Mance Harmon: Hedera Co-Founder

King Solomon of Genfinity interviews Mance Harmon, the Co-Founder of the Hedera Hashgraph network.

Transcription

Genfinity - King Solomon - Founder & CEO
So yeah, we're going to go ahead and get started, guys. So, first and foremost, want to thank the entire audience for coming to this space today. As you guys may know, in collaboration with Hash Pack, Genfinity has conducted more than 130 interviews within the Hedera ecosystem. All of these conversations delving into the intricacies and advancements of one of the world's leading distributed ledger technology networks, shedding light on the potential and impact on various industries and the world at large. Today, extremely excited to have the man, the myth, the legend, Mr. Mance Harmon, who is the Co-CEO at Swirlds Labs, Co-Founder and former CEO of Hedera, as well, also joined on the stage by Marc Ugas, who is the Director of Operations at HashPack. So, should be a very interesting space today. Mance, thank you so much for joining us. Well, I always like to start these out by allowing our guests to give a little bit of a short introduction of who they are and an overview and background of themselves, what led them into the positions they've come to within the Web3 space. So, Mance, what led to the formation of Hedera and, you know, even moving forward a little bit into your position as Co-CEO at Swirlds Labs?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Sure. Well, to start off, as I've said many times, many of your listeners already know this story, but Leemon and I, Leemon Baird, is my co-founder both with Hedera and with Swirlds Labs. We've been working together for three decades. We literally started working together in 1993. We were in the military, working together doing research in machine learning, reinforcement learning specifically. And then we did our first startups back in 2000. We started a company, and then we started another one in 2006. And then in 2012, Leemon decided that he wanted to solve a hard math problem that ultimately led to the creation of Hashgraph, which is the consensus algorithm that underlies the Hedera project. And while he was working on that, I was Head of Labs and Architecture for one of the major identity companies in the space, Ping Identity at the time. And we just started talking about, is there a way to use blockchain for identity-related applications and solutions? Well, it wasn't even blockchain, it was Bitcoin. It was Bitcoin's blockchain when we started having these conversations. Back then, the term blockchain hadn't even been discussed publicly. It's not like the term blockchain had gone through its own hype cycle yet; it was still just Bitcoin back then. And it had nothing to do with Bitcoin. I mean, we didn't start all this because we were big Bitcoin enthusiasts. We started all this because Leemon had invented a very cool tech that we knew had a lot of applications that the world we thought would be interested in. It happened to be the case that Bitcoin made the market for hashgraph. If it weren't for Bitcoin, no one would really care about hashgraph. We would have had to invent hashgraph and then come up with the killer use case. Perhaps we would have come up with money, right? But Bitcoin had already done that and had made the market. And as a result of that, when Leemon invented hashgraph, we realized the importance of it in the market. Being entrepreneurs, we decided, let's go for it. And that's what we did. In 2015, we created Swirlds, which was the first company related to hashgraph. We focused on private networks at that point, Leemon and I neither had any name or reputation in the crypto space. We had a brand new algorithm that was untested, that nobody had heard of. So we decided to create private networks first, focused on the credit union industry in North America. In 2017, we had done enough work there that we thought we could credibly go and build a public network on top of Hashgraph, the algorithm. And then we kicked it all off in the summer of '17 and made that public in March of 2018, five years ago, more than five years ago. And that's kind of the story of what led us into this space.

Genfinity - King Solomon - Founder & CEO
I remember, and I can't remember if it was 2018 or 2019, when some of the testnet use cases were going live to the public. And you probably remember this as well, Mance. You used to create a Creator, that used to create an HBAR wallet. And one of the test cases was different articles that you could scroll down, and then you would get micro payments in HBAR. Do you remember that?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
I'm trying to remember what we called it. We had a really pithy name for it. I don't remember the name of the site, but yeah, we created this demo application that made it to do exactly what you said. You could buy views of the articles using micro payments. And that was the point, to demonstrate that you could do it in real time. You could transfer tiny fractions of value in real time for almost zero cost. I don't even really know what happened to that. It just sort of fell by the wayside at some point. Again, it was never meant to be real, it was more of a POC to demonstrate. I think we took the code that we used for that and we open-sourced it. I'm sure it's around somewhere. It did lead ultimately to a real interest in this by one of our council members. They, it used to be called eftpos, I believe they've changed their name, it's the debit card system in Australia. And they ran with this idea as a council member, they ran with this idea of micropayments using Hedera to provide the payment rails for all that. Yeah, it was very cool. I remember that. I don't remember what we called it.

Genfinity - King Solomon - Founder & CEO
I wish I still had that wallet that I used, because I know a lot of people use the old, you know, the smaller digit wallets for cloud. I mean, that would have been amazing to still have. You talk about ecosystem expansion and development as well. One of the things that really kind of interests most of us in this space, I would love if you could maybe touch base on recent milestones and achievements from within, how the network is being utilized from Hedera's standpoint, any that kind of stick out in your mind that really just make you understand where we might be going in this space.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Yeah, it is really interesting. If you were to look at the specific metrics that normal people might use for measuring growth and that sort of thing, I know that we've been doing great on those metrics like account growth and number of transactions per second and that sort of thing. And all of those are recorded by Messari. So, I'm sorry, Messari tracks us. And I know that they have quarterly reports. The truth is, I've lost track of the details of that. The focus for me has not been so much on those metrics anymore. Of course, I care about them, but I'm not primarily responsible for that in the role today. But what I do know is that we continue to have fantastic growth in those metrics. I am told. Leemon and I were doing an interview just a few days ago, and we took a look and I think we're over 18 billion transactions on the network. That's more than any other layer one by far. And it's being fair about the way that you calculate or you just know the definition, I should say, of what a transaction is. You have to compare apples to apples. And some of the platforms will report a lot of transactions, but then if you look under the hood, in some cases, there are multiple transactions that are recorded for a single transfer of value from one person to another. And that's not really fair. You really shouldn't be having multiple counts of transactions to account for that single value transfer. In our case, it's all legit, and that's what's cool about it. On the one hand, we're just really driving transactions, and on the other hand, it's not really surprising. You would kind of expect it, and that's why we built what we built. We built a system that can process really high volumes of transactions for really low cost. And I would be disappointed if it weren't the case that we were driving really high volumes of transactions relative to the other platforms out there. If you're developing for Ethereum, then you have to take into consideration what the cost is going to be, because it's extremely expensive, and what the throughput is going to be, and the two are related, obviously. The higher throughput you can have, the lower cost you would expect. In their case, they've got relatively low throughput and really high cost, not surprising. But the project you build or the application you build is going to end up reflecting that, meaning that you're not going to have high-volume use cases on Ethereum, you can't, it doesn't work. And so we actually have both, right? We have really high-volume use cases, like some of the supply chain use cases that are out there today. And then we have kind of the traditional use cases that maybe are the crossovers from Ethereum that are lower throughput but still take advantage and have all the benefits of having the network that we have. That being predictable costs when you make a transaction that doesn't fluctuate with the value of the token, the high throughput for expansion, etc. You know, the benefits of combining tokenization with smart contracts, native tokenization and management of tokens in sort of the API layer in combination with smart contracts, rather than running everything through a smart contract. You know, a lot of advantages that people take advantage can benefit from. But we always focused on those really high-volume use cases that we think ultimately are important to the projects as the industry matures.

Genfinity - King Solomon - Founder & CEO
I should mention, I do believe it was today that the 19 billion transactions threshold got...

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Oh, there you go.

Genfinity - King Solomon - Founder & CEO
Like, yeah, so, and to me, it sounds like, in your answer about milestones and achievements, what really excites you is kind of the comprehensive solution that's being presented and the different ways that enterprises and retail may be leveraging the technology as a whole. Instead of just looking at individual things like TPS, things like that, so it was interesting to hear that you're not even necessarily looking at that stuff anymore because it should be a given at this point in time that that's what's occurring.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Yeah, well, you know, I've watched them from time to time. It's not the case that I wake up and I say, "Let's go look at the metrics for the network today," right? Because it's just... It's not the most important thing for me to look at. It's, you know, I'm curious and it's cool and I like seeing the growth, but what's more fascinating to me is to see emerging themes in the use cases. You know, we've seen multiple supply chain use cases go to market or being developed. They're really significant big companies that are creating some form of a supply chain-related use case. And those generally do require what I've said - high volume transactions have to be really low cost but high throughput, high volume. And it's also the case that they many of them are sort of using the same tech that is being used for tracking widgets, whatever those widgets might be that are being manufactured, tracking those widgets through the supply chain itself but then turning around and also tracking ESG-related information, right? So energy usage on a widget-by-widget basis, being able to report that information publicly, being able to take that emissions information and enable the companies to mint emissions tokens and then those tokens ultimately being traded for credits or offsets. The two seem to be kind of going hand in hand, again not surprising. If you can track all the raw materials that are flowing into that type of process, if all those raw materials are represented by tokens and then they get combined into manufactured and finished products that also are represented by tokens, if you have that kind of visibility into the supply chain that we didn't have before, and by nature, the tokens are designed for value transfer, that's the reason we have tokens is because it makes it easy to take value and it's a representation of a token and transfer it from one party to another, if you have all of those elements together, then it just makes total sense to track the energy-related by token and follow, do all the things that you're going to end up needing to do in an ESG context.
So we see that happening with Kia and Hyundai and Avery Dennison and... Oh, there is a…

Genfinity - King Solomon - Founder & CEO
Fresh Supply.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Thank you, thank you. Fresh Supply. I'm struggling there. Yeah, I mean, when you see those kinds of things happening and by the way, only one of those companies is a council member, Avery Dennison, and the others aren't, which is significant also to me. When you see that kind of pattern emerging, then that's very exciting because it means that we're getting closer to larger-scale adoption, and they're all figuring it out. They're figuring out how to make it work well for that use case and figuring out the value that makes sense for the market. And that's where we see real growth, not just in those things, but those are exciting to see.

Genfinity - King Solomon - Founder & CEO
Yeah, and I think a newer announcement that I believe just came out today, and we talk about you know, the tracking of things like carbon credits, and even maybe ways that institutions can start leveraging carbon credits in ways that make sense. So, Carbon-based is partnering with the HBAR Foundation and Impact X to launch Asia's first digital-native carbon registry utilizing Hedera. One thing I found interesting… That's a huge milestone obviously with Asia's first digital-native carbon registry as a whole, but going and doing a little bit more deep diving into Hedera Guardian, in and of itself, an open-source platform leveraging Hedera technology. One comment that I saw on their website was very interesting to me. It basically said, "You know, the balance sheet of the world should live on a public ledger." And let me preface it this way, Man, so I remember doing an interview with Christian Hasker, maybe two, two and a half years ago, and he was talking about kind of the way that carbon credits were going to evolve over time and where they would live. How big is that announcement, especially with the green initiative stuff that's all coming out across the board, and you know, any thoughts on the Carbon-based partnering with the HBAR Foundation and Impact X for the first Asian digital-native carbon registry? Would be great.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Well, look, I think it's really important and it's a further data point that indicates that we're moving in the right direction. As a platform, Hedera is moving in the right direction as being adopted as the platform for ESG-related use cases.

Genfinity - King Solomon - Founder & CEO
One-hundred percent.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
We've kind of had this reputation for a long time. You know, we've been to Davos last year, this year in January, I forget the last Davos we were there, and we had a big presence, and it was all focused on our ESG creds. And, you know, you could... It was palpable the conversations that were had with Hedera and the various leaders of the world, including not just political leaders, but economic leaders, guys that are and ladies that are running the biggest companies in the world. Care deeply about this issue, and we were there as the ones that are being held up as the best platform on the planet for these types of use cases, and there's just been a lot of traction there. The HBAR Foundation has taken the lead primarily in helping to drive that. Wes Geisenberg over there is really the man behind a lot of the success that we've had here. We did sort of seed the market, I would say, with the first version of the Guardian. So, the Guardian is an open-source tool that makes it easy for companies to measure and report and validate the energy consumption and usage as well as tokenize those emissions tokens or carbon credits, whatever the case may be, depending on which side of the equation you're on here, whether it's carbon capture, you're creating the credits and offsets, or you're using energy. The Guardian makes it possible to manage and track all of that in a way that's a lot easier than if you didn't have it. It's sort of a middleware type of source code, so it sits on top of Hedera but then gets built into various applications by big companies, including ServiceNow, for example. ServiceNow, I don't know what their valuation is today, but it's been north of 100 billion for a long time. Their customers are like the Fortune 1000, and they've been using the Guardian, building the Guardian into their processes and making it possible for their customers to track this type of information ultimately through Guardian, meaning through Hedera. And Envision is a community member that has hosted Guardian. They've taken the Guardian service and created a hosted version of it, making it easier for various organizations to use the Guardian. You don't have to take the code base and write software and build it in. You can just buy the service. So, we've got a lot of momentum there. I guess the one other thing that perhaps I should mention is kind of old news to me at this point, but I think still noteworthy, and that is that...

Genfinity - King Solomon - Founder & CEO
Very much so, apologize for that, Mance. We did lose all of the Wi-Fi aspects, and I think that we've got everybody back in here right now. If anybody can share or everybody down there in the audience can share, we retweet that would be fantastic. I know we were talking about Hedera Guardian, ESG initiatives, everything coming down the pike, and, Mance, apologies for Twitter Spaces kind of rug pulling there. That is the problem with doing these on Twitter.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
No worries, no worries. Just if you can't just tell me the last thing you heard me say, and I'll try to repeat from there.

Genfinity - King Solomon - Founder & CEO
I think that it was going down the path of what his Guardian did.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
We talked about what the Guardian is, or no...

Genfinity - King Solomon - Founder & CEO
To an extent, I mentioned the phraseology about balance sheet of the world should live on a public ledger that I think that kind of started expanding.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Okay, okay. So, I'll just pick up from there. No problem. Now what I was saying is that... Let me think about... To reframe what I was saying, is that the Hedera, as a project, has a good and increasing reputation as the project for ESG-related use cases. I mentioned the Guardian. Basically, the Guardian is an open-source project that we created and seeded. We basically gave it away. We open-sourced it. We kicked it all off. We're still involved in it, but we don't run it per se. There is an organization out there, a community member Envision, that has created a hosted version of the Guardian that makes it possible to use the Guardian, which runs on top of Hedera, obviously, for the tracking and tracing, or the management, reporting, and verification, or validation of ESG-related information in your organization. Whether it's the fact that you're using energy to produce something, or if you're on the flip side of that coin, or the other side of that equation, if you are doing something to reduce carbon in the atmosphere, then you can use the Guardian to track that in, you know, that process and provide certainty on a, on a, you know, certainty that the process is valid and that the tokens that are then being minted, like the renewable energy credits or the offsets that are being created, are legitimate, and you're not double-spending on those. So, the idea that we can have a ledger here that provides transparency to these processes on both sides of the energy equation is really powerful. And what I think is that when I see these types of activities, these announcements like what we saw today, where there are new standards that are being talked about and created, and new marketplaces being created for the trading of these types of tokens, it's exciting because it reminds me of where Bitcoin used to be a decade ago, or maybe more than a decade ago, right before there was Coinbase. It was pretty tough to be trading Bitcoin. And now what I'm seeing are the creation of standards around the tokenization of these types of credits by the world's leading organizations in this space, and that will eventually lead to massive marketplaces for the trading of these tokens. And I, again, I think that we're just in the earliest stages, and Hedera is right in the heart of it for a lot of good reasons, and it's going to be a big growth area for us.

Genfinity - King Solomon - Founder & CEO
I think, you know, you mentioned, you know, where we may have been at in the past and where we're at now, and I would be remiss if I didn't bring up the drop micropayments platform that's built out on the Hedera network that leverages USD and USDC and HBAR for micropayments, being integrated into FedNow and their Service Provider Showcase. If you could just give some of your thoughts around how crazy it is to see stuff like that occurring at this point in time, and how the technology is potentially going to be leveraged, even in an ecosystem like the Federal Reserve's FedNow and things like that.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Well, look, this one was fun, and it was fun because it took me by surprise. That's the truth of it. I mean, the interesting thing here, I've known Sushil, the guy that's in charge of all of this, for a lot of years now, and I had talked to Sushil maybe a couple of years ago about this project that he was going to be pursuing, and then I hadn't talked to him much since then. And so when FedNow put that information... Shoot, can you still hear me? Yeah, okay, sounds good, good. Sorry, when FedNow put that information on their website, it was a surprise to me, so I got on the phone with Sushil and he recorded some stuff with us. And I think to just describe it a little bit, FedNow provides effectively provides payment rails for the transfer of dollars in a... and that's basically it. I mean, the value of FedNow is that it makes it possible to do instantaneous transfers at really low cost. It's still centralized, it's not decentralized, but that's all it is. And when you think about that in comparison to the world of crypto, but we've been doing that for a lot of years now, FedNow is a way of doing that with USD. And what Sushil has done is built a solution on top of those payment rails. So, basically, it's the user interface and all the information that would go around it or needed to manage that process when you're transferring the value, transferring the dollars. Sushil built that into an application and it operates on top of Hedera. So, it uses the Hedera Consensus Service for tracking all the transfers and the administrative functions, etc. Anything a user might do or would do is audited and recorded on HCS. It's in an immutable form, then, and you can prove what was done in the past in a transparent way. And it also uses the Hedera Token Service for the transfer of USDC. What's interesting is that FedNow decided that Sushil’'s application, Dropp, was the first that they wanted to put out there, and that shows and demonstrates confidence both in the application itself as well as in the infrastructure on which it is built, that being Hedera. So, I think it is important. I think it's important as a statement, a public statement that crypto is going to be a part of this. And I see the two systems working together, both the existing payment rails as well as the payment rails that we effectively are providing by creating the tokenization service that people can use. You can use a tokenization service for transferring that value, and I ultimately see a merging of those solutions, or I should say, infrastructures over time, and it will happen in precisely the way that we're seeing it now. It will happen higher up in the stack. Again, you have two different sets of payment rails that are transferring value of different currencies, if you will, and then the solutions that are being built on top are going to make it possible to use any combination of those value transfers with the different rails, but in a single solution provided to the market. And so you'll end up seeing this convergence of the systems in this way over time. And congrats to Sushil and the team there for getting this far and being the first to do so. I think it's a big statement.

Genfinity - King Solomon - Founder & CEO
I think, you know, bringing up the aspect of tokenization... I mean, I know that I've done some deep dives in the past and looking at Aberdeen and Archax and Archax's tokenization engine. The first use case from everything that I could find within Archax's tokenization engine was tokenizing a £15 billion Lux Sterling money market fund from Aberdeen, leveraging the Hedera network. I want to ask you a very similar question that I asked you at Consensus. But when I asked you the question at Consensus, it was surrounding transactions per second and real TPS occurring within Hedera, being a drop in the bucket. Understanding what's coming for tokenization as a whole. Aberdeen is one of the largest fund managers in Europe and the UK, and I think they have around £360 billion assets under management, or Euros assets under management, whichever it is. When you start seeing things like that, where £15 billion has been tokenized over time in ways that make sense and I'm just going to phrase it under leveraging the technology, is that a drop in the bucket in ways that tokenization is going to occur on top of the technology that is being built right now?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Well, what I would say... I wish I knew the numbers off the top of my head, because I'm happy to share them with you, but I don't. I honestly don't remember what the maximum number of tokens is that we could post on the network. But what I do know is that we have been increasing those numbers by orders of magnitude. In the conversations that we're having with organizations – the Hashgraph Foundation, the HBAR Foundation, and the Hashgraph Association – when we have those kinds of conversations with potential users of the network, the use cases that we're talking about result in many, many, many millions of tokens being created. Tens of millions or hundreds of millions of tokens being created at maturity if those applications are built in and go to market. So, knowing that, what we're focused on is the future and increasing capacity on a continual basis. Leemon and the team have been putting in place full strategies for scaling with the kind of scale that we anticipate is coming. So, I do think that if we're talking about transactions per second or we're talking about the number of tokens being created, when we're talking about the number of accounts that exist on the network, all of those things, I think we've seen just a tiny fraction of what we're going to see in the future. And we're focused on the future in figuring out how to ensure that we always have the infrastructure in place to meet the demand.

Genfinity - King Solomon - Founder & CEO
I should preface that for the audience down there as well. I think what you're talking about isn't HBAR, the unit of account-based asset on the Hedera network. It's literally what you're talking about is HTS, or the Hedera Token Service. How much is the maximum threshold as things become tokenized that could exist on this network? And how can we scale that by issuance of new tokens from tokenization occurring?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Exactly, that's exactly right. What I've said many, many times is that we're going to end up living in a tokenized world. If we go back to the beginning of the conversation and talking about supply chain use cases, think about what the implications of that are. Everything that gets manufactured, and more, but let's just stick with manufacturing products. If only things that got manufactured end up having a digital twin in the form of a token, how many gazillions of tokens are there going to be in the universe? Everything you look at, touch, feel, and then beyond that, anything that has value that is more abstract IP or music etc. Art, you know, anything that has value, much of which is not physical, is going to end up being represented by tokens. And so, there's, you know, going to be a huge number of tokens in existence. We are architecting the platform and thinking about how to scale in such a way to be able to represent all of that value.

Genfinity - King Solomon - Founder & CEO
I have to give May Chan a shoutout down there from HashPack, and then Marc is up here with me as well. When I asked this question, Mance, because recently, I think this was maybe three or four weeks ago, we saw that Standard Bank, Shinhan Bank, and Siam Commercial Bank created an extension of work that's been going on for a couple of years, with a successful proof of concept surrounding stablecoin remittances and things like proof of reserves, things like that. I want you to maybe potentially touch on that, to see these banks kind of continuing, continuing, continuing their proof of concept aspects. But I did want to give a shoutout to the Hashpack team because I watched the internal – it's this live on YouTube – the Standard Bank, Shinhan Bank, and SCB aspects, and like 45 minutes in, you can see that the infrastructure that they're using from the wallet standpoint was Hashpack. So, great job to the Hashpack team. I saw that in the video. Mance, if you could touch base on those types of pilots and what they represent for the network, and even how cool it is to potentially see them using a public infrastructure wallet like HashPack that has been built out for what they're trialing out.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Yeah, well, I don't know if May is with us, but if she is, it would be great to have her chime in here as well. What is exciting about this? Look, we built a general-purpose network without focusing on a single use case, and that is different than most of the other layer ones out there. You know, most of the layer ones are kind of known for something, something singular, and then maybe there's a little bit of activity going on on the edges. But we intentionally chose to create a general-purpose network, and we intentionally chose a variety of initial council members to represent the entire universe of use cases out there.
When we selected the council members or invited council members to participate on the council, we intentionally ensured that it was cross-industry and cross-geography, so that we would have representation across all use cases. And we've already talked about supply chain here; we've talked about ESG. We're now talking about basically value transfer, cross-border payments, and that sort of thing. And to have the banks doing the work that they're doing pretty much without our direct support – I mean, it's true that we're helping with architecture and advising and that sort of thing, but these are PoCs and use cases that they care about, and they're testing out with members of our ecosystem, including HashPack, independent of us. And that's really what we wanted to see. We wanted to see the different industries, the subject matter experts in the various industries, represented on our council figure out where the value exists for Hedera or blockchain in general. And then do those experiments where we support, perhaps, with just technical expertise, but we're not driving them; they're happening on their own. And that's what this represents, right? This represents a whole other category of use case that's also being done on top of Hedera. And you know, I think that that industry is continuing to do those experiments and figure out what works, what doesn't work, what can scale, and what can't scale, and what the legal and regulatory ramifications are across those jurisdictions. They're very complex problems. Technically, it's pretty simple, right? It's just transferring value from, you know, from one account to another a couple of times, for example. But the real problems are building out the solution and dealing with legal and regulatory issues. And they're all doing that work. It's, again, what excites me about it are the patterns that we begin to see across organizations that are doing very similar things in similar ways, standards that begin to emerge in those industries, and things happening without our involvement. Most importantly, things that are happening without our direct involvement, because we can't scale. We want the world to be adopting and doing all these things on their own, in parallel, without our involvement. And that's what we're seeing.

Genfinity - King Solomon - Founder & CEO
One of the interesting things within that initial announcement, within – we'll stick on maybe stablecoins for a second here – within the announcement between Standard Bank, Shinhan Bank, and SCB – and I should preface this, it's not SCB proper; I think this was SCB's Tech X platform, which is like their fintech kind of arm within Siam Commercial Bank – but the announcement that Siam Commercial Bank put out, at the very bottom, was saying, "You know, this is another stepping stone towards not necessarily central bank digital currencies, but bank-issued stablecoins." So within that, not narrative, but within that aspect I can think back to the interview that I had with Worldpay and FIS. WorldPay, obviously being an arm of FIS, and you know, they've been trialing out Circle USDC. So, most of us have heard of USDC and proof of reserves for stablecoins, leveraging the Hedera ecosystem. What does that represent, that proof of reserve aspect, and how can Hedera and the technology help in that regard? I guess that would be a question that I have. And then also, they're using Hashgraph's Axiom Oracle service to Axiom Pro, which is really interesting because that's a native Oracle service that's built out on Hedera as well.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Yeah, so the fundamental problem for stablecoins is being able to provide transparency in what is backing the coins, the tokens that are being minted. And there have been a lot of different approaches to providing the proof, the transparency that would be needed, not just by the regulators, the regulators that care about it, but by the public at large. I mean, some of the stablecoins out there have not been as transparent about what is backing their – you know, the stablecoins that are in circulation today, what the reserves are that are backing those and you can do it in such a way to provide that transparency, and that's what is being explored with us on the network. I think that, you know, bank-issued stablecoins – it's going to be interesting to see how that plays out. You could think of it as bank-issued stablecoins – another name or another flavor of that is tokenized deposits. And what I have seen in recent months is kind of a shift towards the industry and some of the banking-related players focusing on the ability when you put your deposits into, say, you have money, you have Fiat, you have USD, for example, and you put it into a savings account, then there are tokens issued to you that represent the dollars that are in that savings account. In some ways, that is bank-issued stablecoin, you could call it that. I don't know if all the different synonyms mean exactly the same thing; there probably are nuances across some of these instruments that are created and used. But I do see that as the kind of thing that sort of goes mainstream. How does the existing banking infrastructure on a global basis participate in this tokenized world? And, you know, I see tokenized deposits as a central component of that. There's some reason to believe that that will be some version of that will be accepted by regulators. And then there are systems today already that track the number of dollars, and they provide that transparency not to the public, unfortunately, but to the banking regulators, so that they can see, you know, what the reserves are in a bank that are backing the various instruments, that sort of thing. But if you combine that with infrastructure, blockchain, or DLT-related infrastructure such as Hedera's, then you get an interesting combination. You could provide the transparency publicly. I don't know if it will work out that way. I think that's still, you know, there's a lot of activity around this notion of having hybrid systems where you have banking-related use cases that are done on private networks, but then the private networks end up interfacing somehow with a public network like ours. It could either be state roll-ups where the private network, the state of the private network gets backed up, or it could be that the private network serves as sort of an application network – what we would call an application network, a sort of a centralized application – and audit information is backed up or HCS is used in Hedera to back up the audit-related information, or it could be a layer two, or it could be a peer. I mean, there are a lot of architectures for how you can combine private networks with public networks to achieve a balance of privacy and security and transparency that benefits both the public as well as the regulators. And it's still too early for me to see exactly how that's going to go, but being able to prove that the reserves are what are claimed is going to be a central component of that. And I know there's a lot of work that's going on there with Hedera in that regard.

Genfinity - King Solomon - Founder & CEO
I definitely want to get to this because I know kind of the onset of our conversation talking about throughput and fees and things like that on Ethereum – and certainly nothing against Ethereum – but when you talk about EVM or Ethereum Virtual Machine versus Ethereum as a unit of account-based asset, there's lots of differences, things like that. Hedera has been building out – I don't want to say quietly, but I would say behind the scenes – with some public announcements of EVM equivalency. And even more recently, within the validation cloud, it was a big recent announcement, so one of the fastest RPC providers globally integrating their mirror node service into and relay service into Hedera. Also seeing an announcement coming out, let's say two weeks ago, about EVM (Ethereum Virtual Machine) JSON-RPC interoperability and then MetaMask integration, things like that. From the earlier posts, Mance, it's very clear that the EVM equivalency is going to be equivalent in a way where you can use the services that you would want to use from EVM but then also use the utility of the Hedera network and ecosystem in different ways on top of that. Can you touch based on how important that is not only to have that equivalency there but to build it in the correct way that allows kind of that mass adoption of the network of Hedera and use the services that Hedera is really good for on top of it and why it's kind of a scaling thing that we're seeing?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Sure. Well, from the very beginning of the project, we knew that we wanted it to be possible to run EVM contracts on Hedera. You know, Ethereum had the early market lead, and we ended up maybe a year into the process coming to the conclusion that we shouldn't build our own smart contract engine. That if you think about – let me just take a step back – when you think about the tech stack, at the very bottom of the tech stack is the consensus algorithm, and then on top of that are various services that run again on top of the consensus algorithm, including the virtual machine. And then on top of those, you end up with additional layers that provide identity and maybe other middleware types of services. This is just kind of how tech markets mature over time. Maybe it starts with a monolithic solution like Bitcoin was at the very beginning. But then as you begin to add features and capabilities, what ends up happening is the function of that monolithic system sort of gets broken up into layers, and those layers each individually get optimized. And then within those layers, there spring up markets of competitors that are trying to provide additional value within a given layer. And so you could think of the smart contract piece of this as a layer you know, from one perspective, it could be a layer. And we knew that there's certainly going to be a marketplace of smart contract engines that we're going to compete with one another. And we believed pretty early on that the EVM was going to win that competition. So, given that – given that we made that decision not to build our own, but to adopt EVM, and of course, what we have today is the Besu implementation of the EVM – then we wanted to figure out, okay, so for EVM-focused, what does that mean for us? What features do we need to add? And there were a couple of different guiding principles. One was that we wanted to provide other services at the native layer – meaning that you just call an API and get the benefits of the consensus algorithm beneath, get the performance and the power and the security and the low-cost benefits of the Hashgraph consensus algorithm without having to use a smart contract, but provide the smart contract system there alongside it. So, if you needed to do something different, for example, when managing a token, if there are special features that you wanted or needed for managing your token or tokens plural, then you could use a smart contract in conjunction with that service. You get the best of both worlds – you get the low cost and performance of a native token service, and the programmability of the EVM. That was one guiding principle – it was like standards plus. You know, we wouldn't be conformant with the standard, the emerging standard for what it could be in an EVM, and we wanted the benefits of our services that we could provide that I've described. That was one. And then, secondly, the guiding principle was if we're going to be EVM focused, then we need to provide all the other tools and trappings, as it were, that developers have come to depend on in the Ethereum market. For when they're doing their development, or, so, MetaMask, for example. We knew that we needed to be MetaMask compatible. And there are a lot of different tools that developers use that are specific to that EVM layer that we ultimately needed to be able to integrate with and support. And that's why we have the JSON-RPC tool and other activities that are going on. But the goal is to provide the compatibility that the Ethereum developer community expects with the benefits of the native token service and the Hedera consensus service and the various services that we offer that are native, with all those benefits, minimizing the need for smart contracts but getting all the benefits. Does that make sense?

Genfinity - King Solomon - Founder & CEO
A million percent. I mean, I think the layers of interoperability aspect and the patchwork that we're going to see over time – I was writing down Cliff Notes as you were speaking, and for me, it's about programmability, from the developer standpoint, from the mass adoption and retail user standpoint, compatibility with services that make sense for the users, whether they be a dev or whether it be my grandma that's coming out of her house trying to leverage crypto or the technology. Benchmarking that based on utility and then thus creating kind of these layers of interoperability that make sense for how we kind of gain traction within this space as well. So, it totally makes sense to me, and I really appreciate the answer. It's actually a little bit refreshing to hear, to be like, you know, look – EVM is what it is. It's where it's at right now, so let's build an equivalency aspect that way people can utilize the benefits of the technology that we have on top of what they're already kind of used to. And that's a really great growth marker towards adoption as well. So, if I didn't misconstrue that, that's it. That's it.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
We think EVM is likely going to be around for a very long time. It's going to have its own life cycle and growth path. And we want to remain equivalent. And again, what I'll use – I'll use the term "standards plus." We want to be standards plus, where you have the compatibility and integratability with the existing standards, plus a lot of value that we provide that you don't get on a different layer one.

Genfinity - King Solomon - Founder & CEO
A hundred percent. And I know that we'll be running out of time. I've got two more questions for you, Mance. So, I know how busy you are, so we really appreciate your time today. And thank you so much for front-running us, too, and once we restarted the space, joining back. Yeah, I really, really appreciate it. Twitter gets crazy sometimes. I want to kind of ask about – this is the first question. And just your opinion on what you've seen from both retail and enterprise growth and adoption and interest cycle to cycle. The retail question is a little bit different, obviously, and this isn't about speculation, things like that. But I'm talking about the building out of things like DeFi and oracles and open-source development within Hedera. And then, enterprise – from the governing board standpoint, from whatever kind of traction you guys are getting – if you could touch based on retail and enterprise growth and what you've seen, especially it's been a hard time for most blockchain and DLT enthusiasts over the past couple of years. But what have you seen behind the scenes? Has there been a slowdown in interest, or has there been, you know, just any of your thoughts you extrapolate on that, whatever ways you want.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Sure. Well, okay, so several thoughts. One, another try to keep it brief. I know we're near the end of the hour here. One, I think when it comes to DeFi, there will continue to be improvements in infrastructure. There are still a lot of just technical challenges associated with things like DEXes, right there's still a lot of ways you can improve DEXes, as an example, and so we'll continue to see the evolution of those technologies. There's a big battle that's going on and who can build the best DEXes. I think it's going to go on for a long time. But interestingly, I don't think that it's the DEXes that are going to benefit the most from that. I don't think it's the crypto industry per se that's going to benefit the most from that. I actually believe over the next 10 years, it's the mainstream financial organizations that are going to benefit the most. They're going to see – they have seen what's going on in the DeFi world. The fintech, the non-crypto fintech community is building for those banking systems – systems that will make it possible to interface with say, the layer ones, and all this tokenization that's happening that we've talked about already. The value transfer is likely to happen first and foremost in a big way with the existing financial organizations. I mean, obviously, it's happening today in a relatively small context in the world of crypto, but the mainstreaming of it is likely – my opinion – is likely to happen when the traditional banking systems get into the game with the new tech infrastructure that supports tokenization, and then you're going to see it all take off. What ultimately happens is probably the big bank or whatever end up buying, you know, the organization, when it's possible to buy. I mean, in some DEXes, that's not possible, obviously, but you know, in the big DeFi space, it goes beyond just the DEXes. So, but we'll see consolidation, and we'll see mainstreaming. I think that will happen. The traditional financial systems are probably the ones that are going to benefit the most in the relative short term. So, that's number one. You asked about retail. Well, NFTs – you know, for pictures – has crashed. I don't see it coming back, not the way that it was. What I do see is that NFTs for that represent real value – not speculative value – taking off. In the use cases we've already talked about are good examples of that. So, I do think we're going to live in a tokenized world. NFTs are going to be at the heart of that, but it's going to be NFTs that represent real value – hard value underneath – and not just speculative value.

Genfinity - King Solomon - Founder & CEO
So, non-unitive account-based assets dealing in NFTs – where they're unique items that operate on these ledgers, so, like, digital identity and the way that zero-knowledge proofs potentially tie into that digital identity aspect. Things like real estate being tokenized. Exactly how NFTs could be. Okay, got it. Totally 100% – sorry, sorry to interrupt.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Not at all. Well, real estate is a great example, but NFTs that represent real goods – outside of real estate, right? The supply chain – when we talk about the supply chain producing, producing whatever it is – widgets – and those widgets have a digital twin – those digital twins are NFTs, by definition. They're NFTs. Maybe they're dynamic NFTs, right? I know there's a big push to make it possible to make changes to the NFT – augment the information that's associated with an NFT so that, you know, as the provenance of the owner, as the provenance of that NFT or the underlying asset changes over time, the information that flows with the NFT increases over time as well. So, dynamic NFTs that represent real-world objects – in addition to, in addition to real estate – that kind of thing. And for the past two years – you know, maybe, yeah, I would say for the past two years – even during the downturn, sort of crypto winter, as it set in, we have seen an increase in real work being done by enterprise. So, I think that enterprise now is both building, but not just doing experiments. They're also building to deploy. That is new, it's healthy, and it's happening again without our direct involvement. And it's happening a lot on Hedera. And so, all of those things are very positive. It's always cool to see a killer use case that is sort of retail focused. I'm sure there will be other – you know, more in the future. But we've never sort of hung our hat on that, so to speak. We've always assumed that some of the most boring applications – applications that don't even have a user interface that a retail user would take advantage of – are going to be some of the biggest drivers of usage of the network. You know, back-office types of applications where there's a lot of machine-to-machine interaction – transfer value, machine to machine transfer value. And I think that's still going to be the case.

Genfinity - King Solomon - Founder & CEO
I hate the fact that we're wrapping this up because I feel like you and I could probably go back and forth for like two or three hours on the Twitter space, to be honest with you. The last – and I certainly appreciate your time, man, so I know how busy you are. The last question that I kind of want to ask – it's kind of twofold. The first part of it is, you know, if you've been familiar with the Hedera ecosystem for a while, there is kind of this 100 Year Journey. Based on the technology, based on building out for sustainability, things like that – the question, the first question within this two-part question, and I hope Patches from HGraph(Punks) is listening down there because he always complains that I ask, like, fourteen-part questions – the first part that I have is: Are you, like, surprised right now being five years in – and congratulations, five years since mainnet just occurred, like, last week – have you seen more traction in the first five years than you expected within this 100 Year Journey? And then the second thing is more so for you to provide any forward-looking statements – what are you excited about, let's say in the near term, within where this space goes?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Well, you know, on the five-year point, there are some parts of this that are not nearly where I thought we would be. If you had asked me back in, say, 2017 or 2018 timeframe, how long would it take to get regulatory clarity? I don't think I would have said five years. It's taken a long time, and it doesn't feel like we're that much closer. I mean, there is progress that's being made. Congress is now involved in helping to drive some of the regulatory clarity. Those are positive steps, but it's been brutal, right? It's been brutal over the five-year period, having to operate in this sort of quagmire of uncertainty, I guess I should say. So that's been tough. In terms of adoption and development, we did add a lot of things that we didn't plan to add at the very beginning. It's not the case that I think we got it wrong. What I think is that the deeper we got into it, and as the market continued to mature – which is always the case – as the market matures, refinement on requirements for use cases always occurs. We ended up deciding to build certain things that would have been more difficult to predict at the very beginning. HCS – the Hedera Consensus Service – is an example of one of those things. It's what's driving the vast majority of the transactions on the network today, and it's been extremely well received by a lot of the enterprise users out there. And at the same time, we were able to improve the smart contract service from what it was originally to, you know, by two orders of magnitude, so that it could be viable on a network like Hedera. And then the tokenization service – so there, you know, as we've gone through the market and we're responding to market demand and understanding what the market needs in terms of features, there have been some things that have been developed that we couldn't have predicted that we would develop right at the very beginning. In terms of just usage and adoption, it's been both better and worse than I think we would have anticipated. It's fantastic to see the fact that we're driving this many transactions per second. You know, 19 billion – you say 19 billion – is amazing. And if you'd asked me three years ago, would you have 19 billion transactions at this point, I don't know what I would have said. It sounds like a lot. So, that's very cool, and we are seeing some really good use cases – some heavy-duty companies that are building really world-class use cases on top of us. And at the same time, we haven't even nearly begun crossing the chasm, as it were, as an industry. You know, it's taken a long time for the industry to mature to the point where they're the killer use cases – whether they be retail use cases or enterprise B2B use cases, or enterprise-to-consumer use cases. It's taken a while to figure out where the value is, and then start focusing in those areas to really build out solutions that solve real-world problems. We're getting there, but it's taken longer than I haven't expected back in 2017. So, it's a mixed bag, right? It's a mixed bag in terms of what I would have expected, both positively and negatively in some ways.

Genfinity - King Solomon - Founder & CEO
Here's my last question, and I just thought of it right now. Let's say three years from now... who do you think Hedera, from the technology standpoint – what ecosystems do you think will be Hedera's competitors? Or do you think at that point it almost becomes a moot point and it's more about cooperation and how, like you talked about before, those layers of interoperability start playing a part?

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
You know, what I think is going to happen is that the large – let me take one step back again just to frame this. There are a range of use cases out there, and each major category of use case ends up with its own competition. There will be competition across layer ones and other related infrastructure, in each category of use case. And in some of those categories of use cases – certainly the financial-related use cases – what I expect is that the big players are going to be getting involved in a big way. It's taken, again, it's taken a little longer than I would have expected. I thought that what happened with Meta, or Facebook at the time, in Libra was going to be great for the industry. And when that happened, I could see major competitors to Facebook gearing up to participate in a really big way. And then, you know, Facebook got in trouble with Congress and they had to give testimony before the members of Congress and make certain promises about not going to market until the various regulators had all given them a green light to do so. Well, that put the brakes on everything, with Facebook ultimately killing the project and taking the pressure off of their competitors in the payments space that slowed everything down. But I now see it beginning to pick back up. And ultimately, I don't know when it will happen, but ultimately, those big players are going to be really getting involved. When they do get involved, it's going to be that a range of layer ones will end up benefiting from that and participating. You know, these use cases are too big, too important to be dependent on a single infrastructure. And so, I think that there will be multiple infrastructures – the DLTs that are involved in supporting these types of use cases. And yeah, when that happens, those DLTs that participate, I think, are going to benefit substantially over the long term. And I've always thought – I've always thought that there'd probably be half a dozen layer ones that survive for a hundred years, right? I just think that, you know, that's going to be healthy, and it's going to be required by – you know, to support some of the most important use cases in the world. In other categories, maybe not, but for a lot of them, it's going to be a multi-platform solution that goes forward for the next hundred years.

Genfinity - King Solomon - Founder & CEO
Well, I think that sums it up very succinctly, Mance. Thank you so much for your time today. Again, guys, today we had Mance Harmon, co-CEO at Swirlds Labs, co-founder of Hedera, former CEO of Hedera, dealing in multiple different facets and multiple different segments of where this space goes. I should mention, Mance, Hello Future Live is in October. I know that's a big initiative that's going to be driving engagement within the community, and I'm looking forward to it. I know that we met down at Consensus. I'm looking forward to meeting you again down at Hello Future Live. Genfinity in collaboration with Hashback again, there are multitudes of interviews within the Hedera ecosystem, as well as all these cross-chain spaces that we do. Today, we had Mance Harmon, and we've got a lot of information from you today. Just really appreciate your time and thank you for all your efforts. I'm looking forward to talking again soon. So, thank you so much, sir, and thank you for joining in again after we rugged by the way.

Hedera & Swirlds Labs - Mance Harmon - Co-Founder & CEO
Sounds great. Yes, Leemon and I both will be down there at Hello Future Live and look forward to seeing everyone.

Genfinity - King Solomon - Founder & CEO
All right, guys, to the audience down there, thank you guys so much. We will see you next time, and thank you. Bye.