Privy and Agentic Commerce: Agent Wallets, Wallet Infrastructure & x402

Transcript

Gabe Tramble (00:00) Today we're gonna talk about the constraint layer in the agentic economy and what that means for wallet infrastructure providers like Privy who need to maintain the controls around the wallet and not necessarily just providing the wallet infrastructure because we don't want agents to just go rogue as they say.

Gabe Tramble (00:16) So today we have Max Siegel, the COO of Privy, who focuses on agents and wallet infrastructure that recently actually got acquired by Stripe.

Gabe Tramble (00:25) so Max, can you tell us what is an agent wallet and how is this materially different from an embedded wallet or like a human driven wallet?

Max Segall (00:35) 100%. So at Privy, we build infrastructure that allows you to provision wallets so you can embed crypto into your product. So we got off the ground serving many of the sorts of companies people think about when they think of crypto, like Hyperliquid, you could sign up with an email, get a wallet and start trading. Pumpfun, Farcast or Zora, OpenSea, all of these traditional crypto products. And as we were building and as agents started becoming more popular, people started using our wallet infrastructure to allow agents to manage digital assets. And so an agent wallet is just using privy to spin up a wallet and have the agent manage the wallet. And as we've supported more of these use cases that have gotten more and more traction, There've been a host of features that are specific to agents that aren't as important when you have a human managing the wallet. And so we've basically built an entire product capability set specific to agents. have an agent CLI, we have a policy engine, we have compatibility with agent protocols and a bunch of other things that I'm excited to dive in on.

Gabe Tramble (01:54) So you guys are building this wallet infrastructure and one of the branches is this agent infrastructure that has exposed kind of a new set of problems in that space. ⁓ Before we get into like the particulars of those problems for the agent wallets, can you describe like who are these users and what are you noticing people using these wallets in the first place?

Max Segall (02:19) Yeah. So we, about a year and a half ago, I think, or a year we had our first big breakout agent managed wallet customer, this company Banker that many people in the crypto world are familiar with. It's a bot that lives in the X feed and any time you tag it, it takes an action on your wallet based on what it was prompted to do. So I could say, I max want to send $10 to Gabe. It spins up a wallet for Gabe. It sends 10 stable coins from my wallet into Gabe's wallet. And then Gabe, you could say, I want those $10 to earn yield. And it would sweep them into a DeFi protocol for you. And people started having a lot of fun with this new crypto form factor. And it started driving, you know, tens to hundreds of millions of dollars of volume in privy wallets. And as these wallets got more usage, there were all sorts of new demands. Like at this point, agent, the quality of agents was a lot lower than it was today. And so it was very likely that when you prompted the agent to do something it would do, it would misinterpret your And so this was a big driver of our policy engine feature set and, you know, allow listing certain receiving addresses. So if the agent, you know, misinterpreted your prompt and hallucinated wallet actually can't physically perform the action. that it interpreted, like it can only perform what you design and lock down the wallet to be able to do. So supporting early builders like that, like Merit, like Nevermind, and a bunch of the very frontier builders in the ⁓ agent-managed wallet space allowed us to have the right tool set in place. So when there was like the massive open-claw driven agent explosion that we saw in the beginning of this year, We were ready with the capability set. And at this point, a third of Privy signups, we have like hundreds of signups a week for Privy accounts. A third of them are using Privy for agent managed wallet use cases. And it's a bunch of frontier builders pushing the limits of what's possible. There are a few popular patterns we're seeing, a couple of shapes that are pretty common. One is people who want an agent to... portfolio manage, that's actually a product shape that works quite well today and is ⁓ showing real value at scale. We have a company, Glider, that does this. I think one way to think about the value prop is it's like a betterment on chain in Forrest. And you can set up a wallet, an agent a set of rules of how the portfolio of assets in the wallet is managed, and then just let it run on That's a very popular use case. Another one is for payments and, and actually like consumer driven payments. So you get an open clause set up or you have your agent working for you. spin up a wallet for the agent and then you just prompt, you know, the agent is prompting it to make payments for you. That's an explosive design space right now. And we just launched with AWS. It was two weeks ago now that their agent core platform, their agent builder platform. natively integrates privy wallets so that agents you create on the platform are provisioned along that we set up. set them up with wallets and they can make payments across the X4o2 ecosystem. We did a similar thing with Langchain and their agent building capabilities. So that's a super, super common use case. Give the agent a wallet and let it start paying for things. And then the third very popular use case, and we're seeing dozens of great teams building this, these, they're almost trying to become ironically like Stripe for agent payments. And we're a part of Stripe, we're owned by Stripe. ⁓ And these teams are building marketplaces where an agent can come in and there's a marketplace of services they could purchase, like they could purchase one. unit of SMS or one unit of compute. And it allows for per use microtransaction based services so the agents can do whatever work is needed of them. So the agents can drop into these marketplaces like Sapium or like Lava or like orthogonal. There are a bunch of great teams building these types of products.

Gabe Tramble (06:46) Okay.

Max Segall (06:50) Actually, Stripe has our own version of it as well. And they can drop in, they could purchase services. It's all happening on crypto rails with microtransactions. And that's another super exciting design space that's opening up.

Gabe Tramble (07:04) Nice. So there's the portfolio management payments being able to provision and just pay for things with the wallet and then the microservices. On the microservices side, are those type of services similar to like AgentCash Locust? Is that the same type of product?

Max Segall (07:20) Yep, There are so many great teams building in that space right now.

Gabe Tramble (07:26) And then just ⁓ for these products are basically allowing you to provision a wallet in like your codex or some type of agent tool and then it can pay for microservices through like X4.02 and MPP. And that's what you're saying has been another big use

Max Segall (07:43) Yep, and it's both sides of the transaction. So it's the agent having the wallet to spend on the services. And then the wallets are useful for the services. So you can have a Cloudflare wallet or a Twilio wallet, ⁓ and you can really open these platforms up. So it's not like the platforms need to integrate services one by one and have umbrella API keys. You could have ⁓ a payout wallet accumulating value for the service to claim.

Gabe Tramble (08:13) Interesting. Yeah. So we've kind of only talked about so far just on the show in general, like the services that are provisioning while it's for the consumer. And you're saying you're supporting both the consumer and the enterprise who's basically providing the services, the micro payment services.

Max Segall (08:32) Yeah, so it's, mean, the whole is at the frontier stage right now, but we need a way for the service providers to get paid as well. So that's either gonna look like there's a wallet accumulating value for the service provider to claim, or there's cool stuff we could do as Stripe or other merchant side ⁓ products that can cool stuff we could do as Stripe or other merchant side ⁓ products that can automatically convert the inflows into fiat outflows.

Gabe Tramble (09:10) Got it, okay. And correct me if I'm wrong, I'm try to extrapolate this higher. So if I'm the end user and I wanna pay for a microservice that will tell me the price of Bitcoin, then I would use one of these like agent payment services that can use X4.02 and find a provider. Let's say the provider is CoinGecko. But you guys are working also with CoinGecko to accept those payments as well.

Max Segall (09:35) Yeah. So it's these, these marketplace services are either giving coin gecko and interface to plug into so that they could provide like per per use services to agents and get paid for that. ⁓ you know, or obviously Stripe, Stripe is investing a ton on this front as well.

Gabe Tramble (09:58) Nice. And specifically, what are these different ⁓ policies or pieces that become important that's different from a normal wallet? Like, what are these things that you've accumulated from, it seems like, just real customer interaction with like BankerBot? What are the particulars here?

Max Segall (10:16) Yeah. So the way the Privy wallet works is when we spin up a wallet, split the wallet's private key that controls the wallet into shares. So there's never a single point of compromise with the Privy wallet. And then you as the developer implementing Privy, you can figure who controls the wallet. That could be an end user like you Gabe. It could be an agent that's controlling the wallet. It can be our customer can have full control over the wallet. And when the controller of the wallet initiates a transaction, the key shares come together in a trusted execution environment and execute the transaction. And the trusted execution environment is, there's sort of like a checkpoint in the trusted execution environment to make sure, does the transaction satisfy the conditions that are allowed on that wallet? And that's how our policy engine works. So you could say, you know, an agent managed wallet can only transact up to $100 a value a day. That's like an example of a policy. And so if you're trying to put $120 transaction through when, even if the proper owner of the wallet initiates the transaction, if it violates the policy, it gets blocked in the TE and it does not, it cannot execute. So we've, we've built our policy engine. So many of features of our policy engine are built around supporting these agentic use cases and preventing, you know, if, a prompt is misinterpreted, let's make sure that value doesn't go where it shouldn't. So if, you know, an example, Madeline, uh, who leads a lot of our agentic work at Privia loves to use is like, you know, if the prompt is, want to buy a boat neck sweater and the model interprets like that as I want to buy a boat, then that purchasing a boat transaction is not approved. So the policy engine, it's super expressive. Like if you can think it, you can design a policy around it. And that's, that is like one of the largest features. One of the most important features for agent managed wallets. Another one is, it's, it's, it's, it's related to policies. It's what we call quorum approvals and you can designate rules so that you know, if a transaction meets a certain set of conditions, maybe the agent managed wallet requires the user to also approve the transaction. So that's another feature on the security front. We have all other sorts of things like allowed origins to make sure that certain types of transactions need to originate from certain sources. So, you know, maybe transactions under a certain amount can be fully managed via an agent. and transactions over a certain amount need to be managed in an interface. You could also start with a user wallet. So you could get a wallet in Ramp, one of our customers, and then you can delegate the management of that wallet to an agent for certain actions. So you could start in a traditional product, a traditional user wallet, and... then have the agent take over and start making certain transactions for you.

Gabe Tramble (13:33) wow, interesting. So in that last example, let's say I'm trading, I'm trading them, say, okay, actually I want to have the agent do these little rebalances. You guys support infrastructure to allow both at the same time. Nice.

Max Segall (13:47) Yep, exactly. So all sorts of rules and controls you can put on it, which a lot of that functionality was born from supporting early agent builders. And it's cool, like a lot of the fintech companies who are doing nothing with agents yet, they want the same rule set. they feel great about being able to either block list.

Gabe Tramble (13:58) and we'll

Max Segall (14:12) receiving addresses or set transaction limits on wallets. Like lot of these features that were built to support agent builders are useful to companies like Deal or Klarna or Ramp.

Gabe Tramble (14:23) Thanks. Why do you think that or less like, can you help us understand why this design decision is not put on the developer side or on the user side as in, you maybe I can put in a prompt or maybe some code that says, okay, don't spend more than this much, right? As opposed to moving that into the actual wallet infrastructure side. Can you help us understand why that is important or ⁓ is something that you guys have taken on specifically.

Max Segall (14:56) Yeah, so it's flexible to the point where the developer can expose the creation and enablement of those rules to the user. So the developer could say, I actually just, I don't care who my user is, I want to protect them in these five ways. And so I'm going to put these rules on the wallets and that's easy to do. And then you can have the user, you can give the user the ability to set either like MFA controls or transaction limit controls as well. And then that gets enforced by the same policy engine under the hood. So it's a very flexible product that allows you to protect your users if you'd like, and it allows your users to like progressively secure their accounts if say the asset value in the wallet exceeds a certain point.

Gabe Tramble (15:45) Okay, so you guys are taking the decision of basically cutting a lot of the risk and then the user can basically expose that risk and by doing that it's at the wallet layer that it kind of gives the most leverage for that. Nice, okay.

Max Segall (15:58) Yep, exactly. So I think the big thing to call out is like, there is so much excitement about this space right now, but it's also very clear. We've just scratched the surface of what's possible. Like many merchants still don't accept stable coin payments. And so, and that's, that's changing quickly, but you know, as, as we at Stripe make it easier to accept stable coin payments by default and other merchant facing payment tools do similar things like capability set's gonna evolve a ton as we just have completely new unexpected use cases emerging.

Gabe Tramble (16:44) Yeah, are there any use cases that you think are going to be bubbling up that you're seeing early right now or pretty novel implementations or any things that kind of break from those three that you explained before?

Max Segall (16:57) people are doing all sorts of crazy things. it's really sky's the limit. Like if you can imagine it, you can build it. But the big limitation right now is the fact that many merchants don't yet accept stable coins. And I think we at Stripe have like a big role to play in addressing that limitation. actually just, we just today made MPP enablement. ⁓ a self-serve, you know, any merchant, regardless of where they are, can turn it on today. And that's like one of many, many steps that we're taking as Stripe to make this easier. Then the other thing that is pretty cool is that you can, with a privy wallet, with stable coins in it, you could provision a card on top of the wallet. And then, know, now you have a way of facilitating transactions from the wallet. even if the merchant doesn't accept stable coins yet.

Gabe Tramble (18:01) It seems like Stripe and your guys' positioning ⁓ is pretty unique because a lot of early technology has to overtake. the incumbents or and that's usually done by distribution or like virality of the products. But in your case and kind of for the broader ecosystem, Stripe is really like one of the big gatekeepers here and they can essentially just like turn the lights on. So I'm sure that you guys have some friction maybe and like what are you seeing as the path typically for building? Is it like, OK, you guys are co-building or do you kind of feel like you're like a lab, how was this dynamic, especially as they're like a gatekeeper in this case.

Max Segall (18:48) You're saying like, what's, what's the, how do, how do we and the rest of the Stripe team work together to facilitate types of products? Yeah. So we have been operating as privy for the last year, even though we're a part of Stripes org. And so we're building as close to teams who want to access this tech as possible. And the idea is like the

Gabe Tramble (18:56) Yeah, yeah, yeah.

Max Segall (19:17) crypto landscape, the way stable coins are being adopted, like it's changing so quickly and we need to get the modular products as close to developers as possible. So when a team like Banker, when a team like Merit Systems wants to push the space forward and reimagine what's possible, like let's give them the raw building blocks and stay close and whenever they need something, whenever the product doesn't work well, let's evolve it fast. So we're doing that. And then we're building privy into and wallets in general into many of Stripes biggest products and making them stable coin fluent by default. And, and, and, you know, we, we, we almost have like a customer relationship with link. For example, we, just announced that like link is going to be holding a balance, have it have the ability to hold balance by default built on stable coins. And that's, you know, us working closely with the link team and treating them like they're our biggest potential customer with 200 million users. And, and so we work super closely with all the product teams across Stripe and try and find ways to take the same tech that we're like rapidly iterating with the frontier builders with and bring it into our own products.

Gabe Tramble (20:39) And for all of these different stakeholders, I'm sure not everyone feels the same way about crypto and kind of like this revolution and centralized finance and such. But from the executive level, is there buy-in across the board? Like talking to the link team, right? Link is in like a lot. products. When you're paying for stuff online, you can kind of do the easy checkout with Link. ⁓ And they've really nailed that in as a tight product. like, are you finding friction in these conversations or is it really like a hot lead and you're just onboarding them as a customer?

Max Segall (21:16) Yeah, I mean, the amount of like top down buy in on stable coins at Stripe is like the most exciting thing I've I spent I was at Brex for four years before joining Privy in 2022. And I decided I needed to work in crypto after like trying to build products on fiat rails. Like I just kept running into all the limitations of ACH and the other popular payment methods that Brex is built on top of. And so that was that was like the catalyst for me getting excited about crypto in the first place. And now it's playing out in the biggest imaginable scale with Stripe leaning in as hard as it is. And, you know, in order to deliver Stripe value to, you know, as many people around the world as possible and in order to really create instant frictionless payments, no matter how big or small they are, like crypto is the enabling technology that makes that possible. And so there's tons of top-down excitement and pushing teams to think about, we deliver this experience we're trying to unlock with crypto rails? And we're featuring all of the most exciting things happening on previous tech stack in Stripe firm-wide company all hands meetings. And that's honestly inspiring a lot of the building that's happening at the product team level. And it's really cool. And this isn't like, this isn't just happening at Stripe. We see the same thing happening with our biggest customers, our biggest FinTech customers as privy, where teams will see P2P payment experiences being built by crypto native teams. And, you know, next thing you know, Remitly is trying to replicate that with their user base of tens of millions of users and, and Revolut and Robinhood are keeping a close eye on like all of the all the trading and investing use cases that are working on the crypto side of the market and figuring out, okay, what can I deliver to my tens or hundreds of millions of users? So it's this like super exciting moment where the things that are happening at the frontier, the crypto native teams that are just like defining the products that can work are inspiring things happening with teams who have access to tens to hundreds of millions of users.

Gabe Tramble (23:40) With what you're seeing right now, I want to pose this question as kind of like a three. potential answers and maybe if those don't fit then can come up with your own but I'm curious where do you place your bets on gonna be like the largest ⁓ economy? Do you think it's gonna be on the like ⁓ B2B stable coin side or like agentic commerce or like where the autonomous agents are basically buying and selling services ⁓ or do you think both like between both and yeah of those three I'm curious where It's from all the stuff that you're seeing, which in lane kind of seems like is going to be the biggest or have kind of the biggest ⁓ outcomes.

Max Segall (24:24) Yeah, so our mandate is just like anything real big impactful that has PMF built on crypto rails. We want to be the infrared behind it. And we are like super ear to the ground nimble on picking up on, you know, where are there trends that are working? Where is there like real value being delivered with crypto? Right now, I mentioned a third of our signups are agent managed experiences. Most of those are not working at scale today yet. They're experimenting and there are teams that are breaking out with use cases that are driving a ton of volume. The three I mentioned being like the three big main ones. And so that's a massive investment area. And we just like have irrational conviction that like in 10 years, there are going to be more agent facilitated payment transactions than human facilitated payment transactions. And that's going to happen on crypto rails. And we need to make sure we can support everything that's that that builders are trying to unlock with that. So we're investing a ton of product energy there. And then fintechs, every big fintech, you go down the list of the top 20, you know, biggest or most valuable fintech companies like they're they all have some stable coin crypto strategy and just making sure that we're able to address whether it's delivering native yield or payments to countries worldwide or unlocking access to markets they can't serve, making sure we have everything we need to support those use cases that's massive, growing quickly. The crypto native side of the market is there are pockets of explosive growth. Hyperliquid obviously is like a very top of mind thing. They were one of our earliest customers and there's a whole ecosystem of teams building on hip three, hip four, unlocking use cases that are getting. really quick PMF, like being able to trade commodities over the weekend or being able to create markets around the valuation of private companies. So lots of cool stuff happening there. And then the so the those three use cases, agentic use cases, fintech use cases, market crypto native market use cases, whether it's purpose or prediction markets, and then the fourth are treasury use cases, people who are reimagining how do you build business, finance, operations, infra on crypto rails and make that more efficient. There's a ton of work at Prairie happening on that front too.

Gabe Tramble (26:55) Wow. So you guys are playing in a bunch of fields and what you're saying is the commerce side for payments with like these neo banks and upcoming startups is basically where like this hardened use cases and then on the agent side is like R and D in basically fine tuning. Is that a good articulation of that?

Max Segall (27:15) Exactly. You've got it.

Gabe Tramble (27:18) In on kind of circle back a bit on the T side, the trusted execution environment. Could you explain the reason why you guys took that decision and like what that actually enables for agent wallets and even just payments in general?

Max Segall (27:35) Yeah. So it is, we big fans of TEs. They're the gold standard of security. They are extremely locked down. The AWS Nitro enclaves that are TEs are built on top of, or they, you know, they're default off the network and they are secure and they are extremely They're really well suited for these like checkpoint controls. So whether it's a policy engine or a quorum of approvals, like you can at the T level enforce in, ⁓ you know, this is enforced entirely by code that ⁓ if you have a policy in place, like if the transaction does not. comply with the rules of that policy, it's physically impossible to get that transaction through the TE. And then the other thing about TEs we love is everything that happens in the TE is verifiable. So there is a proof that you can go back and reference on exactly what happened, what conditions were met. And that is great audit feature to make sure that the system is doing what it is designed to do.

Gabe Tramble (28:57) Interesting. So this environment is more robust for ⁓ being able to execute the policy and the logic and all these different functionalities for the managed wallet.

Max Segall (29:09) Yep, exactly.

Gabe Tramble (29:10) On the AWS side, just to break a little bit, so you guys partnered with AWS to basically facilitate like micro payment services on behalf of Amazon. So Amazon's they have like this managed agent service and then you guys are rolling out your service in collaboration. What are they kind of after there and what do you think this enables in terms of like distribution? Because Amazon is such a beast really this seems like a distribution opportunity, not just for you guys, but for ⁓ other projects, et cetera.

Max Segall (29:47) Yeah, they are, they are you know, they're the whole suite you need to stand up and, and manage an agent for your product. So they're trying to be like the one stop shop you can go to, to build and manage your agent. And I think payments is if agents at the highest level or kind of like code that can perform or intelligence that can perform work. Being able to participate in the economy is a core part of performing work. And so it's important to them that the agents that they're allowing teams to build have a way of paying for things. And I think there's like a pretty big philosophical race happening when it comes to payments of like. Are these payments going to happen on card rails? Are they going to happen on crypto rails? Is it going to be a combination of both? And I think they recognize that there are some really great advantages to payments happening on crypto rails. know, for one, it's permissionless to spin up a wallet. And so when you have an agent autonomously, maybe spinning up a sub agent for a task, like getting that agent access to an account that can hold money and pay for things, it's much easier to do that. with a permissionless system, then getting that agent access to a bank account, which is the traditional way of getting a card. like getting that agent access to an account that can hold money and pay for things, it's much easier to do that. with a permissionless system, then getting that agent access to a bank account, which is the traditional way of getting a card. But then you have the roadblock of many merchants don't accept stable coin payments today. So you need some way to, if the agent wants to participate in the economy and the counterpart they're trying to transact with doesn't accept stable coins, need some way to allow that agent to access that service. So AWS. integrating wallets natively, integrating privy and our agent managed wallet capabilities natively. This is them saying, you know, they see building block as part of their offering.

Gabe Tramble (32:06) And is this why you guys have the card? Is that for agents being able to spend or is that more on the human side?

Max Segall (32:13) Yeah, we have the card. mean, the card, it's one of the it's similar to our policy engine. Like it came out of requests on both the human stablecoin wallet side and the agent stablecoin side. So our card capability is like one of the best examples. One of our flagship customers is this company ARK used to be called Dollar App. They're the fastest growing Neobank and Latam. And their big big value prop in the beginning was help people in Latam save in dollars. And so if you were, if you wanted to get paid, you live in Argentina, you wanna get your paycheck in dollars, you can give a regular account and routing number so the paycheck can go into what feels like a bank account. And then Bridge, which is another subsidiary of Stripe, they converted the Argentinian peso. payroll into stable coins. And so the dollar account balance was denominated in dollars. And people, you know, in all the markets that dollar app launched in went crazy over this value prop. They were saving in dollars. And then, you know, the big question is, well, like, everything is stable coins behind the scenes. But then the big question is, like, how do I actually use those stable coins? And being able to provision a Visa card on top of the wallet so that You know, could go onto Amazon and purchase things or you can go to Netflix and purchase your subscription or even go to a grocery store and put down a card. That's like the big unlock because most of these services, especially then, didn't accept stable coins. And so it was built around just this like acknowledgement that people want to hold crypto assets. There's like a of value in holding crypto assets, but you need a way for those assets to be spendable in the real world.

Gabe Tramble (34:10) And for you guys, everything seems to be denominated in USD, across the board for these payment services and for ⁓ even the agents. Are you guys seeing any certain areas where the denomination of the currency is not always dollars?

Max Segall (34:31) Yeah, I mean, that's I think that's one of the most exciting trends right now. We work with a bunch of local issuers at Bridge. We have a bunch of local issuing capabilities as well. I think it's like reasonable to expect that people are going to want to hold stable coins, hold local currency stable coins. ⁓ So I think, you know, in terms of like growth areas that I'm extremely high conviction. And in the crypto ecosystem, that's a big one.

Gabe Tramble (35:02) And for what you've seen, what are those actual use cases? Is it for consumer day-to-day spenders? A lot of trading happens in US dollars. So yeah, for those new denominated current digital assets in different currencies, where are you seeing those specific use cases so far?

Max Segall (35:23) Yeah, it's just who like don't want to think about currency conversion their entire life is in Brazilian rail and they want to hold balances in Brazilian rail. They don't want to have to like worry that some macro event made this transaction I was planning 3x more expensive in you know very volatile currency even though you know saving in dollars might be advantageous the like certainty of the value of the transaction is a priority for lot of spenders.

Gabe Tramble (36:00) Yeah, on the builder side, ⁓ where are you guys seeing people blowing themselves up essentially when using ⁓ agentic payments or even just kind of these payment services in general? Like where do you guys see the most risks ⁓ for builders, developers in general?

Max Segall (36:20) I think it's the same biggest risk we've seen from the beginning at Privy, which is when you're building tools for a frontier market, there's a very big temptation to take like the newest tech trend and build the product around that. And so when we were getting started, like account abstraction was like the big new capability, ERC 4337 had just come out. There was a new way to sponsor gas payments and There was a whole wave of builders in the beginning when we were first getting Privy off the ground that would come to us and say, we're building an account abstraction app. And I was like, what does that mean? And they're like, well now I can sponsor gas. So we're building a product around that. And that's like, that is not the product. There's like no inherent customer need behind that. That's just a ⁓ tool to make building the product easier. And I think the biggest risk by far is like right now there are so many new tools coming out and people are looking at the tools and saying, ⁓ there's my product idea. But starting with the like, what's the, what is the real world experience we want to unlock? And then let's look at the tools we have at our disposal and maybe stable coins and crypto like aren't the right tool for it. And just being like super pragmatic about what's the best way to deliver value to the world and going, going problem out first tech out. I think that's the biggest risk.

Gabe Tramble (37:46) Do you have any example of these currently right now, these hot trends essentially on the tech side or even the research side as these protocols start bubbling up?

Max Segall (37:59) Yeah, mean, like agents are very cool and very useful, but like an agent might not be right for facilitating the either payment activity or investment activity that you're trying to use. like, know, agent out is, think ⁓ it's similar to like ERC 4337 out. Like, let's actually think about like, what are we trying to build? What are we trying to drive? Does an agent make sense? Increasingly, agents are super powerful. And so for many, many activity, it will make sense. But like, don't start with, we have agents now, let's build something with it. Start with, this is the problem I'm trying to solve. Let's figure out how to do it.

Gabe Tramble (38:49) Okay, so even the overfitting of agents right now as pretty good, like a pretty hot topic, AI agents, is one of these things that you're noticing as well.

Max Segall (39:01) I mean, it's a third of our customers at privy. So it's pretty crazy how many teams are excited about this. Rightfully so. It's like the most powerful thing I've seen available to people. making sure that you're thinking about it from a, this is the problem I'm trying to solve and this is why it's a good solution to that problem is the right way to go about it in my view.

Gabe Tramble (39:26) Yeah, yeah, I'm just having these conversations. I've noticed a lot of strong builders are using some deterministic code to facilitate large portions of their operations. And then the agents are kind of just orchestrating these tools, like these deterministic tools, maybe it's for trading or market making, security. ⁓ So yeah, definitely the overfitting, I agree, on the agent side ⁓ has been a big thing. I'd say to end here and just the final question, of all the stuff you're seeing, I'm curious, where is the alpha? Is there any type of companies or team or new provenance that you're seeing evolving? And it might not have to do with agents, might just be kind of trends amongst customers or ⁓ stable coins in But I'm curious to see, where would you stake your bets at this point?

Max Segall (40:25) That's a great question. mean, there are lots of cool things happening around agents. there's, I think that's great place to spending time. The thing that like I've always been really bullish on for teams that are like building crypto into their products or the fact that like crypto rails give you like, it allows you to build like anything into a super app because of all of the protocols you have access to and things are on crypto rails. So, you you can take stable coins in a wallet and invest them and convert them into any other on-chain investable asset. And increasingly, that's a pretty big universe. It's not just like ETH, Sol and Bitcoin that are thought of as like traditional assets, but it's like tokenized stocks and commodities. you know, you can make, you could take positions on prediction markets. So That's one example. You could also, you know, take stable coins and very quickly build P2P payment like Venmo-esque experiences on top of them. You can invest them into DeFi. And so, like, I think these Neo banks that are building on stable coin rails and like able to hold stable coin balance, like they're going to quickly become super app type companies like Robinhood. I think that's a really underrated trend. The fact that Rails allow you to turn any consumer app into a super app.

Gabe Tramble (41:57) So like a WAP or ⁓ maybe like Slash, these are the companies you're thinking of.

Max Segall (42:01) Yeah, two great teams that we work super closely with.

Gabe Tramble (42:06) Nice nice. Well cool, man. Yeah, thanks. Thanks for sharing and this has been great. Yeah, I hope to have you back soon See ya

Max Segall (42:14) Love to come back soon. Thanks for having me. Super fun.