Mike Townsend: AlanVey is the guest for today. He's the founder of Aventus Network which hasraised over 20 million. They are creating the proof of stake, blockchainleading to great energy efficiency. We talked about the origin of the project,how it's going so far. What they're specifically doing to create this techstudio approach, where they're funding early development of projects on top oftheir blockchain.

Mike Townsend: Andit's a genius strategy, and I appreciated Alan breaking it down. Somethingother crypto projects should definitely pay attention to because there is amassive problem in the treasury allocation onto new development companies whowanna build apps on top of protocol. So. Building your own app on top of yourown protocol seems to be a super effective way, as opposed to just givingdevelopers money to then maybe build an app on top of your protocol.

Mike Townsend: Soanyways, we talked about all that and more, we talked about Alan's background,what he sees going forward in crypto, and much, much more hope you enjoy thisconversation. Here is Alan Vey.

Mike Townsend: Allright, Alan excited to be chatting with you. You're running Aventus network.Why don't we start there? Ventus raised roughly 20 million in an ICO. What was,let's talk about maybe the fundraising of early days. You guys raised throughan ICO you're based in Dubai. Tell me what the project is trying to accomplishin the world.

Alan Vey: Yeah. Hey,Michael, to be in So, yeah, we started out that was back in 2017 when we didour ICO, I had just kind of finished my masters in artificial intelligence atImperial college in London. And I really started building this thing out inLondon, our team store kind of mostly based over there. It started looking atevent ticketing finally enough.

Alan Vey: So it wasquite a different vision. And in building that out, we ended up doing dealswith sort of big companies like live nation and. Originally on Ethereum andEthereum just didn't scale. So we were faced with those problems, solved thoseproblems in delivering on the big deals that we had done that led to event askind of becoming a layer too.

Alan Vey: And thenwhen COVID hit, we obviously saw live events. Weren't exactly a growth sector.So we thought we've got significant treasury because our, the money we raisedwas in EHA, right. Ither was $300 when we raised it. By that time, it wascloser to 3000, 4,000. So we had some good treasury left to expand the vision.

Alan Vey: And we wentbeyond event ticketing, so really expanded into loyalty, video games, morerecently, aviation, some supply chain use cases all sorts. And that's whereevent as the layer two was born most recently, then we, we kind of looked thenext step ahead, where things going now, scalability was the big problem.

Alan Vey: What's thenext. And to us, it's connecting up all the value. Right? You see greatblockchains, lots of cool communities in different ecosystems, whether it'sEthereum, some of the stuff that's moved into polygon, then we've got Solana.We've got avalanche, a bunch of cool ecosystems. And all of these need to chatto each other and be connected up.

Alan Vey: Andobviously Gavin would having co-founded Ethereum and then going on to launchpolka dot, having that vision and that ecosystem, we thought we'd really liketo plug into that, that dot Samma ecosystem, but retain that kind of internetof blockchain mentality, connecting everything up. So that's where we aretoday.

Alan Vey: And that'swhere we're going. We're busy becoming a power chain in that ecosystem. We'vejust now. Our intention to go for one of the, the bids, the auctions to towardsthe end of this month, and really making sure that everything can talk to eachother, make web three adoption, really simple for everybody by extracting awaythe complexity and building out the tools people need.

Mike Townsend: What,what's the definition in your mind of a Parachain?

Alan Vey: Yeah, sosimply put, I just say it. It's a bunch of blockchains that are in the sameecosystem that can securely talk to each other. I mean, this year we've seenover a billion dollars in hacks so far from bridges, right? There are a lot ofproblems in whether it was Salina wormhole or the Ronan bridge that actsinfinity users.

Alan Vey: Or morerecently what was it? I can't remember the most recent one, but anyway, bignumbers and their inherent security vulnerabilities with these bridges, withthese communications, polka dots and ecosystem, that's kind of taken care ofthe communication between blockchains in a way where that's very unlikely tohappen.

Alan Vey: So that'show that's in the simplest form. It's communication Ecosystem.

Mike Townsend: And,and specifically communication between ecosystems. So it's, you're focusing onbuilding the communication layer between avalanche polygon Ethereum, those.

Alan Vey: So wemaintain what you call sort of a decentralized bridge to Ethereum. Cause wewere in Ethereum layer too.

Alan Vey: Now we canchat all the other polka doc para chains, everybody who plugs into thatecosystem. And then we just kind of template it out so we can now plug onto.Whatever the next might be Salina, various other chains, none have happened sofar. Cause we're very focused on plugging into the ecosystem. But given we chatto Ethereum that all that infrastructure's.

Mike Townsend: Andwhen you say you chat to Ethereum, look what, let's break that down technicallya little bit. So ethere so Bitcoin, right? There's blocks of transactions thatare grouped together into the, into the blockchain Ethereum salon, avalanche.They have different constructs, slightly different constructs, polygon, andthen the problem you're solving, how do you describe the problem of the bridge?

Mike Townsend: Andthen technically, how would you. How, how, what the bridge is doing behind thescenes.

Alan Vey: Yeah. Somany of the problems in, in these bridges, I mean, let's, let's look at thesehacks and why some of them have occurred, right? Yeah. Some of it is based on,I'd say not sort of being full, maybe not enterprise, but not running the rightsoftware development practices when it comes to hygiene on key management, whenit comes to your processes, the boring stuff, but the stuff that keeps everyonesafe.

Alan Vey: So I'd saythat's 50% of the, the issues we see. And then fundamentally, when you have twoblockchains that achieve consensus in a different way, there are opportunities,their time lags, they're inefficiencies, where opportunities for takingadvantage of those ecosystems as they start to reconcile. But there's still discrepanciesexist.

Alan Vey: Now it'salways different per implementation, but in an abstract sense, that's what youcan think of some of the problems. So in addressing that the best way to do sois by blockchain sharing a consensus mechanism. That's why the polka dotecosystem's so powerful with polka dot, getting out the way, and they callthemselves layer zero.

Alan Vey: So theydon't really concern themselves with business logic. They just worry aboutgetting that right between all of the, the chains they've just launched thecross chain. That's a strong way to, to kind of be sure you don't do that. Somaking sure you have your processes and making sure you take into account theseconsensus issues and at times perhaps not being quite, just performant, but makingsure that you put the security first in that communication before anythingelse.

Mike Townsend: And solet's talk about polka dot for a second. So they're layer zero. They're doingwhat's their unique approach here.

Alan Vey: Yeah. Sothey really focus. they let the, the para chains essentially are business logicspecific. So you come up with use cases, the use cases like decentralizedfinance applications, right?

Alan Vey: Debt,lending protocols. There are others that focus on being just like Ethereum.Where they copy the Ethereum kind of smart contract systems. Everybody kind ofhas their own niche. Our niche is being enterprise grade, right? We build theinfrastructure. We bring the kind of deals that fit in the enterprise world.

Alan Vey: Now, whatpoker dot does is support that infrastructure by dealing with all theblockchain stuff that everybody has in common reaching consensus, dealing with,who gets access to this network of communication, a secure way that everybodycan secure a slot. How everybody sort of chats across these differentblockchains that kind of cross chain messaging and all the protocols aroundthat.

Alan Vey: Soeverybody can share that same base infrastructure and focus on we, what we kindof do best in the ecosystem in terms of business logic for specific use cases.

Mike Townsend: Hmm.Interesting. And what, why are those when you say the bridges? So many of thebridges have been hacked. Failed and lost capital. You mentioned 50% is theblock in tackling the managing of the keys, the, the basics here, basicsoftware development.

Mike Townsend: Isthere an inevitable path forward on the architecture of bridges? This is, arebridges are most decentralized today? Are we moving to a world where they'redecentralized and what does that. What is the decentralized bridge? How is thatactually operating?

Alan Vey: It's aninteresting question, right? I guess, to a degree, it comes down to what's thelegal definition.

Alan Vey: And thenwhat does the actual practical definition boil down to? Because peopleobviously try and trade as close to the legal line as possible. But practicallyspeaking, sometimes that's insufficient. So let's look at, I think it was the,the Ronan bridge where it was compromised. It was considered to be adecentralized bridge by that.

Alan Vey: You meanthe. The consensus of the participants in that bridge, agreeing on what thestate is between the two networks that they're kind of connecting, right? The waythe participants achieve that consensus. It's not one party that says this iswhat's happening. There's a collection of parties that come together to agreeon what has happened.

Alan Vey: What'smoved from one blockchain to the other one. Now. if you make a majority of thatbe third parties. So not one entity controlling them, legally speaking, you aredecentralized. Now the problem that happened with the, the Roland bridge wasover a period of time. There were actually only, I think maybe 10 sort of participantsthat were securing this network seven of which had.

Alan Vey: Securityprotocols that were similar or, and somehow were compromised in very similarfashions, meaning it was quite easy for a hacker to kind of get access to thekeys, get a majority of the network and rewrite it to whatever they want, printtheir own money. And then when others try to withdraw their money, kind of fromthe ATM it's, it's actually no longer there or backed by the bank in, in, inanalogy.

Alan Vey: So that.The kind of idea, really what you need is a bunch of completely separateparties with separate economic incentives, with their own security standards,ideally with their own technical audits on a periodic basis doing their ownpenetration testing of their systems, all of those kind of things that we knowin softwares is very important when you get to the kind of market caps we'retalking about for these companies, but it seems potentially doesn't always takeplace in, in some of these implementations.

Mike Townsend: interesting.And do you see the future as being inevitably when we say decentralized andcentralized, we do, are you thinking about the number of validators? If that'sthe right word that validate the bridge transactions? Am I saying this theright way? Does this, is that kind of, do you feel like the more validators andthe more individual operate?

Mike Townsend: Is itthe individual operator? So seven of the 10. Had very similar structuralsecurity gaps. And is that, is that like, who are managing these seven? Likewho are these people that are managing the seven that cause the vulnerabilityopportunity?

Alan Vey: So this iskind of a, a question blockchain industry wide, right?

Alan Vey: What isdecentralized, what counts as they're not being a central party. So when youlook at some of the, the cases. And obviously it depends. I'm I'm, I'm going onsort of sec statements, right? So security and exchange commission in thestates. Former people who are in charge, obviously saying Ethereum is not asecurity for a variety of reasons.

Alan Vey: You usethe, the, how we test to obviously evaluate some of these things. More recentadministrations, potentially less favorable, but now maybe it's going to thecommodities kind of commission. I mean, that's an aside, but depending on howyou look at it, what counts as decentralized. So if there's not, if there's noparty that if they went bankrupt or ceased to exist, stop paying their serverbills and their, their validators nodes, whatever you wanna call it, go down.

Alan Vey: If there'sno party you can eliminate, which destroys the entire ecosystem. I'd saytechnically speaking that's to a degree decentralized, right? So if you look atan architecture, let's go back to the PDOT example. We discussed PDOT obviouslyhas significant number of let's call them validators or what co within theirchain.

Alan Vey: Andthere's, there's a significant number of those, which means that anybodybuilding on top of it, the power change, the business specific logic. Doesn'treally need a hell of a lot of notes because you're deriving your security fromthere. It's a similar principle to polygon, right? Polygon derives its securityfrom Ethereum.

Alan Vey: Meaningthat because Ethereum has so many validators, they don't quite need the samenumber because that in that security exists there, you, you still needsignificant amounts. But much less. So, so it always boils down to, to thatsame kind of thing. Yes. More is better if they are more diverse, just morenumber of validators, doesn't help.

Alan Vey: You requiremore parties with differing economic incentives or interests within the networkto be involved. But as you scale that you start having issues with scalability,there's, there's always trade offs, right? So that's why a multi-tiered kind ofarchitecture. As you typically see in, in, in any sort of bigger applicationis, is what it's all about.

Alan Vey: You haveyour security layer at the base that takes care of the good things, build yourbusiness logic on top, get your sort of whatever infrastructure on top of thatthat helps you with your load balancing makes it a bit more developerexperience friendly and really focus on that, that tiered architecture todeliver the greater security.

Mike Townsend: Hm. Ithink we painted the landscape of bridge as well. When you think of what thefuture looks like, you describe it as not necessarily more validators, but morediverse validators, presumably to prevent a kind of systemic wide or consistenthack. If you find a vulnerability in one validator and seven, others are theexact same and there's only 10 total, then you have a 400 million.

Mike Townsend: Likewhat Ronan happened, which I believe was bailed out. I see a note bailed out byBinance. Is that right?

Alan Vey: I, I didn'tfollow it extensively afterwards. I kind of learned a bit more from thetechnical side of it, but I've seen a few of these I've had bailouts or otherpeople come in, whether it's VCs or, or parties like violence to try and helpprop up the ecosystems.

Alan Vey: But if youlook on posting of these hacks, total amount of assets locked within thesebridges. they plummet and they haven't returned for any of the ones mentionedso far to anywhere near the same level as before.

Mike Townsend: Andwhat would be an incentive for either VC or an exchange to when they saybailout? I, I think of it as the classical, like government bailout.

Mike Townsend: Sogovernment giving usually very low interest loans to companies to help themthrough difficult financial times. Now we're talking in an analogy here, but abridge is not a centralized organization. How, what is a bail? Even in theory,look like in this example.

Alan Vey: So I wouldsay if you look at the economic incentives within that environment, right,there's, there's two reasons to support an ecosystem.

Alan Vey: It's eitherone for the value that you believe you can buy on the cheap or for the riskmitigation that is required because you yourself have exposure to thatecosystem. So often it's not clear what the legal agreements are behind thescenes who's involved in what to what depth, but. Let's say, for example, youhave a significant stake in a company that has certain exposure to one of thesecompromises happening.

Alan Vey: You may beincentivized if they're good user numbers, if there's good tech, but there wasjust a mistake to try and support that asset and use that, that user baseelsewhere. Right? There's there's still value there. It doesn't immediately goto zero. Confidence is lost in that particular implementation.

Alan Vey: But there'svalue in the communities. There's, there's so many different sort of assetsthat compromise a business or ill com businesses are composed of that. Ibelieve supporting those users, making sure that they don't get. Completelyburned by it. I mean, one for the industry as a whole, it's beneficial to nothave massive negative set sentiment breakout again, but even more specifically,you may be able to acquire good favor or generate additional usage for yourecosystem by supporting an ecosystem like that.

Alan Vey: So I can'tsay, I know for a fact why, but if I think of the economic incentives involved,that's how I would reason about elements of it.

Mike Townsend: Imean, I can't imagine it's just donations. Like, I, I can't imagine finance isinterested in just giving money away to people on different bridges. So therehas to be at least a perceived positive ROI.

Mike Townsend:Exactly. Interesting. Yeah. I think CELs is kind of in the middle of that nowwith famously what's his name? Sam bagman fried coming in and offeringdifferent projects money to build them out block five or Celsius or others. Soit's kind of an interesting. Secondary market after like, after catastrophestrikes, who the people are that come in and, and offer deals to help theseeither companies or protocols and some examples through.

Mike Townsend: Okay.So let's talk aboutAventus a little bit more. What, what would be you advertisein the site that it's enterprise. Grade. What does that mean? Exactly. Andwhat's the difference? What should, what is, what should come to mind whensomeone thinks of enterprise in crypto?

Alan Vey: Yeah, so Iwould say there's two ways to kind of break that down.

Alan Vey: It's interms of features and, and the sort of product suite, but also more sort ofgovernance and on the corporate side. So let me start there. When, how we'vebuilt our ecosystem. So we'll go through quarterly technical audits. We havesort of an independent board of a bunch of regulated entities and whatnot thatsit within a foundation.

Alan Vey: So we'll ona quarterly basis, have to put forward what we believe we can achieve. We willthen be assessed against that criteria at the end of a quarter, by anindependent board, sort of. Government agency auditors who will come in,they'll have a proper look through everything. They'll make a recommendation tothe board.

Alan Vey: And on thatbasis, we'll either receive grants for the work we've done have certainpenalties depending on what wasn't delivered. So that kind of a structurealongside having independent non-executive directors, regulated entities andwhatnot, big public trade company, regulated adminis.

Alan Vey:Administrators also the local regulator involved in what we do all of thathelps you build up the government structure to make something a bit more on theenterprise grade side. And then in terms of feature set, what I'd say is whenyou looking at how you roll out a product is obviously sort of, you can buildit MVP class scale at that way.

Alan Vey: And many ofthe products in the early days that was. But you get to a point where thearchitecture sort of matures, how you're working on your tech debt and thevarious processes you start putting in place. Right? So this is key managementprocedures. This is looking at disaster recovery. This is the penetrationtesting.

Alan Vey: This is allof these kind of audits, code audits, all of that kind of stuff in place.Performs part of the picture and then. Just what you focus on feature wise. Sofor example, events, we've built what we call the gateway API. So we haveeverything from the base blockchain network. Then we have different validatorspeople can run and we have managed service offering around that so that we cankind of support people with service level agreements and ensure their code'sbeing operated in the right way.

Alan Vey: We then.The gateway API that we build on top, which is almost like in fur for Ethereum,a load balancer, it provides people, the ability to sort of proxy and pay forpeople's transactions on their client's behalf. So it means bigger corporatesdon't have to touch crypto or their users don't all have to touch crypto.

Alan Vey: They cankind of process that on their behalf for using intermediaries. So differentways of how you look at the, the payments, the invoicing. Of some of theentities as well, that can't touch crypto and how you can kind of work aroundthat. So yeah, lots of different areas, the key things to focus on, if you wantto do deals with public companies or highly regulated entities and, and what

Mike Townsend: what'sa customer of yours, like what would be a typical transaction?

Mike Townsend: Likeideal customer comes in? How much do they pay? What are they getting? .

Alan Vey: Yeah. Yeah.So I would say ideal customer would take our blockchain as a service offeringwhere we deploy them a permissioned version of the Adventis network within thatnetwork, they're required to use the utility token in the same way on thepublic network.

Alan Vey: Itmaintains a bridge to the Adventis network and Ethereum, which. They can,they've got their own internet, but it has the ability to connect to theinternet of blockchains. Right? So that's at the base layer on top of that,they would purchase the gateway API product to ensure they can integrate theirapplications.

Alan Vey: So let'suse aviation as an example, cause we're busy, rolling out some, some cargodeals with heat, dry port and national airline. So set up the base blockchainthen set up this infrastructure so we can plug in the existing tech stack.Restful APIs with SLAs and, and somebody that can call up and then ask to kickkind of thing.

Alan Vey: When, whenstuff goes wrong, right? The way they're used to working with software. We havea white label NFT marketplace offering where you have regulated custody, bothin the, the us and Hong Kong. You've got sort of insurance product wrappedaround that Fiat on ramps, all of that kind of good stuff. If you want it allas simple as open sea, you know, anywhere in between.

Alan Vey: So that's,I would say more in the sort of platform as a service layer and then ultimatelyinto the application domains in some areas like ticketing, for example, thedeal that we had done with one of the live nation festival. Was for ticketdelivery. So we built a delivery wallet where you essentially deliver NFTtickets and through that you help.

Alan Vey: So, so thatalt is sort of B to BTC. We don't deal with the BTC elements, but all the wayup to software stack. So I'm just demonstrating to you at different levels ofthat stack from the infrastructure of the blockchain, to the, the, the sort ofplatform as a service layer and up into the software as a service layer, havingofferings across all of.

Mike Townsend: andyou mentioned ticketing a couple times in the airport. I imagine theapplication is related to people's tickets. Is there a, is there a, a problemwith the current ticketing solutions either on, you know in person experiencesor on airports, like I'm picturing apple pay or apple. You know, pops up withthe thing.

Mike Townsend: So youhave digital versions of that. It could be a PDF on your phone or a paperversion. Is there a incentive for airports to move to NFT or cryptodecentralized ticketing?

Alan Vey: Soticketing, mostly we've dealt with live events so far. In aviation, it's notticketing for we don't do any ticketing for the actual airline tickets,although we are busy exploring a lot of airports are struggling right now witha problem of.

Alan Vey: Check intimes, I think check in times have gone from something like 40 seconds onaverage to over three minutes, right? With all of the COVID checks that have tohappen. There are a bunch of other things they check in. They never used tohave to they're understaffed as it is the whole industry's taken a hit rightfrom the they've had to make cuts.

Alan Vey: So they'relooking for operational efficiency. So there are conversations aren't goingaround. The representation of the different levels of authentication that userhas gone through and restructuring. What levels of like pre authentication youcan get in the states, you guys have stuff like TSA pre-check or whatever,right.

Alan Vey: Where youcan, you can kind of do a lot of the work before you get to the airport. A lotof that doesn't exist in Europe. So it's looking at some of that kind ofinfrastructure is blockchain absolutely essential for these applications? Idon't think so. It's more interesting on the cargo tracking front in aviation,ah, that's where you're kind of creating a, an interoperable backbone betweenthe different sort of it's a Providence system, right?

Alan Vey: And they'vegot a bunch of systems, bunch of paper work done at any 0.5% of these thingsare missing. In the world and there's, there's a big expenditure around that.So making sure you know exactly where everything is and you have that sort ofuniform backbone of interoperability between all the systems.

Alan Vey: That'swhere the power really comes in in the aviation sector.

Mike Townsend: Andwhen you're tracking packages it's a good point. It's not ticketing. It's it'spackages are, are, is there currently today? Is it a centralized database whenthey scan, you know, picturing like ups or DHL or FedEx, I'm sure they have adatabase where they just manage this internally.

Mike Townsend: Thebenefit to them to moving decentralized would be what. coordinate with othershipping companies. Is that the idea?

Alan Vey: Yeah. Sowhen you look at it today, you've got, it's quite complicated how it works atthe airport, right? So everything fits within, what's called the ULD uniformload device. And that's where you've got either baggage post or other cargo,right.

Alan Vey: That's oneunit and these units are the things that people track around the airports andit goes through D. People's custody and different airports now where it getsquite complex is when you're dealing with what they call interlining, which iswhere multiple different carriers are involved in one ULD.

Alan Vey: So youstart whatever let's say out in, in China, somewhere that will then get carriedby one airline to Dubai in Dubai, it switches to a different airline to Londonin London. It switches in a different airline to wherever, right? That'sinterlining. The freight, then there are many different baggage handlers thatare involved.

Alan Vey: There'sthere's about five or six parties involved in moving these things around. Somany of them use different systems. They have different formats in thosesystems. There's a lot of the stuff that's done in sort of paperwork. So. Currently,they lose 5% of these things. At any point in time, they don't know where 5% ofthese things are.

Alan Vey: So that'swhere I think the power of blockchain can kind of leapfrog the infrastructureto a point where it's all sort of interoperable with a common standard andcommunication channel on the back end. And that's where you can hopefullyreduce that number down as much as possible.

Mike Townsend: And isthe onramping to a world where all Divi, all packages are tracked, tracked onblockchain.

Mike Townsend: Is theonramping to that through a, some sort of coor coercion of different players touse this, or is it within their interest? You know, who's what, what is theincentive of like the third airline in a five airline journey to scan or usethese use this blockchain are. Would they be getting paid for this?

Mike Townsend: Or howdoes this practically get rolled out?

Alan Vey: Yeah. Sothere the penalties along this process for wherever the thing goes missing,right? So if somebody missed places or can't prove that they got it to theright spot, ah, on the hook for payments, that's how the industry works. So theonly person that's really doesn't work for is the company that sells these LDSbecause it's great.

Alan Vey: When theygo missing, they get more. But they're not really involved in the supply chainbeyond selling people that should we call it the hardware to move thingsaround, right. So it benefits all industry participants, although most are verytech savvy. So it's important to start with those that do have sort of more ofthe technical infrastructure or go to the systems providers already.

Alan Vey: So we verymuch intend to have a B2B model where we help support the industry, theexisting sort of participants to upgrade their infrastructure. Rather thanlooking at a replacement product. We're, we're very much in the business ofowning business transactions and only building as far as we need to, into theapplication domain to kind of realize that value.

Mike Townsend: And,and would this be a big enough opportunity? The PA I'm picturing, if you, ifAventus was like the blockchain for the entire world's shipping in freightmanage. Like that would, that would be such an enormous accomplishment. Whybother spending your time with like ticket ticketing projects or something,right.

Mike Townsend: Youcould only go after so much in a day. How do you think about likedirectionality, how you spend your time?

Alan Vey: Yeah. Sowhat we've tried to do is build an ecosystem of companies and make them asindependent as possible at any point. So to a degree it's almost been like aventure building studio model. So we will start.

Alan Vey: In a newdomain, we will bring different people from that industry, get them involved onthe board, get them on the cap table of that business and hire in staff to thatbusiness. So as Aventus, we fund the first rounds of that business to solve theproblem and find product market fit from there, we then build businesses thatcan attract VC funding and kind of live on their own.

Alan Vey: So this islike planting a bunch of seeds. We get it to the point where it's a tree thatcan kind of sustain. And then hand the rains over to, to other people to kindof really run that. So we are very much focused on the infrastructure ofthings, building the plumbing, building all of the tools that people need torealize this.

Alan Vey: Now in theearly days, we have to build all the way up the stack. That's the ticketingexample more recently with the video games we've built. So let's take loyalty.As an example, we built a loyalty coin. That's now got 2 million activewallets. That's rolled out across four territories globally. We built theinitial infrastructure, came up with the design of how you tokenize this cashback system in a more efficient way using blockchain.

Alan Vey: And welicensed that to a partner in. So really we just take it as far as we'd haveto, to get industry buy-in and then we kind of let the experts run with it.Like we we're in the business of owning blockchain transactions. Our primarygoal is to get event as being the engine in as many areas as possible.

Alan Vey: So to us,it's a diversification of risk. We went all in, in the early days on ticketingand saw how that played out. So we really remodeled our business to be focusedon planting these various seeds, giving them to a level where they can thenkind of flourish and grow themselves.

Mike Townsend: interesting.That is an interesting layer.

Mike Townsend: Howmany different projects now are, are active? And I guess by active, I wouldsuggest the definition of having raised outside capital or have outside peopleworking on, on that, on that project.

Alan Vey: So everyonethat we've done has reached that state. Fortunately. So that would be, we'vegot video game token in game economy essentially looking at how you incentivizepeople.

Alan Vey: So we'velicensed that to a partner that's got about 600,000 users on it. Right now. Imentioned the loyalty application. We that your partner that's got about 2million active wallets on it. We've got, obviously we did the ticketing side ofthings. That's had a, just shy of a million tickets go through it so far.

Alan Vey: We havedone on the event is block. Then there other use cases, there were some supplychain use cases. Those were very low volume though, but a couple gold deals inDubai where they moved some assets around looking at the Providence on those,and then NFTs that's where we've seen significant growth more recently in ourecosystem.

Alan Vey: So in the,the year and a half, that we've been sort of properly in production. Now, sinceFebruary last year, we've done about 20 million transactions through thenetwork across the various use cases. So there's of the core ones that wereally built the business up all the way. I'd say there are about five, andthen there are obviously just third parties that come and, and use theinfrastructure those on.

Alan Vey: Now thatwe've proved various use cases, you start having to chase people and someactually come to you and you can, you can do it the easier way around. .

Mike Townsend: Yeah.Yeah. It's funny. I, I talk to a lot of different projects who will raise moneyeither through VC or an ICO or, you know, somehow, and then they'll have thiscapital that they then create the foundation.

Mike Townsend: So theend goal is like, make this protocol large. You own a portion of the protocol.That's your path to, you know, your financial path. And then the foundation isdedicated to be effectively being a VC giving grants to people that then build.Your layer two protocol or layer one protocol, whatever it is.

Mike Townsend: Andthat seems to be consistently failing. It seems like there's not many greatexamples of foundations who can effectively manage capital. And I think part ofthat is is there's not, there's no, unlike a VC, there's not. A legalrelationship. It's not like I'm owning shares in your company. It's typicallygrants allocated to small development teams who put forth proposals.

Mike Townsend: And sothe development teams have gone away, gone around and said, okay, I'm gonnagive a proposal to everyone. And then I'll take the grant. And then I'll kindof just not really work on it and whatever. So it seems like a major challengeacross the industry is how to allocate foundational dollars. To helping to, tosparking development on their protocol.

Mike Townsend: Right?A lot of protocols are sitting around with money saying we want people to buildon us, but we don't really know how to do it. And you guys have taken the tactof let's just build it ourselves and then create the seed like you said, andthen hire people. So you're acting more like it'd be more analogous to aaccelerator or like a launchpad than it would be to VC fund, which iscategorically.

Mike Townsend: How.Protocols have approached this. Does that resonate you?

Alan Vey: Yeah. Bigtime. Yeah, I, yeah, I normally refer to it as like a venture building studio,I guess. It's really what degree of hands on are you going in? Because reallyfor these, we will go in, we will define the initial product. We will scorethis kind of headline deal that proves the product market fit few small deals,but you need that like big name, right?

Alan Vey: Somebodythat resonates in that industry for aviation Heathrow airport resonates rightfor ticketing live nation resonates. So once you get it to that stage, then youcan obviously attract your first. Two 3 million funding and a C ground from aVC, a VC ensures that whatever team you bring in there, they have that propercorporate discipline.

Alan Vey: Should wesay? And that seems to be much more a recipe for success, or, I mean, let's seehow big it grows, but so far we've found that to be much more successful thanthe few projects we have said, okay, here's a grant. And on average haven'tseen amazing results.

Mike Townsend: Andwhat, what's your backend recipe here?

Mike Townsend: So youhave an idea. You have a thesis around like gaming NFTs shipping. I imaginethis comes forth through just brainstorming. Like where is, is there aparticular, like thought matrix you're running through like PR you know,problems in the market, the number of participants, the number. Like, how doyou sort of think through the different you know, there's not a ton of 'em youhave five companies and there probably doesn't need to be a ton.

Mike Townsend: Youknow, it's not like you need 10,000 projects. You maybe need, you know, 10,five per year. Like it's, it's a small and manageable number, but they each canbe very large. Yeah. How do you think through both the identification of thetype. Project you want to invest in. And then what are you doing in the earlydays to build it?

Mike Townsend: Isthere team of developers who just kind of run with a product scope and onto theraces?

Alan Vey: Yeah, so wedo it all very much. Client first, client driven. So we will look at who do wehave access. In what areas, obviously you have to, you can't just go into anyrandom sector where their, their use cases, but this technology, especiallywith NFTs now, as well, that opens up a whole nother window of engaging wideruse cases.

Alan Vey: So it'shaving a core team of maybe three or four people who really understand thefundamentals of this technology and how you could apply it. And giving thosepeople together with our, should I say connector network? We have maybe four orfive individuals who are incredibly connected globally within differentmarkets, right?

Alan Vey: These guysare kind of black books where if you say you want to get to person, if you say,I want to talk to Ikea, you're chatting to one of the founders the next week.So it's building first, those reputations with those introduces to understandthat you're not gonna make them look stupid when they put you in a room withsomeone.

Alan Vey: So that wasstep number one, step number two was then really making sure that that analysispiece is there. So we chat with the introduces. Okay. Here are the people. Hereare the areas we can get to. Here are my hottest contact. Here are less. Sohere I have really good relationships. And then we work those relationships.

Alan Vey: Weunderstand. Okay. These are the different sectors. Now let's prioritize themrelatively and we'll go through as a team and we'll be like, okay, I got theseideas. I got these ideas. And the more of these things you do, the quicker youcan kind of run through that process takes very long in the beginning,obviously.

Alan Vey: And thenfrom there, we'll then start having the conversations and it's always on afriendly basis. We never go in and it's like, here's a hard pitch to, to buymy. Hey guys, we wanna have a friendly conversation. You know, we knowblockchain really well. You are obviously the expert in your industry. You'vegot time now let's have a chat and see if there's some new revenue streams wecan unlock for you.

Alan Vey: And thenthat friendly collaborative approach leads you to getting a really goodinsight. It's the relationship building, right? You then really work on therelationship with that party. You understand their needs, you understand howyou could potentially solve problems and make their business better.

Alan Vey: And thenyou work back from that to a solution. So that process all kind of sits withproduct and, and business development until such time as we then get a legalagreement. That's when we really bring the tech teams in and we're like, okay,now we understand what the scope of work is. We understand what value we aresaving or creating, and we're just taxing that value.

Alan Vey: So Nick,you're making money off of. We carry the costs of all of the initial R and D.So it's, it's on a no cost basis. We're just gonna figure things out. We've gota good relationship and that's how we then build it. Then when we do thatinitial MVP, that's the point at which we prove it or disprove it.

Alan Vey: And that'swhere we go from having spent a couple hundred thousand to saying, okay, nowthis project gets serious resource.

Mike Townsend:Interesting, great description by the way. So you're, you're almost, we reallyare running a venture studio. I mean, Doing everything from brainstorming todiscovery and processing that with people in the field, mocking it up on aprototype funding, early development, and then shipping products to get earlyusers and then recruiting people to then run it.

Mike Townsend: Andyou've done that, that, that general process has been run through five-ishtimes for the different applications.

Alan Vey: Exactly. Sothat's what we did in ticketing. That's what we did in loyalty was then. Afterthat was the supply chain use case from there. It was the video games and thenmost recently in NFTs.

Alan Vey: So thoseare sort of key five ones. And now we're repeating that in aviation. So that'llbe the, the sort of sixth sector.

Mike Townsend: And isthis funded by a separate fund? So early on ICO, the ICO money came through onhow ICOs work is they come through on a, a token. So people. You'll issuetokens. People will purchase those tokens.

Mike Townsend: Youtypically at a discount and then that's the incentive for people to purchaseit, like on the, is on the initial coin offering. Is that, is there a separatefoundation? That's how, how you structure the organization? Yeah, structurally.

Alan Vey: I run thecommercial arm and I have to go to the foundation and justify our existence.

Alan Vey: I wastalking before about the sort of corporate regulatory structure. So we have thefoundation that's completely independent. That's where the independent sort ofnon-executive directors sit. They're the guys who have the technical auditsthat you have to pass on a quarterly basis. That whole process sits with thatentity.

Alan Vey: So we'll goforward and say, look, so we've built a business. That's kind of revenuegenerating. We've raised some VC funding, and then we show, okay, this works,then we'll go back and say, we've identified another one. And then we kind ofhave to jump through those hoops and that process. So very much in the way wehave to build these businesses.

Alan Vey: It kind ofmodeled out after a lot of the VC models, right? Where you gotta hit thecertain metrics, you've gotta get your KPIs around certain things right beforeyou unlock your next trach of the kind of money that's been agreed. So thatprocess is, is how we kind of go through it. Now, anybody can apply and kind ofjump through these hoops and a couple have done it, but nobody has been able tokind of generate the, the objective of the foundation is to deploy its assets,to ensure that there's a sustainable ecosystem.

Alan Vey: Past allassets having been deployed, right? That's that's the ultimate goal. So if abusiness gets any financing from the foundation, all blockchain functionalityhas to become exclusive to wherever that token is used. That's the kind ofincentive of the foundation to look after that, that sort of promise beyondthat the objective is get businesses that can pull in other capital.

Alan Vey: And justkind of exponentially grow the ecosystem through different use cases, differentcapital. Ideally, there's a value added model on top of that, where enterprisevalue can be captured through other value added services that aren't necessarilyblockchain related, but ensure a sustainable business that can continue todrive transactions.

Alan Vey: So that'sthe model that they look at when they're assessing kind of the applicationswithin the ecosystem. Mm

Mike Townsend:gotcha. Gotcha. And how much of the. I know it went, it changed in price, buthow, what is the treasury? Is it consisting all ofAventus network tokens, andthen who is, who currently makes how many people are on the board that makethat decision on the foundation's behalf?

Alan Vey: Yeah. Sothe treasury initially was 60,000 ether that was received in return for selling60%. Of the AVT token. So that 60,000 ether was worth 20 million at the time,but obviously significantly expanded from there. I don't have clear visibilityas to exactly how much is left there, but so far I believe about 50 million hasbeen deployed.

Alan Vey: Sosignificantly more than was initially received in terms of dollar value. Interms of, then there's also a component of a, B T, this is all public information,cuz it's on, you can see it on their Ethereum blockchain. So there's about 12%of the total, a BT supply remaining within foundation treasury, that's beingdeployed towards grants and whatnot.

Alan Vey: We, weactually are busy going for the para chain slot. So as part of going for thatpara chain slot, you put up rewards for people who help you secure the slot. SoI know 600,000 AVT is going toward. Anybody who participates in that to helpsecure the para chain slot for 96 weeks. So those are the kind of areas thatgets deployed in, in terms of that board.

Alan Vey: It's fivepeople that sit on the council itself and then have a bunch of independent sortof auditors, technical advisors, third parties that generate reports andwhatnot. independent professional career non-executive directors who evaluateall of this information and kind of make decisions on that basis.

Alan Vey: So there'sregulated administrators that sit on that board. There's a bunch of differentpeople. This is all set up in, in Jersey and channel islands.

Mike Townsend: Yousaid New Jersey

Alan Vey: In Jerseychannel islands. So it's just shore from the U.K.

Mike Townsend:gotcha. Okay. So there's a, there's a nonprofit company that you set up in anisland off the UK in the channel islands.

Mike Townsend: Soit's registered there and then you, was it you who chose that? The five people,did you say five people are on the board?

Alan Vey: Yeah. Is itso they were selected the administrator. So when you set up in thatjurisdiction, there's certain, it's like when you set up. Dubai or Singapore orJabar or any of these jurisdictions that board comes together.

Alan Vey: There'scertain regulatory requirements. So there's certain administrators that justhave to be on it. If you set up there and then they are the key deciding forcebehind how the rest of everything kind of comes together. We helped draft thecharter initially. So the purposes of the foundation, this is what everybodyunderstood.

Alan Vey: This waskind of the terms and conditions of the token sale back in the day. Soeverybody understood when you're purchasing this, what is the purpose of theentity with respect to the tokens and whatnot, and then that's the structure.So it's a not-for-profit they no beneficiaries, all it does is act in line withthat purpose.

Mike Townsend: Hmm.Gotcha. Interesting. Interesting. Got it. And it's necessary to do that becausethe money you raise through the ICO has to. Allocated somehow. And to have itbe allocated through the same company who's making the software introduces aconflict of interest. Is that the primary?

Alan Vey: That's thepremise of most of the kind of setup of the blockchain structure around the2017 area era, you separate commercial arm from more objective arm.

Alan Vey: Should wesay in terms of evaluating performance and achieving the purposes? Cause onceyou have a commercial arm, there's always equity, which can create a skew ofincentives. Is somebody playing for the best interest of token holders or forthe best interest of the equity. And despite trying to be able to always provethat that conflict of interest will always be something that somebody in alegal case could pull on and say, but there was always this potential conflict.

Alan Vey: So thisstructure removes that by having no beneficiaries, not for profit, ultimatelymake the decision on how you distribute the assets.

Mike Townsend: And Iimagine that was pretty straightforward for you because that's how most of theother project. Are structured and it, it works. So why not?

Alan Vey: It waspretty much a copy paste.

Alan Vey: I gottasay. We've got so coin shares about 5 billion AUM headed by Danny masters. Theyhad sort of traditional finance guys building blockchain products. They wereour first investors rarely back in the day in 2016. And they were the firstsort of, one of the first exchange traded products. So they understoodtraditional finance corporate diligence compliance, all of that stuff.

Alan Vey: And that'swhy they, they pretty much set up a majority of the structure knowing how to doit correctly from, should we say traditional financial markets.

Mike Townsend: That'sgreat. That's awesome. Cool. So do you feel that going forward the next five,10 years will look certainly, well, do you feel that it will look virtuallysimilar to how people experience it today and how they're interacting withmajor companies?

Mike Townsend:Experiences like airlines, ticketing and gaming it'll feel the same, but that asignificant under the hood technological structural change will happen tomoving to a decentralized methodology for the primary reason of coordinatingbetween different organizations would that, or if that's not the summary youwould give, how, how would you give the five to 10 year outlook?

Alan Vey: Yeah, Ireally think. This is infrastructure, right? People didn't really notice theinfrastructure changes that took us from web one, which was, should we say,read mostly blockchain the internet to web two, which was kind of read andwrite internet where suddenly you are putting your information out there onsocial media sites and all of the stuff stems from that.

Alan Vey: So I thinkyou will see the implications of the, the new business models and the neweconomic incentives. But I don't think the core infrastructure will necessnecessarily be that apparent to your average person using the products. Right.So, yeah, I think it's infrastructure. It's gonna roll out on the back end, buttransform how many of the products work?

Alan Vey: So if youlook many people look at a future and they say, oh, Dows decentralized,autonomous organizations could take over governments and decentralized financecould take over banks and. I'm not sure. I really subscribe to that classmyself. I think having these tools puts pressure on the existing marketparticipants to innovate or be beaten by their competitors that are innovating.

Alan Vey: And I thinkthat's how to roll out. Right? The, the internet didn't destroy sort ofcomments. It just changed the way commerce was done into a digital format. Andthat's the same thing that's gonna happen here. We're going to see banks becomemore efficient. We're gonna see. The, the power shift changing.

Alan Vey: It's almostlike a nuclear deterrent. If you do have the ability to take all of your assetsinto your own custody, if you do have the ability to run these ecosystem.Without the central authority, you force them into a situation where it's amuch more fair and equitable split. So maybe we won't see the same kind ofamassed data or wealth concentration between big social media companies or, youknow, at least there's an alternative to much of that.

Alan Vey: I don'tthink it's a big surprise that Bitcoin was launched 2009, right after the, thesort of 2008 crash in the markets. Right. So that's the way I see the next fiveto 10 years Evolv.

Mike Townsend: I loveit. I love it, Alan. I really appreciate the way you explain things. Let's saycomplicated business that you're working on, but it's also a, a structure thatI think is super unique and works really well.

Mike Townsend: Andwould be something more projects to take a look at specifically the, theincubator accelerator. Like factory process that you've that you've created.It's awesome. Were, are there any particular books or people, or, or techaccelerator programs that inspired you that you want to throw out there?

Alan Vey: Yeah. I mean,it's, it's at the end of the day, it all comes down to people, right? So ofcourse theAventus team or everybody that's in the team like this is if, if afew hires hadn't happened the way they. We'd never be here today. There arevarious people along the way. I'd say I started with doing my master's thesis.

Alan Vey: The, theprofessor runs the crypto center. William Notten bolt. He's been involved thewhole time. He kind of got the initial passion into all of this. So any kind ofacademic institution, I think you can find a lot of those kind of charact. Heintroduced me to Danny masters, who I mentioned before, helped structure all ofthis with coin shares and then the various people down the road, in terms ofbooks, I'd say one of the best ones that I read is a book called grit, lookingat how you combine passion and perseverance.

Alan Vey: When, whenpeople talk about being talented or whatnot, how much does that matter versusjust kind of beating on your craft and really putting in the work. So I thinkreally learning that discipl. Is kind of key to everything is, is that was avery helpful book for me. Anyway, a book for me anyway, coming from uni andbeing, should we say maybe a little less structured and disciplined and thenaccelerators and whatnot.

Alan Vey: I, I wouldjust say that the, the sort of investment partners we have involved with usGabby ventures, which is coin chest SkyTel ventures, those guys have, havereally, really helped put us on the map in various industries and, and push us.

Mike Townsend: NiceAlan. Well, thanks for helping on today. Appreciate your time, man.

Mike Townsend: Thiswas fun to meet you and learn more about what you're working on.

Alan Vey: Lovely.Thanks for having me, Mike, this nice chatting to you, man.

Mike Townsend:Cheers.

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