The Asia Tech Podcast recorded an insightful conversation with Joel Lin, Contributor at Citadao. Citadao is a Decentralised Finance platform that aims to resolve problems like lack of liquidity, access limitation and lack of composability in the real estate ecosystem.
 
Some topics Joel discussed:
  • The link between the Web3 space and the gig economy
  • A task-oriented model VS a typical business model
  • Does having a job titles limit one’s capability
  • Benefits from using blockchain treasury as a bank account
  • The impact of having good quality members anchored together by a common mission and vision
  • Problems linked to real estate equity
  • Newly introduced Soulbound Token
  • The importance of understanding the legal landscape of movable assets
Some other titles we considered for this episode:
  1. Defining Yourself
  2. Having a Say in How You Want to Live Your Life
  3. Consensus Mechanism Is the Best Mechanism
This episode was produced by Stephanie Ng.

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:04
Hi, this is Michael Waitze. And welcome back to the Asia Tech Podcast today we have Joel Lin, who’s building Citadao Joel, thanks for coming on the show. Did I pronounce the name of the company properly? By the way?

Joel Lin 0:15
Yes. Citadao is the right way to pronounce it,

Michael Waitze 0:18
what does that mean? Because in my brain I kept saying Citadao and maybe that’s just because I used to work at Citibank. But what is Citadao mean?

Joel Lin 0:25
So Citadao is actually merging of the words between Citadel, which is a castle, the Dow, which is a decentralised autonomous organisation, something very new in the web space.

Michael Waitze 0:37
Yep, yeah. Okay, did I get it like citadel? Do we want to just get a little bit of your background first, because then I want to go into what is adapt, but let’s just get your background first.

Joel Lin 0:46
Sounds great. So a little bit of my background, my name is Joel, I am a contributor as an adult. And my background has mainly been in the Institutional Diversity space, he was the author with UBS Investment Bank, the land, CBRE, and most recently, with a private equity platform funded by one of the biggest issues in the world, this kind of before came into the battery, where we hope and, and I’ve been in this space since then a full time. So what gets

Michael Waitze 1:16
you sorry, from capital land routes is just a very traditional real estate company and a good one for sure. And UBS, I worked at UBS for a bit as well. But what gets you to move from there into web three, because normally, the transition from web three is from like, web two, I was building this other thing. And then I saw this new tech come in, and I wanted to switch but like, what was it for you?

Joel Lin 1:34
So it’s a very huge change from many aspects of what I used to know from a cultural perspective. from a lifestyle perspective. Yeah, so everything changed. But from my from my perspective, I think I’m just kind of going on with the trend. Web three is kind of a byproduct to me of the gig economy, that is increasingly taking the world by storm, we have heard a quick presentation, we have heard of millennials and all the younger generations, kind of deciding that they want a much better work life balance, they want to be better recognised for their effort, they want a culture that is more focused on objectives and performance and recognising them for their contribution and talents. And I was kind of figuring out what this means, really. So I decided to take a peek under the hood in the web three space. And I kind of found that with the web three space, you better recognition, you get better balance of your work and lifestyle. And most importantly, you don’t really knows that much from entering a trade fi space into a defy space.

Michael Waitze 2:48
tell me how this works, right, so what is the connection between web three and the gig economy and the great resignation? Because this is something new that I’ve heard read, like I think I understand web three is and we’ll get to a definition of a doubt in a second. But what is the connection between web three and the gig economy?

Joel Lin 3:08
So in the web freespace compensation is predominantly dished out on based on a task basis. Yeah, so it’s a task oriented kind of model in the old world that although the traditional world I came from, we are paid for our time to turn up at work, and to not have any other commitments other than what we say all the time. Typical web to a platform or traditional company platform. And how it works in those cases is we cogs in a bigger system, we are out there generating revenue, for the shareholders, for the creditors, for the different stakeholders of the company. And our share of that revenue we generate is basically our salaries. So that is what a web to traditional platform is like. And we have found that, in many cases, both my team and also my team, we have found that talented employees who are able to outperform in a very productive tend to get penalised by the inability to actually contribute more and getting compensated better than the typical pay review cycle. In a traditional club,

Michael Waitze 4:23
he just described my entire career and Morgan Stanley, you’re laughing, but I’m not kidding. Like, I used to have these conversations when I would provide services to some of the people on a trading desk. And I was like, what was that worth to you this year? And they were like, at least a few million bucks. And then my boss came and said, Here’s your bonus of $50,000. And I’m like, Huh? It doesn’t make any sense to me because I’m being told it’s contributing millions of dollars to the trading desk, and you’re paying me 50 grand and like you could pay me 100 grand, and it would change my life, but it wouldn’t impact your ability to compensate everybody else. It just seemed unfair. Is that what you’re talking about?

Joel Lin 4:56
Yeah, because in a virtual space, you have your capital providers which are your creditors, your shareholders stuff that you have to meet and prioritise very interestingly, above and beyond the employees who are bringing the revenue. Yeah, the space. Yeah. And to me, I felt that there’s a gap here, because I see tell us increasingly living the web to space, whatever free space. And that’s freedom really, because the web is based compensated in a more fair manner, whereby we are paid for our contribution, measured by the task that we put up, and in many cases recognised by the community that we are making a positive impact on. And we can go into detail about how Dow operated, which will help to explain what I meant, but what I see increasingly is a whole bunch of very talented engineers, the top talents everywhere, living the life of your Facebook, Google, or your web two platforms and just becoming part of the economy, they don’t identify with any single one company. In fact, they identify with multiple projects in the free space that they’re working on. And each project they find value in how they can actually contribute as an individual. And as part of the greater economy to build up the future of the work we universe, the use cases and stuff and to define a person in the web to space by way of his job title, saying that, hey, you know what, your marketing executive or your technical executive, so all you can do is marketing or technical. I feel shortchange talent, the industry individual significantly, because you’ll find that a person anybody is actually unique in the way that they are talents more than just what their title describe them. I can be a good technical expert, I can be a good marketer, I can be a good singer. everything right? And but what why am I only compensated for what my title define me as the web is basically allows the individual to define himself? More wholesomely? more comprehensively?

Michael Waitze 7:03
Yeah, so talk to me about what a Dow is, because I want to get back to this idea of increased compensation. But there’s also this idea of increased competition. But talk to me about a Dow first and then I want to talk to some theories around this access that it gives you to get compensated for more of what you do holistically, as opposed to just how your job title defines you. Yeah. So what does it down? How does it work? And why is it better?

Joel Lin 7:26
So Dow effectively is an acronym for decentralised, autonomous organisation, we know our sole proprietorship we know partnerships, we know limited companies to start companies. But Tao is probably the new generation of digital companies that essentially define more so by their communities than their capital providers. And we are, say communities, I literally mean the communities, the contributors, the ones that make the Dow project successful is held together by a vision and mission that everybody hold dear to. And what’s unique about a doll is that is a global platform is not incorporated. Any single one country or jurisdiction exists on the blockchain, uniquely, because of this adult typically does not have a bank account, because in order to put a pin account, you need to have shareholders and stuff. So what we have in place of a bank account is actually a blockchain Treasury for a safe, whatever you call it, that is managed and gathered by its community members. So having said that, in most cases, Tao is complicit, do contribute to their community, not by way of cold, hard cash, but by way of the DAO tokens, which is the project tokens, or other digital assets like Bitcoin and Ethereum USDC. So so forth.

Michael Waitze 7:43
can I ask you this, though, because this is really interesting, right? And he tried to change almost like flipped capitalism on its head, right, where the capital providers have all of the leverage. They hire a bunch of people to do stuff for them, they compensate them based on what they think the market is going to take for them. And what you’re saying is, let’s flip it upside down. And let’s compensate people. First of all, not out of a bank account, but out of sort of a digital vault. Yeah. Which is neat, right? Because if you’re global, then you can’t really have like, you’re not based in Vietnam, you’re not based in Singapore, you’re not based in New York or London, you’re just global, right? By definition, the technology allows you to do that. But at some point is like being a Dow, is it more efficient, more effective? Do you know what I mean? And at the end of the day, is it going to get run by humans? Is it going to get run by the software? Like how does it actually work? And does it devolve again, back into, hey, you know what, I’m right, you’re wrong. And the community’s made the wrong decision. Like Do we have a model for an exam for a successful Dow that’s worked at some level? Yeah,

Joel Lin 9:58
go ahead. We have knowledge To address there’s quite a bit of topics in here that we will probably have to unpack go for it. But let’s look at the efficiency part. First down, is it more efficient or less efficient than a traditional company? It really depends on how the Dow is, just like any other traditional company depends on the talents of the contributors of the Dow really depends on the community, because a company depends on its employees to define how efficient it can be. A Dow depends on its community members to define how efficient it can be a doubt is made up of very good quality community members anchored together by a common vision and mission. And, and pulling together their talents who realise that vision will be a lot more efficiently one than the one that is

Michael Waitze 10:48
how do you decide who’s part of the community, though?

Joel Lin 10:50
It’s always a very new structure. So to be honest, during experimental mode, increasingly, we find initially, the doors open, anybody can join, right? And then after a while, we realised that that doesn’t make for very efficient dog. Because anybody Yeah, yeah, then some of the dogs start adventuring with a more permission structure, whereby anybody can join at a base level, but in order to, to be compensated in any way or form by the Dow, you need to build a certain track record, or you need to build a certain level of commitment to the Dow, before they assign you roles and responsibilities, that then gives you the right to apply to the task board to then get compensated for the various tasks or tasks that adults dishes out its community to perform. Okay, so that is one way we have seen other adults actually starting to move straight into permission, doubt whereby they will actually identify who the individuals are in real life. Yeah, and try to make a judgement call based on that. Now, that kind of doubt seems to be operating a little bit more like oh, well to platform should fire company, because in those cases, it’s subjective to the individual characteristics of the person rather than his output. But those 1000s is now where we see the best kinds of doubts out there, or the doubts that assess performance, literally based on the output based on your contribution, based on your technical capabilities, those kinds of doubts, they allow for anonymous contribution, whereby we do not need to know who you are as an individual, where you’re from what you do everything as long as you’re not essentially individual. But what we can do is that we recognise that, hey, this is a task that you undertake to perform, and you perform it up to expectation, even exceeding expectation. And in those cases, you are compensated purely based on your output, rather than who you are as an individual. Now, this change a lot of things in the global marketplace, for human capital, because as you can see, sometimes today, it’s a lot of the job where you’re born, right, we have very talented individuals born in emerging nations that are earning peanuts are even living hand to mouth. But because I’m born in a much more developed nation, I kind of got lucky, even if I’m not as talented, comparatively, I lead a better lifestyle, I get compensated better. Now I think Tao ultimately helped achieve the ideology, that there is ultimately only one price to pay for talent, regardless of where the talent is in the world. And it’s the global price.

Michael Waitze 13:26
So here’s so here’s my question for you. Because you’ve brought up something that’s actually really close to my heart. There are companies like top towel, right? And touring, which, if you’re sitting in Silicon Valley seemed like a great idea. And let me just go through this with you and just stop me when you want to make a comment, right? But like, Turing is an example of this. They say, hey, look, it costs you and I’m gonna make up numbers. Yeah, 225 $250,000, to hire a great developer in San Francisco, or in Boston. But we have access to developers and engineers in India, in Pakistan, in Vietnam, where the engineering talent is great, but it only costs you $50,000. There. Right. So this gets back to your idea of a global price. Do you think that that’s going to, at some level drop the salaries in Silicon Valley increase the salaries or the compensation, let’s say in Vietnam as just as a proxy for everywhere else? Do you really mean and there’s going to be just some even balanced out there that a Dow can actually accomplish that over time? Because that’s what I’m hoping for? Yeah. What do you think? I think

Joel Lin 14:23
across several dal first, we need to understand don’t just compensate for turning up in

Michael Waitze 14:28
office. Yeah, for sure. Not at all. It’s the audio matters. Yeah.

Joel Lin 14:31
It’s outputting. So depending on how much output someone achieve, we might get compensated for doing more work, you might be compensated more someone doing less work. Yeah. So then we look into the concept of compensation not on a monthly or annual basis, but a compensation on an hourly basis because your time is your most precious resource. productivity of a person then matters of talent and matters because if a talent can produce more output in this One more time, you get one more data really?

Michael Waitze 15:02
Yeah. Yeah. I mean, we’re kind of getting back to this. Are you selling time for money? Or are you selling output for money as well. But here’s the other thing that I’m really curious about, again, just an opinion, right? If proximity no longer matters, right? Like you said, I always talk about this, like it was an historical accident that I was born in California, as opposed to, you know, born in Lithuania, like, it’s just a historical accident, right? But, and because of that, I benefit for sure. But if web three and the ability to have some anonymity behind an avatar, right, which then doesn’t hide me from doing something illegal, but takes away bias in your attempt to hire me, right. And that’s the benefit that you’re talking about here. For web three, at least in this particular case, I still don’t want to trade money for time. But I want to trade it for output output. But but it also increases the competition, almost by definition, right? Because then if I’m not concerned about proximity, and I’m not concerned about you know, just people that I know, then there are 1000s, or millions of more people that can do it. So at some point, that arbitrage has to close, there’s got to be some kind of balancing out of what that compensation is, whether it’s for time or for output, how do you how do those things get bounced? Do you know what I mean?

Joel Lin 16:13
Yeah, so I think compensation also depends on if you’re looking at compensation based on our previous so you have to factor in other elements such as productivity, the individual choice of work life balance, right? So yeah, so now I choose to take on a task, if I want to take on a task, if I do not want to, I don’t have to take you on like the traditional company where, you know, some poor guys just get dumped, like tonnes and tonnes of work. Regardless of what kind of pay is on, hey, yeah, so he has no save, because he’s helped the leverage is held against him is like, you don’t do this, we’ll find someone else to do it. And then the programme will just have to do it. So I think it will lead for a more healthier global economy, I feel. And already we are starting to see this shift happening. I’ve been to many conferences, on many webinars and hearing people talking about a great resignation. And people wondering, where are these guys left? They left somewhere, they have to appear somewhere else, right. And they will say that this guy has just left it, they didn’t reappear somewhere we are seeing these kind of things manifest themselves in terms of unemployment rates in all developed nations whereby you see a when developing nations whereby you see an unemployment rate going down to the very end, people say, you know, the economy’s doing very well, everything because the unemployment rate is going down, and then the company, but I can’t hire for the job. And that’s creating wage inflation, right? And then you ask yourself, why are these companies not being able to hire for the job, when all these great talents go to? Why are all these companies ultimately being stuck with the people who choose not to go down the rabbit hole. And then you realise that if he you know what, these guys actually are appearing, that we are just taking on multiple projects at once they are no longer being held hostage by any single manager or single employer, they are having a say in how they want to live their life, and how they want to be compensated for the output. In terms of competition, discovery of talent, the referee, space is still a little bit behind that in the real world. So there’s a bit of inefficiency there. Because like I say, many dogs have ultimately decided to require toddlers to first show that they’re committed and able to have a travel club before you even get compensated in the first place. But once you’re on that compensation level, you practically have the ability to leverage on the fact that, hey, you know what a compensated contributor is down. So when I go to another adult, I say that I want to contribute here. And if this starts with reputable, history opens me access to other adults. So that will lead to better web people just more reputable web three projects actually get into better contributors, first of all, turn into contributors first, because people want to work there. So you’re gonna see the same here in a webseries base replicated by way of the web two companies, where you have Google Facebook, top tier one companies, and then you have your local MNCs and local localised companies that you have your SMEs in a virtual space, you’re going to see for just kind of going to space where the top will just always get the best talents, and then your subsequent projects will get ready to shine the rest of the talent pool, but what we’re going to see effectively over time, and if the trend takes hold the great resignation is no longer going to be the great resolution is just going to be the perpetual resolution challenge in the FIE space, so just by way of social circle realise that hey, you know what colleagues I used to work with, he’s a great talent. He left the company is now leading an even better lifestyle than me slogging my ass off in a company. I’m just gonna go join him right and when you start seeing second league of resignation coming by, by the first wave influence the second wave of colleagues to join them, and they were starting To see actually university students, grad students or the younger generations being very open being very conversant in the Web Suite ecosystem. Yeah, in fact, you’re doing order liquidity mining them play actively in the space. Now you have, you know, statistically stating literally setting up mining rigs in the Tom Justin might be kind and stuff. This guy’s will literally hop out of school into the webseries space.

Michael Waitze 20:25
Yeah, because what’s the difference? Right? I mean, I look at this. And I think Steve Jobs was allowed to be the CEO of Apple and the CEO of Pixar and nobody thought twice about it. Right. They were nobody thought that there was any conflict of interest there or conflict of time. And yet, there was a story recently, I think it was Tata Consultancy. I can’t remember where where, like some guy or some gal was working there, but also doing some other consulting on the side. And people were super worried. And I think that person got fired. I can’t remember the exact details. Yeah, I remember I saw that too. Yeah. But the point is like, so it’s okay for Jack Dorsey. And for Elon Musk. And in the past for Steve Jobs to be the CEO of multiple companies, but the people that work for them, it’s not okay for them to be working on multiple projects. At the same time, even if, even if some of those projects they are some of the same technical details, right? Because it feels unfair, like I’m paying you to do this, you can’t then take that knowledge and do it over here. But in reverse, the shareholders should think for these big companies, I’m compensating you to focus on this. And you’re focusing on both of them. Like, why is that? Okay? And I think that’s one of the things that you’re talking about here. Yeah. Yeah, but let’s bring this down a little bit into Citidao, right? First of all, you call yourself a contributor? Is that purposeful? Do you really mean to like, just set a tone for the way you want Citadao to be run? Because you’re in a way you’re the founder? Yeah. Or one of the founding team? Yeah.

Joel Lin 21:47
The founding team should be consists of a bunch of talents coming together to build a project. And yes, this is all the way we see the Dow being the culture being set, the Dow being built, whereby no single individual should be given ultimate authorities on how things are built and developed. In fact, we believe that consensus mechanism is best mechanism at the end, and is essentially proven by real how we view our data, when I first came in my concept of tokenization was very different from what the Citadao of tokenization is today,

Michael Waitze 22:20
what is the consensus mechanism that you’re using, and then talk to me about the tokenization, as well.

Joel Lin 22:24
So what we encourage essentially contributors who are committed to coming together, we giving them autonomy to set a direction, that code is going to be building stuff, okay. And then we have a constructive discourse, whereby we actively share our opinion, for example, initially, when I talk about tokenization, you’re saying that tokenization should just be focused on real estate, there should not be a second token out there where there should not be a platform token, everything in that then some of the guys can always look, if you look at all the pasta colonisation efforts, they have done that there wasn’t very much traction, right, in a huge way. And they said, Look, why don’t you consider another way of doing it, and they shared their experience, their knowledge in terms of how some other projects, best practices have made them successful? We were able to collectively take all of them together, or their experiences, or their knowledge and everything come together and kind of mash them together to ultimately be what’s the Dow is today. Now, if you look at the Dow we actually provide more value than any worse integration project out there, I’d say simply because we have one common vision that team share together, which is real estate can be more valuable on chain than in the real world. How How does that work, though? So the basic concept is this. We have a scene available today is very capital inefficient, because of all the existing legacy kind of systems in place. And that makes it transaction very inaccessible, very illiquid. And very silo. So what’s the inefficiency there? So when we look at efficiency, when we define capital efficiency in our project, we came together and we said, how do we define capital efficiency, we look at it from three categories, three categories. The first one is better accessibility, the second one better liquidity, and it’s one better composability, which literally means in terms of readability of the real estate tokens between multiple battery projects, that then increases the use cases, which then increases the demand, and ultimately, the value for the real estate.

Michael Waitze 24:34
There’s so much stuff to cover here. I feel like we need to do like five or six episodes on this. Liquidity is something that’s always been really interesting to me in real estate, right? It’s like it’s one of the few things you really can’t short sure I can sell a REIT short, but I can’t sell a house short. Right, and I can’t sell a building short. But does the tokenization allow you to do that? In other words, how does the liquidity increase except for just making it more accessible?

Joel Lin 24:57
So let’s unpack all this time you know Yeah, so to answer your question, yes, in battery space, you can choose sell real estate short. And we can go into that later on, please. So but let’s also go into liquidity. Liquidity is not about shorting the market liquidity is about getting access to your equity in the real estate anytime you want, anytime you need it without requiring any permission to do so. Right. So today, if you bought a piece of real estate, let’s say I bought a piece of house in cash, and a house costs 1 million, so I paid 1 million in cash, I basically swapped 1 million in cash for 1 million in equity in the house. But in today, tomorrow, I realised that hey, you know what, for some reason, I need maybe four or 5000 of the $1 million, the fastest I can get the cash back by way of financing, or even selling the house, the financing are probably looking at 30 days, and I need the bank permission to get so. And if you think about it is actually a bit ridiculous. Because when the bank is going to give you that 500,000 We should put into the house back to you. Right? They’re going to ask you, Hey, Miko, where are you from? A job? How much are you making? Are you married? What are the depths Do you have? They literally go down into your personal life so intrusive every day by holding the House collection and the house is a $1 million house, you’re just taking a $500,000 debt? If there’s just this a house and sell it on the market, they can get easily modify how it doesn’t wish, which is not, why do they need to know so much about you, before even giving you the cash your cash back to you go ahead. And that whole process takes 30 days, by the time your cash comes in, you’ll be like, you’ll probably be like, okay, either the opportunity is gone. Or you’ll be in really deep trouble. Yeah, so that’s how companies go bankrupt, because they’re not able to come out of cash when they need to be defined by liquidity by the most liquid form of diversity today, and markets are your worst investment trust that you can, you can access anytime your resource, you get access anytime on the stock market. And by salary time doing, essentially the hours excluding public holidays. But then that means that on Saturday, Sunday used to have no access to cash. If the bank decides to declare a holiday, you have no access to cash, if that change is said to declare a holiday, you have no access, okay? If the issues go up in flames, you will have no access to your cash.

Michael Waitze 27:29
Or if there’s some kind of global crisis, right? Like pick a global crisis in the past 25 years, they’ll just shut down the stock exchange for a day or two. Like we’ve seen it

Joel Lin 27:37
to cash. Yeah. And that’s unfortunately the way things have to space today. And there is a problem with real estate we see now what if you can access your real estate equity, cash any time of the day, 24/7 365 days a year permissionless. And they don’t need to go and dig into who you are, where you’re from? Are you male or female? Or are you in the middle or whatever? Well, how much you’re making or stuff like, there’s no biasness in giving you the cash and give you the cash within five minutes, which is already too long, because there’s a transaction less than that, right?

Michael Waitze 28:14
So can I ask you this, though? So what role does KYC and AML play in this stuff? And at some level doesn’t really matter? Or those just edge conditions? Do you know what I mean? Like a normal person like your uncle, your sister, whoever it is, it’s not money laundering. They’re just not right. And yet, you still have to comply with the same thing that drug dealers, human traffickers and arms dealers have to deal with, because those guys and gals do stuff wrong, right? So But banks and investment banks and investment houses still have to go through KYC. And even big exchanges, like by Nance have to do KYC as well and have to have AML policies, what is the like? How does all that fit in?

Joel Lin 28:47
So we believe that banks that should just will have a place to play in terms of this whole ecosystem. They are the trusted institutions to do the KYC AML kind of stuff. They are the gateways for Fiat on chain, and vice versa. So that we believe is the play. Now, before I go deeper into this topic, I would like to draw the distinction. Many people normally say KYC AML in one sentence, or even one word, but tragically mean two different kinds of things. KYC AML, anti money laundering. Now, between both of them, wait, lines AML, you do not want to deal with terrorists find money, you don’t want to deal with money, you don’t want to deal with war crimes and stuff like that. Right? So AML is the line that we draw here. And in the defy space of that has been the biggest focus among other regulators. And I’m happy to say that technology has kind of caught up in this space. There are actually AML services being provided right now that doesn’t require KYC. I don’t need to know who you are as an individual.

Michael Waitze 29:53
Right? I know. For instance, this Yeah. Yeah.

Joel Lin 29:57
So I know where the source of your money come from. Yep. And if your money is tainted in any way, that money and its journey, where it’s tainted, you can’t continue this journey anymore, because anybody else it touches will tend those individuals too. Right? So that’s the that’s the that’s the beauty of one blockchain, you trace it back down to the point where money is minted whether whether the digital asset submitted or left cash today, whereby the mobile is out in the world where you have the physical node, there’s no way to face who gets what cash. And I believe because of that, the caller ID l KYC. Standards are actually designed for the cash economy, they are, they are actually designed for to address the cases whereby you know, the cash that is in the hands of a person and get transferred from this person to that person, you have no way of ensuring that the cash is doing the right thing. But when it comes back into the banking system, I have to do the KYC AML. So I think that’s where the currency KYC AML standards are focused on. That’s why AML has to be focused on KYC. Because today, you can’t do AML without the KYC. Without knowing who the person is not blockchain, you can. Yeah, on the blockchain is a completely different concept. In front of blockchain, you can be anonymous, until which point in time you decide to do something malicious. Because if you realise, in the defy universe, the transaction has to pay a transaction fee to the chain, literally, in order to process the transaction, right? And that fee to be paid, you can’t just get it from anywhere, you probably have to get it from a centralised exchange. Like for example, if I’m going to make a transaction on Metamask, yep. I will have to first fundamental must follow if you ever gonna get even phone have to get on a fish, right? And as Chase, and the banks, actually towards me. So after I get my ATM, I can process all the transactions I want with my meta mask, wallet anonymously. But if I do something funny, if I do something wrong, in the blockchain, it’s very transparent. People see instantly, hey, you know what, this meta mask wallet did something wrong? Right? They’re able to track where I get my source of capital, which is the integral form, right? You say, hey, no, you got it from binary fts. And they’re able to identify exactly the transaction, which I prefer. And they can then take this transaction, go to the centralised exchange, go to the banks and say, Look, this individual made this transaction Who is this individual?

Michael Waitze 32:41
Can I ask you this, though? So does this get back to some 00 Knowledge proofs as well, and things like what are they called snarks? Right,

Joel Lin 32:47
yes, yes, zero knowledge. So zero knowledge is something that we believe will will be a leap in terms of advancing KYC AML efforts in the device space, which is good, very good, because even that may differ even more accessible to a lot more people. Yeah, in fact, on the back of zero knowledge, there’s this new thing out there. It’s called a so about open your spt. I’m not sure you have them before. What’s it called saving? So bow token, powder to yourself s o UL. So bow token Scattegories bounded here. So okay, these tokens are unique in the sense that they are non transferable. The moment it goes into your wallet, you can transfer it anywhere else. So I will imagine in the future, your exchanges, your government agencies, so and so forth, will start issuing so about tokens for identity, yes, zero knowledge identity, because then you will see that the support token came from JP Morgan, or came from Goldman, that identify you either as a AI network or as a citizen of the states or something like that, right? And then what’s going to happen is that as a defy project, all I need to know is that sort of our token exists in that wallet as interacting with my smart contract. I don’t need to know who you are as an individual. All I need to know is that you have been KYC entity before, right? And effectively.

Michael Waitze 34:09
So even a traditional stock exchange actually has some structure for this as well. Right? So if I buy 1000 shares of Apple from the NASDAQ, I have no idea who’s on the other side of that trade. Yes, I have no idea. That’s zero knowledge. It’s a different type of zero knowledge. I get it right. And the exchange actually knows who both sides of it are. So fair enough. But you’re right. If I’m a trusted entity, and you’re a trusted entity, why do I have to give up like how many kids I have to use so that I can trade with you as long as I’m trusted? Right? And I haven’t done anything wrong.

Joel Lin 34:36
Yes, yes. So this is where I think the evolution will be now AML is effectively being done on chain. There are many AML service providers that just look at your wallet. See whether you have been participating or receive any tokens from any wallets that participated any malicious activities associated with any known sanctioned individuals and then based on your wall itself sanction you. So then the wallet address cannot participate in the defy space. Now that is AML today in the defy world without having to deploy KYC.

Michael Waitze 35:11
Right? Yeah, no, I understand it. Can I ask you this though? Is this a whole infrastructure that’s getting built with citadel? Like you’re focusing on the real estate market as well? Do you see a time maybe where you’ll venture outside of real estate into other type of asset classifications? And is this only valuable for you in real like real tangible assets? Or is it valuable for digital assets as well,

Joel Lin 35:34
let’s put it this way. I would like to share a little story I have pleased also as a young banker, but in my early days, he’s also said to us by the point in time, I was told that when I started off, there was this very interesting story that my MD shared with me. He said, Look, like you’ve known this bank that you know, of the past. Okay, you might know about it, give the story. Apparently what happened was that boy was going through the roof, then during those times is very good market like today, okay. And the banks don’t have a trading desk. So they were like, Okay, we need a commodities Oil Trading Desk to support our clients to make money. But you know, the oil traders in the oil, multiple Bible studies are very hard to find, right? So they were like, Okay, who do I put in there, they found who are equities trader who are very familiar to oil companies, and they put them into trading the oil markets, okay. Now, everything was good. The market was winning is one directional. The oil price was very profitable. Right? Until one day the IRS received a call and the call was from a port somewhere in the world, in a call saying that, hey, guys, you know what? You have a bunch of oil tankers backlogged in my partner, and my port is totally cluster out because of your oil tankers. What do you plan to do on the oil you bought? The oil traders were like, What do you mean, I only trade contracts, I

Michael Waitze 37:00
have a contract for delivery.

Joel Lin 37:03
They forgot as payment versus delivery. Because the equities trader, there’s no such thing as equities. So you’ve got a whole bunch of oil tankers jamming up the pot, and the traders were like, No, you don’t want to do this. How do you sell all this physical oil you have, right? And the thought was that I’m going to get rid of oil tankers, because it’s causing operational logistic challenges show or whatever is on my operations, right. So you have within a week to get your oil and gas ships out my pot, oil trading desk, had so much difficulty finding buyers for the oil. Because it’s physical. You know, all the things will fool young people were literally packing the oils in the oil tankers already, at the end of the day had take a very huge haircut just to carry on all the oil. Sure, and the profit position, the best may turn into a loss position in a bull market, even though they got the direction, correct, right. So the reason why I share this story is because I believe that tokenization ultimately is a very specialised skill set. me having a background in real estate, I’m confident tokenizing real estate, but you’re asking me to tokenize go ask me tokenize all you’re asking me tokenize diamond, I have a story of a diamond too. And everything else, I will tell you, I did not to do it simply because for physical real assets, you have to actually think about how you’re going to start a tokenize assets, who is going to custody for you how you’re going to manage it such that it doesn’t lose value in the real world. And obviously, if you don’t understand how the legal environment and legal landscape work in the real world, for movable assets now real estate’s the movable. That’s why I like it, for movable assets, like anything else in the real world, how are you going to prevent that asset for being tokenized? Multiple times in different jurisdictions? And then Exactly, yeah, yeah. So I know, it’s a very long window, to answer your question, but I think it sets the rationale logic behind the answer wishes earlier today. So we’ll focus on mercy tokenization. We are performers integration, we build the infrastructure for it. And we’re going to focus on that we are happy to share how we build our tokenization structure with other platforms with the right expertise and skill set to tokenize other asset class, but we will not be tokenizing anything, real estate.

Michael Waitze 39:18
Perfect. So I what I want to do is I want to end here, but I think we left a lot of stuff on the table, but we’ve gone for like 45 or 50 minutes. And what I’d like to do if you’re okay with this is bring you back and then dig deeper into the real estate tokenization part of this for like a part two, if that’s okay with you, because I think we’ve done it. Yeah, cuz we’ve done an incredible job of introducing all of these concepts. But now I want to dig deeper, but I don’t want to do another 50 minutes because I want to make sure that people still listen, I really want to thank you for doing this. Stay with me. Joel Lin building Citadao. This was awesome. Let’s have you back to do part two. Yeah,

Joel Lin 39:50
Thank you, Michael. Looking forward to it.

 

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