Dave Hodgson on NEM’s Symbol platform for enterprise blockchain

0:01i'm ashton addison for event chain from investmentpitch media in the crypto coin show and today on blockchain interviews we have dave hodgson the cio of nem the managing director of nem ventures dave welcome to the show and it's a pleasure to have you here today thanks for having me here you're very welcome i'd love to kick off our time by hearing a little bit on

0:21your background in the space and how that fits in with your role at nem then we can dive into nem yeah sure so i've been in various different tech industries for most of the last 15 years or so um the most recent five years before coming into nem i was doing things like enterprise architects and various types of management consulting generally for larger

0:44enterprises mostly in the energy industries um i've worked in a several different countries they more laterally in the uk and europe but also spent time in australia new zealand and south america and yeah immediately prior to joining them i was working on a peer-to-peer energy trading project which um required a virtual settlement system to run in parallel with the

1:09the uk energy settlement system blockchain became a natural fit and then was the platform that we chose for that project and from there i just started getting more and more involved in the ecosystem generally and it's been probably coming on three years now i would think that i've been around them that's great and yeah it's great to be focused on enterprise because that's a big

1:30topic moving forward and we will dive into the nem enterprise platform as we go in here but first it'd be great for the viewers who aren't familiar if you could briefly explain the goals and the overview of the nem blockchain and the ecosystem yeah sure so nem is one of the older chains that's been around it originally started back in 2014 as a project

1:50the current version or version one of uh nem is is known as one that's been running on public chain live since early 2015. it actually predates heath by maybe six months um the the chain itself has been up 24 7 no hacks no lost assets basically just doing what a blockchain does for the last five well about on six years now and uh over the last probably four years

2:17um we've been actively engaged in looking at our version two so most people in the space should be familiar with the for the difference between each one and these two this is our equivalent um so essentially what we've done is to take the um all the good learnings from writing a chain from scratch all the industry movements between then and now and a few bits of secret sauce to come

2:38up with our version two and that's due to launch in the next month or so that's very exciting dave and i didn't know that nem actually predated eth but i know that it's been around for a long time and it is a very reliable platform with lots of uh develop developer tools sdks and kits and things like that so that's great to hear and now you're very close to launching

3:00nem2 and also the the release of the symbol platform which from what i read is going to focus on enterprise adoption as you said that was sort of one of your specialties can you talk about what the launch of the symbol platform means for nem and for the blockchain industry as a whole yeah sure so obviously for the name ecosystem it's massive i mean it's

3:20most of what we've been working on for the last four years i mean we've been still focusing on adoption of the current public chain platform but in terms of r d that's where most of the focus has been um in terms of the the blockchain industry as a whole we're seeing several chains now come out with probably what's best described as a version 2.0 blockchain so you've got

3:41obviously 2.0 things like apple ground coming on cardano's obviously upgraded recently and symbol very much fits into that kind of basket so we have things like on chain restrictions and controls that you would need to issue security tokens and we have the first one due to be issued shortly post go live we have the ability to deploy as a public and a private

4:02chain and to be able to move data and value between both our own private and public chain and also our public chain and other public chains so in terms of enterprise adoption that makes a big difference because not all enterprises are ready for full scale public chain adoption for everything and frankly it's not the right answer all the time for the stuff they're

4:21trying to solve um so the ability for them to deploy some stuff private and some stuff public and have information flow between the two variants makes a lot of sense for them and we as you mentioned before we've always had the sdks there the interoperability with non-blockchain systems has always been relatively simple so i alluded to selecting them as the

4:44platform earlier on in my introduction one of the reasons why we selected nem was because it was so easy for enterprise developers to pick up and use from the get go there's no proprietary language to learn once they understand how to program with a blockchain then they can just pick up whichever language they're comfortable with whatever they're working right now the same tool sets

5:04and just run with it and ultimately that means you get to market quicker or you get mvp quicker or it's more reliable like depending on which scenario you're in um so in terms of the blockchain industry in general obviously we're bringing that public private push and we have a variety of different features on chain that we can get into later on but they

5:22particularly support regulated industries as well as define and kind of crossing into other public chain ecosystems that's really interesting davin you mentioned tokenizing secure assets and for businesses to be able to um you know securitize and protect their digital assets i know that you're already starting to work with some businesses that you're going to work with

5:45tokenizing some of their assets upon launch which is exciting and we can jump into that um but the the the mix of the private blockchain the public blockchain i think is super important as you mentioned that not everything really needs to be on public chains and it can bog down for businesses that are trying to be efficient and you know work with their capital to be using uh a

6:07public chain for everything sometimes it just doesn't really make sense so with those two things mentioned are those really the core foundation of you know as you as you start to attract businesses to start using the symbol platform those are really the main things and you also touched on you know what else are they really capable of doing with this

6:26platform yeah so those are the main sides that would focus towards regulated industries and generally larger enterprises the the feature sets that would be more appropriate for blockchain encrypt audiences generally um would include things like the atomic cross chain swaps between not just ourselves but basically any chain that supports the secret hashtag transaction so right now that

6:49includes eth it includes bitcoin uh polkadot and cosmos have something very similar so what that means is as services start to build you can abstract the ui ux of that service for the end customer away from the underlying platforms and essentially just flow into whichever ecosystem is most appropriate for what you're trying to do at a given point in

7:11time without actually having to sit in any one specifically obviously eth recently with all the d5 um craze and you know two or three years ago we know that it starts to clog up as as it gets particularly popular other chains are likely to have the same problem so why not allow that value to flow around and obviously east 2.0 is is looking at fixing that for the ecosystem

7:34um but when you build a really nice d5 project for example in polkadot why not be able to tap into the two or three liquidity pools of other large chains nearby um and it's the general direction that most of the the bigger chains are starting to go in now as well so we bring that in natively on chain it's at the protocol level you can do that swap in a decentralized

7:55trustless manner similarly you could easily pay any gas fees or any transaction fees on chain on behalf of users so again you can abstract that away like my mother or my grandfather didn't really want to be messing around paying gas fees if they're trying to use a mobile app if you want to abstract away from that you need to have the ability to be able

8:15to pay those fees on behalf of the user um at least for certain types of user demographics so we have that now baked in as well and the same function that allows that also allows you to use what's called an aggregate transaction which is basically 100 embed up to 100 embedded transactions within one transaction and they either all succeed or they all

8:35fail so that allows you to run trustless escrow type services for example where you don't need a middle person or middle agency we can just both put our funds into escrow and until a given um rationale is true the funds won't be released and if it expires then they just go back to the same parties so we have those kind of functionalities coming in on top of our existing

8:56on-chain multisig controls we've always had or certainly ever since i can remember have had the ability to issue tokens or assets on chain just through the desktop wallet like just through a normal web-based ui that's still present you don't need to go and start writing proprietary contracts or get a developer involved it's literally about four or five clicks

9:17most people who can set up like a gmail account probably could do it that continues into symbol and on top of that we build in the ability to place restrictions on those tokens restrictions on accounts so if you wanted to for example set up a cold wallet that could only transfer funds to a hot wallet you can set out that restriction at a protocol level so then it doesn't matter which

9:38system has been hacked which off chain party gets compromised the chain's going to enforce that that type of control particularly once you get into custodial and regulated markets those types of functionalities start to mirror very closely what they do in the offline world already or the non-blockchain world um yeah so we've got a few few tricks i receive and then there's

9:59some new ones coming that we haven't released yet yeah definitely and i like that you mentioned the cross chain and uh you know atomic swaps having that custody of your own funds and and coins while you're moving them around between blockchains and not having to rely on those middlemen or centralized exchanges i think that's a big trend moving forward throughout the

10:19whole 2020s and you mentioned the polka dot ecosystem and a couple of these other ecosystems are sort of taking some of that value that's being accrued on the ethereum blockchain which has almost 14 billion dollars of liquidity locked into it now and was almost nothing at the beginning of 2020 so and you touched on defy and like that just seems like it's such a huge trend

10:41moving forward into 2021 how big of a role do you see nem coming in and being able to you know be one of those other partners and be able to capture some of that value so people can have you know interest bearing accounts or earn or earn yields um and have decentralized finance applications on nem as well yeah so we're certainly primed to be one of those key

11:05key players in the space i think that space i could probably count easily five probably ten chains going forward that i would think are likely to be prominent in that space i would certainly put us in there so we already have the ability through a custodial solution to get a wrapped xcm so it's called st xcm and it's issued by stakehound essentially what it is is staking as a

11:27service which issues a wrapped erc20 token obviously on the ethereum ecosystem so that you can then get into uni swap have a compound et cetera now that token um comes with a yield that can implicit yield because the stakehound teams run supernodes on our network and get paid as a essentially a proof of stake supervalidator um so that comes with i forget the exact

11:52numbers but it's something like three and a half to four percent yield which is paid out in the wrap token um already so you just simply by holding that wrap takes em you're getting a yield that you wouldn't be able to get unless you have a significant uh investment in xcm um that's going to support the symbol release as well so we will see an stxym

12:16which is the native token for the symbol chain um and we have two or three other projects who are looking at wrapping x y m onto both ethereum and particularly polka dot so i think it's going to become more and more important for those liquidity pools to be able to flow to wherever the solution makes sense so if you need a turing complete smart contract

12:38heath makes sense and it makes sense that liquidity pool should be able to flow there if you want to do trustless escrow through gui maybe that's symbol on them um if you want to use a power chain that can do crazy tps obviously that's into polkadot and really we don't want to stick up fences or barriers to that and liquidity being able to flow where

12:57it needs to flow to at the end of the day it's just a one big open market that has no middle people in the way so definitely and i think that's the entire ethos of the decentralized ecosystems be able to move where you want to move and go where you want to go and have that ecosystem that works together and it doesn't have those barriers when you're just trying to move to a different

13:16ecosystem for a different purpose now we're running short on time but i want to jump back to the symbol platform launch upcoming you mentioned that you're starting to work with different businesses already for the launch to start tokenizing uh business assets right away and one of the businesses that you're starting to work with is with wave financial this whiskey

13:38tokenization for 20 million dollars of whiskey so that's a really interesting first partnership and can you can you talk about you know how did this come to be and what does that really mean to start tokenizing whiskey yeah sure so the um first of all i can't take any credit for the idea it came entirely from wave financial they were looking for a platform to

13:58tokenize on and that said i'm scottish so you know whiskey's kind of close to my heart um so basically the guys have um structured a fund and they're a registered investment advisor out of california they've structured a fund that is for accredited investors or for non-us-based citizens which allows them to take a position which gives exposure to essentially lucky a luxury kentucky

14:21bourbon um the basic economics of r if you can buy enough barrels and hold on to them until they're mature it goes up over time and obviously there's a cost of warehousing and you know that kind of stuff and so the fund takes input from the investors goes and secures a large quantity whiskey and then essentially warehouses that until maturity um that asset class is not generally

14:46available to retail investors unless you're prepared to go and buy like a thousand barrels of whiskey which is generally more than most people have got space for in the garage um so the fund kind of abstracts all of that complexity and it gives a bit more access to investors that wouldn't otherwise be able to get there and then on top of that the so that that would be a legitimate

15:07a fund with a with a proper thesis and rationale without tokenizing so if you tokenize that on top of symbol which the the team are going to do um probably within q1 this year yeah well 2021 um then it allows you to trade those tokens on a secondary market and essentially you've then got a liquid investment in the fun sense not in the whiskey sense um and that then means obviously that

15:32you can realize any of the gain as the as the value appreciates over time which traditionally you wouldn't be able to do because it's quite hard to go and sell like one and a half barrels of whiskey to start with other half leaks so um you know you can do that kind of stuff when you tokenize it at a more granular level um the fund already has distribution out

15:50of quite a few of the major houses in asia particularly through wave financials existing network of distribution partners so they the team there have been running funds for uh i would imagine ben is probably 25 30 years now dave seymour's been in in the industry for about 20-25 years um they have some serious traditional regulated markets behind them

16:14happen to also have been in crypto since probably 2013-14 i think um so it's a really nice natural fit it's a it's a partnership that's grown kind of organically over the last year or so just as we go through learning a bit more about each other's projects and what each other's looking to do etc so yeah we're really excited to see that as the first security token

16:35um i'm lucky enough that as part of the work and then ventures we've also been able to take a position in way financial as an investor generally so we kind of we get to see a bit more behind the scenes as to how the fund works obviously we can feed that back into the requirements and it all just basically helps everyone definitely in that and that is really

16:52exciting coming up for the launch and for the viewers that are interested in following up to the launch and learning more about symbol and for businesses and enterprises that are you know looking to capitalize on nem's technology and start partnering with you guys what's the best way for them all to learn more and to get involved yeah the easiest way is through the

17:11website so just nem nem dot io if it's specifically the symbol platform itself then there's a different url which is simpleplatform.com but you'll get there through them derail most of the comms come out on all of the usual social media channels so we've got nem official on twitter we've got nem red on telegram there's reddit pages there's linkedin all the social media you would

17:35expect but you can get to them all from the website sounds great dave i will leave those links in the description box below for the viewers all the best with the launch of symbol i'm excited to follow it myself and let's follow up in the near future perfect sounds good action thanks for having us