Eric Saraniecki on Why Institutional Blockchains Will Eat Global Finance

**Robbie** (0:00)
All righty, guys, we're back here. We've got Eric Saranac in the office, in the nest, in the Tokenization Tower. We're gonna be talking about the rise of institutional blockchains, Canton. It's gonna get fiery, it's gonna get spicy. Eric, you're the first ever guest on the show.

**Eric Saranac** (0:14)
Truly honored.

**Robbie** (0:14)
In the office, you're live on air now. Welcome to the Tokenization Tower.

**Eric Saranac** (0:19)
Thank you very much for having me. This is exciting. Yeah, absolutely, man. It's been a long time coming, but we're excited to have you. And you guys are doing some great work in the space, so we're excited to chat. Maybe you can just tell us a little bit about yourself. First off, what is some of your background and generally how you ended up with Canton Network? Yeah, sure. So I'm one of the co-founders of Digital Asset. I've been doing this 12 years. Prior to that, I spent about a decade at DRW. I got to join DRW super early, like down in the pits, paper sheets, fist fights, sort of a thing. I was like that University of Chicago football fraternity guy. So I could do math in my head, but I can get into fist fight at the same time. It was kind of like right place and time for me to go into the pits. And I've been in Bitcoin since 2010, and I helped start Cumberland with one of the original pizza transaction guys. So just kind of like, you know, I've been lucky enough to have a group around me of people that have been super early into the space, and I just kind of been very, very active in it. And we had kind of a dual mandate in Cumberland, which was market make and provide liquidity, which would bring more institutional demand, but also invest in the things that we thought was missing, or build the company if it didn't exist. And really, that was the origin story of Digital Asset was, we were looking for things that were really going to bring institutions into the space to adopt and use these ecosystems, not just speculate on them. And we didn't really see anything that was taking that seriously. And that goes all the way back to late 2013, early 2014, formally incorporated DA in 14 and left DRW for that, not that long after. So how did you fund Bitcoin early on? Yeah, I've been asked this a few times and my actual memories are a little bit later than when I actually got started. I will jokingly say something like, oh, well, you could buy drugs with it online. But the Silk Road was 2011 But I'm trying to remember where I got in a little bit earlier. I think it just had to do with some very early street transactions and kind of doing cash swaps for Bitcoin. I stopped doing that once I saw the source of some of these Bitcoins.
But I think it had a lot to do with that peer group that I had at DRW and some of the people that were very early. It was just kind of in the zeitgeist somehow over there.

**Robbie** (2:32)
So on our first episode here in The Nest, it was yesterday. It was just Rob and I. And we were talking a lot about how there's a regime shift ongoing in the space. We're seeing the rise of the professional. We're seeing the institutions come on board. We're seeing just this general shift in terms of token structures, equity structures, how people are positioning their brands, all of that. Canton has obviously been, it's been at least three years that you guys have been creating this entity and this blockchain. You guys have seen this coming. What is this regime shift from your perspective? How would you describe this kind of maturation and growing up phase that the industry is currently in?
What's going to be gone? What's here to stay? What are we going to, what are our do's and don'ts?

**Eric Saranac** (3:24)
Yeah, okay. Well, I mean, not to disagree with my gracious host to begin with, but I don't really agree with the C-shift. I mean, I think that it's more kind of a growing awareness, more than a shift. Like going back to the Cumberland days when we started this thing, the Cumberland thing, I didn't start anything else.
Those are institutions. Those are really big firms. The people that are trading this for size are really big firms. You look at what Binance and Coinbase and OKX have become, they are huge firms. These are institutions by every definition of the word. And so if I agreed with the premise, what I would say is that the children grew up and became really valuable. But I think that it's always been the undercurrent from the beginning. I've personally rejected this sort of its peer-to-peer, censorship-resistant, decentralization, disintermediation, that narrative has never resonated with me, probably to my own financial detriment, because I've never been as sort of psychologically committed to this, like these other ecosystems. And I've spent 12 years, along with many other people, building Digital Asset & Canton. So that's really where my passion is focused has been most of that time. But I think it's more, the space has been very young. I won't use like negative words like juvenile or fucking childish, but it has been for a very long time. And they're getting kind of squeezed out by, well, the next era of evolution is much larger scale. And that is driven by different participants, generally speaking. And they have a different set of requirements. And so just kind of everybody waking up to that. And even if it's yourself, I mean, think about if you're a Bitcoin OG and you're getting, you know, a threat of being kidnapped in Paris right now. Like it's a very visceral real moment of something that you've probably thought about a lot, but suddenly became very real. And that's partially driven by the global awareness. I mean, look out your window. Everybody here knows what Bitcoin is now. So like that sort of general global awareness, people understanding how they can start to attack it, what it means for individuals, all that sort of stuff is kind of coming together at the same time. So I think it's mostly just everybody waking up to what they already knew. And so you're saying the institutions were kind of already here. Everyone's sort of waking up to that. I see Bitcoin as sort of just another asset class. Nothing like truly groundbreaking in a certain sense. Nothing. It is, you know, it's groundbreaking in the sense that, you know, you have this distributed ledger technology. Maybe that's a bit more groundbreaking. But as an asset class, an alternative currency, we have gold, right? We have these sorts of things. What is the mandate that you set out for Digital Asset & Canton? Given the thesis that you already explained, right? We kind of have this opportunity to work through the emergence of this new asset class with new technology. What was the value that you saw it could provide early on? And how did you set out to support that with Canton? I mean, I sometimes say this is like we're the last industry where when I click the button in my phone, it doesn't actually happen.