Hello!
The previous episode shed light on how Dogecoin pushes forward while making sure that crypto natives and institutions both feel they belong. In this episode, we talk about how LI.FI is making sure that the user experience in crypto continues to improve in a forever fragmenting landscape.
Imagine a future where JP Morgan settles trillions of dollars on-chain and none of the DeFi behemoths we know today benefit from it. Adoption of the industry does not directly translate to existing ventures benefiting from it. This is why LI.FI is betting on markets, rather than chains. With billions in volume already facilitated, they know a thing or two about how space evolves.
Founder and CEO at LI.FI, Philipp Zentner, joined me for a conversation to unpack where crypto, tokenisation, interoperability, and distribution are headed.
Two major trends are underway in crypto right now.
On the one hand, crypto-native players like Trade.xyz, Markets.xyz, and many others are bringing traditional assets to crypto.
On the other hand, institutions are using private (customisable) blockchain rails like Canton to tokenise traditional assets.
Amidst these, what is clear is that assets of interest on-chain will increase. Obviously, these will be across different chains and standards, making sure that the fragmentation of assets only increases for the foreseeable future. Meanwhile, it is also true that users don’t want to bother with these standards. They want to go from asset A to asset B in a click, regardless of which chain either lives on, which token standard wraps them, or which compliance framework governs them. The gap between how assets are issued and how users expect to interact with them is growing. Whoever bridges this gap will likely capture the flow of assets.
This is where distribution becomes crucial. Tokenising an asset is only the beginning of the journey. Finding demand for it, getting it into wallets, making it tradeable with tight spreads and reliable execution across venues, that is the hard part. And it is the part most institutions have not yet figured out. LI.FI, with integrations across 800+ applications, from MetaMask to Phantom to Robinhood, LI.FI is positioning itself as the solution to a question institutions are only beginning to ask.
Among so many interop solutions, how is LI.FI building its moat? The answer lies in data telemetry and orderflow. Given LI.FI’s distribution, more and more apps are integrating it. This leads to more orderflow going through LI.FI’s system. All of this data going through LI.FI allows it to understand where the pain points are and make usre that it is the first to address those. This leads to more orderflow, and so on.
What’s interesting to me is how LI.FI, as an infrastructure layer, may have a better understanding of capital flow than the individual apps through which this capital passes. Philipp and his team think of these transactions as a database engineer thinks of queries. Every failed transaction is a data point that makes the next transaction smarter. The conversation delves into why the on-chain world will remain fragmented, and how LI.FI is building to thrive in that fragmented future.
See you in the next one!
Saurabh Deshpande
