Blockchain’s role in the future of crypto

John Wu, Ava Labs President, joins Yahoo Finance Live to discuss growth at the Bitcoin 2021 Conference and Avalanche USD’s place in the crypto space.

Video Transcript

- Big conference going on down in Miami, Florida. And it is all about crypto Bitcoin 2021 Conference. And Yahoo Finance's Zack Guzman is at the center of it all with a guest. Zack, take it away.

ZACK GUZMAN: Yeah, thanks, Brian. I'm here with John Wu president of Ava Labs. And John, appreciate you taking the time here to chat.

JOHN WU: Zack, thank you for having me.

ZACK GUZMAN: You're probably the most closely dressed individual to me here today. And I'm wearing a blazer. That's because you come from the tech world. You worked at Tiger, you're well known in kind of the financial sphere. That may be different than some of the retail crowd here. But talk to me about how it's changed, this Bitcoin '21 conference relative to the other ones you've been to in the past.

JOHN WU: Right. So I've been going to these tentpole type conferences for four or five years. And the number one thing you see happening is the number of people who are institutional or enterprise, traditional enterprise, related coming into these conferences are growing as a percentage every single year. Four or five years ago, maybe 20% of the population. Today, it's, I would guess, 60%. And there's 13,000. And the last consensus that was in person was about 8,000 I think.

So the crowds are growing. And the people coming out more and more coming over from traditional finance or enterprise.

ZACK GUZMAN: Yeah.

JOHN WU: On top of that, I would say in '17 and '18, when they came to this, they were tourists, or they were trying to get educated. The institutional enterprises who are here now, they're active. They're participating or they're serious about participating. So volumes increase and engagement is increased.

ZACK GUZMAN: Yeah, and we've seen the dollars too coming in from the institutional investors started to increase there as well. And I definitely want to ask you about what you're trying to accomplish there with Ava Labs' Avalanche Protocol which we can get into in a sec. But I mean that's a big part of it. The institutional dollars now creates a bigger opportunity for things like you're building out right now to capitalize on all the money that's flowing in.

JOHN WU: That's right. I mean, if you just take Coinbase who had an unbelievable IPO, my guess is about a year and a half ago, retail in terms of the assets they custody represented probably like 60%, 70%. Today it's inverted. I would bet the institutional money is probably 70%. And retail is a lot lower, 30%. But the amount has also grown. Incredible.

And that is great because it feeds ultimately more investment into the operating success of all of these companies in the space. And it's no different from I think in the late '90s when the money went into internet. Some of the companies didn't work out. And there was a lot of bust in 2000. But what comes out of it is great customer use. And ultimately you have these great tech companies that made your life, my life, a lot easier.

ZACK GUZMAN: Well, let's talk about why you built the Avalanche Protocol here because it's one of those things where you get a lot of these things popping up as you said, you don't know which one's real or not. But Andreessen Horowitz, one of the institutions backing what you guys are working on here, as well as the enthusiasm that's come from other investors as well. So talk to me about what you're trying to do with Avalanche and what it improves upon when you talk about-- it's high praise to be talking about in Ethereum 2.0 killer. We talk about Ethereum killers. But to be an Ethereum 2.0 killer and what you're trying to do there, what are you trying to solve?

JOHN WU: So we don't consider ourselves Ethereum killers. We complement Ethereum. So the Avalanche Protocol is compatible. It's EVM compatible. So it's the same type of development you can do on the Ethereum blockchain, you can do on the Avalanche blockchain. And also it's not just A16, we also have Polychain, Metastable, Initialized Capital, all great partners of ours helping us help the Avalanche Protocol build an ecosystem on top of it.

What Avalanche ultimately will be is the premier place to digitize or tokenize just about any asset out there. Right now, we've only been out on the main net for about eight months. And we've already made great strides. There's 50 live gaps on the Avalanche ecosystem. The goal is not necessary just to tackle the $100 billion of DeFi right now growing at a very fast pace, but using the Avalanche technology to tokenize the $700 plus trillion of financial assets around the world on financial services balance sheets. That's the ultimate goal. And that's what the promise is for a lot of these first layer protocols, Ethereum included.

ZACK GUZMAN: Yeah, no. Because it seems like one of those things where you roll out something like this where you're trying to stress the efficiencies of you know the blockchain that you built here and what you're trying to solve. And it's interesting to see kind of different projects tackle different problems. And it sounds like you're really zoned in on financial applications here. But I mean, when you talk about some of those projects being built on top of Avalanche, which ones do you see as maybe the most promising one you'd want to dig into? Or is it more to be built as a general purpose tool?

Because I feel like no one ever wants to pigeonhole themselves, but it's kind of important if you want to catch on and be known as the blockchain for this.

JOHN WU: Well I think that this next version of the ecosystem for blockchains is not going to be like the previous one where Ethereum was the only place and only game in town. It'll be more like the analog for the social networks where you have a winner take most like Facebook, but then you're going to have TikTok, you're going to have Clubhouse, and you're going to have Snapchat, and you're going to have all of these others that are more dedicated and focused on something and certain features.

So with Avalanche, we solved the trilemma. There's security, there's also scale, the low gas prices, and very importantly to the purists, it's decentralized. Self governance and giving the individual empowerment is very important theme these days. So that is one component of Avalanche. We also have the ability because of the enterprise component with our private blockchain to provide services as literally like a SAS product for financial services companies in the traditional world as well.

ZACK GUZMAN: There's a lot of opportunities to go here. And it's the early days as you said. Only eight months on the main net here.

JOHN WU: Only eight months in the main net. I would say organically one of the fastest growers in eight months.

ZACK GUZMAN: Yeah. Well, I mean it's fascinating to watch. And clearly a lot more to talk about. But happy we could have connected here. We'll have you back on to discuss kind of the growth there. But John Wu, appreciate you taking the time. President of Ava Labs.

JOHN WU: Zack, thank you.

ZACK GUZMAN: All right. We'll send it back to you guys in the studio.

- All right. Thanks so much, Zack. And Zack will be reporting more throughout the day and also through the weekend from that conference.