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Crypto smartphone will be ‘transformative’ for the industry: Solana co-founder

In this article:
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Solana Labs CEO Anatoly Yakovenko joins Yahoo Finance Live to discuss the release of an Android-based Web3 smartphone and the outlook for the crypto industry.

Video Transcript

[MUSIC PLAYING]

BRAD SMITH: A new way to trade, a cell phone made for crypto trading. That's the idea behind the latest tech out of Solana Labs. Let's bring in Solana co-founder Anatoly Yakovenko plus Yahoo Finance's his own David Hollerith joining in for the conversation. And it's always great to have you here with us today.

First and foremost, I mean, just general question. How does it work?

ANATOLY YAKOVENKO: So there's a couple of technologies in there. First of all, the Solana Mobile Stack is a piece of software that allows users to store their keys in the phone in such a way that nobody can ever steal them. And there's a wallet adapter to connect all the wallets through those keys to all the applications, a Web3 app store that is Web3 first. So it doesn't have those extractive fees that developers are used to.

And these technologies all tie in into experiences, like tap to pay and bring up your phantom phone, your phantom wallet. And then you can pay with any coin, like with any token at your cafe. So things like that, I think, are pretty important and transformative for crypto because it's not a lot of technology. It's literally something that a small team can build. They just require a few changes that OEMs can do.

So we've been partnered with Awesome to build this amazing device, a flagship phone, the Solana Saga, that's a top of the line device. I mean, this device should probably be selling for $1,300, $1,400. But we want to do well to our community. So you can go to solanamobile.com, pre-order it for $100. And it's $1,000 for retail.

DAVID HOLLERITH: Hey, Anatoly. Thanks for coming on. I'm just curious. What has lead Solana to thinking of issuing a phone? I know your background is Qualcomm. And obviously, Solana Labs has many Qualcomm engineers. So I was just curious, what has sort of led you to this?

ANATOLY YAKOVENKO: Well, I mean, given that I worked there for over a decade and a lot of my experiences were deep in the kernel, as soon as I started working in crypto, I felt that, why isn't the trust zone in my intro device handling the keys in a secure way? Why is there no trusted display for me to sign my transaction with?

These little changes, we had the technology to do that like five years ago. But crypto hasn't really broken out to the attention of the big tech companies yet. So I think we're the first ones to do it. If we see adoption, I'm assuming everyone else will change as well. And that would be a great thing for the industry.

BRAD SMITH: Would you classify this as a cold storage solution? Is it still hot once you kind of turn the device on? How should we be thinking about this?

ANATOLY YAKOVENKO: There's various degrees. Obviously, if you're an institutional trader you need real custody with extreme security. But if you need something when you're walking around and you want to basically pay at a cafe, this is a perfect solution for that.

DAVID HOLLERITH: Now, Anatoly, I can totally see how Solana true believers are going to love this phone. But I am curious, what are you thinking in terms of a user base out of the gate?

ANATOLY YAKOVENKO: So the big risk we're taking and the big opportunity is that the big app store policies right now are so bad for Web3 developers that we believe-- and a lot of devs tell us-- like the founder of Opensea, that 50,000 users, with a best-in-class Web3 experience for those users that are active, that have a primary device as this, is going to be a better distribution channel than the big app stores, because the business models for Web3 are just so different they don't really work with Web2.

Magic Kingdom cannot add a 30% fee on a $10,000 NFT. That's just not going to work.

BRAD SMITH: How many units do you anticipate needing to produce in order to just kind of get that first phase to really address the first wave of adopters out there? So

ANATOLY YAKOVENKO: We had over 1,500 devices registered in the first 24 hours and over 10,000 on wait list. I don't know where that's going to end up with. But I would be happy with anywhere over 25,000, 50,000. To me, that would be an awesome success for a first attempt.

DAVID HOLLERITH: Yeah, it's clearly bold and ambitious. And Solana, the actual transaction mechanism sort of works that way too. But I know you're aware of this too. In 2018 and 2019, a couple crypto phones were issued. And knowing that those have all not been successful, tell me how the Solana phone will be successful in light of that.

ANATOLY YAKOVENKO: So remember that Ballmer video of him screaming, developers, developers, that's us. We're very developer-first. So this a device that's a new platform for developers. We have one of the fastest-growing developer communities in the world out of any network, probably any technology right now.

So what we're building this is for devs to take advantage of these new features. And the theory is that 25,000 Web3 users that are dedicated users that are active and an app store with no restrictions is a better distribution channel than the big app stores. And if that's true, devs will build great apps. Great apps attract great users and so forth. And that flywheel will start.

BRAD SMITH: Solana co-founder Anatoly Yakovenko as well as our own-- Yahoo Finance's own David Hollerith joining us for the discussion. Great to have you both here with us today.