is more efficient markets.

00:28:11.421 --> 00:28:13.570
And I think there's just a lot of benefits.

00:28:13.671 --> 00:28:21.810
Like I would say there's a lot of suffering that happens because of inefficient markets and there's tremendous benefit that gets unlocked as those markets become more efficient.

00:28:22.480 --> 00:28:28.721
When it comes to things like intellectual property, I think we can see like this is an extremely inefficient market.

00:28:28.901 --> 00:28:32.500
It's hard for most retail investors to get exposure.

00:28:32.780 --> 00:28:37.810
Massive institutions control most of the buying power and benefit that comes from it.

00:28:38.310 --> 00:28:45.050
And I think this spans both from a cultural level, like music, and those kind of IP, movies, and that kind, games.

00:28:45.310 --> 00:28:51.971
I think that also spans into science, into the, right across the board, into, innovation, and IP in that realm.

00:28:52.000 --> 00:29:02.961
That it's massive institutions that control, whether it be a college, whether it be these massive companies, and at the end of the day, the scientists, or the artists themselves are not necessarily seeing the benefit from that.

00:29:03.221 --> 00:29:33.026
They're not necessarily becoming empowered to invent or build the next most innovative type, whether it be energy or whatever project, innovation that might happen that because of the inefficient market, that our whole civilization essentially is being stifled because the funds are flowing from so few institutions and because of the benefits and capital and profits are flowing back into those same few hands of those massive institutions that it's really limiting our growth as a species.

00:29:33.901 --> 00:29:39.490
Maybe that's overstated in a way or maybe you couldn't possibly overstate it because it certainly is the case.

00:29:39.941 --> 00:29:44.050
But I think efficient markets will be unleashed because of AI.

00:29:44.435 --> 00:29:53.455
And I would say some of my financial friends have said with how much algorithmic trading or AI assisted trading, we're almost in that place already.

00:29:53.905 --> 00:30:07.705
That although there are certainly a lot of human traders, that many or most or so much of the trading that's happening is either being done on an automated level or is being done by humans that are leveraging these automated or intelligent systems.

00:30:09.326 --> 00:30:15.976
So I think maybe the far distant future is there goes volatility.

00:30:15.976 --> 00:30:22.945
You're like, the market got so efficient that we don't have these dips and like spot trading looks different and leveraged and all these kind of things.

00:30:22.955 --> 00:30:24.476
These tools just look so different.

00:30:24.830 --> 00:30:33.921
It's possible, or it could be that there's just so many variables and there's so many things at play that there's still a huge amount of dynamic energy and a ton of volatility.

00:30:34.090 --> 00:30:39.090
And we just see, year by year, more and more efficiency coming into all these different markets.

00:30:39.401 --> 00:30:49.240
At the end of the day, hopefully that brings greater wealth distribution, less poverty, easier access to key resources and further growth of our species.

00:30:49.881 --> 00:30:50.111
Yeah.

00:30:50.111 --> 00:30:50.961
Fascinating.

00:30:50.990 --> 00:30:53.980
Can't wait to experience a future where that's a reality.

00:30:54.490 --> 00:30:56.361
And let's dive into CoValt.

00:30:56.550 --> 00:31:02.496
When we had a chance to connect, you explained me a bit of the mechanics and how does this work?

00:31:02.826 --> 00:31:07.556
And you're for our listeners that are interested in using the product once it's live.

00:31:07.556 --> 00:31:19.546
I know it's still in the waiting list, but is it essentially I go, I open this multisig, let's say vault deposit my Bitcoin there, but they're not stored in your servers.

00:31:19.546 --> 00:31:21.986
They're not yours or Covault's Bitcoin.

00:31:21.986 --> 00:31:22.415
Correct.

00:31:22.746 --> 00:31:23.955
Yeah, we're a facilitator.

00:31:23.996 --> 00:31:32.576
So the protocol, the coding that we've created it essentially abstracts the complexity of directly writing Bitcoin script.

00:31:34.006 --> 00:31:36.486
It would be too painful if humans had to do it themselves.

00:31:36.996 --> 00:31:41.266
Or even most developers, it's just uncommon that people understand Bitcoin's script.

00:31:41.736 --> 00:31:48.165
Even in the realm of all blockchain development, it's like far less than 10% of the development or whatever has been done there.

00:31:48.645 --> 00:32:01.915
We just make it really easy for users to deploy the tool that lives on Bitcoin, the coding, the script that lives on Bitcoin, in order to hold their Bitcoin.

00:32:02.375 --> 00:32:10.996
So it's still decentralized, it doesn't come into our possession, we don't have the right to send it or transact or block it or any of those kind of things.

00:32:11.556 --> 00:32:33.425
But for some of our yield vaults, we will be facilitating the process on behalf of users to, if there needs to be bridging or if it needs to go say to Arbitrum, because there's an incredible DeFi opportunity, a yield opportunity with one of our partners on a different chain that we have to go and swap their assets that will do that on behalf of the user.

00:32:33.685 --> 00:32:36.625
But it's not that we're taking their Bitcoin and then doing that.

00:32:36.826 --> 00:32:41.566
We're just setting up the programming so that when they execute it, that it's all set up for them.

00:32:41.776 --> 00:32:42.516
You could say it like that.

00:32:42.516 --> 00:32:49.016
So essentially like a no code way of interacting with the Bitcoin, but still managing your own custody.

00:32:49.665 --> 00:32:50.336
Fascinating.

00:32:50.375 --> 00:32:56.496
And when I lock up my Bitcoin, do I get a derivative of it that I can use like an LST?

00:32:57.451 --> 00:32:59.490
Sometimes it depends.

00:32:59.520 --> 00:33:00.891
There's different types of vaults.

00:33:00.931 --> 00:33:02.590
And in some circumstances, yes.

00:33:02.641 --> 00:33:06.070
We're actually building towards having a full LST framework.

00:33:06.371 --> 00:33:11.881
And that will be powered by a compounding liquid staking token.

00:33:12.151 --> 00:33:18.191
Which means that you could take this and stake it into other platforms.

00:33:18.530 --> 00:33:20.901
Or you could just activate your vault.

00:33:20.961 --> 00:33:25.621
And then depending on what type of vault you activated, we do all of that for them.

00:33:26.010 --> 00:33:30.871
Where, when they unlock their vault, they're able to then claim more Bitcoin than when they started.

00:33:31.250 --> 00:33:34.401
So we're very bullish on not having multiple tokens.

00:33:34.611 --> 00:33:39.760
If you lock your Bitcoin in order to earn Core, okay, that's great, but now what are you going to do with the Core?

00:33:40.830 --> 00:33:44.601
In other words, this is a core DAO, it's an L2 on top of Bitcoin.

00:33:44.911 --> 00:33:48.800
So there's different yield and DeFi opportunities that are happening there.

00:33:49.060 --> 00:34:02.230
So our idea being that will help the user take advantage of those DeFi opportunities, but at the end of the day, when they want to claim it back to their native vault, that will do all the swapping for them so that they can just receive it back in the form of Bitcoin.

00:34:03.330 --> 00:34:19.030
And as the DeFi ecosystem keeps evolving, do you see interoperability cross chain becoming as prominent as easily swapping from Arbitrum or Polygon or even to Sui or any other blockchain out there?

00:34:19.456 --> 00:34:32.036
Yeah, I think we see, even by the end of this year, maybe by the middle of this year, we start seeing incredible tools that just start making it seem like it was a joke that we couldn't do this before.

00:34:32.106 --> 00:34:37.056
Like, how were we ever stuck in these little villages where one blockchain could only deal with one blockchain?

00:34:37.516 --> 00:34:50.565
I think we're very quickly moving to a place where Interoperability is a common place, and also where we can abstract that complexity away from the user so that to the user, they're just getting yield.

00:34:50.786 --> 00:34:56.235
Whether it be on Arbitrum or not is not the important thing, because they don't have to go through the pain of that.

00:34:56.505 --> 00:35:02.246
Whether that be on a wallet level, or whether that be on a vault level, or whether that be in some other novel way.

00:35:02.655 --> 00:35:08.536
I would say the thing I'm most excited about in that realm is this company called ECCA, one of our partners.

00:35:09.096 --> 00:35:16.755
They built this D Wallet that allows for custody or control of this wallet to be the thing that moves.

00:35:16.996 --> 00:35:22.726
Instead of moving the assets from one account to another, they move the custody of the account itself.

00:35:23.085 --> 00:35:30.606
And they built these super smart accounts that can not just hold assets from one blockchain, but can hold assets from essentially all the main blockchains.

00:35:32.626 --> 00:35:36.846
Things like that turn, almost turn the architecture completely upside down.

00:35:36.885 --> 00:35:50.175
And now instead of worrying about bridging, because bridges are almost notorious, the place for vulnerabilities and the place where things get hacked and so many people lose so much money, you basically do away with the bridge because there's no more need to move the asset itself.

00:35:50.405 --> 00:35:56.456
If you can move the custody and the way they do that is with essentially key shards.

00:35:56.456 --> 00:36:01.925
They use a 2PC, what they call a 2PC MPC system, and it uses key shards.

00:36:02.115 --> 00:36:04.815
We were talking about controlling your seed phrase earlier.

00:36:05.135 --> 00:36:09.195
In their system, you control a part of your seed phrase.

00:36:09.896 --> 00:36:18.445
The protocol controls the other part, and the entire cryptography and sequence is set up in such a way that assets can never be moved.

00:36:18.740 --> 00:36:24.951
Unless the individual that controls the vault, or controls the wallet, is the one to trigger the movement.

00:36:25.201 --> 00:36:30.391
In other words, the protocol can only support that movement, but it cannot trigger it alone.

00:36:30.791 --> 00:36:34.340
So in this way, they essentially solved not even needing bridges.

00:36:34.800 --> 00:36:39.271
It's like this moment in the Matrix when the small child is telling Neo, there is no spoon.

00:36:39.621 --> 00:36:40.510
There is no bridge.

00:36:40.541 --> 00:36:41.501
We need no bridge.

00:36:41.501 --> 00:36:43.090
There's no, no bridging required.

00:36:43.320 --> 00:36:50.110
We can move into this place free and uninhibited to have full access across all these different blockchains.

00:36:50.231 --> 00:36:51.590
And to me, that just makes the most sense.

00:36:52.141 --> 00:36:59.141
If there's innovation happening across different blockchains as builders and as users, we should not be restricted just to one ecosystem or the other.

00:36:59.990 --> 00:37:09.550
And do you think that over time Bitcoin could end up sucking this value that's on other chains as Bitcoin is a chain with the highest network effect, the highest security?

00:37:11.501 --> 00:37:15.121
I think that actually, like on the one hand, it sounds ridiculous.

00:37:15.121 --> 00:37:16.840
You're like, how would that ever happen?

00:37:17.271 --> 00:37:22.271
But this is, I think how it could happen when we look at markets and we look at almost any market.

00:37:23.030 --> 00:37:38.221
What seems to be the dominant force, the largest, most secure, just the biggest player, and maybe the fastest player, have secure positions, and anything in between has the potential opportunity to get swept away.

00:37:38.840 --> 00:37:56.101
I don't think Bitcoin is necessarily going to gobble up all of these other ecosystems or just suddenly just take over all the liquidity for everything, but I would not be surprised at all if Bitcoin continues to grow as the way to secure your long term holdings.

00:37:56.516 --> 00:38:02.786
What better place are you going to keep your assets that you know you're going to hold long term savings, long term growth plan?

00:38:03.206 --> 00:38:17.266
I think a lot of times you might go to other chains to make money, whether it be through DeFi, whether it be through meme tokens or other types of token plays or trading, or other, algorithmic trading or any kind of things, AI assisted activities.

00:38:17.545 --> 00:38:29.385
But at the end of the day, I do imagine that people are going to take those gains and they're going to buy Bitcoin and they're going to put them in a multisig or put them in an extremely safe and secure self custody solution.

00:38:29.771 --> 00:38:31.681
And that's going to be their long term savings.

00:38:31.701 --> 00:38:35.891
And that's going to be the thing that they pass on to their next of kin.

00:38:36.181 --> 00:38:48.951
And likely when we're seeing estates that are growing and inheritance and these kinds of things that I think over time, we start seeing more and more Bitcoin being one of the primary assets that is gathered and accumulating and being passed on.

00:38:49.811 --> 00:38:56.880
I can't wait to see a world where that's the reality, especially as we just broke an all time high with Bitcoin.

00:38:56.891 --> 00:38:59.190
And I've been here for a very long time.

00:38:59.190 --> 00:39:11.731
And to be frank with our listeners and you, I never imagined to see this price, to be honest, it's quite fascinating, but also was a lot of work and the community went through a lot of ups and downs.

00:39:11.731 --> 00:39:12.990
Yeah, we didn't get here out of nowhere.

00:39:13.440 --> 00:39:19.610
Yeah, it was tough, especially governments never accepting or never endorsing it.

00:39:19.690 --> 00:39:25.771
And this year we having an actual president coming in and stepping out and say, Oh, this is real.

00:39:25.820 --> 00:39:28.951
And it's the ninth most valuable asset in the entire world.

00:39:29.530 --> 00:39:31.231
It's Whoa, very fast.

00:39:31.240 --> 00:39:31.391
Yeah.

00:39:31.391 --> 00:39:31.971
It's bizarre.

00:39:31.981 --> 00:39:38.510
What was down the fringe and in, like you said, in our lifetime, this went from an idea to put in practice.

00:39:38.856 --> 00:40:04.735
To looked at as a scam and where bad things happen and Silk Road and illicit activities and Bitcoin machines and tax evasion or all the Bitcoin maxis and now this incredible like adoption, willingness to, that it's like even in the public perception that you can talk about crypto, and the first thing people think of is Bitcoin, and the first thing they think is oh, Bitcoin, and Bitcoin's going up, things are positive.

00:40:04.916 --> 00:40:09.096
It's not stuck in a place where, oh, and that's a scam, that's only where scammers are.

00:40:09.275 --> 00:40:11.405
And not only that, like you said, actually having a U.S.

00:40:11.425 --> 00:40:12.556
president endorse it.

00:40:12.795 --> 00:40:19.596
And then not only that, endorse it in such a way that other countries are now making moves to also build a strategic reserve.

00:40:19.931 --> 00:40:31.581
And I think this was definitely the thing that people have been talking about forever, but probably never expected that it actually would come or that we would see it unfold this fast, like during this cycle.

00:40:32.141 --> 00:40:34.871
So yeah, it's a crazy, it's a crazy time to be alive.

00:40:35.181 --> 00:41:05.320
And I think the most exciting thing for me is to be seeing not only Bitcoin as a place to hold value, but a place to build on, and a place to build secure sovereign financial tools and tooling and apps, even to secure storage, on this incredible protocol is, it's fascinating to watch that happen, because even three, four years ago, even though a lot of these scripting languages that we're using to build on, like Taproot Script, came online into Bitcoin in 21, 2021.

00:41:05.670 --> 00:41:13.661
So it's been this many years later for people to catch on to what incredible innovation is possible with the existing scripting languages.

00:41:13.900 --> 00:41:26.306
And then also with the evolution of things like ECCA, with the evolution of some of these other trustless protocols, SwapKit, ThorChain, some of these other great things, Threshold, this wild evolution of Bitcoin scaling solutions.

00:41:26.596 --> 00:41:34.275
Now it seems to be this renaissance moment for builders and brain energy and VC money to be pouring in and supporting this building.

00:41:34.445 --> 00:41:37.945
So for all those reasons, it's like the best time to be active in the space.

00:41:38.706 --> 00:41:43.126
For those that are not familiar with Taproot, can you give a very simple rundown that changed things?

00:41:43.126 --> 00:41:50.996
So Taproot essentially allowed, we'll just say, slightly more programmability.

00:41:51.541 --> 00:41:53.061
There's slightly more programmability.

00:41:53.371 --> 00:41:59.440
And I could also say that even before Taproot, things like multisig was available.

00:41:59.590 --> 00:42:03.061
And we, in CoVault, we built in the native SegWit.

00:42:03.510 --> 00:42:05.960
Initially, we built all our vaults with native SegWit.

00:42:06.231 --> 00:42:20.510
And then we went through on the desire to future proof and to be able to hold all of these different meta assets in a familiar way for people that are collecting ordinals and now runes and tap these other kind of meta assets, that we built it also in Taproot.

00:42:21.030 --> 00:42:25.771
I feel like if I get into the technical specifics, everyone's gonna immediately fall asleep.

00:42:26.190 --> 00:42:34.280
But we can say that Taproot, one of the key things that came into being with Taproot on Bitcoin were Schnorr signatures.

00:42:34.536 --> 00:42:40.226
Which is a different way of being able to stack signatures in order to then allow a transaction to go through.

00:42:40.516 --> 00:42:48.445
And it allowed another, you could say more evolved programmability that was not allowed, that was not possible before.

00:42:49.070 --> 00:42:59.420
But with creative engineering, a lot of those things were possible with native SegWit and native SegWit is a smaller kind of data packet that will be produced.

00:42:59.431 --> 00:43:15.521
So for people that are say only interacting with runes, then that would be an appropriate scripting language to use, but if someone was going to be doing something a lot more sophisticated and dealing with ordinals and ordinal theory, then very likely they're going to want to be building with Taproot script.

00:43:16.550 --> 00:43:27.050
In terms of impact, where do you believe or how that CoValt can achieve in terms of a global community of investors, builders, and users in the next 5 10 years?

00:43:28.251 --> 00:43:53.090
I like to believe we can help be that threshold community that helps encourage the legacy economy to migrate toward the on chain economy, where, whether it be funds and hedge funds and these kinds of things, or retail users, or even much larger institutions where they can start finding the tooling that is first of all, up to the security standards that they need.

00:43:53.451 --> 00:44:03.081
That is second of all, easy enough to understand and interact with or easy enough to build on where they can build more interesting and innovative financial products, blockchain based.

00:44:03.670 --> 00:44:15.860
And I would like to see that CoValt is very active in cross cultural economic exchange and using token indexes and token economies as a way to do that.

00:44:16.266 --> 00:44:25.525
Even in the building of our own core team, we were very selective or very intentional with selecting candidates from different geographies.

00:44:25.775 --> 00:44:32.155
We span the globe and we have check ins all the time on, how do you see this affecting people in your local geography?

00:44:32.416 --> 00:44:35.916
And we're building emissary and another DevOps programs.

00:44:36.155 --> 00:44:42.065
We're always thinking about how do we actually introduce key people and key communities and different geographies.

00:44:42.396 --> 00:44:48.786
So for me, I think it's a fundamental part of our mission to help weave this cross cultural fabric together.

00:44:48.815 --> 00:44:52.255
And I think that's one of the benefits of Web3, of certainly of Bitcoin.

00:44:52.596 --> 00:45:01.195
I heard someone say this, that crypto is a lot like music, where it's among the few things that can so easily flow across all jurisdictions.

00:45:01.601 --> 00:45:07.340
There's no line on any map that can stop the music from coming in or that can stop the Bitcoin from coming in for that matter.

00:45:07.360 --> 00:45:13.170
Even when they might pass laws to say, okay, you're not allowed to do this or you're not allowed for self custody or whatever it is.

00:45:13.431 --> 00:45:20.371
That the strength of the network and the freedom tools, is so strong that actually, it does pass across all of these different borders.

00:45:20.811 --> 00:45:28.800
And I think it poses really difficult problems when we run into things like jurisdictions this isn't allowed people from this country.

00:45:28.800 --> 00:45:29.811
How many times do I go?

00:45:29.851 --> 00:45:33.701
I'm in the united states How many times do I go to a fascinating new project?

00:45:34.021 --> 00:45:37.760
And I get the error, sorry, we detected your IP is from the U.S.

00:45:37.780 --> 00:45:38.911
and we can't serve you.

00:45:39.231 --> 00:45:43.150
I'm like, dang, that stings, And this is the U.S.A., aren't we supposed to be the greatest country?

00:45:43.380 --> 00:45:45.731
How are we the ones getting excluded from these things?

00:45:46.010 --> 00:46:03.891
But I think we do see, at least over the next four years, hopefully for much longer, more clarity around legislation and better tooling with AI and all of these other things where we can connect across these different jurisdictions in a legal and compliant way.

00:46:04.210 --> 00:46:19.760
And that very much paves the way for this threshold moment, and for companies like ours to help steward the legacy economy, and help build more efficient markets and to bring those into these new environments of the on chain economy, which has entirely different physics.

00:46:20.891 --> 00:46:21.630
Yeah, for sure.

00:46:22.041 --> 00:46:29.581
I see on your top right of your background, the Bitcoin Startup Lab, is that somewhere where people can get involved if they would like to build on Bitcoin?

00:46:29.581 --> 00:46:30.371
What would you recommend them?

00:46:30.391 --> 00:46:33.141
Yes, this is actually where Covault was born.

00:46:33.190 --> 00:46:35.050
I love to talk about Bitcoin Startup Lab.

00:46:35.110 --> 00:46:48.530
There's like a phrase of saying you got orange pilled, which is like in the Neo and the Matrix, but it's no, you took the orange pill, which means like now you are waking up to financial sovereignty and how important decentralization is and self custody and all of these things we believe in.

00:46:49.161 --> 00:46:53.951
So Bitcoin Startup Lab is an incredible, they call themselves a pre accelerator.

00:46:54.300 --> 00:46:56.251
First of all, it's a quite an exclusive program.

00:46:56.391 --> 00:47:07.110
I believe like a thousand or even into the several thousand of founders apply in our cohort in particular, they accepted I believe it was about 50 or so.

00:47:07.391 --> 00:47:09.271
And they run a very stringent program.

00:47:09.570 --> 00:47:11.561
It's about 12 to 14 weeks.

00:47:12.101 --> 00:47:30.766
During this time, there are massive requirements of what you have to do and accomplish every week in order to find your fulcrum, to find a real pain in the world, and to start finding a way to address that pain with a single feature, with a specific feature set, or in their case, one feature.

00:47:30.905 --> 00:47:36.096
To address one pain problem and, or one pain among one very specific group of people.

00:47:36.365 --> 00:47:58.405
And with this methodology, this is exactly where CoValt was born and where we came to understand not only just the importance of custody, but the importance of building infrastructure on Bitcoin that can empower people to do things that were either very difficult before in terms of having to custom code these scripts to now just being able to click a few buttons and have access to that high level security.

00:47:58.811 --> 00:48:05.510
But yeah, Bitcoin Startup Lab is constantly running cohorts for any founders or builders that are interested in building in the space.

00:48:05.760 --> 00:48:08.150
I highly encourage them to apply.

00:48:08.420 --> 00:48:11.271
They say that they take founders at the bad idea stage.

00:48:11.630 --> 00:48:13.990
So even it doesn't matter what your idea is.

00:48:14.300 --> 00:48:27.021
They're looking for solid founders that they can bring through their process to help you land on an extremely powerful idea and go through their process and methodology to then build that out and to create an investment ready startup in record time.

00:48:27.141 --> 00:48:28.061
That's their main focus.

00:48:28.061 --> 00:48:28.920
That's pretty epic.

00:48:29.221 --> 00:48:35.471
And if our listeners would like to follow more on your work, where they can find you, how can they look up CoValt?

00:48:36.115 --> 00:48:38.545
You can find us on Twitter,@COVAULTbtc.

00:48:38.806 --> 00:48:41.315
My personal Twitter is@glassynakamoto.

00:48:41.436 --> 00:48:43.376
You could reach out to either Twitter account.

00:48:43.606 --> 00:48:50.635
Our website is covault.xyz There you can find our mailing list, waitlist, and all these kind of things.

00:48:50.865 --> 00:48:59.635
Also, we do have a number of our products on testnet, so if you want to test our multisig, you can go to app.covault.xyz.

00:49:01.356 --> 00:49:04.755
Can't wait to get started and can't wait to start using CoVault.

00:49:05.826 --> 00:49:06.666
Thank you so much.

00:49:06.885 --> 00:49:08.166
Really enjoyed the conversation.

00:49:08.516 --> 00:49:09.445
Thanks for all the questions.

00:49:09.835 --> 00:49:14.965
Thanks for tuning in to the Chain Stories podcast where disruptors become trailblazers.

00:49:15.246 --> 00:49:21.365
Don't forget to subscribe to hear more inspiring stories from those who are pushing boundaries in digital assets.

00:49:21.655 --> 00:49:26.835
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00:49:26.985 --> 00:49:31.346
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00:49:31.635 --> 00:49:32.246
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