Welcome And Guest Introduction

SPEAKER_01 0:12

Hey everyone, welcome back to Tez Talks Radio. Today I'm joined by Matt Sabula, CEO of 10X Protocols. 10X recently announced a strategic staking partnership with the Tezos Foundation. Matt, thanks for being here. Before we get into the partnership, can you introduce yourself and give people the short version of what 10X does?

What 10X Protocols Builds

SPEAKER_00 0:37

Sure, absolutely. Well, first of all, thanks for having me. It's uh it's a pleasure to be on the show. Um, I'll give you a little background about myself and then tell you about the the company and and why we're excited to to partner with the Tez. So, you know, overall, like I've been in the crypto space for a long time now. I uh my background is um I went and I did a master's in the London School of Economics and uh I learned about central banks and you know how money works and all that stuff, and I kind of was fascinated by by this whole world. Uh came back to Canada um and traded stocks, options, and derivatives for a bit, and then got into the fintech startup world in 2011, 2012, uh, and then discovered Bitcoin, read the white paper late 2013, like a good noob. I got excited like right around the peak, right? Was approaching a thousand dollars that around that time. So I got you know kind of excited at the top, like most noobs, uh, but you know, was kind of fell in love with the whole concept, read the white paper, and convinced my founders to move, uh, like my fellow founders and the company to move into the crypto space with me. We founded a wallet company back in 2014 called uh Cryptiv. This was a wallet company uh that you know evolved over time, but basically learned uh about Bitcoin, got into Dogecoin, uh, got into Ethereum. We met Metallic Buterin, who's uh based in Toronto or was at the time, we're based in Toronto, um, saw the launch of Ethereum, and you know, just really like got into it early and got our hands dirty, got active, understood what was going on. We ended up selling that company in 2019 to an exchange, which was actually a client of ours. So that company evolved uh over time and it became basically uh a multi-sig cold storage wallet solution, kind of like an early, early Bitco uh that we ended up selling to one of our clients, which was called Coinsquare at the time, which has now become Wonderfy. It's publicly traded and they're merging right now or being acquired, sorry, by Robinhood. Um, so that's that's kind of how I got into the crypto space. Uh took a little time off, started um consulting, sort of work consulting with uh uh workfield asset management. It's a big uh asset manager in in Canada. Um, and then uh in around 2014, when we saw the the election go towards the Republicans, we decided to kind of get the skates back on, uh, start something new. And that's when we started 10x protocols. Um and 10x protocols, it's founded uh with myself, uh, my brother Philip Sabula, who I've been working with since the cryptive days, and our CTO, who was our CTO back in 2014, uh Jeff Byers. So we're kind of got the band back together, if you will. Um, and and we started this company. And what our company does really is we're focused on um on infrastructure. So we build staking infrastructure, we run validators, and you know, we've got this saying in Canada where Canadians, actually, Canada's uh playing uh for uh for to advance in the Olympics right now as we speak. Uh so I'm uh sacrificing something great by not watching it live, but I think uh I think we're doing well. Um but uh but uh but but but basically you know we've got this saying here is you gotta skate to where the puck is going because crypto's always evolving, things are always changing. Uh and so that's that's kind of how we formed the company. So that's at a very high level what what the company is all about, and it's part of the reason why we really love love Tezos. We've been involved uh from very early days, invested in the early days uh around when it when it launched. Um, and um, and we were we've been in touch with uh the team and some of the folks, and we just really love the philosophy around the the protocol, the network, the ecosystem, and so that we're we're big fans of the it, and we can get into why that is. But that's at a very high level what we do. We we own these assets, we stake these assets, we build infrastructure around the assets, and we look for crypto native opportunities to be able to generate revenue with the assets we own and the ecosystems that we support. Um, and we're I should mention we're publicly traded on the Toronto Stock Exchange. We went public um on the TSX V Tron Stock Exchange Venture uh back in December of late last year. So we've been public for about two months now.

Why 10X Buys Tezos

SPEAKER_01 4:45

Wow. In your January 20th announcement, 10x acquired about five and a half million TES, and that was between January 2nd and January 19th, 2026. Walk me through how the TES decision got made internally.

SPEAKER_00 5:02

Sure, absolutely. So, you know, we've we're we we like TES for a lot of reasons, really. Like it's it's it's one of these, you know, with crypto, a lot of it is there's there's these kind of cycles, as we all know, things go up and down. And you know, when when the sun is shining and everyone's excited, there's all these kind of newcomers that flock, and sort of the tourists come uh and it creates these kind of bubbles. And so the reason we really like TUS is there's they've been around for so many cycles, uh, and and there's a lot of value in in the token itself and and in the ecosystem, right? So so we really love it because you know, first of all, there's a lot of good things you can say about it. Um, like it's it's a fully distributed supply. There's a lot of tokens that have these you know huge unlock overhangs from VCs. TES does not, and so that's really great. Um, the foundation is extremely well funded and is extremely supportive of the ecosystem and always supporting projects and initiatives that push the technology forward. And we love the governance model and and and and you know, we're we really think it's very well positioned to win the race. Like it's still relatively early in crypto. There's a lot of great L1s out there, but it's a very competitive environment still. And we think that there's a lot of features around TES that make it so that it has a really great chance of being top five in the world, and there's always change. And so why we like it is you know, there's always dynamic change within the ecosystem, the way that it works, the way that upgrades happen, it's very seamless. And for those reasons, we're we're excited to support it and build on it and work with uh other folks in the ecosystem.

What The Staking Partnership Means

SPEAKER_01 6:43

When you say strategic staking partnership with the Tezos Foundation, what does that mean in practical terms today? And what does it not mean?

SPEAKER_00 6:54

Yeah, that's a that's a great question. And I have to be a little cautious here because you know, we are a publicly traded company. We can't like talk too much about anything that you know may or may not be uh public information. So, you know, effectively what what what our ambition is is to to work um with the folks there and and be able to um help have the uh first of all support the ecosystem, uh build out our our our our infrastructure to be able to process transactions, the baking and all that. Um and so that's that's one thing. So uh frankly, I I kind of um not sure how how much detail I can get into, but we're looking to uh you know get our hands dirty, build in the ecosystem, and work with uh both the foundation and other folks in the ecosystem to um really make sure that you know we're contributing because not only do we want to like enrich our shareholders, which is obviously an important part, but we want to help contribute back to the ecosystem as well. And so that's really important for us in terms of our ethos.

SPEAKER_01 7:55

If someone wants to verify what you're running on Tezos today, where should they look and what should they look for?

SPEAKER_00 8:03

Yeah, absolutely. So I would say to to you know, follow us on our social media uh and we'll be able to share more information as that becomes public and be able to share our baking address and all that stuff that we will be able to share in the very near future.

SPEAKER_01 8:18

Okay, perfect. Now, your release says the foundation intends to delegate to 10x operated validators subject to due diligence and approvals. What does that due diligence process actually look like from your perspective?

SPEAKER_00 8:35

Yeah, absolutely. So I think you know, we've actually been working with some of the some of the technical folks at the TES Foundation to make sure that everything is running smoothly and that they have a really great process. Uh so I think that's that's really what that's referring to. Um but overall, I think it's just a really great way for our team and our firm and our our balance sheet to be able to contribute to the ecosystem and be able to uh help process transactions. And again, further down the line, we'd like to get our hands a bit more dirty and get get in there, start building some some great things with the ecosystem that we would like to see come to life as well.

SPEAKER_01 9:09

Now, when working with the foundation, uh, what kind of questions do they ask that a normal delegator maybe wouldn't think to ask?

SPEAKER_00 9:18

No, yeah, that's a great question. So a lot of it has to do with our technical setup, understanding how our team thinks through the process of of setting everything up. And um, and yeah, it's it was quite a good deep dive, and and I was very impressed with their level of due diligence and understanding and professionalism. That's that's one of the things that I I'd like to kind of point out. That's one of the reasons we like like the asset, we like the foundation, is there's some really great people that are are there at the foundation, and they're very they're straight shooters. They're they're great, great people. And that's you know, sometimes you that that doesn't happen always in crypto. Let's just say that. There's sometimes some some folks that aren't uh on the up and up and and everything. But Arthur, he's you know, a true OG, he's been around forever. Everyone else at the foundation is just very honest and and and diligent, and they work hard, and um, you know, they really believe in this project. And so that's that's another thing. The the people really matter, and and there's a lot of integrity in that team. And I think that that's shown time and time again when there's a lot of kind of fly-by-night operations that you know create some token and pump it up for a bit and then disappear. This has been here for cycle after cycle and continuous improvement and continually evolving with uh the ecosystem and crypto and the tech overall. So I think that's one of the more incredible things about uh the allocation uh and the team and and the reason why we're excited about about TEDs.

SPEAKER_01 10:44

What are your standards around key security and access control? High level, but real enough so that people understand the safety model.

SPEAKER_00 10:53

Yeah, absolutely. And you know, without getting into too much detail, and this is we've got our a really great CTO who's who's worked on again, we created that wallet software back in the day, uh multi-sig. Um, and he's he was actually the founder of um what's what's the largest uh crypto custodian in Canada. It's called uh Tetra. So he's got a very deep experience in that. So for the nitty-gritty details of of that, you'd have to ask him. And frankly, I don't think he'd tell you all the details because it's uh it's one of those things that's uh need to know situation. Uh, but you know, needless to say, we've the other good thing about uh 10x is that we're a publicly traded company, which means we have auditors, uh, we have to be very transparent, we have to file quarterly reports. Like these are our part of the reason why we structure the company in the way we did. We think that sometimes that's missing in in the world of crypto, like very clear transparency. And so we have fiduciary obligations and all that. So, you know, we've got auditors that that go through and and make sure that our controls are in place, that you know, obviously no single person can have access, that multiple parties have to come together. There's there's a lot that goes into it. And we're aided by uh some great folks that uh we work with here in in Canada that really understand crypto very well and and test these controls. And then we have to demonstrate it to them, otherwise, it would be you know difficult to get our audit done. So, you know, I think that our model and our approach um is is instrumental to uh best practices in this case, which is using great qualified custodians, making sure that you know controls are in place for from within the firm and uh and and being very open and transparent in a manner that we absolutely have to be because we're publicly created.

SPEAKER_01 12:35

When uh a foundation delegates, people worry about concentration. How are you thinking about that? And what limits do you put on yourself?

SPEAKER_00 12:45

Yeah, no, absolutely. So that that is obviously always a concern when when foundations do delegate. Um, and so for for us, it's you know, it's really important. We always uh part of one way we'd like to maybe give back to the the ecosystem is to um be able to help contribute back by maybe uh one day releasing some tools to make it easier for for other folks to to stake. It's one of those one of those things that's one of the one of the great advantages of TES that it's it's quite easy and you can kind of run your own infrastructure at home. Uh and so that's I think you know really encouraging the uh the community to to do that and uh and be able to make sure that folks can run this stuff at home.

SPEAKER_01 13:28

On Tezos specifically, can you share an example where you gave up some yield maybe to reduce operational risk?

SPEAKER_00 13:37

Um sure. I mean, with us, like really we've our our infrastructure hasn't been running for that long on Tezos, so we don't have a the great like longest track record of where we've given up uh yield in in that regard. Um, but again, from us for our point of view and from the point of view of our CTO, is like security is paramount. So he's been kind of working diligently in that regard in in like a more cautious manner. Um, but I I don't I couldn't think of a specific example of where we traded uh yield for security. We would we would absolutely security is paramount, and and so that's that's the the main thing for us.

Reliability Signals And Governance

SPEAKER_01 14:11

You also called out Tezos governance and reliability as reasons. What did you look at specifically before committing capital?

SPEAKER_00 14:21

Yeah, so absolutely. Again, part of it is that this long history of acting in in good faith and and and and then we love the the on-chain governance model. And just really when you compare apples to apples, there's a lot of really great reasons to be excited about Tezos. Uh it's been running for an incredible amount of time, it's evolved numerous times. There's been you know multiple upgrades over the last like five, six years that have gone through seamlessly, there's no contentious forks. That kind of stuff really matters. And I think just by design, it was always envisioned to improve and adapt and evolve, which is necessary. And in a world where now, you know, in my personal view, there's two major things that are happening in the world, and one is AI, and that's undeniable, and that's you know, likely to change everyone's lives. Uh, and the other is is crypto, which has been kind of this slow boil, and it's is the two are beginning to interact in in ways that really are exciting. And we think Tez has a really important role in that, and we're excited to see how that evolves. And and I think part of the governance and uh and and all that is all related to how we can evolve and change and adapt to a rapidly um changing technical landscape.

SPEAKER_01 15:44

What are reliability signals that matter the most to an operator like you?

SPEAKER_00 15:50

So, you know, uh uptime, obviously, uh a long history of of it, and a long history of operating and you know, and and and the the fact that you know Tezos has has survived so many uh cycles. I think that that is really crucial. That you know, it's not just a flash in the pan. It's it's been here, it's changed, it's improved, it's evolved, and that's that's integral. And that's that's the main reason we're excited.

SPEAKER_01 16:20

How will 10x approach Tezos voting? And will you publish a short voting note so delegators can follow your reasoning?

SPEAKER_00 16:29

Sure. I think you know, again, partly I think I'd I'd defer to our our CTO, who's a little more in the weeds on that. I think at the moment we're we're gonna abstain. Like we're we're not we don't feel strongly about anything at the moment. Uh, and perhaps we'll we'll make that you know a policy going forward. But that's something, frankly, our CTO has given a lot more thought on. And I I wouldn't want to put words in his mouth because that's kind of his his world, and I don't want to, you know, oh no, put words in his mouth.

Beyond Baking AI Meets Tezos

SPEAKER_01 16:56

No, I'm kidding. For for Tezos builders watching, is 10x purely a validator operator, or are there ways you plan on showing up beyond baking?

SPEAKER_00 17:09

Yeah, that that is our our goal is to show up beyond baking. And you know, there's like I said, for us personally, we're very interested in the intersection of AI and crypto, and we think that is basically the future of finance. You know, AI agents, they're not gonna use debit cards, they're not gonna use credit cards, they're not gonna use wires, they're gonna use crypto. And so, what does that world look like? How can we contribute? How can the community contribute? And what strengths that does TES offer that new world that makes it more attractive and appealing to builders who are are looking for um, you know, an L1 to support? And you know, for us it's really about high throughput, uh, you know, formal verification. These are things that are very important and things that might become increasingly important as you know AI becomes more and more powerful and is able to challenge smart contracts in a way that us mere you know meat bags can't even think of. So I think that's that's a that that's gonna be an important thing going forward, and I think is a huge opportunity set for builders to look at and evaluate and and consider because I think you know the next two, three years will redefine like like the history of computers and will redefine the history of crypto. And these two things coming together are incredibly important, at least that's that's how we're thinking about it. So we do want to get it uh more in the weeds. In the you know, we've got kind of a near-term plan, and then we've got some some things that we'd love to share once they're uh a little more ready for for prime time to to to reveal.

SPEAKER_01 18:52

If a builder has an infrastructure pain point, what's the best way to surface it to you guys?

SPEAKER_00 18:59

Yeah, no, that's that's a great question. Um, I I guess it would be to reach out to us on uh on social media. Uh, we'll be happy to engage and uh find a time to connect and maybe there's something we can do to help.

How Builders Engage Next Milestones

SPEAKER_01 19:13

All right. Well, to close, looking out 90 days, what are the two or three things you want the Tezos community to be able to point to and say 10x delivered on what they said?

SPEAKER_00 19:25

Yeah, no, absolutely. So first and foremost, to to be able to run our validator. Um, and then in 90 days to to begin to reveal things that we can work with in within the ecosystem that are are beyond that. So I think those are the two things.

SPEAKER_01 19:43

Is there maybe a first milestone you could commit to publicly, maybe?

SPEAKER_00 19:49

Um, again, I don't want to talk out of turn. I'd perhaps we can schedule a time for for a CTO to come in, who's you know, frankly, I'm I'm uh I'm not as technically savvy as he is, and I think he's got a few ideas up his sleeve, but I wouldn't want to, you know, again, put words in his mouth and have him uh come back and uh write me a strongly worded text message and once this publishes.

SPEAKER_01 20:13

Well, Matt, I appreciate you walking through what this partnership is and what changes operationally and and how you guys think about responsibility as a validator on Tezos. I want to thank you for coming on to Tez Talks Radio. Well, thank you. That's appreciate it. That's it for this episode, and we'll see you next time. Thanks for joining. Thanks. Take care of that.