00:09:07 · Oliver Smith
[00:09:07] S0: Yeah, it does. It is so it gives your investors kind of absolute confidence in in what's happening. They they can see the kind of end-to-end of that. But but no, tell me the second half.
00:09:17 · Doug Ricket
[00:09:17] S1: Yeah, and and I love that because you know, I'm I and a bunch of our management and board, we've been investors in the pageway fund. But I'm thinking in the future, you know, I could be gone from PageOI and what would give me confidence and you know, not reading the news last year. Um, and so really uh I just I love setting this stuff up right now because we are the good guys, but how do we prove it? How do we let people know that we're not cheating? And so I love raising that bar because you know, the less honest people will not be able to meet that bar. So the second half, and and I feel like these two are just coming together into a beautiful uh pancake recipe or something. Here's the syrup. It's the cash in side. So historically, this thing has been all um traditional. And you know, some of it we have to follow securities law and KYC, our investors, uh, on the debt side to make sure there's no money laundering and everyone is legit, no one's on the OFAC list and all this kind of thing, uh, which is a fairly heavy process, uh, and we're keeping that. But um we also have redemption on the fund balanced quite nicely, where the normal flow, people can basically tell us in Q3 they want to take money out and they get it out in Q4. So it's pretty close to liquid. Uh if you want to take your money out to go buy a house or something, like you can plan that a quarter in advance. Um, but it it gives us a little bit of stability. So I think the fund is really well balanced. But then what we're doing with the crypto side, or the blockchain rather, is connecting to the blockchain crypto world. So when people bring cash into the fund, uh they now get a token. And then that token is tradable to others who have passed the KYC barrier and are in this kind of walled garden. And so that means now instead of, you know, you instead of you want to take money out on October 16th, oh well, we're early in the quarter, it's Q4. So, you know, we've committed to getting your money out in Q1. That could be by the end of Q1, that could be March 29th. It's actually still a ways from now. Because it's a tradable token and we have uh, you know, a couple hundred investors in the fund already, boom, you can get liquidity tomorrow.
00:11:28 · Doug Ricket
So in on the platform we we have set up that we're launching this month, uh, you know, you have a million dollars in the fund, you can post that available. We have typically a waiting list uh of people who want to put more money into the fund. They can buy your token tomorrow and you get instant liquidity. And so putting those two together, the whole meal, is uh, you know, I think it it connects to this beautiful story that was to me really the promise of crypto and blockchain. And uh, you know, I follow the economist uh Paul Krugman, who has mentioned, you know, to him crypto or Bitcoin, I should say, the OG, uh is you know most useful for uh you know fraud, ransomware, tax evasion, uh his main use cases. And I think there's some truth to that, but I think some of the promise of it, we can we can make it come true now. And so putting these two sites together, the attestation and the liquidity, um, I think the story becomes more like we're connecting wealth holders from around the globe to be able to put their money into this fund, and it goes to needy people who are new to credit, able to get credit, to get through hard times and take advantage of opportunities to get ahead. That's the the beauty of what PageOi is doing. And through the power of the blockchain, they are able to have confidence that we are not double pledging, confidence that the loan tape is what we say it is, and they get full liquidity in an instant modern 21st century blockchain kind of thing uh on their capital. So I think it's it's really a beautiful story coming together with these two ingredients of the attestation and the blockchain, you know, crypto liquidity side, uh, to make a great capital product for the investors uh to know that you know nothing shady is going on and they have great access to liquidity and and people, um, the recipients, the the the point, the so what of everything is our recipients, who are three and a half million active users right now around the world, they get access to capital that they need at a good affordable rate.
00:13:28 · Oliver Smith
[00:13:28] S0: Amazing, because it sounds like you're blending the best, sort of the best bits of of DeFi and and sort of tokenization with the challenges of private credit. And by bringing them together, it actually ends up being a better, sort of a better solution for everyone. Um, and especially, as you say, the borrowers who are ultimately benefiting from this. Um I I've got to ask a question actually about the collateral piece, just because I'm my my tech brain is is curious. How do you um you you're so so you're locking down the phone? You have the ability to sort of lock down the phone. Um, and that is ultimately what sits at the heart of this. Um how how does that work? Is that an app? Is that a is that a sort of a built-in piece of technology? How does that work?
00:14:13 · Doug Ricket
[00:14:13] S1: Yeah, great question. So we've been doing this since we started in 2015. Originally it was just our own security software. Like I had been a Google engineer and I had played with the first Android phones and you know, had my fingers kind of deep in the operating system. And the first demo, I used this to recruit my uh my first co-founder, uh guy named Mark Hainen, who also worked at Stellar. Hi, Mark, if you're watching this. Uh and you know, I I showed him this first phone that uh I could sit at my laptop five feet away and boop, click and disable his phone. And you know, he could try re-reflashing it, re-wiping the operating system, but no, it was secured. It was, you know, probably the first version of the PageOi lock. Uh probably someone really dedicated could have found a way. But it it doesn't have to be 100% invulnerable, it just has to be 99.9 to work almost all the time and keep the majority of hackers out. And so a few years in, we we took our software, our security software, we packaged it up into a platform, uh, a product that we then license to the smartphone manufacturers. And so, you know, these are all the major smartphone brands around the world. And, you know, I went to China with the team in 2018 to launch this thing. And I honestly thought, hey, why is any major brand, why is Xiaomi or Appo or Honor or Huawei or Motorola or anyone, why are they going to use our security code? That sounds crazy. We're a tiny little startup. And I think the answer was the mobile industry is so competitive that if we can help you know your brand in Brazil sell another 500,000 phones, that's really meaningful. And being able to provide credit on good terms to a customer is really helpful in selling phones. Just like, you know, if you think of uh at our economic level, buying cars, like I think a lot of people do some kind of financing or release on their car. It's the same thing for our customers getting smartphones. And so um, we built up this security platform over time. We work with the manufacturers, and then at the point of sale, you know, a customer in a physical retail store buying a phone uh will find that phone comes preloaded with the Page security APIs in the operating system. And then if they're financing it with PageOI, they download the Page Roy app at the point of sale.
00:16:26 · Doug Ricket, Oliver Smith
It connects kind of like a you know receptor there to the APIs, and uh and it becomes strongly secured. Uh not it doesn't have to be perfect. Occasionally we find jailbreak vulnerabilities, we patch them. That's the name of the game in security, is kind of an arms race. Uh, but we've been able to do it, and the result is you know, honest customers, it helps keep them honest, it helps them paying on time, and it blocks out the fraudsters who would uh you know, sign the contract. Sure. So they'll sign a thousand contracts all day saying they promise to pay us, and organized crime will bring a thousand people, take a thousand phones and never pay back and disappear. And that's really what we're blocking so that we can serve the honest customer who's gonna pay us 90% of the time. Occasionally something's going on and they'll be late for a couple days, but they'll come back and pay in full. And so, really, by by blocking that fraud is really the key thing that the mobile security does. Interesting. Interesting. [00:17:24] S0: Um, I I'm gonna ask you a little bit more about that. But first, you're you're you're creating this secondary market essentially by by allowing those those tokens to be traded. What what are your expectations when when that becomes more liquid? Do you expect that's gonna bring a different class of an investor into the mix? What what do you think will emerge from that?