Crypto: Mastercard's partnership with avalanche demonstrates ‘comfort level’ with blockchain

Ava Labs President John Wu joins Yahoo Finance Live to discuss the avalanche cryptocurrency's enrollment in Mastercard's "start path" program that enables later stage crypto startups scale and grow.

Video transcript

ZACK GUZMAN: Welcome back to Yahoo Finance Live. It's obviously been a huge year for crypto in 2021 and a huge year for Avalanche, one of those protocols going up against Ethereum and the other alt ones out there to bring people to its platform. Avalanche, the coin that powers that blockchain is up more than 2,000%-- in fact, more than 2,500% on the year. And for more on that, I want to bring on John Wu, the president of the team behind Avalanche, Ava Labs president joins us right now.

And John, I mean, when you look at it, obviously, prices just kind of scratching the surface for what's going on with the Avalanche because so many people have been joining that ecosystem this year. And you guys just announced, too, that BitGo, one of the large custody giants out there, more than $64 billion in assets in custody, is actually supporting the building now in Avalanche, too, by supporting the native token. Talk to me about how big that is for another driver to look forward to next year.

JOHN WU: I mean, that is very big. BitGo is a great partner. They are one of the old hands in this space. They are a trusted, secure source for not just individual people in crypto, but also for enterprises and institutions. So their partnership with us allows us, basically, allows our fans to get more access because they are plugged in with many access points. So it is fantastic. It's great. We love working with them. They're very professional. And they allow institutions to really gain comfort in their own custody of things. So it's going to be great for more people to get access to Avalanche and AVAX.

ZACK GUZMAN: Yeah, it's obviously been a very busy year, as I said, but for you guys, just a busy few weeks here, right? We've been talking about, it was already added to Coinbase, so there's that. But then also FTX, and of course, you've also now added USDC in terms of building out the DeFi piece of what Avalanche is capable of supporting here. And last time you were on, we were talking about total value locked kind of a piece a measure that people look at in terms of how much money is flowing into the network for DeFi. That's also continuing to grow. So I mean, talk to me about maybe what the USDC piece and that stablecoin being added to the platform maybe unlocks now, too.

JOHN WU: So BitGo and FTX is about access. USDC natively gives easier adoption for people to use stuff natively on Avalanche. And again, it makes it easier, it makes the experience better instead of having to go to some other chain and then bridge it over and then get a rap version of it. Now it's natively there. So it's kind of like if you wanted a certain type of wine in Williamsburg, Brooklyn at a nice restaurant, it's now available there. You don't have to go to Manhattan to buy it and then bring it across the bridge.

AKIKO FUJITA: John, your company one of five startups that was recently accepted into Mastercard's crypto accelerator. We've seen a lot of the traditional players build out these accelerators, you know, yes, to help companies like yourselves scale out, but also, I'd imagine, to try and tap into some of the technology and solutions that you offer. So looking at the accelerator itself, what kind-- or looking at a potential partnership with Mastercard, what kind of development opportunities do you see coming from this?

JOHN WU: Hi, Akiko, nice to see you. So it's basically getting approval to work with Mastercard and to create solutions, Blockchain-enabled solutions for them and perhaps their partners and their merchants. So we're talking about things in payments or anything that is related to digitizing assets. For a company like Mastercard to allow a first layer, layer one-- the first one ever is Avalanche-- it speaks volumes to the comfort level of enterprises wanting to work with a permissionless blockchain. And we're very proud that Avalanche was the first one because we pride ourselves, in terms of adoption, not just for crypto native stuff, but also for traditional enterprises.

ZACK GUZMAN: I also feel like that's kind of one of the upsides that's always been there, right, with what you guys flex apart from some of the other ones out there-- faster settlement times, transactions, everything that we've talked about. But I guess, the big growth is getting to be the rails that some of these larger institutions maybe turn to if blockchain technology is going to be the backbone of everything we see in this next iteration, next chapter of the internet. I mean, talk to me about that as maybe the end holy grail, or is it something different, really, that maybe Avalanche is looking forward to next year?

JOHN WU: Based on the pace of my conversations with Fortune 500 type companies, even large retail brands out there, the-- we're past, like, the exploration point and just pure discovery. The conversation's now leading to how do we work with you, and how does Ava Labs, the software service team behind Avalanche, help us plug into a permissionless blockchain? It just goes to show that the adoption from the traditional enterprise world, traditional finance world, for a permissionless public blockchain is happening. It's happening actually faster than people realize. And we are very excited about this.

AKIKO FUJITA: So what are some of those applications that are being explored right now that we haven't seen yet?

JOHN WU: Well, a couple of weeks ago, we just had this great announcement where we partner with Deloitte. And Deloitte is actually going to build on top of Avalanche an application that allows government agencies to use the permissionless blockchain of Avalanche in order to collaborate and to manage the workflow, as well as the data management in-- you know, unfortunately, it's too early for the Kentucky situation, but other situations like that when there are thousands of partners and the local municipalities to the service providers all need to be connected instantly and value needs to get to the poor victims of these natural disasters in an almost instantaneous manner.

Ultimately, a solution that is permissionless, where a lot of people are working off of the same data, replicate a manner, is far more efficient than having monolithic silo servers. So that's an example of where the public blockchain can really help speed up, in this case, literally needed grants to victims much faster than the traditional methodology and be cost efficient in doing it.

ZACK GUZMAN: Yeah, and John, lastly here, I mean, Avalanche is now the 10th largest cryptocurrency project, according to CoinMarketCap, which we use here for a lot of our data. I think earlier this year, it wasn't even the 40s maybe. So I mean, when we're thinking about maybe how much runway is here, marking up still just about $2.5 billion, I mean, talk to me about-- I know it's kind of funny. We talk to CEOs, they don't like weighing in on share price.

For people like you, I'm sure you don't track the daily price here for Avalanche. But when you look at maybe how it stacks up against all the other ones now and where this could go, it still seems early days. So what do you foresee, I guess, next year in terms of if it's 10 now, where you want to be?

JOHN WU: Zack, you're right. I don't like to think or look at the price as often as, obviously, your viewers do. That's their job. But I'll just relay what some of our venture partners have been saying. They're saying things like, well, as a market cap to the amount of adoption, that ratio compared to some other layer ones, we're by far the cheapest, especially for the fastest growing in terms of the adoption.

And then another great quote from one of our venture partners was, wow, you guys are just executing. And he's absolutely right. Our tech team is constantly innovating the platform. Our business development team is constantly working with blue chip DApps and also helping native DApps launch on Avalanche, and all at an incredible pace. So everyone at the firm is working with purpose and planning in this hyper growth industry. And we just love it. So, let the adoption continue. And then the price will speak for itself.

AKIKO FUJITA: Well, John, we hope to have you back on the show again soon. John Wu, Ava Labs president, joining us there.