Intro: Welcome to the Collective Intelligence Labs podcast where we talk with the world's best leaders about an inevitable transition to the Web3 century creative economy. Please welcome your host, CEO of the Collective Intelligence Labs, Alex Shkor.
Alex: So, Hi everyone! Today we have with us Ray Chohan, co-founder of Pet Snap leading R&D intelligence software and unicorn company. Ray is a big proponent and investor in Web3 industry. And I think Ray is a perfect example of a profile of a successful IT entrepreneur, who got deep into Web3 space.
And from my personal opinion, this is exactly the profile of a person who we need more in the Web3 space in order to push adoption to the next level. Tell us Ray, how can we bring more people like you to the industry? What is still missing in crypto for people from enterprise to come on the massive scale? Oh, maybe you can just start with sharing your story on how you got into crypto.
Ray: Oh cheers, Alex. Really looking forward to this conversation today. So I think it might be useful just to kind of set the stage and share with the audience how I ever ended up exploring this rabbit hole in the first place.
So probably like most folks, especially folks from a B2B enterprise background, similar to myself. It would have been in 2017 actually, Alex. I'm always curious and listening to certain podcasts, consuming certain content. If our memory goes back to 2017, it would have been what Q2 and things started really picking up pace in terms of price action, noise especially around Ethereum and Bitcoin and some of the other funny saying now traditional assets. I call it BOGs. so ETH and BTC, just the noise and trying to understand that technology.
So initially just off podcast, and what really caught my attention back in 2017. It would have been, Alex, the concept around smart contracts. So just the underlying principle around smart contracts, smart contract economy, Blockchain and smart contracts could potentially enable that underlying narrative really resonated with me, Alex.
Alex: And actually I think, was a trigger for many people, especially in legal tech. And I think this buzzword smart contract… hence Buterin doesn't like it anymore. I think it was like, it's actually a really good idea to PR it this way. Yeah, I see how, how it brings you to the space, especially from IP perspective and legal frameworks, which smart contracts are bringing for like legal tech. And for advancing the IP industry?
Ray: I couldn't agree more, it was definitely that underlying technology, and then connecting it with what I see within, obviously the IP space, the whole kind of umbrella of legal tech. Also Alex, your personal experience, right? Whenever you purchase a house, or ever make a large purchase, the actual process of people, paperwork, and 15 conversations, it's not much fun, right?
So, when you learn about a potentially game changing, and revolutionary capability, like smart contracts, like wow, holy shit, I can't wait for this technology to be released. To be fair, I was just a fan of what it was, being because like, please hurry up, can you build this because this would be really useful. I don't have to speak to five, six people in the value chain. Those people are getting paid commissions in that value chain, which is really annoying because you sometimes don't need them.
And for code to be law, I really love that phrase, that really caught my imagination. So that was the initial genesis of my journey down the wonderful world of digital assets, Blockchain stroke call it crypto.
Alex: Got it. So, let's talk now about a nice balance. So, imagine if in the future when Web3 really takes off in like, we will have really massive adoption, and at some point, obviously existing IP assets will be on the chain and tokenize these NFTs and it's maybe not even will be patents anymore. How do you think it will affect industry? So, what do you think this change will lead to for patent system itself?
Ray: Really good question. This one I have been pondering for quite a while. So, see my organization, we're kind of the one of the world leaders in providing analytics to stakeholders who have exposure to patents, who work with the asset class, and also the surrounding teams who are involved in innovation. And we do kind of more of that broader body of work around innovation, intelligence, that's kind of our space, but with patents always close to our heart.
So, to your question, do I see the underlying system which has been around for well over 100 years? Do I see that changing anytime soon, within the next five to six years? Probably not! These things take time, that these are fundamentally institutions. They are public, private institutions, and government organizations.
So, the actual patent system? Yes, it can be highly inefficient. But it has served a lot of innovators well, over the last 150 years. So, I don't see it disappearing anytime soon. Do I see this system evolving and adapting to the world of Web3? Yes, I see that, what that will look like in the first innings, how that's provisioned in the first innings.
There's a couple of ideas being kicked around. I think there's some really interesting companies like IP, we're doing some really positive work in this space.
Also, companies like molecule.to who have launched a really compelling concept around early-stage biomedical research and launched the first ever, I think tech transfer based, Dow decentralized autonomous organization, I think that's pretty cool, where you're enabling early stage researchers to actually have ownership within the fundamental R&D and then have upside and economic upside upon success. I think that's really interesting.
So, I think in the first innings, we are going to see this convergence of Web3 eating away and improving part of the IP system. I don't think it will boil the ocean in one go, I think no one's going to do that. To be fair, not even bitcoins doing that with the monetary system, right. Everything is done in gentle baby steps, and you incrementally add value, win hearts and minds, including governments, and, and then take people on, on the journey.
So that's where I see things from an IP standpoint. The good news within the IP space, this is specifically patents, trademarks, maybe federated data rooms within R&D projects, that's potentially low hanging fruit.
And from what we see in the market, customers are open, they are fertile for deploying this technology to enhance R&D, improve openness around their IP strategy and innovation strategy. So, I do see things picking up in the next 24 to 36 months.
Alex: Yeah, thank you for sharing these insights. It's actually, what I really like about this conversation, like what I think very valuable to share with the rest of the audience is that you guys in Patna also started from the Tech Transfer industry, right? And in this also was the first kind of entrance point to the market of IP and RD intelligence.
And looks like we might have the same thing with NFT and DeFi, is just like a bit different type of change, because like it's much more in the change of world business process of R&D and because you need to put these assets on chain, you need to find a new, totally new way for commercialization through DeFi, through like tokenized assets.
Do you think these similarities have some, any of some foundational reason? Or is it just like, happens to be the same way as you guys did?
Ray: Good questions. I've reflected on this one for quite a while. I think the tech transfer community and ecosystem is probably a really fertile place to start, when you're launching new technology, new workflows, new ways of doing things.
So, I think as a beachhead, it's compelling. It worked well for us, especially in our, what I call patent analytics 2.0 phase that was back in 2012, 2013. Right? Also working with that community, you're kind of at the top of the funnel, right? Government funded early-stage research, academic research, where that goes, be it a license, be it a spin out company from a university, which is basically an incubator, you're right at the beginning of that funnel.
So, at the early stage, to start moving your assets onto a blockchain, to start from day one on launching your research or your early-stage company through a DAO and tokenizing it of the, I think it makes sense, right? It's at the beginning of the journey.
So, if you kind of start with that form factor, as that spin out company scales and hit certain milestones, or that technology further develops and it's got people knocking on the door to license it, because it's a really compelling technology. I think if you start off with a Web3 form factor from the roots of tech transfer, it's a healthy place, right? It's a very natural place. The barrier to entry with tech transfer is low, because we're at the beginning of the story, be a license, be at a federated data room, be it a tokenized, small spin out company from a tech transfer office.
Alex: Totally agree. And it's fair, there is an export, I think about this and like, they are basically much more focused on creation of value and Web3 unlocks even more opportunities to create value and capture value kind of automatically when your assets are tokenized.
Now let's switch back to DeFi a bit. So, like it's actually one of the first use cases which took off in Web3 space. And I'm just wondering, what do you think about this, not really popular, but still a widespread opinion, that DeFi is not really a use case of Web3, because it's just an infrastructure for other use cases. And basically, the reasoning behind this idea is that world financial space is just an infrastructure for real use cases, real industries.
So, in my opinion, I really think that once we bring real assets on chain, whatever it can be like an applied DeFi tools for this, it can really accelerate adoption of Web3 space. What do you think about this? What do you think about DeFi and about considering it as a use case or not?
Ray: I mean, DeFi as a, obviously, a stream of Web3 is compelling Ryan, and it's people talking about the DeFi summer, but it seemed like it ended up being the NFT summer rather than the DeFi summer, whether we can come to come on to NFT's later on. But I think DeFi, if you look at it from the first principles standpoint, it has huge potential.
I mean, if you look at Uniswap version three right, in particular version three, which is a lot more user friendly, and is getting a lot more adoption, and obviously you see Metamask improved their digital wallets, but fundamentally, what DeFi is doing in a really elegant way, in particular Uniswap, I think they've got a really elegant solution. And they're one of the leaders in this space, it basically collapses all of the financial infrastructure behind certain yield products, various financial instruments. Literally, is a few clicks of a button, and you're cutting out so many middlemen out of a process, right?
So many people skimming off the top of a financial process, which is what fundamentally traditional banks do. So, what excites me about DeFi is, yep, there's all this noise around price action and yield. And to me, that's all just a bit of fun and noise. All of that stuff's really noise to me, Alex. Well, what, what I really love is the fundamentals behind DeFi is how you can collapse all of that backend infrastructure, which is in traditional banking, and through a Web3 methodology. Remove all that noise, remove all that cost, remove all of that friction, and just pass value back to the user and the customer. I think that's what we need to really focus on.
Frankly, it's bullshit. If you really unpack it, certain financial instruments, certain financial products, and you look out who is getting compensated, what throughout that process, if customers really knew they would be horrified. And I think DeFi removes that, that's what I think is spectacular about DeFi.
And if you look at total value locked in, it's always floated between what 70 billion to what, 98 billion at its peak, so it's tiny if you compare it to traditional finance markets, but it's, I think it's the underlining tech which is really compelling.
Alex: What do you think is important to have as a next breakthrough for DeFi as well? Like is it like security issues, like you heard about all these hacks in DeFi projects and the money stolen so obviously, you know like, we have these infrastructure in centralized finance whereas they pay a lot of for, for this infrastructure and basically justifying their fees.
But at the end of the day, with DeFi we have a smart contract, open-source smart contract deployed, which can be used by anyone. Anyone can deploy their own version of V scope. And it's, as infrastructure becomes really cheap, but there's still some risk in place, there still risk that your money can be stolen, right?
So maybe this is what we need, like, some better security or what, what do you think?
Ray: Yeah, I'm gonna say the big scary R word, which no one really likes, but we have to face it, and boy, it's coming soon is Alex, we need regulation, we need to embrace regulation.
So you are right. Out of all of the DeFi projects, there's some really good projects out there. But there is sadly, and this always happens, the web was like this in the early 90s, well, in the mid to late 90s, and maybe even early 2000s. There is a Wild West component to Web3, in particular DeFi. So we did see some hacks, we did sadly, see people lose funds.
So I think what needs to be done now, and I think it will happen in the next 12 to 15 months is that this space will get regulated in North America, and Europe. And I think they're really thoughtful protocols, which have good investors and have good teams that will partner with regulators to then provision and shape regulatory framework, which fits within DeFi. That's gonna take time, right? That's, it's not gonna be easy. I mean, it's that simple there.
Because each, you're going to have the financial traditional regulatory bodies who've got their incentives. And then likewise, with the entrepreneurs within Web3, and all the customers have their view on the world. What I'm saying is, we have to, this has to happen. Everyone's got to grow up and try to meet in the middle somewhere.
Alex: I totally agree. So, I am also a big proponent of friendly regulation of crypto. To have this friendly regulation, we just need to work closely with regulators and suggest what and how it needs to be regulated, because there's no way that crypto will not be regulated at all. Obviously, any financial infrastructure has to have some regulation to protect investors, to protect users. But
Ray: On that point, I mean, it's happening right now, right? I mean, you got Gary Gensler, digging in, digging his heels quite publicly. In the last three, four weeks, you have everyone freaking out and blowing up on Twitter, and now even LinkedIn a little bit, and all over YouTube, and all the main social media platforms.
But to me, this is a good thing. We now have to, for example, I think what Coinbase are doing, trying to lead the way on, they're building out this framework right proactively. I mean, even though the SEC haven't engaged with them and reply to their emails, or their phone calls. They're taking it on their own back to say okay, we're going to build out a framework, we're going to send you guys a proposal, we've worked seven days a week for the last bloody three months, trying to build out a framework for you guys to review.
Let's now partner together to figure out what is the security? What is the commodity? What does the framework actually look like? So, I think you have to act like Coinbase, trying to be proactive and positive, and actually approaching the right institutions with, with a proposal and say look, this is the icebreaker. Let's get talking, let's sit around the table. Let's get our teams working on this. I think that proach is really thoughtful, and it's great for the wider community.
Alex: And I think you know, what also triggers when I hear. It's also an opportunity for smaller countries like El Salvador, for example, to become faster and regulate crypto, but just don't have that big user base compared to the United States and everyone who wants to work with the United States as a business.
But what do you think about this, was this the initiative of El Salvador, or obviously just taking bitcoin as national currencies is just a small step? It sounds big, but obviously, it's not like adoption of whole crypto projects, but it might be a good start. Do you think it will lead to something bigger or do you think other countries will follow this path?
Ray: Yeah, I think, when we look back in 10, 12 years, what El Salvador like, did last month in terms of officially making it legal tender, I think it is a moment in terms of nation state, adoption, and backing. So, if you learn what happens in Latin America, in Chile, Argentina and Spain Pacific, sadly in El Salvador, it's horrific how their currency gets debased, people can lose their life savings because the banking system has so much exposure. It's insane, right? The whole plumbing and infrastructure there, on the way it used to be.
So, for a lot of people in El Salvador, you speak to folks in Argentina, you speak to folks, even here at Cyprus in 2013, the banking crisis there, you speak to folks in these countries, when they go down the Bitcoin rabbit hole and, and understand it's potentially a revolutionary safe, cryptographic store of value, and a way to predict their wealth, they immediately understand it.
So, I think what El Salvador have done, it is a moment, it does mean something.
Actually, for a lot of these emerging markets, and emerging countries, specifically Latin America, who are doing some amazing stuff around gaming, Web3, I get so many inbounds from entrepreneurs within Latin. It's brilliant the ecosystem out there in terms of early-stage companies is pretty hot what's happening in Latin America.
And they're really hungry, because they feel like they're behind the curve, right? So actually, El Salvador making Bitcoin legal tender being a trailblazer around the general regulation around digital assets. This is actually an economic development opportunity for these emerging countries. The way they're seeing, it's how the US capitalized on the internet in the mid to late 90s.
For a lot of these governments, they're like, holy shit, this is our time. A lot of the countries have a much bigger, have a lot more noise, much larger population.
Because we're smaller, this is actually an advantage, we can get in early, we can make this a big moment in our story in terms of economic development and enabling wealth creation. That's what I love about Web3. It's really here right now.
And if you jump in early, it can help some of the smaller nations who have amazing talent, amazing academic infrastructure, certain parts of that. It could be certain pockets emerging within Europe. I know Estonia are looking at a few things. So, this is a wonderful timing opportunity for the smaller folks.
Alex: Yeah, I hope some, some of these folks will listen, either to this podcast or somewhere else, and like take this advice seriously and start exploring how to bring more value to their country with Web3, with regulation of Web3, I'm sure it will be very well paid off like, in long term.
I think actually, education is one of the most important things to focus on intellectual space, not only because of bringing government employees and likes to our side, but also to just have more developers in the Web3 space. You know, like, there's so not that many people actually yet,