Travis John (00:01.32)
Welcome back to another episode of the Real World Assets Show. Today we have a special guest. We have Andrew Almeida here from Rise & Shine. He's the managing director, managing partner of the fund. And just on the show today, because a recent announcement with Oasis Pro and Avalanche, this specific Avalanche infrastructure fund has been in the works for over a year and now we can announce it. It was announced earlier this week and we're one of the first shows to pick this up. So.

Welcome, Andrew, welcome to the show.

Andrew (00:32.206)
This is amazing. Thank you, Travis. I'm really excited about the conversation and to be a part of the conversation a little more officially now.

Travis John (00:40.744)
Yeah, likewise. And I've been chatting with your team for over a month. I had a call and you've been actively fundraising. And most of this has kind of been a bit in stealth mode over the past year. And as we talked about earlier, fundraising and funds and even a lot of the infrastructure stuff around blockchain wasn't a great year in 2023. That's significantly picked up in 2024 as we know a lot of...

you know, a lot of wind behind our sails now. So tell me a little bit about yourself, how this got started, and then we can get into Rise & Shine.

Andrew (01:18.092)
Yeah, thank you and thank you for having us. I have a traditional finance background. I cut my teeth in Wall Street per se, working across asset classes, equity, fixed income, even as a multi -asset class portfolio manager, junior PM, in my most recent banking role. Did a lot of consulting out on my own when I started working independently after leaving the corporate side.

and then naturally started finding my way into blockchain. So fast forward to how we really birthed the idea for this fund was during this time of crisis, right? Like after FTX exploded, you felt the magnitude of what was going to happen to the industry, right? And I guess for me personally, having...

You know, I got my series seven license in the year, you know, 2008. I think it was January of 08. And the firm I was working at made us get our six license first. So I got my series six in like the summer of 07. And then, so if you know that time of year, like the magnitude of like a centralized institution blowing up and fall out, I had already experienced that on the TradFi side.

and saw what was happening in the, let's call it, crypto side and knowing that there's going to be opportunity coming out of this. This thing which, and I hadn't gotten into this space too heavily at all, I spent most of my career in traditional finance, passed on Bitcoin, passed on Ethereum, didn't spend the time getting to know the power of decentralized consensus, what that will mean for computing.

And, you know, so, you know, among the crypto crisis, crypto winter, I said, what's real here? What can we really look at that might have staying power? And I can have something to offer or discuss with the traditional finance community that I know and I've been a part of when they're looking for clarity in this asset class now. So we were opportunistic about

Andrew (03:44.265)
coming up with the idea for this fund, for me, Avalanche is the choice that we looked at and decided we want to commit our time to based upon the protocol and the team and the architecture and what it might mean for enterprise and institutions. So yeah, I mean, the fund has been over a year in the making testing our own validators.

and testing the messaging. I think, and we should talk about this, I mean the messaging and the communication in this world between the traditional finance world and the crypto world. I think we want to be a better part and a big part of helping improve that conversation.

Travis John (04:30.408)
Yeah, that's well said. And I'm not a young guy, so I was through the 08 crisis as well. I mean, I was I owned a title company, mortgage company, real estate company, very heavy and distressed assets during that time. It was actually.

a more active time in real estate and more lucrative, unfortunately, for many of the end users, but from a transactional standpoint, there was a lot going on. But as you mentioned, blockchain solves a lot of that. Most of that was just all the murkiness of financial data. So today with blockchain, with distributed ledger, and with AI,

All of that is essentially solved. Like the 08 situation isn't always solved. There were still bad loans, don't get me wrong, but it would have been most of that, the compounding effects that we were dealing with for many years could have been identified way in advance, clearly.

Andrew (05:16.838)
Right.

Andrew (05:28.678)
Yeah, and a number of problems under underneath that kind of always crisis like you're saying just transparency into data time of which you receive data the number of different participants who need access to let's say like the mortgage pool of data, but they're all reconciling it from different places like we really need to get blockchain and crypto back to the concept of talking about the power of shared ledgers and away from meme coins and away from

a lot of the things that have tainted the color of this industry.

Travis John (06:04.744)
Yeah. No, I think one of the first posts that I came across from you guys was probably like six months ago, and it was something I think Julie put out about like, let's have a conversation about blockchain, not crypto. And obviously, they kind of go together like peanut butter and jelly in a lot of ways when they're put together in a sound infrastructure. But blockchain is really where the magic is happening. And you mentioned that. I appreciate that. I think...

Andrew (06:26.308)
stretch.

Travis John (06:34.28)
Again, I'm a big fan of L1s and blockchains and particularly Avalanche and the team there, obviously being born out of Cornell, obviously a New York based company and very focused. I've met Morgan and many of the people on institutional team on Avalanche, I've had them on the show and they're doing quite a few, their inroads into finance, particularly Citi and many others is significant.

And obviously they're not going to be the only winner. You know, blockchains, there's several others that I've had on the show and I talk about that are doing a great job, but Avalanche is definitely one of the few that are going to make it. And for the long run, I think having a fund, and again, we haven't really got into kind of the problem you're addressing and maybe that this is a good transition, but ultimately, where did you see after doing your due diligence and realizing like Avalanche is doing some great things and blockchains the future?

what was kind of this big idea, this intersection of how your fund came together and why infrastructure was the issue.

Andrew (07:41.475)
Yeah, so when, you know, looking for opportunity and doing the diligence across different chains and understanding protocols for us, you know, I spent time taking Gary Gensler's MIT class actually, where, you know, it's free online on YouTube, anyone could take it. I recommend everyone to take it to get educated on what's going on in this industry. But when you start getting a fundamental understanding of the components,

that make these upright because we did, you mentioned Julie bringing up, well, let's talk blockchain, not crypto. And she's done, Julie McKenna, marketing head of our team has done an incredible job with the communication of this because what we have found is that like the term crypto is just so widely used. Like, of course, the concept of cryptography and the digital signatures and all the cryptographic technology underneath blockchain, those components.

are very important, but it's the term cryptocurrency that people ran away with. And, you know, obviously currencies are regulated by governments, right? Everything got murky. So when we look at the fundamental reason of like why these systems exist, and we get back to the concept of decentralized agreement, right? How do we come to agreement? And then how do we store that data, right?

the consensus protocol and the blockchain and the virtual machine, right? These are all different components that when you look at what they are and understand where the innovation is and where the innovation has been made, Avalanche becomes a very attractive option because they've made innovations in how we come to agreement, right? They've made innovation in how we store agreement. And then they've made innovation in how...

or they've innovated on how we build and separate these components, right? Like you look at the Ethereum ecosystem and the Ethereum virtual machine are tied together. You now have some, that concept is kind of coming out to start using, building virtual machines into that, trying to introduce other virtual machines into that ecosystem. But Avalanche, that architecture has always existed from the beginning, right?

Andrew (10:05.952)
So when we look at the differences in the components and the ability to come to agreement, we see like a superior architecture for what? And this is the problem we believe we're helping solve as a fund that Avalanche has helped solve and that we want to invest in the infrastructure to continue to do is how to bring institutions into this world, right? When we think about why blockchain or how blockchain is going to get adopted or

cryptography is going to get adopted or these ecosystems, it's going to be in the building of applications that take advantage of decentralized agreement or shared ledgers, right? So when you see some of the applications that, or institutions that are starting to gravitate towards Avalanche and...

how they could benefit from using shared ledgers.

it really starts to make a lot of sense and that's why we're here, right? So Avalanche and their architecture give you the ability to do that, to create your own permissioned and privatized blockchains. They were calling them Subnets. I think there's some rebranding around now, you know, calling them L1s. And that's really what it is. It's a blockchain as a service ecosystem where any institution, enterprise, video game, right, can go spin out their own private blockchain.

and then customize, we talked about the architectures, the different pieces of how you would put a chain together, coming to agreement, processing that data and storing that data. Avalanche has separated those pieces so you can customize your own chains, right? And privatize them, permission the users, KYC who comes in, I mean, it all starts to look very friendly from an institutional perspective about why institutions would choose to use Avalanche.

Andrew (12:08.957)
right, they can effectively start with their own private chain and then, you know, their, you know, initial network, internal network, and then start permissioning out from there. I mean, the flexibility from building your own layer one using Avalanche is just is really what attracted us. But then, you know, I think the average person would then say, well, what is what are the

What is Avalanche then and why are they using them? What does it really boil down to? Because I ask myself this question a lot, like what does that really?

Andrew (12:49.468)
What is the network? It's hard for people to get their heads around it. You know, because if you have all these other layer ones, Subnets using Avalanche, like what is Avalanche? And people really need to start to understand that that fundamental or at least what we're standing behind, advancement in the consensus protocol, right? All these L1s that will be launching off of Avalanche are fundamentally going to be using Avalanche's agreement mechanism.

for coming to agreement. And we think that's really powerful. We think Avalanche made an advancement there, the team out of Cornell, and we think it'll make a big difference when it comes to scaling blockchains. So I know that was a lot, but it's a very unique architecture and that's why we're supporting the infrastructure there. So.

Travis John (13:35.048)
Yeah.

Travis John (13:44.872)
Yeah, no, it's very well said and it's not an elementary school explanation. Like you said, it's nuanced, it's complex, there's a lot of moving parts and I think you said it very well, as condensed as you could. And I totally agree that they're obviously in a rebranding standpoint. I mean, notable Subnets right now are...

More in the gaming side, you have Shrapnel, you have Beam, you have some well -known ones, but a lot of these use cases have been proven out. Avalanche has obviously participated in Project Guardian, which involves Citi, Wisdom Tree, et cetera. We've seen several use cases and even some that are not public yet of pilot programs that are happening that can't be publicized yet where...

other financial institutions are involved and as you mentioned, the ability to roll up your own permissioned public, however you want to control it, have your own L1 seems to be where the puck is going for the future of finance and the future really of blockchain in general. Whether you're a gaming project or not, as you mentioned, most of what the needs are is you want to have your own blockchain.

You don't want to run an L2 on your laptop and call it an L2. And I know that gets poked fun a lot, but the truth is, sometimes that is what's going on. It's literally like there's... It's not a true blockchain infrastructure where you're able to leverage, obviously, Avalanche's architecture, but then you're also able to have all of your controls at your disposal. Like you mentioned, if you're a financial institution, you can have all your KYC, AML, everything built in.

And if you're a gaming side and you want to have your own like Beam, you have your own token, you literally have your own blockchain with your own economy, your own token economy. And that's where, like we talked about earlier, that's where crypto makes sense or that's where a tokenized economy makes sense because you literally have a complete ecosystem where your gaming infrastructure is incentivized and it runs completely on the Beam token. And that's...

Travis John (16:01.576)
That's a genius setup. And I think that's where you see things like JP Morgan doing with the JPM coin, things like that, where it doesn't make sense for everybody. But when you actually think it through and you design the right architecture for the right use case, it's magical, you know, what the next step for the future of finances. So I think getting into the specifics of why your fund exists and why it's infrastructure for Avalanche, like what are the issues with

onboarding people into Subnets for Avalanche. I think that's obviously what you guys are solving mainly and clearly that's the precursor of course, probably some expenses I'm guessing, but maybe give me some background of why that's needed.

Andrew (16:47.447)
Yeah, well, at a fundamental level, it's a proof of stake ecosystem. So you have to put up tokens, capital, in order to run the protocol and operate a node or a validator on the system to validate transactions, validate data. Now, as you're scaling a blockchain and you figure that, you may want to operate your own chain, you'll need more.

Travis John (17:07.464)
Yep.

Andrew (17:15.67)
validators which will cost more capital and require the IT infrastructure and know -how or technical expertise of securing your network. So you have a capital requirement and you have a requirement for technical expertise. So there's a gap for many startups for certain to get involved or build an application on Avalanche if they wanted to build their own L1. It's cost intensive.

And two, they may not want to focus on running the network and securing the network, right? I mean, we know very well how the IT industry is, right? There's not a, let me say it this way, there's a shortage of IT industry workers.

And not all of them are excited to leave the jobs they've had a career building in or ready to retire in, built a career in, and are just going to jump into blockchain. So it does matter to have those skills. And I think maybe when these systems were developed, they thought like every company or internal team would just be going through these docs and be okay, running their own validators and nodes. But

Really not the case. So just the capital requirement and that technical expertise is an issue we're solving for as a fund, right? With that capital, we'll deploy it to validators and run those validators. What I think we've done that's very unique that no one else has done is we're solving a second order problem, which is getting the traditional investment world, the TradFi world, as they like to say.

into the decentralized finance world. And you can't do that through another, you know, on -chain restaking DeFi protocol or, you know, another Celsius. You know, we can't keep making these same mistakes over and over again. We have to go meet people where they are. And the traditional finance people know how to allocate as an alternative investment, you know, through a fund structure that's a Delaware fund that's audited or now through ETFs we've seen approved.

Andrew (19:37.171)
But what we've done is set up a private fund structure that allows them to allocate in a way that they're familiar with, but now allocate to the infrastructure of blockchain. So we're trying to match and align the interests of investors with the needs of those building on the network. And those building on the network need what? They need validators, they need capital and technical expertise. We're gonna provide that as a fund.

And how will we offer return to our investors? Well, obviously the Avalanche main net staking reward. But what we've innovated and I think we'll do quite differently is now think of this as a traditional financial product infrastructure fund where you then lease out that infrastructure, right, to those who need nodes to build. And we can create another income source to the fund that way and have a...

trusted arrangement right was almost as an IT blockchain operator for that company who needs someone to help run their nodes or to expand their network. So we think we've done an interesting thing in aligning those two objectives.

Travis John (20:55.976)
I agree. And for context too, as you mentioned, the proof of stake network, the rewards on staking on the Avalanche network is not to be diminished in importance because there's definitely great rewards there from someone investing in the fund. And as you mentioned, there's other income streams that are coming as part of that leasing node infrastructure, etc. And I wasn't aware of that. That's a great add -on.

Andrew (21:24.112)
Well, yeah, I mean, think about anyone who wants to go start an application on Avalanche. They're going to have to put up 2000 coins. If they want to start a subnet or they're on L1, 2000 coins per validator at $40. That's $80 ,000 per validator, right? Five, 10, it gets costly. So how can they...

Travis John (21:38.12)
per validator, yeah. Yeah.

Travis John (21:47.208)
Yeah.

Andrew (21:51.632)
get their project started or expand their networks, they could lease from us. There's also very interesting developments with the Basel III capital requirements for digital assets. The increased capital requirements against banks makes it more costly to hold these assets on their balance sheet. Well, now there's a rental option. If you're going to continue to build out your bank infrastructure and applications on the Avalanche network and you don't want to run those validators or

keep those assets locked on your balance sheet, you can rent validators from a US -based Delaware fund. So I think what we've done is very unique and very supportive of expanding this network, the network infrastructure. I mean, it truly is network protocol infrastructure for decentralized applications, right? We're not launching a token. We're not creating our own protocol. We're taking the traditional...

Travis John (22:30.6)
Nice.

Andrew (22:51.856)
path and providing capital to the new world, let's call it, the decentralized world.

Travis John (22:58.448)
Right. Yeah. I mean, one of my first careers, I was involved in tech and consulting and I worked with companies like Capgemini and other consulting agencies where we were working on tech projects and deliverables. And, you know, as over the years, I mean, you learn about like their agencies and there's their consulting companies and infrastructure companies just serving IBM, just serving, you know, all these different, this is really just the next wave of technology innovation is that the next

Rise is on all of these L1s where all this infrastructure is moving there. So it's just, this sounds like a new concept. Like I know to new people, like you said, to new people, but this has been going on forever. This is no different than the companies that have multimillion dollar companies that are IBM certified partners or Microsoft certified partners or all these certified partners who I've worked with over the years that...

Andrew (23:36.592)
Yes.

Travis John (23:56.584)
all rose through the internet activation. So now we're into the blockchain activation, which means there's a whole different set of partners that are coming to the table. One being how Rise & Shine is deploying and injecting capital into this opportunity and network infrastructure. And as you mentioned, deploying on a blockchain like Avalanche could be generally four to six validators are recommended. You're looking at...

almost a half a million dollars to just support the network. That's before any deal flow, anything happening. So it's important that you're able to look at that and this does solve a big need and a big problem. It also takes deal flow that's coming in through Avalanche and essentially helping it to redirect into areas where, hey, maybe you're not quite ready to...

validate your own stuff or you don't have the internal resources like you mentioned, here's where you can look at Rise & Shine and their infrastructure partners. So like, I guess, unless you want to add anything, I think it's important to talk about like the fund and, and in particular, like how, you know, how now it can be accessed through your partnership with Oasis Pro Markets, right? Like that's, that's the big, that's the big unlock, I believe. Yeah.

Andrew (25:11.472)
Yeah, that's the big news. Yeah, I mean, it's been a lot of time in the making for testing, for getting the story out. I mean, we went to the Avalanche Summit in Barcelona last year and I, you know, talk about doing like your due diligence. I just went and bothered everyone I could speak to and told them about this idea and tried to understand what they were doing with their validators just to get a feel for how people would react to it, just to get a feel for what people wanted and could help them. So now we're here.

We're at that point, we're raising capital and very excited about this partnership with Oasis Pro. Their interests are very much in lockstep with ours in terms of bringing the traditional investment world to the decentralized finance world or blockchain world. And infrastructure is a key part of that. So having their support, I mean, it really means a lot to us having them as a placement agent to help us.

Travis John (26:08.36)
Mm -hmm.

Andrew (26:10.352)
in the capital raise, I think is going to make for a great long -term partnership between both of us and help bring more assets on chain, right? As more companies look to tokenize real -world assets, I think they'll start deciding to take the path of putting them on private networks first, and they'll need private network infrastructure. We think Avalanche is the best place to do that.

Travis John (26:38.664)
Yeah, and like you mentioned, it's going to really depend on what their needs are and it's probably going to be that combination of public -private, as you mentioned, definitely very permissioned at first, most likely is going to be the path. And then, I mean, obviously we're seeing some funds like BlackRock and the Securitize stuff be issued on Ethereum. And that's really more just a fund there where there's instant settlement. That's obviously all the wallets are...

Andrew (26:58.32)
your own.

Travis John (27:05.928)
It's all white -labeled or white white type of stuff, so it's not something that anybody can DeFi or anything like that. But it's a good start, clearly, and it's been a big newsworthy part of the growth here of everything we're seeing.

Andrew (27:12.432)
Right.

Andrew (27:21.936)
Yeah, I mean a lot of great news coming out and institutions starting to take their step in. So, you know, we've put out a few LinkedIn posts that just like for the last year, since the Avalanche Summit that I went to last year, just saying like the institutions are, they're coming to this space. And I think this is just the beginning. So it's an exciting time.

Travis John (27:42.536)
It is. So what's next? I mean, as we're winding down here, I think this has been an excellent conversation. And we'll definitely have you back. I know it's early, but this was big news. And as we've been talking over the past month with Julie, I wanted to, we chatted, this was probably a good event to have you on, at least for a quick chat. And we can have you back as you're raising funds or you have additional partners that you, maybe some new projects that you've.

blocked in that are going to be using your infrastructure agreements, et cetera. But yeah, I mean, what else would you like to share?

Andrew (28:18.704)
 love to come back sometime. Definitely keep you posted as to what partnerships we have on the Subnet side and interest that comes in across the fund when we get the fund closed. But yeah, for us next, it's just completing the fundraise. People can come learn more about us either through our website, our socials, or Oasis Pro. And...

We'll continue to have more of these conversations. So we appreciate you bringing us on for this. Yeah.

Travis John (28:52.072)
Likewise, yeah, that's been great having Andrew and I'll share all the links when I share this out with my audience, but it's rns .partners is the main jumping off point. You can get to LinkedIn and obviously learn more about the Oasis Pro partnership and get access to the fund that way and find out more if you happen to be someone listening that's in that accredited status and is interested in taking a look at the fund. So.

Andrew (29:18.064)
Yeah, of course, let me be very explicit about that. The fund is for accredited investors only. And all the concepts of doing your own risk, your own diligence, please, please be very careful in the space and do your research on what we're doing and what others are doing in the industry.

Travis John (29:40.264)
Yeah. Well, this is a unique solution and kudos for at least the next step and the big partnership and the announcement. So we'll be chatting again soon. Enjoy the rest of your day. Great chat. All right, you too. Thank you. See you.

Andrew (29:53.52)
Thanks a lot. Take care, Travis. Later.