chainlink full nodeTokenizing Real-World Assets On-Chain Chainlink Tech Talk 10

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great welcome to this afternoons at least for me at least im on the east coast so this afternoons webinar on tech talk on tokenizing real world assets on chain uh were gonna let people get a few minutes uh to uh come on into the room here so please make yourselves comfortable youve got a minute to relax before we jump in and meet our guests and and talk about this really exciting uh opportunity all right i think were going to go ahead and introduce uh the folks and were going to move in as people are kind of troubling into the room uh so thanks again for joining uh my name is uh william rickaroth im an md here at uh chain link labs uh focusing on a variety of different areas but specifically trying to help us grow into new market areas and so this is an exciting new market area that were gonna talk about today the tokenization of real world assets on chain uh my guests today are patrick omeara uh chairman and ceo of invinium and uh brian hanke co-founder of cash gold uh patrick welcome thank you good to be here buddy thank you all right awesome uh patrick was kind enough to invite me to his conference in miami a few weeks back and uh it was quite it was quite the show i appreciated the the opportunity to be there with the mayors of miami and new york and everybody else it was really it was really good a great gig uh and uh welcome to you as well brian thank you for joining thanks for having me great um so i think if weve got uh folks enough folks on the panel what were going to do today here is were going to do a quick presentation just a few slides to kind of set the scene for what tokenization is i do suspect that most of the people listening in probably already know it so im not going to try to be too too basic but i do want to make sure some basic rules and contexts of what were talking about today are set talk a little bit about what some of the challenges are particularly around uh validating and ensuring that uh things arent being double spent among other things and then were gonna jump in were gonna come back to these uh these amazing gentlemen and talk a little bit more about their specific projects and uh learn um how they are tackling exactly the challenges that weve laid out in those slides um so with the controller of the slides please move us forward thank you great so first and foremost what is uh asset tokenization and i think in its basic most basic way of thinking about it it is simply a digital representation of any physical asset and that might seem a little overly simplistic but uh if i for example have uh i dont know uh 20 uh cubic yards of of of land that has a certain amount of ore in the ground that could potentially be tokenized a home would potentially be tokenized a stock or a collection of stocks could be you know one apple stock or a collection of 20 apple stocks or a collection of an entire tech portfolio any physical asset that exists in some other area can be tokenized created as a token and validated and verified on chain were going to talk about several of those use cases today um but there are some some benefits to this uh there are some challenges as you mentioned to this as well and the benefits in particular are uh liquidity accessibility transparency and composability so what is what do any of these things mean first i like to actually start with accessibility um those of us who are fortunate enough i think to live in a place like new york its not difficult for me to go buy a stock of apple um its not difficult for me to to buy a gold fund its not difficult for me necessarily to um access a variety of interesting investment opportunities but thats not the case for literally billions of people around around the planet it is not so easy for people just to say oh i want to have some exposure to apple stock or i want to have some exposure to gold i want to have some exposure to some of these really interesting and and uh fascinating uh opportunities because they simply dont have the kind of systems in place the brokerage houses and the banks and everything they would need to actually participate whereas if theres a token thats sitting on chain that that absolutely represents that physical asset one-to-one or whatever the ratio predetermined ratio was you know that you can get involved in these assets and potential appreciation of these assets without necessarily having to have all that infrastructure in your in in your place of origin its also incredibly transparent skipping over to 2.3 you know exactly what it is you have you know exactly what it represents at all times you can even know exactly which wallet its sitting in and you can verify that its not moving if its done right you can verify that theres not been double counting that this asset isnt owned by multiple parties if its done right you can also be sure that the underlying asset hasnt in fact moved and its still there physically representing the token uh that that that you would be in charge of sorry if you could go if you could stay on thats if you could stay on that screen again um liquidity uh is a huge uh advantage as well um specifically if youve got a token lets say of a house um but its an incredibly expensive house if someone wants to invest you could offer liquidity by having a thousand or ten thousand even a hundred thousand different people invest in fractionalize and split into different brands into smaller chunks so that we can participate in some really interesting um type of opportunities that we would never be able to participate in individually and lastly on composability you can build an interesting basket of options if once somethings been broken down into tokens then someone can create a basket of art and cars and real estate or whatever else and then and then you can participate in a multi you know variant strategy rather than just being physically associated with one and only one asset so theres just theres a lot of fun things that can be done in this world that were all excited to explore next slide uh quick little plug on the chain-link side of things where do we come in uh as many people on listening and might know we are platform um an oracle platform and specifically a network of node validators and operators uh including the likes of swisscom uh of deutsche telekom of um lexisnexis uh infira and and many many others who can independently validate information on our network and in and ensure that tokens uh are correctly being uh both instantiated originally without those values as well as monitored right um based on those values so were that that link between the tokens themselves and the data thats coming and flowing from all of the different off-chain resources so for example it could be um whether or not trees in a forest still exist and if they do then a carbon uh asset thats been tokenized or a carbon capture effectively a asset thats been tokenized can continue paying dividends as long as the data is validates that in fact this exists as were going to learn about today it can also be uh quite simply uh the fact that a a a bar of gold still exists and its still physically sitting where its supposed to be or bill of lading or whatever else that is the underwriting asset for a given token that can be validated constantly and monitored by the chain link network if you want to give us one more slide well wrap up right here um and this offers i think an important part of plays an important part in the in the ecosystem specifically around the transparency as we mentioned it also helps to prevent systemic failures chances of hacking people getting in and saying well actually theres three times more of this asset um or theres six times more or in fact the asset doesnt exist all of those attack vectors uh can be thwarted if youre using an oracle network which has multiple node on uh networks multiple node operators who are all independently validating that a certain uh item is either true or or false and if they all confirm that an item is in fact true the likelihood of them all being down at the same time is close to zero and the chance of them all being hacked at the same time of course is close to zero so ensuring that you get that absolute proof that in fact an asset is real that its properly uh its properly in existence and that um it hasnt been uh you know hasnt been changed since the initial um uh minting will allow you uh effectively to you know feel extremely secure that these tokens that youre trading with are in fact real uh and have genuine value the last point were going to make here before we go off to our panel is also the benefits of knowing that when youre working with this type of solution you dont necessarily need to be on a particular blockchain you can be future proofed in that decision one of the huge advantages of using a network provider like a chain link is that as long as our node providers and their node operators are on chain x y z or whatever else the information can be shared across those chains those tokens can both effectively be traded eventually across chains the information thats available can be traded across chains and you can also pull data in from the different data sources that are sitting on different chains so it really helps people to not necessarily need to know what they need to build on today knowing they can build on whatever theyd like or maybe three years from now therell be a new platform but whatever theyre doing today will allow will easily uh you know work in that new environment so enough about us enough about basic concepts i really really really want to learn more about the gentlemen that are on the call today um so im just going to go through the notes that i have here in front of me and apologies if im looking to my left im going to start uh with patrick uh you know welcome again to the podcast really interesting uh to hear from you today can you tell us a little bit about yourself a little bit about invinium um and you know whats it like to be ceo of a major company patrick let us know uh well first off thanks for having me uh pat omara im the chairman and ceo of inventium and um uh i love that you describe us as a major company thats pretty fantastic um you know we view ourselves as a startup and a scrappy startup even though were growing um for this last uh six years um and and uh focused on tokenization and uh the data associated with the asset and if the asset has no entropy um meaning um the bitcoin or ethereum theres no entropy in what that is there might be entropy in the network but not in bitcoin or ethereum but if theres a physical asset for which entropy exists so think of an infrastructure asset think of a private equity asset think of a real estate asset you need to be able to prove the state of that asset so you can value that asset so you can price that the capital stack so you can trade the capital stack right so so inventive is really focused on that right the ability to provide real-time surveillance by a digital instrument to an asset so you can understand the condition of that asset so you can value it thats great uh and were also going to welcome uh brian hinke uh great to uh have you on today brian would you mind telling us a few minutes about yourself and cash gold and what brings you here today sure um well i started off my career in corporate finance for big publicly traded companies then i did an mba and then i started my own software development company which i was working on until late 2016 and i got interested really interested in blockchain then i kind of knew about it knew about bitcoin but when i started to learn about smart contracts i was really fascinated by this technology and kind of the potential to maybe use it to make things more transparent more universal all of the things that you discussed in your introductory presentation there and i had known uh the other founder of the company gregor for many years because i used to invest in gold through his company and i kind of pitched the idea to him that we should create gold back tokens and he said yeah hed been thinking about doing that too and based on his background in in having created a vault in singapore and many years of experience in trading precious metals it was a it was really the right person to start the company with so we started it in uh 2018. im gonna actually stick uh im gonna stick with that uh because you just mentioned something can you tell us a little bit more about so what is that what does that mean exactly so youre gonna tokenize gold uh what does that process actually look like um in order for that to work on a blockchain why do that on a blockchain oh yeah i think both of those are interesting questions well because i would say because of the transparency and the immutability of the transactions but we started from kind of a different perspective i think than many other products out there in that we wanted to begin by figuring out how do we track the assets and how do we prove that the data is reliable so we we started off and we actually created a company called gram chain first and we developed this asset tracking system that could be used to track assets for tokenization but for also many other reasons like collateralization or doing swaps trustless swaps across distance and once we had created that asset tracking platform then we we built a token on top of it and the difference there is that it allowed us to provide real-time tracking data secured by the blockchain on all of the gold that backs the token great so im just trying to try to guess so youve got gold thats sitting in a i guess someone somewhere sitting in a vault that maybe has a barcode or something youre scanning it and every time you scan it it turns into a token something along those lines yeah so we give the vaults that store the gold a scanner which is basically an android device a lightly modified android device that has an rfid scanner and they attach an rfid tag to each bar they put it in a tamper-proof bag after they test it and weigh it and they use this scanner to log this bar into the system and then assign the use case or the custodian for it and then all of that data gets time stamped on the blockchain and it becomes public you know virtually in real time so people can always see where the bars what type of bars are they whats the purity whats the weight when did they come in when did they leave if they were redeemed and thats all provided by the vaults we cant manipulate that data or change it or anything the only thing that we can do is once the vault has assigned the bar to us as a custodian then we can set the use case and in the case of the token its either locked or its unlocked if its locked it can be used to create tokens if its unlocked it can be withdrawn okay thats kind of how it works at a high level okay ive got a few more questions but im going to try to mix it up and im going to switch back over to pat and well come back and get more into that story um so you used some terms that im not super familiar with when we when you talked earlier specifically entropy i feel like thats a thats a term that i that i find in crossword puzzles uh and i think i know what it means but can you just go a little more into detail again so whats a good example of something that is being tokenized on nvidia today and and whether thats and has entropy or not you have to explain to me what that might mean yeah yeah so entropy is um that is a concept that systems break down right so it doesnt matter how perfectly made the boiler is over time steam engines will break down um and all systems and processes break down over time so the dollar yen trade even though it lasted forever eventually entropy happened and and that trade died right so they talk about entropy in an asset like a building so if you dont maintain the building it breaks down over time because of the elements the mechanical systems break down does that make sense um and so entropy is is the the breaking down of a system of process or an asset and so one bitcoin is always one bitcoin but if you buy a building and you dont maintain it it begins to degrade right and so you need to be able to if you have a digital instrument that represents uh ownership right so think of the token the tokens rights to the asset have to be legally defined right and that legally legal definition typically we when people say whats the um operating system in venium we typically say jokingly the the chance record of the state of delaware right or english common law right meaning that token represents a legal contract or right or interest or share or note or bond or whatever it might be so it it that represents that and in that token its a new form of stock certification but because its digital we can have it accessing data in real time so it used to be that you had a stack of documents and then youd go send somebody to tell you how your assets doing now those documents are all attached to the token and that token can real time look into the data systems of that asset itself an office building a port an airport a toll road and you can see things like foot traffic you can see rent payments all of those types of things and so what happens is you can see real time how that data uh uh is evidencing the performance of the asset rent payments coming in foot traffic in the mall tolls being paid on a toll road and so what happens is you dont necessarily want to put all that data on the blockchain but what you want to do is you want to credential that data because if all assets all physical assets are eventually going to be tokenized you need one of two things the worlds largest database or you need to be able to make data composable at the edge so that it can be read by smart contracts and thats what inventium does so you own a building and rather than sending your data to a database that is pulled from youre making like a linkedin page for your building right your credentialing the data at its source and then inventing them to the mechanism by which that data can be understood and processed through a smart contract that sounds like a probably a pretty important use case for independent validation im guessing right because otherwise that the flow of that data is absolutely critical to whether or not the asset is shown on chain of having value controlling that flow and ensuring that flow is secure im guessing is probably one of the single most important things you guys need to do yeah so in accounting thats called observability right the observability of the inputs because if you are a corporation and you have a bunch of assets on your balance sheet if youre not able to prove to your auditors real time the source of the data and the provenance of it they impair that asset from whats called lay level one a a a liquid asset to level two a market alternative to all the way level three an illiquid asset and what that means is you discount the value on your balance sheet dramatically but if we can have real-time information about the performance of that asset and the the input is observable and you have a sophisticated model and any period comp suddenly im a big corporation i can carry that asset at full price so it unlocks enormous value so your ability to borrow against it goes up the ability to trade against it goes up theres third-party marks and it just makes the market that much more efficient because you have the ability to get real-time data on the performance of that asset and if theres not good data one of the two things happened either theres a diminution of the price a a a lack of data discount or if people dont trust the data enough they just leave the market all together and what were doing is giving you good data to entice institutional investors to look at all sorts of assets that they havent looked at historically on an atomic basis or individual basis instead of wrapped up in a big securitization um and and the discounts that happen people can rely on them if theres a discount on a real estate building in new york because you dont trust the data you know in midtown manhattan on a skyscraper you might discount it five percent or seven percent but if its in malaysia in kuala lumpur all of a sudden you might discount it 30 to 35 does that make sense because youre not sure about the macro market and youre much more focused on the individual address so you know bad data has huge impact okay i think i i think i understand i mean its obviously an area for for folks that are very uh you know well attuned to that market im guessing that if i am a developer or if i am trying to get into that space i can come to you for to find clients or to find tool set or to find uh opportunities to build in new areas so you know what whats the first thing im going to find when i come out and and interact with your team sure so typically we say that price discovery we think is the killer app for blockchain on why enterprises are going to use it big corporations are all going to go to blockchain because they can prove the validity of the data so they can price assets more effectively so they can carry them on their balance sheet correctly so usually we have large asset owners and so a we we call this the pathway to liquidity number one better accounting treatment number two the regulators give you better regulatory capital release number three you can borrow against it better collateralization then therell be secondary trading and then lastly new novel forms of distribution but it all starts with accounting treatment where you can prove the value of the asset so a guy whos already got a great asset but its being held at a lower amount he wants to prove this is my great asset right and and then and then right people who are regulated all of a sudden they can go to the regulator and say hey regulator you always give me a discount because you didnt trust my balance sheet i can prove to you the value of this asset right and so this is where tokenization is unlocking value for large corporations um individuals who have assets tied up in illiquid things real estate right um that that typically they could borrow at very you know depressed um uh uh full value appraisals um because that you know they can only borrow 40 50 60 against the value of that asset and why because the bank themselves has to haircut what that value is because they need to make sure theyre covered yeah yeah so i think that validation is its critic its obviously critical without an independent validation without the validation layer without the the truth has been or better bigger than trust which is kind of one of our slogans here at uh at uh chain link you you actually cant function the market literally cannot function because you you cant under collateralize anything uh if in fact you cant prove that its there so its critical for you im kind of curious im going to switch back over to brian um i think my biggest concern might be i dont know i guess double counting things of this nature so how important is independent validation in your in your world um and is there something again that you guys are doing that sets you apart well that really goes back to the whole point of gram chain um the scanners as i mentioned theyre operated only by the vaults and we work with accredited vaults like brinks and loomis and these companies thats what they do they store assets theyre insured to do it theyre independently audited as well so the fact that only they can add the data to log the bars in and out has a high level of um what am i trying to say here its um its very reliable data and then of course you can theres no reason you cant also do another independent audit on top of that which we did at the end of last year just to validate the system and uh we used bureau veritas for that so you can still do traditional audits its just basically another layer of data and its its more detailed theres more detail in it and its real time so you can always do a periodic audit to validate this data but um we think its extremely reliable data that has good processes built in place thats excellent and can can i piggyback off that william so i i think that one of the things that you can do is when youre talking about processes you know proof of a process right we can prove that this process happened or proof of source right an iot sensor etc but when youre looking at data and the origin of data um one of the things that happens when you move data it changes and so in venue what we do is we go to the system that creates the data and the moment its created we run a sha-256 we create a hash stick that hash in the payload of a block with information about how it was created who was the individual who put the data in etc and because its contemporaneous with the the um data creation if somebody changes it in the future and you pull that data up those hashes wont match does that make sense so youre literally going to be able to say hey this has been altered were going to be able to prove it and so fraud can still happen but it has to be pre-you know pre-planned way before the data goes into the system right and what youre doing is youre creating an audit trail to catch the person when fraud gets identified so what youre doing is youre creating a limited window for opportunity right theres no happenstance opportunities for fraud it has to be planned years in advance and if you can use tools like uh you know iot sensors foot traffic sensors motion activated sensors all the way to water meters with toilet flushes the ability to fake data you know they they look at toilet flushes as a proxy for occupation of the building right how how full it is and if you can have iot sensors motion sensors and toilet flushes as well as electricity usage you can tell pretty much exactly how often that buildings being used you know what i mean and you correlate those data elements anchor them into the payload of a block and you can paint a picture that its really hard to to spoof or fake does that make sense it does you lost me it totally flushes but other than you know generally speaking yeah i i would add to that we do exactly the same thing the theres this audit trail so if a mistake or fraudulent transaction does happen its going to be detected its going to be known who did it when they did it where they did it if theres too high a data error rate at a vault then its going to be addressed and if its a fraud then thats going to be figured out very quickly and the window of opportunity to catch them is unlimited because this data is stored forever in the in the blockchain but its with commercial vaults that store gold its very unlikely for them to misappropriate the funds because their business is simply storage of of assets thats all they do theyre not like a fund or a kind of financial industry where they can take the assets and kind of gamble them or re-hypothecate them they really just keep the assets secure so theyre not the rate of fraud in a commercial vault like loomis is going to be exceed exceedingly low if it happens at all right and im guessing that the chain like proof of reserve solution is playing an important role in all of this right its keeping taps on exactly the the amount thats in the in the vault ensuring that you dont ever uh over mint things of that nature is that is that what you intrigued you the most about it yeah well that just adds another layer of security and protection because now you have 16 independent nodes that are validating this data and recording it and setting it in stone above and beyond just simply embedding a hash in the blockchain so its basically impossible if an error or mistake or a fraud does happen to sweep it under the rug you just cant do it um and then of course theres the benefit that these nodes and the chain link technology can make the data available across multiple chains so if we want to expand onto other block chains its a good way to do it but yeah as you mentioned the oracle the smart contracts dont allow the minting of tokens unless theres locked gold which is more than the number of tokens outstanding so if theres a hundred thousand tokens and theres a hundred and ten thousand grams of gold locked in the vault then you can win 10 000 tokens but you cannot mint more its simply not allowed by the smart contract thats fantastic i imagine um the percentage of total gold thats tokenized today is probably very very little and so the market opportunity is huge is that is is uh is it just you know what what are what are some some bold predictions as far as your thoughts as to what you guys are gonna you know see happen in the market the next couple years well i think tokenization will obviously be used a lot more especially for gold and precious metals because they really lend themselves to that use case its a lot easier than something like a building but i think therell also be a lot more growth in in non-fungible assets and the use of nfts not just to represent digital goods but to represent real goods of all kinds whether thats buildings or cars or artworks the vast majority of the nfts out there are just theyre backed only by some kind of digital good or digital intellectual property or something and there hasnt been a lot of usage yet of physical goods but i think thats where therell be a lot of growth and im guessing that the system that i guess both pat system and your system and and the proof of reserve system would play i think a critical role in all that growth as well i mean theres theres no reason why what youve done for vertical x couldnt necessarily apply to these other areas if im if im correct yeah thats great you know one just quick aside years ago i went to a conference and somebody uh talked about tokenizing gold already in the ground uh as of as a way of raising money basically selling the gold already in the ground based on estimates at like i dont know x percent and a discount or something so they could raise the money that they would need to go and mine it or something like that is that is that a thing are people doing this is if you if you run into that i know thats out of left field but i just it seems as an interesting potential derivation of what youre talking about i ive heard it done and i mean ive heard it discussed i dont know a lot about specific cases i think that would be something that would be a lot more for patricks company than ours i do know um theres a company called tradewinds that has a permission blockchain that has a gold token which if i remember and understand correctly its backed by above ground gold but it could be gold thats in any kind of state like a working process it could be on its way to being refined or or could be not yet minted or cast into a final product and i think they were cooperating with a canadian mint or maybe uk mint on that but i i think its coming but thats it becomes more complicated because of all of the legal ramifications and how its more difficult to prove whats actually backing it and so on so lets lets spend a couple minutes on that then and ill switch back to you patrick we talked about all the benefits i think everyones sold on the benefits im sold on the benefits obviously we all we all believe in the benefits we wouldnt work where we work uh what are the challenges that youre seeing on your side you know again you had this amazing conference about a month back uh the room was packed a lot of really big name companies there um im guessing theyre not all 100 on board and tokenizing already right so theyre going to see some challenges what challenges do you see in your space that you are helping these companies through so thats a broad question and and let me kind of narrow it down to a couple discrete answers the first is um most of our clients today we in our sales pitch dont mention the word blockchain at all just like because what were doing is were solving a pain point in their business so you know oracle does not go out selling sql databases theyre celebrating selling uh enterprise systems that deliver outcomes for uh their clients so what were doing is when we come into our clients we talk about better data data provenance the ability to prove observability better balance sheet treatment uh and and when they go on to this we say great theyre doing that and then they realize theyve begun a process of anchoring data to a chain that can then be linked to a digital instrument which represents the capital stack now the devil and the holy spirit are in the details and this is not just a technology problem its its a legal problem where that technology represents an interest in an asset and it has to be able to be perfected in a manner where that data thats being processed either in legacy systems or smart contracts because of a smart contract is automating and cutting out middlemen while still performing middle function you need to be able to prove that the data being processed is good data so thats what no im just going to say this i guess this already happens today so what i love about this thing is this is a process that already has to happen its not like youre inventing a product youre just moving this into and youre doing it more efficient way right so today how does that actually function today they actually have to what send someone out uh what is the manual process thats happening today thats going to be replaced by by this system yeah so we have one of the largest asset managers in the world as a client right and they come in and they they are for their real estate funds uh they that they manage on behalf of third parties they send somebody they get an annual audit um or evaluation on their building and theyre literally you know they manage many trillions of dollars and they have gotten the price down to sixteen thousand dollars a mark um you know or evaluation what we do is because we onboard that building we use our our software we can feed that data real time you you know we hash it into the payload of a block we use very basic robotic process automation we push it into the valuation tools we get them out of data collection and data entry cushman jll cbre houlihan loki and they can now do a mark for one thousand dollars so instead of sixteen thousand where theyre going collecting raw documents bringing it and looking at it were getting they can not only see every previous quarters mark theyre now giving a mark instead of sixteen thousand for 1 000 and what happens is for that company that you used to get one mark a year all of a sudden theyre getting four marks and every piece of data that is going into a unique cell they can see the in period data but not only that the formula from which it was derived and and and the instrument from which they extracted that data element and prove that that was the correct data at the time of data extraction so what this does is it provides total provenance to the data elements going into the calculation so this is keeping the asset ready for sale every day of the week right because the data is 100 auditable all the way through and because we can automate this they can get more frequent marks with total observability for less money and so literally including this cost of our software they get four marks a year for literally six or seven thousand dollars less per building than they were getting you know previously even though they were the biggest asset manager in the world yeah so yeah it does so so uh whatever legal and regulatory hurdles already exist the only thing that youre doing is you have to convince all those parties that the data coming to the system is just as good as the manual verification that they were getting um and and in fact its going to be better because youre going to have multiple sources youre going to have the providence youre going to have the digital certificate youre going to have it in proof that it hasnt changed you can use the chain like node network if you need to vow and have independent validation so youre actually going to be above and beyond what a manual uh correct so most of what were replacing is an excel spreadsheet driven system even though these are the largest system you know companies in the world literally the excel is 80 of the time and what were doing is automating where middleware is an accountant and a piece of paper right and what were doing is were going directly to the data systems hashing into the payload of the block and extracting the data element pushing it into the calculation tool and theres less chance of whats called fat fingering a calculation right you hit the wrong key etc right and theres very famous examples of this right there was a the chief investment officer for the pension plan state pension plan for the state of pennsylvania was fired for misappropriating funds and what they found is three years prior there had been a fat finger and it took them a million man hours to find the error a million man hours right that they were paying 3 400 because it was a law firm doing it per um you know you know per hour and and they they eventually uncovered it they identified it they spent literally two to three hundred million dollars identifying a manual data entry error and what we do is we automate that calculate it and if theres a break in the calculation its immediately flagged this seems out of band this seems a little bit you know wide for the system so large banks who are looking at collateralization for their loans and looking the underlying asset if theres a number that seems out of sequence it immediately flags a human being to come in and put you know a second set of eyes on it so we got some questions flowing in from the audience we only have a few minutes left um i i dont know if we advertise this as 45 minutes uh approximately for the for the viewers we might run a few minutes over because this is really actually pretty great weve got a lot a lot of questions i want to switch back to brian really quick some of the questions that are coming in um are actually from the retail side which i think is interesting and its just kind of about the flow of okay so i own this i own this this token can it be converted at some point to actual delivery of gold uh what happens if god forbid you guys were to i dont choose to stop operating or choose to change your business model and go do something else what what type of what does tokenization offer when it comes to security uh for the the end holder of the token um in your model well so sorry that was for brian sorry well thats a lot a lot to cover in one question but ill try uh so yes theyre redeemable theyre designed to be redeemable and especially redeemable in in practical amounts so we have bars as small as a hundred grams which is about six thousand dollars which compares with like um industry standard 400 ounce bars which are now nearing 800 900 000 and you can redeem them from any of the vaults in the system which were trying to add more so eventually its going to be distributed all over the globe but right now we have uh dubai zurich singapore dallas and well be adding frankfurt soon so you can either pick up your bar from most of the vaults or you can have it shipped to your home address or you can redeem it and then sell it for usd so thats thats encouraged i mean thats available on demand we also accept gold deposits if theyre on the list of our accepted gold and then create tokens on that i think the other part of the question was how the tokens get created no i was just it was just like lets i guess do you guys have to be involved so someone has if someone has this this if they purchase gold uh tokens uh through you and they want to go to one of your partners in the vault and they want to get physical delivery are you involved in that relationship or can they just prove i mean its kind of because we have to instruct them to do that but the process is all automated its kind of like online shopping so they go on our website they log in the system detects how many tokens they have in their wallet and then they can just kind of pick the bars they want and then theyre theyre purchasing that bar and the checkout process instead of paying with a credit card they pay with the tokens right and then they choose whether they want to pick it up in person or whether they want to ship it or whether they just want to receive the usd value in their bank account and theres no lock up right they can come in and out if fiat whatever absolutely its available on demand anytime thats the whole concept of the system is for it to be freely convertible to and from tokens and then i think they also asked what what happens if the company gets into trouble or something well the company doesnt own the gold the token holder owns the gold right so i mean and the chain link proof of reserve and our smart contracts ensure that we can never issue more tokens than we have gold so if we held some tokens we could withdraw that gold but if we dont hold tokens we cannot withdraw the gold i it would be very difficult because of the way all the checks and balances and the smart contracts are set up and and if we did manage to do it somehow you know it would be theft it would be fraud and it would be detected quite quickly so just really quickly were going to finish up with brian and then well switch back to patrick um any any kind of advice for anyone listening today if theyre trying to get into into your space uh some some thoughts about how to get started or how to get either get started with you directly or in the metals area well yeah at two things i mean you need to think about how youre gonna track the asset and how youre gonna prove it and of course gram chain is available to other companies who want to use it or of course they can create their own solution but they need to have a solid way to track the asset and prove its existence and prove that its not encumbered the other thing that i think is extremely important is you have to choose your jurisdiction and your regulation because if youre not properly regulated and compliant youre not going to get anywhere youre not going to get a bank account youre not going to get listed on exchanges i mean in the worst case youll get shut down but if you operate outside of a regulated environment or in a gray area you will find it very difficult to do business so you need to do your legal research first before you start building okay great well thank you so much um then uh pat theres several questions i dont know if youre following the chat i think about theres too many questions here so im just pick picking the one or two that might be the most interesting i mean i think with the what im seeing here um can i answer the why blockchain yeah lets do that one ill let you choose your own question yeah is that all right because i i think thats a great question right why blockchain why arent you doing this in a centralized database right and the answer is if you want to sell the building in the future or youre going to fractionalize this or these tokens are going to exist in multiple jurisdictions and and we can imagine there where theyre listed on bulletin boards or alternative trading systems or exchanges and theyre trading back and forth you have to be able to commute trust in the performance data of the asset and what were doing is were giving a real-time digital notarization and thats not saying the data is true its saying this is the data just like when you go into a bank and you notarize something theyre not theyre not saying what youre saying is true that youre signing just that you signed it on this date and what were doing is saying this is the information on this date you can look at this information real time you can see the historical you can prove it hasnt been altered since moment of creation and what that does is if its in a single database that can be manipulated right and what were doing is were commuting trust in the performance data of the asset so that that can be connected to a digital instrument which represents a piece of the capital stack and so what that does is right now real estate you have 120 day diligence from the time you strike a price because you need to do you know an asbestos a structural engineering mechanical engineering reports etc but here if you can look at their performance data on a daily weekly monthly quarterly basis and a third party has been validating it all the way along youll literally be able to take a piece of that and shorten that diligence to three to five days so youre using blockchain to commute trust in underlying asset performance data not just the ledger of ownership itself does that make sense it does and and uh theres actually one more question that im gonna uh im gonna leave you with is your last one on here that i thought was interesting which is uh specific to the business model are are retail investors coming to you to um effectively uh purchase these things or are platform developers and people who want to tokenize their assets coming to you as a platform for that process so specifically who is it youre targeting and whos going to be the most interested in speaking with you so the people who hire us are typically the general partners in limited partnerships where instead of them setting a mark on the asset theyre getting a third party too and theyre automating it so that their limited partners have more trust in them so if im calpers or calstrs or canadian pension plan and i want to put more money into alternatives as a fiduciary i cant if the gp is setting the mark right its got to be a de minimis amount but if theres a third party sending a monthly or quarterly amount as a fiduciary they can allocate more to it so the gp says to the big institutional lp i can take more of your money these marks arent being set by me theyre being set up by hula and loki or cbre and so we get hired by the gps for the benefit of the lps who want to buy it now these will be listed on htss and exchanges so were affiliated with about seven of those three of whom we have investments in but in a tokenization platform but theres an entire ecosystem and were just the data layer that informs the performance of the digital instrument were not the exchange were not the custodian were not the bulletin board were not the um you know were not the calculation engine were not the valuation engine were just stringing as the data flows through all those systems and is attached to the token great listen guys thank you both so much i think we are getting to the end of the time weve probably lost a few of our viewers already uh this this is one of those spaces where honestly you could you could have six different people on here we could talk for about 17 different hours um somebody said in this chat at some point that if you go to a world where everything is everything might be digital its unbelievable to think uh how much activity that we are gonna come through these pipes so congratulations to both of you on amazing progress so so far um i do want to uh plug uh a feedback survey so for those of you who are listening theres going to be a link to a feedback survey in the um in the chat window um let us know whether were entertaining you boring boring you doing whatever else so we can get better next time uh and then just lets do 10 seconds for each of you to say goodbye to the items or anything you want to leave the last thoughts for for the folks uh brian just uh thanks for having us if you want to learn more about what were doing just check out our website its at cash.gold graham chain is at grand chain dot com great and thats graham is in the measure of unit uh g-r-a-m gram chain correct thats it uh and pat yeah hey thanks for having us its its its great to be connected to chain linked and and to your entire ecosystem and uh the one kind of last thought ill give is that for us to move to a decentralized reality is going to take an ecosystem not a single monolith and we need lots of people plugging in providing services all the way along um for these things to trade its early days we need a lot of development to be done for this to be functioning the way that it should be literally were talking about tens and tens or hundreds of trillions of dollars of assets that are going to be tokenized and theyre going to be traded and theyre going to be listed and everything from surveillance of a rent payment all the way to iot sensors to green bonds and carbon credits and proving the savings of energy all of this is going to happen its all going to need oracles to power smart contracts and thats why were so excited to be affiliated with you guys attending thanks great thank you all thanks to our audience and uh best of luck to everyone you Learn about the innovative tokenization use cases and critical strategies enterprises can leverage to design and build smart contract applications.Speakers: Patrick OMeara, Chairman & CEO, Inveniam Brian Hankey, Co-founder, CACHE Gold Moderator: William Herkelrath, Managing Director, Chainlink Labs Learn more about Chainlink for Enterprises: Learn more about Chainlink: Website: Docs: Twitter: Learn more about Inveniam: Website: Twitter: Learn more about CACHE Gold: Website: Medium: Twitter: Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains. Chainlink Chainlink,