Unlocking the Power of UTXO Lending & Staking with FluidTokens - Matteo Coppola & Raul Antonio

Jacob Brown (00:02.287)
Mateo Raul, how are you guys?

Raul (00:07.47)
I am great, what about you, Jakub?

Jacob Brown (00:10.743)
Excellent excellent Matteo. How you feeling? How you living?

Matteo Coppola (00:14.439)
Very good, very good, good climate in the Web3 space, Also green candles, a bit of happiness around. So always good to have, you know, in every single cycle and this is the time to enjoy it.

Jacob Brown (00:31.344)
Yes, yes, we survived the bear market. We can start to thaw out a little bit and, you know, enjoy, enjoy the vibes. Yeah, it's a joyous time, but you guys are doing some cool shit. So I want to, we're going to talk a lot about DeFi on Bitcoin, UTXOs, Bitcoin, Cardano, which is an interesting one. Cause like you guys are started on Cardano and you've recently came to Bitcoin. And so.

I'm actually curious about, like, let's do this real briefly, but like, give me your trajectory into crypto. Like, what got you guys into the space? And maybe, Mattel, you could start.

Matteo Coppola (01:14.031)
Yeah, for sure. So basically, I started in the crypto world in 2017. I started on, of course, on Ethereum, of course, Bitcoin a little bit before, but as a developer, I was very interested in the programmability of the crypto, the blockchain world. And I started in 2017. I was involved also in my university about blockchain stuff, and then moved

back into the UTXO world in 2018 with Cardano and Bitcoin of course, but Cardano was going to offer smart contract functionality. And so I started as an academic, as a student of the blockchain world. And then I started working for companies that needed my technical expertise. And two years and a half ago, we started free tokens, me and Raul together, and now with all the team.

So this has been the trajectory so far. It's been a long journey, as many of us, but definitely very interesting and full of innovation.

Jacob Brown (02:21.755)
Love it. What about you, Owl?

Raul (02:24.758)
Yeah, my story is a bit different. I was more into DGEN mode, meaning that when it was 2015, I found out what Bitcoin was and I was looking at all the files that were around. If you did some tasks, they sent you some fraction of very few Bitcoin at that moment.

Bitcoin was something around $300 and $400, so very, very low. But I was a student, so I couldn't purchase any single fraction of Bitcoin. later, one of my friends spoke to me about Ethereum and other assets that were coming up. But I was just looking at them as a speculator, mostly.

And finally, I started to collaborate with some projects, doing some open source code and meeting people during hackathons. And during one of these hackathons, I met Matteo and he was really trying to preach to me the UTXO technology saying, no, you should start, you should start. And well, you know, here after, I think three, four years that I know Matteo.

Jacob Brown (03:40.412)
You

Raul (03:48.676)
It's been a long journey and a good one.

Jacob Brown (03:54.496)
Love it, love it. You got UTXO Pilled by Mateo. That's great. I actually want to have a click on this UTXO thing because you mentioned in 2017, Mateo, that you were trying to use these new smart contract platforms that have more programmability, which Bitcoin historically was viewed as like it can't do that much. So I ever went to Ethereum, I ever went to these more expressive languages.

I don't see many people talk about UTXOs as like a paradigm though. Like you have Bitcoin, Cardano is also UTXO based. like what, help us understand, cause most of us don't think about UTXOs besides it's like special to Bitcoin, but the difference kind of between UTXOs as a paradigm to program for and the opposite of like account based models. Like what's the appeal for UTXO based stuff?

Matteo Coppola (04:52.16)
Right, yes. So definitely from a developer perspective, the account model of EDM, so Ethereum as a first player, it's much easier to understand because you have basically a view of everything is happening on the blockchain. it's basically you're developing as when you develop standard Web2 applications for most of the time. The UTXO model on the opposite side is a little bit more complex to develop on because you have

a limited view of what's happening in every transaction. So you have the inputs, the outputs, and a little bit more information depending on the blockchain. But when you manage the UTXO, so the single pieces that contains the monary tokens, are much more flexible and you can even scale much stronger. Because basically, if you are using some UTXO, you don't have to involve all the UTXO that exists.

When on the opposite side, when you're an account model on Ethereum or anything similar, when you modify something, you're basically modifying everything. So there are some limitations and the consensus model of blockchains already limit the speed of decentralized blockchains. So if you also have to change the state, the global state, every single time, it takes a lot more effort and it scales a little bit less.

And this is how Bitcoin was thought at the beginning only for payments. So it was a peer to peer transactions. And then different blockchains started to expand also after seeing Ethereum success. And Cabana is one, but there are different that are around.

Jacob Brown (06:37.268)
Interesting do you think is it fair to say that UTXO base chains are theoretically more scalable?

Matteo Coppola (06:46.343)
Yes, theoretically, yes, also in practice. The cool thing that happened later is basically understanding that UTXO blockchains are much easier to use with zero-knowledge proof technology, because basically you have to prove a limited set of things, which are your UTXOs, instead of the whole global state that must be. It's difficult to understand what is the whole global state every single moment or in time.

So it's more scalable and also is probably more compatible with ZK technology, is going to be used for bridging stuff. So for connecting different blockchains and different ecosystems.

Jacob Brown (07:29.998)
Got it, okay. That's super interesting. Okay, then what's the, and this is better for you, Raul, what was the, know, Mateo brings it to the UTXO side, and what was the catalyst to build DeFi stuff on Cardano?

Raul (07:41.678)
Thank

Raul (07:48.812)
Well, we started to build on Cardano once smart contracts were still not a thing. And in my opinion, that was the best moment because a lot of people were coming and playing around with NFTs, with market place and so on.

However, there was all this liquidity locked inside these assets, so tokens or NFTs, and they couldn't do much with that because you could sell them or that's it. That's all you could do. So we created the very first version of Fluid that was this peer-to-peer lending platform where borrowers were posting their collateral looking for some lenders.

and it found the perfect market fit at that time and that motivated us also to adapt and keep changing that with the new iteration, with the evolution of the platform. And at end of the day there were very cool things that were possible using UTXO that with account models we couldn't think about it, even not just around the architecture but

Also the fact that there is the proof of stake and the protocol itself rewards some addresses because they are just holding the native token ADA. It was really a good ingredient for building DeFi just using that.

Jacob Brown (09:27.845)
Got it. Okay, so it started with the timing list. This is 2022, so there's like an NFT. This is like DeFi summer, but also NFT craze. Is that the timeframe?

Raul (09:39.436)
Yeah, I would say yes.

Jacob Brown (09:42.747)
Got it. And so you started with, is it lending? You did loans initially? that your first product?

Raul (09:49.225)
Exactly, peer to peer lending where borrowers were asking for loans.

Jacob Brown (09:51.184)
Got it.

Jacob Brown (09:54.682)
Got it, okay.

Well, yeah, I want to touch on some of the stuff you're doing on Bitcoin in a sec, but actually my knowledge of Cardano is extremely limited. I don't think about it at all. And I think that's most people that are in my audience. But there was a big announcement recently with like Bitcoin OS, which is done by Idan Yago and his team doing this like new roll up infrastructure thing. It looks super interesting. And Cardano had a big announcement of like they're one of the first top tier partners and networks to put integrates.

But give us some color on, for those of us who have known nothing about Cardano, what's the appeal for Cardano?

Matteo Coppola (10:39.191)
Right. So Cardano is very similar in the mindset with Bitcoin. And this is what we started working on Cardano, right? Because the philosophy, the original philosophy that Bitcoin had was about decentralization, fairness, Transparency, accountability of everything that happens on a shared ledger that nobody can censor. And Cardano is one of the few chains that

keeps this original philosophy with Bitcoin, but at the same time has basically developed more the UTXO architecture to support programmability with the smart contracts. So this being very true to the actual original ethos of Web3, we started building there. And it's still like this, it's still one of the most decentralized blockchain ever. It's very easy to set up a pool to become a validator.

of the network is not prohibitive. don't need so much investments for doing that. And it's very efficient and it's very secure because the approach has always been very scientific, academic. They decided to go with a functional language to prove more formally the properties of the system. And this means that also the blockchain itself

doesn't go offline often, not at all, not even once. Exactly as Bitcoin has done, right? So when you transact and you put your money on blockchains, you want to be sure that the money don't disappear or that you always in any moment can transfer them. And this is why we like Bitcoin, we like Cardan, right? And the similarities with the UTX architecture between the two makes an additional step

additional pro for our choice of building there. And now in this year with BitcoinOS announcement, this choice has awarded us

Jacob Brown (12:36.714)
Hmm.

Jacob Brown (12:49.8)
Yep, interesting.

Matteo Coppola (12:49.828)
It was basically the ZK proof of Bitcoin OS itself is allowed only because of the UTX architecture of both chains. If it was different, like an account model, it would be much more difficult.

Jacob Brown (13:05.002)
I see, I see. Yeah, it's interesting. Has Cardano always been UTXO based? Because like I've heard stories through the years that, especially after the block size wars, a lot of people were kind of like disenchanted during that time and they ended up going to different chains, some went to Ethereum. I guess a decent subset went to Cardano. So there's a lot of like brain power in Cardano that is like slowly coming back to Bitcoin.

So yeah, has it always been UTXO based since the beginning?

Matteo Coppola (13:40.828)
Yes, yes, it's been UTXO since the very first day. There is only one technical detail that is more like an account base, which is the distribution of the staking rewards. But that's the only point. It's not something that you normally write smart contact on. It's just part of the system of the architecture to distribute your staking rewards. Everything else is always UTXO based.

And the thing is, on Cardano, a lot of people arrived in the previous cycle when there was not yet the smart contracts capabilities. And a lot of the development had to be done still at that point of time. And so when people wanted to use the Actualify, EVM, Ethereum in particular, was probably the best option. And because it was a first player in the smart contract market, right? So definitely the

tools for developing the frameworks, the examples, the documentation was much more present in the Ethereum side compared to Cardano. Now we are in a point where actually Cardano has a lot of good tooling, a lot of very talented developers, and a lot of examples of smart contracts that have been working for years already.

Jacob Brown (14:59.214)
Got it, got it. Okay. No, that's interesting. Cool. want to maybe kick it over to you, Ro. I want to jump into the decision to move from Cardano to Bitcoin. I'm assuming you guys are watching ordinals pop off and you're like, hmm, Bitcoin's not boring and dumb anymore. It can do more stuff. So what is the, like you're building on Cardano. You have a working platform people are using. What was the big decision to start building primitives for Bitcoin?

Raul (15:30.678)
Yes, so as you know, and as we said, we have a community of people coming from Cardano, but the cool thing about our community is they like to explore and expand and test other chains. And they were the ones pinging us saying, hey, you know, there is a lack of dApps or DeFi on Bitcoin, or in us coming to come up and runes.

will come up soon, it would be nice if you check it out. And it started like a challenge. Me and Matteo were looking at the documentation of not just the Ordinal Runes protocol, but also about what was actually possible using Bitcoin scripts. And

Our task and challenge was it is possible to create a lending transaction without using multi-senators and oracles. And it was not easy. We didn't come up with a solution at the first try. But one day combining the fact that Bitcoin is deterministic, meaning that giving a set of inputs and outputs, the transaction hash is always the same and cannot change.

And given the fact that you can share this transaction hash without revealing the details of the all the transaction, it was possible to build a peer to peer lending approach. we launched it actually it's live right now with the lending for ordinance and it's already compatible with the rules. And the cool thing is that once a loan starts, it's completely permissionless and decentralized fluid.

has no control over the assets and cannot change any term of that because everything is written directly on Bitcoin.

Jacob Brown (17:33.979)
love it, I love it. Yeah, when you described it to me, I think we were in Lisbon and we were chatting and you broke that down for me, like how the deterministic piece works and I was like, my God, that's so freaking smart. And it's like, you have to kind of understand hash functions and these kind of things to kind of like somewhat grok it. So like if you're lost, if listening and you're lost right now, go do some of that research. It's not super difficult.

But yeah, basically you can take in your inputs, it's gonna run through some hashing algorithm, and then you'll get a consistent number, and with that, you can do certain things. As you said, you can have a certain hash that will confirm this is what's gonna happen. So that's been one of the crazy things this year is that even just PSBTs, which were like a technology that's been in Bitcoin for a while, but it wasn't until ordinals came around that all of this PSBT,

infrastructure was built into wallets and people started using them to swap atomically. It really shows there's a bunch of stuff that Bicklin can do that's already just kind of like there in script if you think about the problem the right way. So maybe there's a topic here and actually I'll do this a roundabout way. First, what can you currently do on Fluid? Like what's the product suite you guys have live today?

Raul (18:57.164)
Yes, so we have three products live and the most popular right now is Staking. So we are able to use a script or p-codes on Bitcoin to lock some UTXOs, therefore some ordinance and runes, until a certain day. And the cool thing is that in a similar way, as I said before, Fluid has no control over those assets.

because those assets are only time locked, meaning that if I stake, I am the only one who can unstake and I am the only one who will be able to get them at the end of the time. And the most important, Fluid cannot stop you to unstake because you are interacting with Bitcoin itself using the OPCodes. And this means that every project can first of all...

projects like they do revenue share or they want to reward community or just give more utility decreasing selling pressure of their collection or their own, they can create staking. They can verify if the users are staking the right ordinals because that's shown on the ledger and they can verify if they are staking until the right time because that's also deterministic and in this way you can create a system where

Everyone is happy, projects are happy, community is happy and we as Fluid provide infrastructure so we are also happy. The first product that we launched on Bitcoin was the one that I said and it was Lending. So, lenders can provide liquidity and actually it's an off-chain mechanism where lenders and borrowers interact. So they will get an email saying, a borrower would like to borrow from you. These are the terms, do you agree?

and if they both agree on the terms, they will sign two times each, the loan will start. And at the end of the time period, the lender can claim the collateral in case he didn't receive the payment or the borrower can unlock the collateral only if he pays back the lender using PSBTs. And the second product instead, the third product, sorry, is the DEX.

Raul (21:23.5)
we created a kind of model where users could sign their will to sell or buy runes, meaning that it was not custodial, it was just an off-chain transaction signature, and some other parties were able to say, hey, okay, I like your price and I will purchase this amount at that price. And this was done because...

In opposition of currently bulk listing or bulk selling, bulk on the runes marketplace, maybe some users were not able to purchase all the bulk or that amount but wanted to purchase a little more, a little amount. And in this way they were able to do it because they were able to find the best price and purchase to that user in this way. And basically it enforced and leveraged.

an atomic swap where both parties agree and they can choose the right tail of the mouse.

Jacob Brown (22:31.752)
Yeah, three key DeFi primitives, Dex, Lending, and Staking. And the Staking one's interesting because you guys are the first mover in this space. No one else currently has Staking infrastructure for L1 assets, mainly Ordinals and Runes. So like, there's a question here because you guys are kind of at the frontier. How far can we push script?

Cause like there's obviously a narrative of like, if you go to an L2, you can do a bunch of things. You get a whole new design space. And maybe we get OpCat and that will make things easier for you guys. But like when it comes to building today with the limitations of script, how far can we push script to build further DeFi primitives in like a permissionless way or like improve UX? Like what's your kind of pulse on where we currently are and like pushing script to the max?

free W.

Matteo Coppola (23:34.903)
Maybe I can try to answer this one. So yes, the script language of Bitcoin is strongly limited if we compare to any modern smart contract environment. It can be leveraged a little bit more than what we're already doing now without going into the multi-signature approach or compromise. This is what we basically are going to build next month.

that we're building at the moment. So basically we had these three primitives and now we're building on top of these three primitives. But of course there are limits, limitations, so you cannot do super fancy stuff, mainly because what you see during the validation of the script is very limited. The thing that we call context when the transaction is happening is very small on Bitcoin. So you don't see everything that you may need for custom conditions and logic.

But still, think there is some more room. And what we are doing it thanks to the fact that we spent years on Cardano, another UTXO blockchain, because all the knowledge we acquired there allowed us to push the script language to the limits and to actually obtain the FI and permissionless protocols, primitives, that nobody else was doing.

Most of the people on Bitcoin are okay with the compromise of protocols that in reality are multi-signatures. So they are multiple signature, one from them and one from the protocol itself. And they trust the protocol in the sense that if a loan is happening, they just believe that the protocol won't be broken or won't be malevolent. But in general, if you are believing in the FI, you want to the opposite.

So you need to trust no one, trust only the code and verify yourself if you want. And this is why we started building on Bitcoin because I think Bitcoin needs programmability and either with a layer two chain like Cardano connected or with protocols that are native inside Bitcoin itself like we are doing. But somehow it needs it, right? Because those money must be

Matteo Coppola (26:03.231)
not only transfer between people, but sometimes also programmed. yes, so basically we knew we could do it and we started doing it because we knew that the community would have enjoyed it, who would have used it. And I hope it will never happen, but if any protocol that currently is a multi-signature gets compromised and people start losing their bitcoins or their rooms or their ordinances, that will be a very strong

example of why we need to actually push the permissionless and defy approach also on Bitcoin. On other chains, everybody's used to it because the smart contracts are already there, so you expect to use them. But on Bitcoin, of course, either you hold them and don't use them or you want to use them, but normally accept the compromise of trusting third parties.

But we don't like it. We don't like it because the blockchain, the principle of Bitcoin as well was permissionless, trustless, not censorable and not... And the parameters of anything shouldn't be changeable easily. So this is how we are pushing forward with the script language.

Jacob Brown (27:20.061)
But yeah, it's super interesting. The fastest way to build trust is to be trustless. Like if no one can mess with your money, then you know you can trust it, like trust in the code. Double click on one thing real quick. You said context, and I'm trying to understand how the devs, like what is their limitations. One of the things I've heard is this thing of transaction introspection. Maybe it's the same thing of like.

In the way that bitcoin's written you can't really look down the stack too far and like check a signature You have to kind of stay near the top. So how you order things is super important. Is that the Is that one of the like biggest? Headaches right now building on bitcoin is that you don't have this a giftably design the stack very deliberately because of how limited script is

Raul (28:12.406)
Yes, exactly.

Matteo Coppola (28:13.015)
You want to answer that one?

Raul (28:16.13)
No, yes, as I was saying, when you are dealing with OPCodes, as Matteo was saying, you don't have that much OPCodes available at the moment. What happens is this. You are able to decide and give some inputs that will be used by the script during the validation. However, the size of the inputs that you can have them are not that much.

Jacob Brown (28:42.802)
we're getting rugged a little bit.

Raul (28:45.002)
And if you are dealing with multi-signatures, you can check and signatures if they are available.

Matteo Coppola (28:47.085)
I don't think as well, probably, reconnecting. I can go with the answer at the moment in the meanwhile. It's a set of limitations. It's not just one single limitation, but it's actually multiple things. The thing you were talking about is just about the script language works in a stack, so in a vertical way. you need to be

Jacob Brown (28:53.768)
Yeah, yeah, go ahead.

Matteo Coppola (29:14.605)
very careful on the order of the elements that you put inside. So definitely you have limitation on how deep you can go without removing all of the top elements. But there are other things, for example, we cannot, the meta protocols by definitions are protocols on top of Bitcoin. You cannot really validate the content of the meta protocols inside the transaction using the script language, at least in a direct way, right? In a very obvious from a developer perspective way.

So that's what I mean as a context. You cannot see, which token this guy is spending. Is somebody else also spending the same amount of tokens? You cannot really check that because the context of the transaction when it's happening doesn't give you this information. So the condition that you can apply to say, okay, this transaction is valid are very limited because you don't have these elements to compare or to move.

Jacob Brown (30:14.369)
I see. Okay. Thank you. Thank you for that little wisdom. Last few questions. I want to help me get some color on... let's hold on. See if he's back. The man is back. Are you... your internet okay now?

Raul (30:32.638)
Yes, yes, that's where we should.

Jacob Brown (30:36.232)
Okay, we're good. Mateo handled it and finished the question so we can just dive back in. Yeah, I want to touch on a couple more questions before we start to bring this to a close. The Bitcoin OS one is big. They're doing a great job of marketing. I've been watching them for a while and that team is very well known in the Bitcoin space. How do you guys view the Bitcoin OS Cardano news? Like, what's exciting about this?

Raul (31:10.13)
Yes, so I think that the thing that Iago says usually is that BitcoinOS is not a bridge even if everyone is explaining it like a bridge because it makes it easier to understand and in my opinion the cool thing is that well first of all when you are using BitcoinOS as bridge you can really see the potential and the power of UTXO as Matteo was saying it is easier

to get a proof, a smaller proof on UTXO, but most important you can split the computational in order to verify that proof in easily steps, in UTXO steps that usually in account model you cannot because you have the whole proof and you have to verify yes or not. And in this approach you have the advantage

you have no trust involving this bridge because the only way to unlock bitcoins that are locked on layer 1 bitcoin in the ZK bridge is to burn them on the other side. So every bitcoin that is on Cardano in this case is always backed by one bitcoin on bitcoin layer 1 and nobody can touch them until they are there.

Therefore there is no team with the multi-signal of keys that can do sketchy things while you are playing around with the file, thinking that everything is safe. So this is for sure the first thing.

Jacob Brown (33:00.083)
So the the big one of the big unlocks here is Almost all the bridges we have currently and like bridges is like a loose term here just to like get Bitcoin into a chain But but a roll-up is doing more than that But all the bridges currently are more they're just glorified multi six whether it's like seven people staking or it's known entities They're all multi six and so there's you have that cuz that custodial risk

As the number grows, the incentive to steal increases. Rug, eventually, is the fear. So something like this, you're saying that based on the cryptography of the Bitcoin OS, kind of like software, you put it in and by holding that token on the L2, in this case, you control the exit as well, right?

Raul (33:53.226)
Exactly.

Jacob Brown (33:56.834)
Got it. Okay. Now that's exciting. Is there... This might be like you don't know or you can't drop alpha, but like...

Raul (34:00.34)
further.

Jacob Brown (34:06.08)
Up. losing you. Could you hear me?

Raul (34:11.092)
No, yes, yes, no, was saying that the additional, just to add something to what you say is that in a roll-up bridge, the cool thing is that you don't have to trust that there are N amount of signals that are good parties. You only have to rely on at least one good party that is the operator of this. And why do we say that it's trustless? Because you can be also one of these parties.

And therefore, at that point, the only requirement is that, are you a good party? And if the answer is yes, then you don't have to trust anyone. The only thing that matters is that you can trust yourself. And usually, the answer should be yes.

Jacob Brown (35:06.123)
Yeah, we hope we hope you can trust yourself No, that's good. Is there is there any Is there any alpha on when we might see this because you know bit VM has been a big topic over the past year For that exact reason like this one of n trust assumption is such a better model than the current custodial bridges or multi-stick bridges but nothing is live so like

Raul (35:09.866)
Exactly.

Jacob Brown (35:34.264)
Is Bitcoin OS soon? How soon is it? Do you have any idea or reports on that?

Matteo Coppola (35:42.856)
It's in the time of probably six months, around six months from now. They are actually working on it in this moment. And the Cardano teams are helping the Bitcoin team to actually do the Cardano part. yes, BitVM was different because the first, for example, version of BitVM was very limited to two parties only.

So most of the DeFi doesn't revolve about two parties only. So you definitely had to upgrade it and they slowly understood how to do that. But still the assumption, for example, of BPM are very strong. The amount of collateral you have to put in the, you need to check that the collateral when you use the BPM is still enough and safe. Otherwise people can be misbehave and basically steal your money.

Still, it's an interesting approach and probably the new iterations of it will be very interesting. Bitcoin OS is much more direct in the sense that it has to prove the current state in a ZK proof, right? And then at least one verifier verifies that is the proper one, which is much more grounded.

It's more tangible from a developer perspective, at least. yeah, so the app to answer is around probably six months to see at least a testnet or some kind of testing environment that works. And then if everything works and probably the auditing process also goes well, then at that point, I think we release on mainnet.

Jacob Brown (37:34.222)
Awesome. Okay. Last couple questions to close this out. I mean, you guys have built some really cool stuff with staking. You can go Stake Dog right now. If you're hearing this, go try it out. Lending and a DEX. But what's coming soon? Like what's on the roadmap the next like six to 12 months?

Raul (37:54.664)
we want to provide the experience that you have on EVM chains or that you have around on Bitcoin. So one click defy I would say. It's not anymore signing my transaction and waiting for the other party to sign his part, but no, I want to be able to give programmability to UTXOS and to interact with directly that in one click get a loan or provide liquidity.

for against some runes and so on. So this is our task and we are already in contact with some teams that are building on top of Bitcoin to allow this. So we are not doing this alone and hopefully you will see it very soon on Fluid.

Jacob Brown (38:49.325)
Very exciting very exciting that yeah, that would be a big UX upgrade compared to how we currently are doing a lot of this stuff like I Don't know what I'm signing. I'm starting my life away clicking it, you know four times do any kind of loan and then it works So it's good. But for like my mom is definitely not gonna use using a wallet and signing a bunch of stuff in that way So that's exciting. Okay last question to close this out. I like to always end on a kind of a high note like

Broadly speaking, what are you guys most excited about? It could be your project, could be Cardano, or some off-code upgrade. What has you guys most hyped right now in this space?

Matteo Coppola (39:29.473)
There are so many things, honestly. That's why I work in this space personally. There are actually many. One is the idea of blockchain, particularly, of course, Bitcoin, but in general, blockchain in the world. People are not fighting against it anymore. Now we are just trying to regulate it, to understand how to integrate with the current laws and frameworks.

Even all the institutions now are actively trying to enter the space, to be part of the space and to use it, which is the most important part for a blockchain and for a crypto ecosystem. Regarding the technology part, definitely Bitcoin OS is very interesting because basically connecting the UTXO worlds, all the UTXO blockchains that are around, basically creates a very big

I say competitor to the EVM world that has always, you know, it was always the top player for smart contracts. And now Bitcoin remains the biggest liquidity that has not been used properly yet. If we are able to actually connect it in a very safe way to all the other UTXO chains, now these other UTXO chains become layers of

programmability of smart contract support, and people can just use them, probably even hiding the details. They don't even need to know they are using, for example, Cardano, and then just go back to Bitcoin to settle their Bitcoin, their Runes, their ordinals, and any kind of other protocol. So it's just this experience of the user that keeps improving in a safe way without compromising safety and decentralization. So this is the most important part.

what I think next year will be about.

Jacob Brown (41:32.414)
It's a beautiful time to be building DeFi and crypto for sure. What about you Raul? What are you most excited about?

Raul (41:40.958)
I would say that account abstraction is the word. Why? Because today I onboarded one of my friends and he said, okay, but what I have to do? And I told him, you have to download this wallet, this wallet and this other wallet. And he was, wait, why do I have to download three wallets? And what I think should be the ultimate goal in the space in general is that you don't matter what wallet your users

are using but you are able to interact with that wallet natively. So they don't really see the difference, they don't have to feel this strange experience for them having to download three passports or something like that. Because I think that right now is a moment where we will get retail attention and

It's a good opportunity to not lose them in the process of onboarding due to these tech difficulties. But I think that right now we have the tools and probably not just on Cardano, on Bitcoin, but in general in all the chains that should be the goal.

Jacob Brown (42:55.439)
That's a good one. That's a good one. Yeah, yesterday I just paid someone in Bitcoin for some meat I bought and like I was like, hey, send me your wallet address and he has to fucking go on Coinbase and pull these 20 digits and text me them and I gotta go. It's just like, I know he hates it, but I'm the guy who's like, let me pay you in Bitcoin, man, please. Like I'm the Bitcoin guy, let me pay you. So he has to deal with my complexity, but it's a terrible experience all the way around.

So yeah, account abstraction is gonna be a big one that's like still pretty early days and there's like none of it really on Bitcoin. So that's gonna be exciting. Yeah, I have any other questions. This has been a great conversation guys. You guys have done some cool stuff. Anything that you wanna close on or a question that I didn't ask, you wanna talk about.

Matteo Coppola (43:49.979)
Well, we talk about almost everything in a big view, right? So definitely we touch all the possible points. Regarding just adding to the account abstraction, one cool thing we are building as fluid tokens is an abstraction where Bitcoin wallets can interact with Cardano directly using their wallets, which is the first step for actual full abstraction.

In this way, once we will have, for example, the Bitcoin OS bridge and people want to swap or trade or create loans on, for example, Cardano, they don't have to download another wallet or manage Cardano's native assets. They just use their Bitcoin and their rules and their ordinance and everything should work smoothly from the same old usual wallet. And this is the experience I'm looking for. I don't want to...

have to buy other cryptos to pay for the transaction fees. I don't want to understand if I am on a layer two, which layer two, if there is enough liquidity on that layer two. All these problems are the biggest ones now in the blockchain ecosystem. And as we have seen already this problem, we are very well set to solve them and to, before they happen also on Bitcoin, for example. So this is a very good.

and positive point of view regarding the account obstruction.

Jacob Brown (45:14.344)
Got it. Okay, one last question then because I keep hearing that term of like account abstraction and You can use a Bitcoin wallet and do things on XYZ chain Cardano in this case And I never know what that means like it sounds magical almost like how it sounds too good to be true. So like What what does that UX feel like I have X first?

It feels like I'm sending a Bitcoin transaction basically, but I'm interacting with a Cardano DeFi app or smart contract. Is that the flow or what am I missing?

Raul (45:47.24)
Yeah, usually, let's say that you have some... you would like to purchase one NFT on Cardano, for instance, but you don't want to download a Cardano wallet. So what happens is that this account abstraction is able to generate a Cardano address that is not controlled by anyone except your Bitcoin key. So you will be the only one that...

if any asset drops into this Cardano address you will be the only one controlling it and it can go even a bit more powerful than this because it means that ideally and it is possible any ADA that is already in that address you can even stake it using your Bitcoin wallet and get ADA rewards using your Bitcoin wallet and that's

Sometimes it seems like magic stuff, however it's just cryptographic because smart contracts can verify other chain's signatures.

Jacob Brown (46:57.226)
Interesting. Well, that's a good one. That's a good one. it, I mean, going back to Roadmap, is this tech still kind of like early, kind of like ZK is still kind of early, or is account abstraction pretty full-fledged and we just need to build it on Bitcoin?

Matteo Coppola (46:57.548)
It's mathematical.

Jacob Brown (47:17.885)
If that makes sense.

Raul (47:17.93)
It should be live on testnet before the end of the year. And hopefully at the beginning of next year, it will be live on mainnet. So we are testing all the possible use case scenarios and want to be most compatible possible.

Jacob Brown (47:35.955)
You heard it here first. very soon, guys. Very soon. That's great. Well, Mateo Raul, this has been great. Thank you for coming on the show. You guys are building some cool ass shit. So yeah, I appreciate you guys coming on.

Raul (47:52.5)
Thanks to you, Jakub.

Matteo Coppola (47:55.481)
Thank you as always. Always a pleasure to speak and particularly speak with you. But these topics are always interesting to share. When we know it's so fun to share like this.

Jacob Brown (48:08.597)
100 % 100 % all right well this will be exciting in a year I mean you guys have done so much in the past six months It's gonna be great to reconnect in a year do you know round two of this podcast and you guys have tooken over DeFi on Bitcoin So yeah till that time. Thanks guys

Raul (48:20.106)
Yeah.