How Fermion Protocol is tokenizing real-world assets

0:00I'm ashon Addison from the cryptocoin show and today on blockchain interviews we have Justin Bannon founder of firan protocol and bosan protocol here to talk about tokenization rwa on blockchain real world assets and more Justin welcome back to the show and thanks for taking the time thanks for having me back Ashton great to be here there's so much that's happened in real world

0:24assets and tokenization since our last discussion and I know you're deep in it uh and with the the growth of feran protocol now which last time we spoke uh firan didn't exist yet but maybe it was in the works uh under um bosan but I would love to hear what you and your team have been up to in this part of web 3 and what firon protocol is all about and then we can dive into all of those

0:50topics today sure um well I think you know the the easyest way to sort of explain firer on is to is to kind of look at how things are done currently um so you know at present if you want to exchange sort of items physical items I guess there are two key ways that you would you would do do an exchange so one of them would be you know something like Ecommerce um and that basically in that

1:20process you know a buyer wants to buy something and they will sort of send their money to the seller um often via an intermediary if they don't trust the seller like an intermediary like Amazon and then the seller will send them something you know in the post or via career and if everything's fine great um but if there's a problem then those problems are sort of disputed after the

1:43fact and that works really well for you know trillions of dollars of of value in in in in in in Commerce but it doesn't work for everything so you know for example if you were to go and want to buy a million dollars worth of like paper Tesla shares um you wouldn't typically do that via e-commerce if you wanted to buy a gold bar you wouldn't do that via e-commerce the same with you

2:08know a $10 million piece of art or real estate or or things like Commodities if you're going to go and buy you know 10 tons of cocoa beans you know you that's not the method that's used well what the method that's used in those cases is a method that happens within the finance and sort of Securities industry where um the the the item is sent to a sort of

2:33trusted agent a trusted intermediary um that will verify the authenticity of you know do two things one verify the authenticity um of the goods and the second that will release the funds immediately so to prevent you know any danger of of of the the buyer getting the goods and the seller not getting paid or the seller getting the goods and the buy so so they managed

2:59this sort of kind of very verification and what we call atomicity that you know one side of the transaction happens um then the other side happens um and so that that sort of method um is is a method that involves what we call like high levels of verification um and so the difference you know between boson and feron is very much the difference between the sort of

3:22e-commerce method I described initially which Bon replaces and with feron um goods are sent directly to a a trusted verifier um and are then custodi and we can then immediately release payment to the seller um so you know for higher value assets where okay you know that the assets may be able to afford um you know more sort of what we call

3:53transaction costs so it it's quite expensive you know relatively more expensive to send something to a verifier than it is to just use a an onchain protocol um but it gives you higher levels of verification and it's also more efficient from a capital point of view because you can immediately release those funds once the once the physical asset is in is in custody so

4:13that's the kind of the the core differences and really quite fundamental um between Bon which is what we call you know sort of um low transaction costs um uh and so highly efficient and and and fermon which is got uh you know higher transaction costs but is very Capital efficient and gives you much higher levels of verification mhm that's a great explanation Justin I think a lot

4:40of people are used to purchasing things on Amazon when it comes to uh Securities or large amounts of Commodities uh I I'm sure there are inefficiencies uh in the old way that people used to do it and uh I'm curious to know in what ways blockchain and real world asset tokenization can improve that and and how exactly firon protocol is doing that so what's the big vision

5:07for revolutionizing this part of trade with tokenization um well the the the I I guess I start with the vision and I I I'll tell you what the big the big vision is I mean our our vision um our belief is that there should be um a decentralized way of exchanging any physical any offchain asset um that you shouldn't

5:36have to rely on centralized platforms or centralized infrastructure or trusting counterparties and all of those things that you should be able to do that just using Code um and so you know you know Bo on covers a massive part of that the whole kind of Commerce Dimension but it it all it does leave you know a sizable chunk um you know probably about hundred

6:01trillion dollar trunk um which is the high value assets that that I've described so we're building the ra the rail so that any offchain asset can be um exchanged in a trust minimized so you don't have to you know you don't have to trust um other other you know intermediat or or uh counter parties in a decentralized way but I guess the big Vision behind that is you know I wrote

6:28last year an academic paper with The blockchain Economist Professor Jason pots which described that when we move the economy from um being on these kind of paper based rails where we have paper contracts with people and if they go wrong we take people to court and try and get money you know as compensation and we move on to blockchains where everything's encoded in blockchains and

6:51if we don't fulfill our side of the bargain we get you know slashed or penalized Etc that that that that change uh to a more deterministic reliable sort of substrate is what we would what we call a computable economy it's an economy that's as deterministic and robust as a computer you always you know run a program twice you always get the same answer um and so that's that's what

7:16the the great vision is but that Vision will only be enabled if all assets are brought on chain with these same sort of um what we call strong commitments and so you need very specific type of software that enable that ensures if I tokenize my car you buy you you buy the token that you've got this kind of strong guarantee that either you're going to

7:39get the item or your money back MH mhm definitely and with the more recent news on know Black Rock starting to talk about real world asset tokenization I think that's woken up a lot of traditional investors traditional Finance they see okay there's big players understanding that there's value in rwa uh and I what you're saying about tokenizing the different assets I feel

8:07like they're going to be doing that but there's probably a major difference in their vision of it to yours do you know about the differentiators in the way that traditional Finance might want it done and maybe the way that blockchain wants it done yeah I mean absolutely I think first of all I let's look at the assets first of all I mean at the moment this category

8:33that we call real world assets includes things like debt Equity um bonds Etc um those assets are can be completely originated and transfer transferred on chain I mean there's no reason why you would need an offchain Ledger or offchain paper certificates or offchain records for equities and you know so if you had stocks in for example example Tesla Etc

9:01it makes far more sense to just have these things on chain and then you get all the robust guarantees natively we're not at that stage at the moment so a lot of these real world asset projects are sort of bridging things like treasuries or bonds and they're you know they're bridging those on chains that you can buy them onchain but then they're bridged back to an offchain Ledger I

9:20think that's the temporary State of Affairs that you know anything that can be tokenized will be natively it's it's blockchains are a spec a technology specifically designed to store transact transfer value um and so you know I think that's the ultimate Destiny of all that class of assets but there will always be a class of assets that have a a kind of offchain often physical sort

9:45of residue if you like that can't be transfer transferred your house you know um your car you know all of these kind of physical assets um so you know that's the class of assets that we we focus on exclusively um and so you know I think a lot of the real world asset projects that are sort of doing this bridging that will be a temporary thing eventually you you'll be reig

10:10originating all of those other assets directly on chain but then you know when you look within our sort of sector there are many there there are many projects that are really just sort of using a classic web two business model um where okay send me some money I will send you a token and I'll put a gold bar in my safe um and so again that's kind of like

10:38that's like using blockchains but it's not using the native decentralized blockchain business models and so you know for example if you imagine s SPF had had a s had had you know um an arm of their business whereby um you know he was issuing gold coins and and had loads and had allegedly had gold in the safe I mean that would have been as at risk as

11:03all the other assets that that he was you know um allegedly custody in um what we are building is um our systems that have the same robust cryptographic guarantees that if you hold an if you hold a token you have a claim on the underlying asset and specifically designing them to have you know what we call minimized trust minimized trust in intermediary minimize trust in counter

11:32counterparties um and that's the whole point of blockchain it's you know it's the whole point of of of blockchains is that you don't need to trust anyone you can just verify your claims and so I think that that's the big difference so you've got lots of these um different platforms that say okay send me some money I'll lock up some gold and give you a token send me some money I'll lock

11:53up some diamonds and give you a token so and I think again these will be you know we'll look back on these is a sort of a transition where it's a kind of a halfway house we're using blockchain technology but we're not using in a way that gives um everyone the core benefits of of of what we call trustless and what does the ideal blockchain look like in terms of the

12:19infrastructure to make sure that the uh the the transaction in terms of real world assets is done as best as possible because some of the uh factors that people look for in a blockchain is the decentralization the security and the cost and the speed is there something to focus on in making this part of the industry efficient well I think you know the

12:47things you mentioned are obviously key key factors you know that sort of the more performance factors but and you know an overwhelmingly important factor is is um building where there's demand um you know we we will be um launching uh firer on to main net and you know you know it will be on um on eth but also on uh base because that

13:18that's where there's a huge amount of demand um and and and and so you know I think that's a very important factor as well but our our strategy with firm on is is is is a multi-chain strategy I mean our our vision for feron is to be this sort of decentralized um uh sort of exchange layer for high value assets wherever those high value assets may be

13:45and you know I think with high value assets as well we need to recognize that you know very often people want will want the secure additional security of the sort of ethereum main net um and Al sort of prestige and things and things like that um but but but also um chains like Bas you know have are probably going to get the Lion Share of transactions um for for for some of the

14:10reasons you stated yeah that's great to know I really do believe ethereum technology is the best for real world assets and there's a lot of layer two solutions um but there has been a lot of traction on base uh network uh as of recently so that that's great to see and yeah going where where the demand is of course that makes sense um and with the different

14:34you know you gave a lot of examples of different Commodities um whether whether it's equities or you know treasury or actual uh cocoa beans you know all of these different Industries have different barriers to Innovation you know some of them have been trading real world Commodities in gold for thousands of years and they have a way of doing it in their heads that you know blockchain's

15:01so new it takes a while to actually integrate that into the industry some of them might be easier than others what where do you think will first The Innovation will first start taking over in more of a major way in in which kinds of equities or Commodities we'll start seeing tokenized first well I mean in terms of the broader categories we're seeing a lot of demand in the for

15:31example luxury and you know luxury jewelry SE uh sector um and so we you know we're doing a number of implementations in that se in that sector where we're tokenizing luxury jewelry um creating tokenized resale markets and there sort of common themes where you know this technology if you create a tokenized resale market and you know you're a brand then you can use you

16:00know uh you know great technology but that technology is not competing with you for your either your customers or to try and compete with you to take a larger and larger share of the profit you know we um the firon protocol being decentralized you know will will take um you know about a half a percent in terms of transaction fees and you can trust that you know fir On's not going to go

16:27evil after a couple of years and then start hiking that because it's decentralized and it's it's controlled by its community and you know if you're part of that Community then you know it's it's it's bu and for its its sort of um token holders um but to you know your question in terms of um you know which sectors of for example Commodities I mean with commodities it's not just a

16:52technological exchange challenge um what we have is the this kind of model um implemented over many different types of Technologies for hundreds of years whereby uh middlemen extract The Lion Share of the profit between the farmers and the consumers um and so what blockchain and they do that because they have this Prime position of controlling the market and they they can sit there

17:21um control the market and charge what they want but if you replace them with neutral technology um then the you know that performs the same role that gives back power to both the you know the producers and and the end consumers um and so wherever that um wherever that Dynamic is strongest and I mean there's a lot of places but you know certainly cocoa

17:48coffee we you know we we've had um a lot of advanced interests for from for example cooperatives and then many of these kind of fair fair trade Cooper operatives that you know you see where you go to these independent coffee shops and they they're selling direct but it's a challenge for a Cooperative of farmers in Brazil to sell their coffee in globally to coffee shops without using

18:15intermediaries um but using um protocols as the as as the the kind of connective tissue means that they can solve that problem without the with without this sort of excessive EXT extraction of a middleman so those are the sort of areas that that um will come on board first once you've proved that uh business model in in those sort of high demand um areas it it you know it it can then

18:43expand you mentioned there on fashion I remember bosan was doing uh something along the lines of you know luxury fashion and uh the tokenization or or digitalization of it and I know it's a huge industry I'm I'm not personally in deep in fashion but I know shoes Alone um are a multi-billion dollar industry um and of course there's counterfeits when you're looking at uh high quality

19:10uh highlevel shoes other fashion brands you know all of the purses there's fakes everywhere um will this technology help with sort of working out the Kinks in in that kind of the fashion industry as well and maybe removing counterfeit fashion and also making it cheaper and faster for to get the real thing yeah I mean absolutely

19:38so what firmon does is it is it enables these sort of higher levels of verification and that can either be because you know in when you go to do the exchange um the item will be sent somewhere to it could be the brand itself where it goes through the Brand's Warehouse gets verified repackaged and you know and and and sent on and um therefore allowing the brand to

20:04continue to make money from resale plus you know very importantly um extending the relationship that the brand has with those consumers every touch point that they have with consumers um is is an opportunity for for sort of Engagement Etc um so so that you know that sort of manual method of verification but also integrating with various different Providence and authentication chains um

20:31is you know very straightforward with with firon so yeah you could have um you know a brand or you know you said you doing something with Rolex you could have a Rolex you know authorized service center that could authenticate um but equally you know there could be an embedded NFC chip or some other mechanism whereby you could um sort of authenticate the provence of

20:59the of the item and did I see something in my research about working with DOL and gabana as one of the early Partners uh with firon so um for F's main net launch um which is which is uh coming up in in February um we will be fractionalizing using F so the other thing with with feron in addition to um enabling this

21:28sort of high verified um exchange is once the assets then in safe custody we can then fractionalize that asset or create multiple fractions of that asset and then these can then be gifted or sold or transferred to um communities of you know kind of avid fans and so with the um what the launch asset for uh fermon will be tokenizing a million doll

21:58what's it called the glass suit which is a uh a suit all over a million dollars it's a fidal so it's got a a physical suit and an nft um and it's this amazing piece of fashion history and that's going to be tokenized um and then those tokens will be um uh gifted to an AI agent um which will then interact with the uh firon and

22:28B on and F General sort of fashion web three communities and be able to reward um those communities with with tokens and sort of pieces of of itself so um and really that's that's part of us demonstrating um the possibilities of what we call like new modes of ownership um so whereas historically perhaps these luxury brands that would have these very

22:54top tier assets that would own would have a very small number of elite buyers that would would buy those assets um and that's that that Still Remains but there's now an opportunity to sort of democratize ownership of some of these assets to um groups of of of very very loyal um fans and drive sort of Engagement U with them there it's very cool a million dooll suit and being able

23:20to own a little bit of it um for for tokenization and for liquidity purposes uh it's hard to find one person if you're the a wealthy seller to to sell a million doll glass suit to uh I feel like this is the perfect use case for tokenization to be able to when as and as inflation goes up too things are getting more expensive it's hard to find a buyer that wants

23:43that exact thing for that exact price when you can have tokenization and you can divide it into a thousand or a million yeah I mean and then it is possible that someone comes along you know there are we part of what we're building is the mechanisms for recombining um and so you know there will be a threshold above which someone places a beard and they can get a certain number

24:04of shares then you know these things they they can buy out the the suit um but also you know there may be we we may get offers for major film stars to want to wear the suit to the Oscars and then it'll be for the community to decide whether or not they allow the film star to do that um because you know it may well as you add to the story of the suit you add to the

24:29value of the suit so you know this thing could have a sort of a life of its own it's also going to have um it's going to be embodied within an a AI agent which will grow in sophistication um so this thing you know may may well become one the the first self-aware asset um that owns itself yeah that's really incredible you know I've seen more about the functionality

24:54of AI agents uh in the past month or two in actually having functionality to do things I feel like 2024 was the year that AI agents became known uh but I hadn't really seen a lot you know you can you can speak inference with with AI but you sort of have to do everything yourself after and we're getting to that turning point where AI can actually make actions on

25:18your behalf and I feel like that's really going to take the intersection of AI and blockchain to the next level whether it's for trading on your behalf or managing the e-commerce uh transaction um what do you think about AI agents in in your part of the industry and how they will increasingly potentially take over as that neutral middleman well I ni I see I think the

25:46complement of AI agents and crypto is going to be the the basis of this new computable economy um so I mean why would we want AI agents well um you know at the moment we interact with the internet with keyboards fingers and screens I think we're going to look back on that and and it will be you know such devices will be clearly in the museum

26:15next to those typewriters and Telex machines and things like that I mean it's a very artificial way to interact um it's much easier to just natural language Converse you know if you want to book a holiday or know I need you know I've got a wedding to go to I you know I I need a new suit um for it to go out there and search and do you know and and the great thing about AI agents is

26:40they work for you it's not like you know doing business with Amazon Amazon you know very their their objective is to make as much money as they can from buyers and sellers an AI agent will work for you will go and do all the same search Discovery putting transactions together and so you will imp Empower an AI agent to do a lot of these things on your behalf um however there's one

27:04danger there which is empowering AI agents to do transactions is you know risky especially if they're high value ones um and so the combination of you know having your AI agent execute transactions with the sort of trust guarantees that that firon offers um is is is going to be huge um so you know there's a AI agents need um you know protocols like feron and Bon

27:32to execute um you know you know in a verified way um but I think there's also a flip side which is one of the reasons that web 3 Technologies and blockchain Technologies haven't been adopted is because there's complex you you know there's complex uh uxx but also those Technologies are super powerful um I mean who wants you know if you you don't want to be using technology is where you

28:00could delete your life savings with you know click and so they're also powerful um too powerful and so you know having an AI as the intermed you just talk the natural language to an AI and let it go and do all these kind of complex um transactions in the background is also you know make makes a lot of sense so when you kind of put those together um AI agents and crypto I think

28:27a sort of natural partner partners and um so what we will be developing I mean both with Bon as the sort of base layer for this technology but also leveraging um firon is that whenever an AI agent wants to go and buy and sell something they will be able to use um an an extension of of of like either Bon for everyday Commerce or firer on for these high value assets to go and buy these

28:54things with these strong guarantees that either they get their item or the money back mhm um and so you know mentioned we're going to be creating this this sort of AI um agent um from the that that's going to be the embodied version of the glass suit but it's also going to be highly functional it's going to be scouring the planet for um underpriced Rolexes or you know all of these

29:17different physical assets that are that are stuck in siloed um uh platforms or websites and listing them on firon finding buyers and then doing that the agent will then use firon protocol to execute the exchange in a trust minimized way um and so and then be making money on the spread and so you know not only are we going to be build the technology we're going to build some

29:45of the use cases to demonstrate that technology um and I I think with large potential to to create lots of value on on on the sort of spread it's very cool Justin I'm looking forward to to seeing how it all plays out um and if we can talk about you know the near future the next steps for growth for firon we don't have a lot of time left but I know you mentioned the

30:09obviously the the Dolan gabana agent that campaign the there was a a main net in the future a token launch you talk about any of the the road map plans and what are the next steps for growth for for firon and for the community to get involved yeah absolutely so we have a main net launch um that's happening sort of uh middle of middle to end of February uh we then have the um whole

30:37sort of uh token launch that's happening uh in the in the summer and in parallel we've got a number of major um sort of brand and partner initiative so one to tokenize a whole sort of you know huge resale market for a major Global brand and another to build a token IED ecosystem for a sort of entire industry uh that that the're one of the sort of leading players in that industry

31:06uh you know is is working with us to do um so I think yeah I mean it's just build build build um and it's great to you know to see us have come out of another sort of bare Market um and and into you know the beginnings of a ball Market where once again people are realizing the you know the massive power and utility of Technologies um like blockchain M what's the best way to get

31:34involved in the upcoming main or campaign so I would encourage everyone to um check out our website at firer onroto.com um where you can join a bustling community and be be um kept informed and uh yeah lots of lots of opportunities to add value and uh be rewarded as well looking forward to it I'll leave the

32:03link to those socials and the platform in the show notes below as well all the best with tokenizing the World Justin I'm looking forward to seeing more of this in all of the industries uh moving into web 3 and and how firon protocol can play a big role in that I appreciate your insights into all of this and would love to follow up in the near future likewise thanks for having me