Stablecoins: History, Mechanics, Policy w/ Sam Kazemian (Frax Finance)

Rex (00:03.225) Sam, welcome to the Signaling Theory podcast. Sam Kazemian | Frax (00:06.184) Hey, it's good to be here, man. Rex (00:08.399) Well, man, it's been a while, but it's so good to see you. And I'm really excited for this conversation. I guess before we get started, can you just give a very brief introduction, who you are, what you're working on? Sam Kazemian | Frax (00:19.906) Yeah, for sure. So my name is Sam and I got into crypto a long time ago in dinosaur years. I think it's actually about 11 years now. And so I got into it when I was a student at UCLA studying neuroscience and philosophy, totally different, not CS or anything. And then just got into mining. And then after college, I founded my first crypto company. It's like a decentralized version of Wikipedia called Everpedia. the IQ token that's going really well. It's rebranded to IQ AI recently. And I think I'm most probably known for founding FRAGS, which is what I'm the founder and CEO of. It's a stablecoin issuer and DeFi platform. Founded that in 2020 in the heyday of DeFi summer and the DeFi cycle, so to speak. Now we're just grinding, taking frags to the top and involved in a few things. So I'm really excited to be here. Rex (01:26.071) Awesome, man. Well, again, I'm really looking forward to this conversation. And as you and I discussed a little bit before we started recording, you know, I think one of the, the coolest parts about your story is like, you're, very much a Wayne Gretzkyite, right? Like skate to where the puck is going, not to where the puck is. And, I think like regardless, you know, I think everything that you've believed in has been completely vindicated by like the way the industry is going today. And the fact that. Say what you will, but like really the only thing in crypto that still has like positive sum energy and like real promise to provide utility outside of speculation is stable coins. so, you know, what I'm really looking forward to is like starting back in those like 2020 days when Fraxas first thing and, know, we met and I entered crypto around that time. And especially during the 2021 time when DeFi summer was DeFi itself was kind of like the molten core of what was happening in crypto. then now fast forward to where we are, it's been quite a journey and just really want to unpack what it's like to go from DGEN to, I don't know, like legitimate. So man, I'd love to start this conversation out about like... One, would love to hear from you. What was time like during that 2020, 2021, know, like just real exciting time of innovation in DeFi and in like the first phase of stable coins? And how would you kind of compare and contrast of like what it's like now? Sam Kazemian | Frax (03:12.878) Yeah, that's a great question. And I think to kind of put everyone in the vantage point, we have to kind of do this kind of... Anthropology of stable coins and the history of like stable coins that people probably don't know some some of your viewers I'm sure do because they go way back. But for example, most people probably don't know the very first white paper For stable coins was this thing called signage shares by Robert Sam's It was back in 2014. I think tether had just started as like the first kind of fiat stable coin but and it was on Omni chain like colored coins on like Bitcoin Bitcoin essentially. The first white paper, and I would recommend people read it because it's like a historical artifact, right? It was called Sinerit shares. And the idea was you have two tokens on a proof of work blockchain, right? Back then it was just proof of work blockchains like Bitcoin, Forks, know, Dogecoin, Litecoin. And then the idea was there's a share coin and then there's a stable coin like called shares and currency. And if you want to expand the supply, of the currency because there's a lot of people that have there's demand for it. Well, you you can print them on a blockchain just like how the Bitcoin blockchain prints Bitcoin. But then who do you give them to because you don't want a centralized like like person figuring out doling out like the Federal Reserve, which like banks or whatever get line of credit or whatever. And so you give them out to the people that have the share token on the proof of work blockchain and the share token is kind of the store of value kind of a representation of a share of of this chain and this monetary system and you obviously also get it as a reward for mining this blockchain. And then what do you do when the currency needs to be stabilized? The supply needs to contract because there's not enough demand for it but you need to keep it at some peg, let's say a dollar or whatever, right? The way that you would do it is that, well, you need to create some value, you need to print some stuff out of thin air and buy back the currency, right? And you print share tokens. Sam Kazemian | Frax (05:24.514) because that's the thing that actually the blockchain can print, just like the Bitcoin blockchain can print BTC, right? And so you have this two-token system and then, you know, the first question is obviously, well, why does the share token have any value at all if it's the thing used to print and buy back the currency? the value of it is the future cash flow of the expansion of signage, signage being like the actual money, right? Like signage is like an economic term, which is like the extra value of money. From like the actual coinage more than the cost of it, right? Like it doesn't cost $100 to actually print a piece of paper with Benjamin Franklin's name on it, right? But it's worth $100 that that extra value is called signage It's a it's technical economic term and so the name of this system this protocol was called signage shares and and a stable coin system based on signage shares and so a lot of people don't even know that that exists that that was the first like when I when I read it and a lot of people read it, they're like, okay, there's this way that you can create these programmatic ways that aren't just like digital gold or like Bitcoin forks and things like that. And then fast forward like, you know, a few years after the kind of the ICO era and all these things, right? I would say like Maker, MakerDAO was also one of the important like innovations in how to do some kind of programmatic Creation of money right you over collateralized that you put it in a smart contract and then you minted this like stable coin die, right? most people the way that I would describe this is like most people in crypto had this very I Ideological thing of the best form of a stable coin is that it has the best Properties of Bitcoin, right? It's decentralized. It doesn't have a blacklist You don't need an off-chain thing like a bank account or like like a permission or license to run it. It doesn't have any dependency off chain. But it's also this very familiar unit, the dollar, USD, that everyone does their accounting in, has their debt denominated, and wants to do commerce in. This was kind of the holy grail, right? The decentralized, whether you call it algorithmic or whatever, the whole point of it was that there's this holy grail, whoever finds it first, like the exact mechanics and stuff, right? Rex (07:50.725) Thank Sam Kazemian | Frax (07:54.032) at first is gonna be like a trillionaire because it's like as big of a deal as like Bitcoin, right? And so for a while, like there's a lot of stuff like basis. It was another idea that actually raised nine figures. And I think like, this was part of the whole psyche of crypto investors, entrepreneurs of like, can we design the like holy grail of like stable currency on the blockchain? And that's where like Frax comes in. have a very unique hybrid model of the original Frax decentralized stablecoin, partially backed by hard assets like USDC or fiat coins or things like that, and partially by the Frax share token, which actually the name, the lore comes from the original signage shares. Most people don't know that. It's not because it's a literal security or something like that. In retrospect, we probably just call it Frax, which is what we actually renamed it to recently, FYI. So the upgraded token actually is just called Rex (08:45.829) You Sam Kazemian | Frax (08:53.976) we locked off the share, but originally the lure of it was that it was a nod to the signer it shares white paper. And retrospect might have been too nerdy of a nod. And so we launched the original, obviously. Rex (09:02.757) Thank Sam Kazemian | Frax (09:08.308) One of the most successful decentralized stable coins in novel protocol on liquidity mechanisms, things we call AMOs, which is like algorithmic market operations, smart contracts that would move the collateral to curve, would even deposit newly minted frax stable coins into lending, right? In like Aave compound or in our own. we designed like FraxLend so we can have these CDP systems. And so I think a lot of the original mechanisms for like the DeFi cycle was curve, frax, and convex, these flywheels that had a lot of liquidity so you could farm them and they had a lot of good yields. And so we kind of commanded the DeFi layer of that stuff. And so that kind of takes us to the... Terra, which everyone has heard of, the end of this cycle, which basically people usually like, In like historical terms, there's like before Christ and like after got BC, AD here's like before Terra implosion after Terra implosion. That's like my my historical marker. so mid 2022, essentially, right, I think it was May 9th. I still kind of remember the implosion date. I think that's the end of that era. And I think the main thing in everyone's psyche, whether it was like investors, crypto entrepreneurs, even even our Rex (10:26.661) you Sam Kazemian | Frax (10:38.672) was that I think everyone kind of came to this collective consciousness realization of like That's not the thing. You don't want to build your digital dollar on a really risky and and Innovative sure right but but riskier than like essentially risk-free Digital dollar if you if you need to build a financial system on chain the dollar should be as riskless as possible And then you could take additional like like risk in terms of This is this novel mechanism that gets extra yield or is like super super efficient will hypothecated four times or something And yes, there's risk each layer you hypothecated but you get benefits will give you the extra yield or even Better if you do a curve pool with this thing then we'll give you even more liquidity or whatever And so I think everyone came to this realization whether they were super conscious of it or not like if they you know, they like said I think as a industry, right, like what VCs invest in or like what entrepreneurs want to touch or use, right? Overnight this changed, right? Because there was just these tons of, what was it like, Terra, like anchor, fintech, deposit apps and all these things and people were going around like getting new users into like the stable coin and then all of their thing went to zero, right? So it was like the most insane like wake up call possible. And after that, we obviously, know, Frax is like a household name, right, and DeFi, pretty much everyone that was active in that era has used it, benefited. Frax never de-pegged, by the way. The only time if you could say it counts was during the USDC 24, 48 hour SVB thing, which we had some USDC in the balance sheet, but I don't even know if that really counts. We never de-pegged during the Terra, you know, thing. our mechanisms have always been... Sam Kazemian | Frax (12:42.338) Perfectly as advertised they work the same way there's never been some kind of exploit or anything which we're really proud of you know knock on wood but the Interesting part is that we we also changed we said okay. We have to design a base stable coin Which is FRX USD. It's a new ticker. So it's not just the old one It's just built from the ground up FRX USD and then we have a Staked version a yield bearing stable coin called s FRX USD go figure everyone just puts in S in front of their name, whether it's Athena, Maker, Sky, or whatever. And that one is the one where all of the old school market operation mechanisms, protocol, and liquidity, that one is a yield-bearing stablecoin that actually has really high benchmark yields. It's almost always at least equal or even higher than Athena's currently, which is... pretty much industry standard scalable. It also has like a floor of the T-Bill rate, right? So there's this riskier benchmark yield bearing stablecoin and then there's this payment stablecoin that is really just backed by genius compatible collateral. I'm not saying it's licensed, no one is licensed if you're following like the whole genius act and we'll get to that, but it is compatible in the sense that the same type of collateral that is in the act, this is backed by those types of collateral, custodied in the same way. So that's the whole history in ten, actually ten years and fifteen minutes. Rex (14:14.213) No, awesome, man. And I think I love your like BCAD thing, right? Like, so let's just sit in BC for a little bit or I guess like BD before dough. But, you know, I think something, you know, you talked a lot about the things that existed back then that made DeFi and really the conversation around stable coins what it was. And those are things. you know, like the curve and convex, you know, the curve wars, um, and, and that, what we're gesturing to here is something that, um, you know, I'd love to get your reaction to this, right? But me personally, I feel like that is something that we lost with maybe with Doe Kwan, maybe with SBF, or maybe just in the lull between 2022 and today. But when I look around, I don't see any like positive sum energy in. And just like excitement and motion in DeFi and in mechanisms and in like these flywheel games and you know, not to say that like crypto is dead and like everything. It's like there's interesting stuff going on. But for me, it's impossible to not to recognize that the thing that, you know, at least for me, like brought me in here and said that like, we are really building something different. I look around and I don't see anymore. And one, I want to hear like, what are your thoughts? Do you agree? Do you disagree? And two, I want to hear whether or not you agree, whether you think it's gone or it's just different. I mean, what do you attribute that change to? Sam Kazemian | Frax (15:54.518) Yeah, so I that's well said. I agree mostly I would say 60 percent and then I revise some of it and actually you said it well at the end too. It's like it's it's changed. It hasn't completely disappeared but there are things that have changed. For example, I like I was saying in terms of the industry being ideological design and research and mechanism oriented experimental oriented and all this stuff. I miss those days. I don't think those days are coming back because the industry has actually matured. You can kind of think of this honestly in every industry, right? Like, obviously I was a kid, so I am extrapolating based on like things that I read, but I'm sure in the dot com era, right? There was this like era of like experiment to how do you how can we wire these server like things and how do we do these different rack designs and blah blah blah. And then AWS came out and figured it out and standardized it. and then if people were still talking about rack design or whatever in 2007, they would sound kind of like people reminiscing, like how we reminisce or talking about the history of algorithmic stablecoins and stuff. People don't really do that R &D anymore. It's figured out, it's commoditized, and the services you can pay for, like how there's stablecoin issuance services. One which Frax does, then Athena does, MZero, all of these things I think. people have heard of. So in that sense you're right. In that sense I think the experimentation is gone but it's moved to different places and so one of the things that I think is important is as frax grew last last cycle right part of the thing even kind of before the whole Terra thing that I was moving, like you're saying, I try to move before things happen, is that as we were growing to an all-time high supply of 2.9 billion, I think is the exact one, sometimes I just rounded up to three, I just always got this feeling that the stable coin that people would hold, like Olympus Dow held a bunch of it, Temple Dow, all of these curve pools, I was always thinking... Sam Kazemian | Frax (18:14.292) if any of this stuff implodes, because this is an experiment, and again, to be fair to like even Terra and Do and all of this stuff, even though he was very abrasive online, it was experimental, right? Like it's not like they were like, we will like guarantee this is as safe as it was, like dude, this is a freaking algorithmic stable coin. It's backed by the other token that came out of thin air. Like that part was not like super opaque. It was like, this is, it's literally on the chain. and you can mint it, redeem it and stuff, right? And so this stuff always scared me as it got bigger because I was like, other projects, their livelihood and all this stuff depends on this stable coin, including even Frax, which thankfully no one's lost money holding the centralized version, which now is different and it's in the S-Frax USD, you get a ton of yield for the risk that those mechanisms have, right? think the important thing is in order for us to onboard the next one billion users, right? I think there's about a couple hundred million users in crypto worldwide. Tether itself has about 500 million wallets, according to Paolo when he gives presentations. So in order to get the next one billion new people onboard, I don't think the main parts of the industry can be super duper experimental. That doesn't mean they won't. have experiments, right? But they will be in the margin because this is a maturing industry. And the important thing to consider is with that comes the ability to bring on tons of new people. Whereas by definition, if you think of last cycle, we were the misfits, the tinkers, and like, you you weren't supposed to get your like grandma or whatever when people like, when can my grandma use it? Well, the answer is when it doesn't implode on her potentially, like every two, three, four protocols that she tries, right? And so I think it's just moved to a different part of the industry. And in terms of positive sum, actually, it's interesting you say that because I think if there was one important thing for people to take away from FRAX both last cycle and this cycle, it's that I've always had the ethos of figuring out how to work with positive sum projects. Rex (20:17.285) Mm-hmm. Sam Kazemian | Frax (20:43.832) two-way street both sides have to want this but from the beginning if you think about it like when frax was doing really well we could have we could have like whenever there was a new stablecoin project or defi project or something we could have been the kind of the starting beef type and be like don't use these guys they're new no one no one like knows how risky it is or something and we could have talked down on people right that that's one kind of way that could work but then the positive sum way which I've I've been very proud of that we've always kept is that we go to this new project and team who are mostly always nice people and they want their project and their protocol to take off and we say, if you need a curve pool liquidity or something to peg to, make a pool with frax We will help get it out to people. We obviously did as much due diligence as possible, right? But then also worked with these teams to figure out how to make it really good for them, right? And so a lot of people would peg to the Frax stablecoin, right? And so the important aspect of that is, because we were positive some, the most amount of projects that would work with Frax compared to, you know, back then, like Maker or like, you know, Uniswap or something. Frax was the most paired stablecoin on Curve on AMMs, all this stuff. And so and then we grew a really great relationship with Curve, Convex, those teams, that area. and it's just if you're working and the goal is to increase the size of the pie rather than take everyone everyone's piece that is usually the road to success in an industry that's expanding and growing right and so that's a little bit different now but we haven't changed our mindset about it we just have to go about it a little bit differently Rex (22:41.509) So I was gonna move us forward, I guess I just have to ask like, what do mean it's different now? Sam Kazemian | Frax (22:48.354) Well, The thing that's different is there's a lot of new entrants in the game that aren't those tinkers, ideologues, researchers that just want to build out. There's large corporations and institutions like Stripe and then now with Tempo and everything, and then there's banks, and they don't necessarily see things the same way. Stripe actually has been great in Tempo. They're awesome guys as well. I guess you could say like they're crypto native. So then maybe they're actually one of us, right? One of us. But then there's banks, there's other issuers, and there's institutions that in the traditional financial world, this stuff is not how... you play, right? You play by saying, we're better, use our thing, their thing has issues. And so the way to play this game is to create direct economic alignment where possible. That's why issuance, stablecoin issuance has been such a big deal because a lot of people or institutions or entities or companies want their own branded stablecoin. But then whoever issues it essentially has this economic alignment with the company and the distribution alignment. And so you could kind of think of issuance and like these partnerships as the new curve pools, right? Like if you issue, for example, a stablecoin with like Frax, Frax is infra and then underlying, it's actually backed by Frax USD, which is the genius compatible one. Or like you issue a stablecoin with M0, which underlying is backed by Sam Kazemian | Frax (24:36.98) Same thing with Athena. They have an issuance platform, so if you issue one with Athena and it's backed by USDTB. you essentially are having a big curve pool together, right? It's like a big curve party. For us that know the old DeFi lingo, right, the translation is let's start a curve pool together and then your curve pool will have liquidity against all the other curve pools and it's composable. But composable in the traditional financial sense means like redeemable same on off ramp and things like that. We know composability on chain to mean you can build on top of it seamlessly, right? Rex (25:15.533) Yeah, I was saving this for a little bit later in the conversation, but I think it's appropriate now. I would love to get your take as someone who's really in the trenches. Your take on this whole hyperliquid, USDH or whatever, hyperliquid stablecoin. And for those who have a life outside of crypto Twitter, which... Good for you. Teach me. essentially, you know, it seems like Hyperliquid wanted to have a, you know, like in-house branded stable coin. They put out essentially an RFP and then maybe there was allegations that, well, like the RFP was like kind of never really legitimate. They had a solution that they wanted to go with and they were trying to do some decentralization theater. regardless of if any of that's true or not, what that started was this like frenetic bidding by all the major stable coin issuers of like it started with like, okay, you know, we'll create your stable coin with you and then we'll share half the revenue. And then it was, we'll share all the revenue. And then it was, we'll pay you. dude, but then it even went to like, I hate this rebrand sky, right? But like maker, maker is saying we'll give you all the revenue and we'll Sam Kazemian | Frax (26:28.77) That was frax. We were the one that put in all the revenue. just like, hey, listen, we'll just up the ante, Rex (26:42.741) Put extra money in on top of it for some sort of incentives or whatever and I guess You know to me there's something I Don't really quite get it right like if we want to go back to our curve analogy or you know Like let's start a curve pool together like if you'd said that to alchemist Let's say but we're essentially saying for every unit of economic value that we have by having this curve pool We'll pay you that economic value plus 10%. What's really happening here? I mean, is this as simple as kind of like vanity metrics are important in a speculative space. And so like you get higher vanity metrics, maybe like you have some dynamics in terms of investors or people buying governance tokens or that kind of thing. Is there maybe an opportunity? You know, what I've heard is like, well, the opportunity is really in. generating revenue from services related to issuing the coin. mean, how do you think about what kind of happened there and what do your take away is? Sam Kazemian | Frax (27:47.543) Yeah, I think it's a pessimistic take, and I'm not saying you said it, some people do, right? To say that it's the governance token vanity metric stuff, because the first thing is, A bunch of people are saying this, like Frax was the first one, we were like one of the four or five, I think, finalists. And then we lost to Native Markets, but it was really interesting because there was like Paxos, Frax, Athena, Native Markets. There's one like Sky, yeah, yeah, yeah. And so, and Agora, think as well, we're like the finalists. then... Rex (28:19.045) All right, yeah. Sam Kazemian | Frax (28:28.398) The main thing is there's so many different places that you can create value with stable coins. Think of the curve pool analogy, right? People pay tokens to actually have these curve pools together. That's paying, right? It's not like you made money initially, right? The reason you did that is because you actually create liquidity that is useful in different places. You can put up a lending pool or lending markets can actually integrate you. And then from the lending market, Maybe people will hold it more because they're lending into it now it's a source of yield. There's just so many secondary and tertiary effects. For us, I'll tell you why we were the, I think we're the second or third. to like propose to issue it for us obviously would be backed by Frax USD our base unit right the same way that if you know if Agora issued it it would be backed by a USD or Athena they said it'd be backed by USD TV that's four billion dollars of stock, essentially, like of liquidity sitting there. It's a four billion dollar curve pool, right? And so that itself has some value, even if you're not getting the T-bill yield underlying it. There's just a lot of places in which, like you said actually, well yourself, you can charge if you really need to down the line and other people need to use your infrastructure to interact with it. Think about it like this. One of the ways that I kind of said it was, Imagine if you like Rex were given the sole authority to issue stable coins. No one else could issue stable coins in the world other than you. Except the one caveat was that you can't get the T-bill yield underlying it. You cannot. You basically that layer is a public good. Only that layer. You have to give 100 % of the T-bill yield back to the brand or whatever. Sam Kazemian | Frax (30:29.808) No one else can issue stable coins other than through you. It's just like I don't know God-given like just thought experiment, right? Would you take that because I would I I would and I would figure out well how I could make billions of dollars down the line from that knowing that every single thing that has to Literally like issue stable coins has to come through me, right? And that's essentially the abstract situation that it was for hyper liquid or people assume, right? We're actually a little bit far out after native markets one. And so we'll see if like the quote pairs end up being USDH or not when it becomes ready. But the feeling of it, I know a lot of people were like, it's just a ticker or whatever. The social signaling of it was that it wasn't just a ticker. It was not just a ticker, but really the unit that most of the order books for hyperliquid, which is again, very sticky, it's very difficult to start like a perpetual order book, right? From nothing, have people bidding on both sides and have a deep order book of IO and that's a big deal, right? You can figure out how to make money from that later if everything has to come through you. also it was just so fast, right? So it wasn't like people were doing spreadsheets, if we take five bips of something, of people were like, if we win it, we'll figure it out later, essentially. Rex (32:00.514) Mm-hmm. Yeah, you know, it makes sense. And I think this dovetails pretty nicely with kind of what we're seeing in the rest of the industry, right? Because what you're essentially saying is if you can capture this huge position servicing, you know, what overnight will become one of the world's largest stable coins, even if you can't make money on the underlying collateral, there is so much opportunity. You know, what I said was to provide services and secondary, well, guess services around it. and I think kind of how we're seeing that shape up, you know, really looks a lot to me what was happening with Stripe and Tempo, right? Which is what they're realizing is that. And sorry, this isn't just Stripe and Tempo. It's with all of the different USDT chains. And I, you know, I don't know anything, right? But I'm pretty sure we're going to see a circle chain at some point. like. By vertically integrating, you can build real revenue generating services that not only generate more revenue than T-bills, but I think we're all hoping for T-bill yield to drop pretty precipitously. And then the question becomes, well, where's the value in the stablecoin business? And I think that's makes a lot of sense and is cool and like, I don't really have any problem with it until you start to like kind of think through what this means in the end game. Right. And so like my question for when we're talking about something like Stripe and Tempo, right, is they can call it a blockchain, right. But at the end of the day, if they're controlling all the nodes, like, is that really a blockchain or is that just like redundant distributed compute? Right. And Like if they're calling it a stablecoin, but really it's just like, what's the difference between Wells Fargo just like putting up a website and saying, hey, we're going to keep track of these numbers for you. And like, it's a stablecoin. Rex (34:11.257) Just to wrap this all up in a question, do you worry that the vertical integration of services around stablecoin starts to challenge some of the ideas that make crypto so compelling in such a different system from the one that we're trying to, if not displace, augment with decentralization and credible neutrality? Sam Kazemian | Frax (34:31.308) Yeah, that's a that's actually a fantastic question. And it has two parts. So the first part is what I like to call the difference between like stock to flow and the stable coin space. Right. Like the stock means like the TVL based revenue you can just get from likely T bills or like if your stable coin is like a yield bearing one right where you hypothecated right like Athena's or or like S frax USD ours the riskless ones. the fiat coin like our FRX USD or Tether USDC and all this stuff, they're just T-bills or cash equivalents. They're all stock-based, stock meaning the underlying reserve-based monetization. But as you said really well yourself, there's different areas. There's also flow, flow meaning volume, payments, movement-based monetization on settlements, on fees. stablecoins never have been able to tap into that because where they've operated are these decentralized networks like Ethereum, L1s, L2s and all these things. so as stablecoin issuers have grown a lot into monetizing the stocks so well, they've thought about, how can we also monetize the flows? Because the stablecoins move more than pretty much most cryptocurrencies, right? This is also something that goes back to Ethereum and I know we're mostly talking about stable coins on the stock, but if you think of Ethereum, most of its value from burns and all this stuff, it comes from flows. It comes from state changes of the Ethereum virtual machine. And so you can think of the stock issue on Ethereum as, imagine, actually you don't have to imagine it, BlackRockBittle, one of the most famous RWAs, has a couple billion TVL, right? But that thing doesn't move. There's no flows in it. There's like 40 something white listed entities. Frax is one of them. Athena is one of them. There's like a few others, right? And it doesn't move. literally, if you have this like two, three billion like RWA, there might be like a thousand transactions a year. All of the thousand transactions a year might literally cost like 200 bucks, right? In total across these like gas fees moving these values between the balance. Rex (36:57.337) Mm. Sam Kazemian | Frax (37:00.898) sheets of these different entities are burning them. Ethereum only captures like $10, $20 like base fee burn on that $200 of gas fees in a year, but it's securing $2, $3 billion, right? But all of the admin fees and the management fees and the revenues for that $3 billion worth of BIDL goes to BlackRock and the holders of the RWA. They get a lot of money for that, right? And so you can think of it as high stock monetization, very low flow monetization, right? And that's one issue with the Ethereum way of capturing value, but that aside, that's probably another one hour conversation. back to stable coins, they're also trying to think, okay, we've really, really done a good job of monetizing the stock, how do we monetize the flows, right? And so that's why you see all of these like stable or plasma for like the the tether aligned chains, obviously Frax is Fraxstool, our own chain where we actually can give free gas movements of FraxUSD, but also other types of capturing of flow fees in like DeFi. But in order to actually capture any of the flows, you need your own like blockchain, right? And so you basically need your own place. And obviously, as you said, the second part of your question is, what happens if a lot of these are permissioned in some certain way or not as decentralized as Ethereum or even like the more decentralized L2s, I think as long as, you my own view is... As long as there's a way to credibly exit those places and actually hold your assets and everything in a non-custodial way. Like that part doesn't become illegal. That part doesn't become impossible. Because a lot of this stuff, also we live in a society, right? Like it has to be possible and then the society has to allow it, right? Like I will not be using, like it would suck, right? But I would not be using Sam Kazemian | Frax (39:12.818) Ethereum if for some weird reason it became illegal to die. I don't expect it to write but tornado cash is like a good example I think it was terrible that it was sanctioned I'm glad it's like off the sanctions list, right? But it was super decentralized, right? But then when you sanction it, I am a law-abiding citizen I I cannot use it even though technically it's this you know This contract in cyberspace that can't be shut down even with like sanctions or like the military of the US but I'm not going use it because I am a law abiding citizen of my society and my society has made it so that it's not legal for me to use it. And so my point with this is like, as long as the society is up keeping these ideals so that people can use them, which requires civic activism, actual participation in regulation and things, which is why we were really active in like the genius bill and things like that, because that's our area. There's obviously other areas privacy like coin Center does amazing work in this area, which we were supporter of blockchain Association which were a part of as well and then two is these need to exist there needs to be some builders that actually Continue to do this and and create these fully decentralized upkeep these fully decentralized networks entities Dows protocols and so people can still make use of them and they can power the backbone of certain types of actions that I think should always be available. Rex (40:45.495) I hear you. You know, mean, there's, there's part of me that has kind of an allergic reaction to what you're saying because, You know, I think like the old adage, right, is that Americans are the only ones who still need to be like, still need to be told and to understand the value of crypto. But like you want to know who doesn't need to know the value of crypto or like Venezuelans or Russians or pick your like pariah state. Right. And so I kind of In my head, right, like what keeps me passionate about this space, despite everything from like the SBFs to like whatever else is going on, right, is that like we do live in a society and that society is like kind of fucked up at the base layer and like look around how things are going. Like things are spinning more and more out of control regardless of what country you're in. And so kind of, I thought the point of what we're here is to... create something that's credibly neutral that serves in contrast to that. And you talk about how maybe the way that this is all okay is we can have these permission blockchains like the tempos of the world. And as long as there's a credibly neutral permissionless way to exit to, let's say, Ethereum, we're Gucci, right? Except for, let's be real, man. Let's say there's $10 billion on Tempo and North Korea is able to hack $2 billion. There's no way on this planet that Stripe is not just going to freeze that immediately, right? And is going to allow them to just withdraw that money. I just don't believe— Sam Kazemian | Frax (42:34.648) The North Koreans or you mean everyone else's? Rex (42:38.001) I'm saying, if North Korea hacks the money, and by the dictates of these systems that we're building, that value is in their private keys, and therefore, if they have the private keys, they should be able to access the permissionless exit. I don't think that that's something that Stripe's going to allow. That's always the obvious way to talk about the North Koreans. But then the more challenging one is— Like when you start talking about Venezuelans who like that is like a really tricky like gray area situation. And if let's say like the, I don't know, the Russians or the Chinese want to provide like a $2 billion package to the Venezuelans to help support like food. we decide like, these are all the communists getting together. And like, that's not allowed. You know, I I am kind of like getting lost in my point here. But all's to say is that I worry that we might've created really interesting technology that makes the financial and banking system better. And like, that's a win for us as a society, but like we, it would be irresponsible not to say that like if we don't protect these credibly neutral systems that we value, they could really easily be subsumed by a combination of Stripe and maybe a couple of central governments and whatever. I don't know, I guess that's just something you worry about in this next phase of stable coins. Sam Kazemian | Frax (44:17.901) Yeah. No, no, I totally do. actually, the here's the thing that I will never compromise on. I see crypto is like the financial version of the Second Amendment. that's that's actually like the the right way, right? Like like the whole point of the Second Amendment in the United States is like the the people are armed if if there is a situation where they have to overthrow their tyrannical government because some something happens, right? Rex (44:33.135) You Sam Kazemian | Frax (44:50.448) But the mere fact that that's there has created such a great American experiment the past 250 years, right? And so nothing has has ever happened so far, right? And they, know, citizens haven't needed to overthrow their government here, right? And I think the one thing actually that I think America could do a lot better in is the totalitarianism of their financial institution. America is a very civically free and probably honestly the exceptional I truly think it's you know the shining city upon the hill right what is it that exactly Reagan said right it and but the financial system fucking sucks it's it's like North Korea on a hill because it's like you want to move your money out why why why are you why are you moving this is this it but it's like it's my money and it's like did you want to get cash why do you need this much cash But it's like, it's the most insane thing in the entire world. And I truly believe that if like they were rewriting the declaration or the Bill of Rights today, they would add it as a human right to financially. Interact with another human being voluntarily. I truly believe that that would be written in The the Bill of Rights if it was written today like back then it was a little bit different right there weren't like banks or ways you can interview just literally carved off a piece of gold or whatever or like and so the the thing is I I think this is the answer to the only thing that America needs to do better. And obviously I know there's a lot of problems, there's tons of things that need to, but I mean on a fundamental... Sam Kazemian | Frax (46:45.646) political philosophy level of what this country needs to fix. Everything else by comparison, right? It's like the Churchill saying democracy is the worst form of government except for all the others, right? America is the best government, the best country in the world and everything, sure, there's a lot of things that suck, but everywhere else sucks even more overall. And like I know some people might disagree, but the thing that really sucks, honestly, is the financial system, the traditional financial system that crypto has dramatically improved. given this kind of exit, think Bology is the one that calls it this like exit where before you're just stuck, the whole point of it was to siphon everyone's money into the banking system, not let it get out and then call you a terrorist if you want it to leave. That's literally what the the mechanics of the old financial system is crypto makes that impossible as time goes on and as long as we have that ability all of these different things are just slight bumps in the road in my view it's like you can have a second amendment right but then you can maybe ban machine guns okay that's fine you can have like these little like caveats is like you can have crypto but fine there's a centralized chain that a lot of people like to use to like buy You know normal consumer products because it's super duper cheap or something, right? As long as the ethos of Bitcoin, Ethereum and some of the most decentralized things that no one else can shut down are there and then like true kind of like decentralized credit system the base layer of like DeFi like Aave and stuff where you don't need to KYC some of the frax and frax lend and Yield bearing stuff that you can just save in dollars. No KYC needed nothing Those will power everything else that can be you know Rex (48:19.267) Mm-hmm. Sam Kazemian | Frax (48:45.584) permission in my opinion. Rex (48:47.865) I mean, would it be, you know, I think based on this conversation where I'm kind of landing is that if you, if you have a chain in which, you can go onto a public credibly neutral chain, which like, let's be frank, the only one is Ethereum, maybe Solana, right? But like, if you can go onto a credibly neutral train and trigger or withdraw permissionlessly from the credibly neutral chain, then I consider whatever you're building. whether it's a chain, protocol or whatever, that's crypto. But if you can't do that, you may be using technologies that were developed in the crypto landscape. may call yourself crypto, but you're not crypto, you're just fintech. And I think where the rubber meets the road is essentially the way that I like to riff off Balaji's saying is like, do you have the rage quit option? And I don't know, like, does that resonate or? Yeah. Sam Kazemian | Frax (49:46.511) Yeah, the exit option, right? Yeah, exactly. The rage quit, the exit. I think there's two parts that should be highlighted, right? One is using centralized products. To be honest, I think we started off this conversation talking about stable coins, right? I think post-TERA, I've categorized, and I think whether people really like to admit it, there might be still ideolog holdouts. USD stablecoins are not fully decentralized. Like sure there might be LUSD, but you you can't really use that in a large enough way. People basically left the idea of there's this like hidden algorithm that you know, you could have this again, like this amazing dollar that is the best qualities of Bitcoin, but it's a dollar that's gone. Stablecoins are a centralized solution. And then you could build, you know, some stuff off of it and things like that. But If you want to use the dollar on crypto rails You're already saying I'm following the Federal Reserve's monetary policy. I want to hold a unit that is Legal tender and issued by the United States government. It's like okay. That's fine. There's nothing wrong with it You use that right if you want pure like immutable no one else can can take my stuff There's Bitcoin. There's aetherium these assets or you can hold them. They're obviously volatile. They're they're not based off of any off-chain dependence on monetary policy or anything. I think that's fine. I think that some people, I'm not saying you, I'm saying just some people, think of this as like everything either has to be fully decentralized or like it's all gone. And I think that as long as Bitcoin, Ethereum, and all of these things are a forefront, but then you have the centralized, like you said, fintech, things on crypto rails. That's a pretty symbiotic, all-inclusive world. And sure, the people only participating in the stablecoin stuff are not doing the exit, right? But they could. It's much easier than being called a terrorist for withdrawing over $10,000 or something from your bank, right? And so I think that that is the most important thing. And then the second part about what actually qualifies as decentralization, Sam Kazemian | Frax (52:14.004) I think the practical thing is both nation-state attack resistant and two societal Consideration right like one thing I I was reading or I was watching actually it was a podcast with Hester purse like I think it was last month where she said that It might be the case. She didn't say for sure but she's like it might be the case that if you run a single sequencer roll-up You have to register as like what is it like a broker dealer or some kind of settlement thing with the SEC if the sequencer is in the United States So like basically it's like if you're like like like running the New York Stock Exchange server, right? Because you literally have the sole sovereign ability to effectuate like the settlement and stuff, right? If that becomes like the law then by definition roll-ups like like the definition of a roll-up a single sequence or roll-up, right is is just dead on arrival, right? Because you you you are not the thing that you think you are so there there's two stages of decentralization. One is, does the entire society actually believe that this is decentralized? It's necessary but not sufficient. So that's one but not sufficient. The second one is, if the society does believe that it's decentralized, They could be mistaken. Maybe it doesn't actually, like, it's not able to withstand a nation state attack if that day comes or if there's a DDoS or network partition or things like that. I think. Sam Kazemian | Frax (53:58.969) There's been a few times, obviously, with a lot of these Alt-L1s, they've gone down for like 24 hours or more, or like there's been issues, obviously not with Bitcoin or Ethereum. But those are the two prongs. One is first, the society itself has to actually agree that it's decentralized. If it's not, you'll just, they'll create laws that'll say like, hey, this thing, every single person needs to do X, Y, or Z in order to interact with this. And so you've lost at step zero. zero is a requirement to get to the second step. That's why the whole Ethereum Bitcoin stuff was so important for the SEC and the government to be like, these things are not in any way securities, the assets are not, none of the functioning of the validators or miners or something are relevant to our laws. People can just interact with them, right? Rex (54:51.213) Mm-hmm. Yeah. this, I am struggling like a little bit with this segue to this, but while we're in this world of, just talking about like where the different forces of centralization and governments, and blockchains kind of all interact. I want to, this has fallen a little bit out of the conversation, but to me it's always been something that kind of confuses me with the kind of the consensus crypto like view is. But what's your thought on CBDCs? Because man, like when I think about it, it's like the government, as you said, we've basically figured out that if we're doing something dollar denominated, it ultimately flows from the US government and Instead of having to put all these layers where it's Silicon Valley Bank and then Circle and all these entities, what if the US government just printed a trillion dollars and put it out onto DeFi? then you compare it against curve pools and whatever, but it's essentially the exact same thing as Circle, but without the custodial risk. And so I've always thought the point of these incredibly neutral systems is that anybody, whether it's you or me, or like some guy in Russia who doesn't believe in the government, or a government can participate. I've just like always been confused why people are anti-CBDC. To me that, wouldn't that like directly imply that the government thinks that the rails that we built have value? Sam Kazemian | Frax (56:36.876) Yeah, mean, I'm going to reframe your question a little bit. And then if you're not satisfied with my answer, you can give me a part two. But I actually saw this thing, and I'll find it, and I'll send it, or maybe I'll retweet this when this is up and reference it, which said the Fed can't even touch consumers in any way because of its own mandate and own rules that it sets. And so people that think they would ever issue a retail CBDC, retail CBDC being what we were describing, like literally like a non-custodial like digital representation of a doll, literally cash, digital cash. They said that it's hilarious people actually even think that it will be possible, not because they don't like the blockchain technology or whatever, it could be different technology, maybe it's like AI singularity tech that can issue like AI dollars or something, but the person said that, and it was a, think it was like a former Fed governor, a economics professor that said the Fed can't even do these things by its own rules. What it does is it exports all of the requirements of the AML, KYC, regulatory risk type of things to other entities and down the stack. And so if it were to ever even try to do any of this, like issue literally on its level just a CBDC the way that people are thinking of it, right? Like a token, like basically like Frax USD or USDC or like a stable coin. It would undermine every single one of its other guidance because it cannot follow its own guide. It does not have a million employees of like AML or whatever. It does not have like 50,000 employees that do all these other parts of these things. unless it just completely wipes the entire way of how the economy works in the US, the difference between private and public sector, things and just scorches earth and starts over, it can't actually do it. Rex (58:45.155) But my friend, like what I would say to that is that's happened two times in our lifetime. Like back in 2000, before 2008, the idea that the government could like directly loan to somebody like, or sorry, the Fed could directly loan to somebody like AIG was like, anathema. And by doing that, it would destroy the whole financial system. And then in COVID, the idea that they could actually directly buy security, like corporate bonds and stocks and stuff. my God, that would, it's impossible. And like, I don't know, man. Sam Kazemian | Frax (59:19.084) No, no, you're right. No, no, no, you're right. But what do both of those things have in common? There's a calamity that literally forced them to do it. And so I guess if there was like a calamity that they answered the solution with CBDC, like we're all going to die unless you mint this stablecoin on Ethereum, right? way that... Huh? Rex (59:39.983) Well, how about this? The collapse of the banking system so that like the piping of how they got dollars eventually down to people wasn't working. And they just realized like, hey, we need to get social security out there. Sam Kazemian | Frax (59:53.859) Yeah, I mean some of this stuff might slowly creep in like I haven't really said this too much publicly but one of the things we're trying to do is by engaging this administration which obviously is very very pro crypto and like do certain things that like you're saying would be like totally completely unexpected for the government to do but on chain for example Treasury direct auctions right of like new Treasury bills, right? They're the ones that are auctioned so that the government can run and Function which is funny because right now it's it's actually shut down But the maybe they should do this idea which were we're actually working on but it's slow is like issue part of it actually on chain as an RWA System, maybe the platform it has to be a private sector one because it's gonna take them years to develop something like Securitize or SuperState or Frax can do the literal issuance, but they physically represent new treasury bills and then people can bid on them with stable coins like Frax USD or like USDT or like Tether's new USAT, which is like a US-connected, genius compatible one, right? And so now all of a sudden you could have literal government debt, like physically represented, not wrapped, not SPVed stuff, and then from there, you could have like a second step or step zero or or maybe there's just a Debt emergency that like they need to issue it on chain, right? Like we're saying like the only way to issue a bunch of stuff and get it out there But these conversations are happening. We're one of them, but then we're also trying I'm sure other people, know are thinking the same thing that and so maybe some calamity Not that I wish for it, but like would expedite it because you kind of have to do it, right? Rex (01:01:40.164) Yeah, or I could even see like, okay, like Trump, what we saw from last time very much loved sending everyone money and put his name on it. Like, well, what if like, he wants to send out money, but this time, like it's a new digital dollar. Maybe it's even like the, whatever the world Liberty one is. and so, yeah. And so, and so like, maybe there's a program that gets started through the treasury department. And then when crisis comes, that becomes a conduit for the fed to act through like. Sam Kazemian | Frax (01:01:57.514) USD1. Rex (01:02:09.271) I don't know, I I just push back against the idea that the government could, or the Fed could never do this because I'm 34 and the amount of things I've seen that the government could never do just in my lifetime just makes me realize that all of this shit is just made up. so I push back against. Sam Kazemian | Frax (01:02:30.71) All of it is made. All of it is literally made up and like it's literally but if they always like do something when they have to do it right now, not during like peacetime or economic stability. Like one of the things I always said was like the Fed is like really good at coming up with like weird acronyms that just like are like but they're just bailout like lending facilities. Right. If like stable coins like God forbid like Rex (01:02:34.008) Yeah. Rex (01:02:41.519) Yeah. Sam Kazemian | Frax (01:03:00.704) get up to a couple trillion and then like collapse or something. The Fed would like come up with this like vehicle that's like the stability vehicle like the and whatever but the acronym would be something super like corporate but it would just be like if you are a stablecoin issuer and like genius lies you could borrow from this freaking like overnight window. It's like okay so it's just like another new way of fudging the way that like M1 money gets out into like a specific area right. good at just coming up with like new ways and I think for example Arthur is really good at writing Arthur Hayes like different ways of like look like Japan's like yield yield curve control is like squeezing the dollar so that like what does he call her Princess Yelen or something he has like different names for her different like like Knight Jerome or something and like they have to get more money out faster than like the Japanese like contract the yen or something so they're gonna come up with like a Fed like treasury program or something. And what it's really is is that the Fed needs to unload its balance sheet, but it can't just do that without some BS excuse. It's all just made up like rules. That doesn't mean the rules don't exist. They obviously do exist, but you have to be able to see that they can be changed just as easily as they're made up. They're just words and numbers, right? Rex (01:04:25.209) Yeah. Yeah, no, man, I am with you on that, but I'm going to go back and push you on the question. Like, do you think CBDCs are bad? And again, what I'll say is that, like, to me, the idea that the actual risk-free issuer could come in and inject us with liquidity, what's to push? Like, why is crypto anti-CBDC? Sam Kazemian | Frax (01:04:52.31) I think so I'll give a very specific answer. If if a CPDC issued by the Fed that is a dollar and the code base is identical to what like Frax USD USDC USDT is I'm totally fine with it. Honestly like like I'll be on the record to say I'm totally fine with it because it has a blacklist not a whitelist. It is issued and moves on Ethereum and EVM chains. It's like ERC 20 standard. and I do not believe that if the code base is like that. they're gonna randomly blacklist curve pools and have massive collateral damage if there's like 5 % of it is stolen funds from North Korea and stuff like that. I just don't, I don't think so. So I would be fine with it. The reason I'm against in practice CVDC is that I don't think that's how it's gonna look like. I think it's gonna have a bunch of whitelist conditions. It's gonna have a bunch of ways in which you can't move it in certain like if, like a thousand if conditions, and like if it hits any of these things, it's like frozen until you have to log into some service provider that you submit documents to the freaking Fed or something. That CBDC I'm completely against and I would very, very, very much prefer one layer of private industry like. genius issued stable coins like, you know, like Frax USD, like, you know, USAT from Tether, all of these things that are truly from a private issuer, but they're almost as risk free, maybe one layer, a very, very small risk, but they function the way that we expect a stable coin to function. Rex (01:06:38.447) Yeah, I mean, I think maybe the way we like close the circle and like kind of get everything that we want is like, what you're almost describing is BlackRock's Biddle Fund, right? Which is this like white listed, incredibly hard to move, incredibly hard to even get permission to like be a part of. But like if you're someone like Frax, you can be a part of it and then use that as collateral to go issue your own tokens. And so... Like what if there's a world where just like how the Fed doesn't actually issue dollars to people, it issues them to banks and then banks, like there's the chain. Like what if we just recreate that on chain? And yeah. Sam Kazemian | Frax (01:07:17.068) Yeah, I'm super pro that that actually so so like, I think you might have seen this the Federal Reserve meeting earlier this week, right? They introduced this concept of a skinny Fedmaster account, which is a funny name for it. But it's basically like, before you had to go through this insanely onerous process that no one had been able to go through, not custodial bank, you know, they tried to do that, not others. And I've been talking about FMA is actually for a few years for like the stablecoin industry. And so the conference the Fed was like, look, maybe there's like a streamlined version that you we can quickly bring on board like DeFi stablecoin insurers, all of these things that have the ability like you're saying, just to have these like really important deposit, withdraw and settlement on the Fed layer. And obviously you have to comply with certain things, but then not all of the insanely onerous stuff of like a master account where you have access to the overnight window in New York and all these things, you just deposit, withdraw. issue assets and settle on FedNow. And I think that's kind of what you're saying and I'm not only pro that but I think the quicker like that access is democratized more the more powerful it is for everyone. Rex (01:08:30.277) Well, damn, I'm gonna have to continue on my quest to find someone to tell me why I should be anti-CVDC. But I think, you know, if you like peel it back one layer and start talking about like the nuances and stuff, think... Sam Kazemian | Frax (01:08:44.118) Does that mean I'm pro-CBDC? guess there's a miss, in my view, like what people think of CBDC, like this Orwellian, like, panopticon of like, are getting watched and like your money is like... Rex (01:08:59.206) we have that. Sam Kazemian | Frax (01:09:00.64) Exactly. That's exactly we have we have the private sector banks deputized to do that exact thing with shitty technology even more like Orwellian panopticon like things like you suspicious activity reports like all of this stuff and then not even being able to use cash anymore somehow like for some reason like if you used to be able to like buy a car with cash and now it's like If you do that, it's like where did you come from? Like a cartel or something or what would you do it? And so I think it that world in which CBDC's Extend that that timeline I think everyone in their mind is afraid that that is the future of CBDC's and that's why they're against it and I'm I would be very against it, but there is a different world in which Rex (01:09:35.908) Yeah. Sam Kazemian | Frax (01:09:56.361) slightly, it depends if this is a pedantic argument, if you call this CBDCs or not, but more reformed access to the Federal Reserve's rails while allowing new crypto and private sector issuers and participants to actually extend that crypto Second Amendment veil over more of the financial life of everyone. That is actually a huge win, in my opinion. Rex (01:10:24.237) I agree. And I guess, you know, I think that's like probably the right view to have. guess my, I feel like people are too precious about, you know, the idea that like we already live in the Orwellian system today and like it would be so beyond like acceptability and be horrible if the government issued like a CBDC that they could like freeze and track when it's like, I don't know, man. You're essentially saying like, if we just upgraded the system we have today to work on better technology? Like I would even like that. Like I hate using Wells Fargo that takes like three days to do ACH transfer. If I can like be still submitted to the same Orwellian stuff, but at least have my transfers go like same day. I don't understand what the problem is. Right? So I just, I've always been kind of confused by the just complete allergic reaction that crypto has to CBDCs when at the end of the day, whether we're talking about the Orwellian version or this more nuanced, more layered approach, like the end of the day, we want more users. Like, why would we not be happy about the world's largest user? Sam Kazemian | Frax (01:11:34.678) I mean, we're trying to get different parts of them on Frax or Ethereum and crypto. So I think there's a lot of nuance, as you're saying. It's not just decentralization or complete government control. Rex (01:11:53.209) Yeah, yeah. Cool, man. Well, I think we could keep going for another hour here, but I think for the sake of everyone's attention span, I will bring us to a close. So first of all, just amazing conversation. You know, I think it's really easy right now to say like stable coins are the interesting thing. We have legislation, whatever. But, you know, at least the parts of Twitter and the conversations that I am like, people aren't really talking about what's going on. It's more just a race to I don't know, a race to raise money and to try to get some sort of endorsement by the government. So I really appreciate like this, this long view back from how things were to where we are and how one of the key builders in this space is thinking about what's going on today. So thank you, Sam. Really appreciate the conversation. Sam Kazemian | Frax (01:12:43.554) Thanks so much, bro. You always have the best questions, the best philosophical outlook, and I think it's always a pleasure. Thanks for having me on. Rex (01:12:52.685) Of course, man. Before I let you go, can you just share with the audience where they can find you, maybe where they can find Frax, or if they're kind of inspired by anything that they heard today, what direction would you point them in? Sam Kazemian | Frax (01:13:04.312) Yeah, of course, I'm always available on X at Sam Kasmeen and then Frax at Frax. So see you there. Rex (01:13:11.479) Awesome. Alright man, thank you very much and have good rest of your day.