How does someone who has been through multiple bear and bull markets in crypto, cope with such a volatile industry? Keep Building. In this “Live from Links” episode, Caitlin Barnett, Director of Regulation & Compliance at Chainalysis) reconnects with her former Gemini co-worker, Ira Auerbach (Head of Tandem, Offchain Labs) as they go deep on the scalability and innovation challenges and successes on the Ethereum blockchain, while sharing stories of their early days in crypto.

You can listen or subscribe now on Spotify, Apple, or Audible. Keep reading for a full preview of episode 164.

Public Key Episode 164: Decentralization & Security: The Core of Ethereum’s Evolution

How does someone who has been through multiple bear and bull markets in crypto, cope with such a volatile industry?

Keep Building.

In this “Live from Links” episode, Caitlin Barnett, Director of Regulation & Compliance at Chainalysis) reconnects with her former Gemini co-worker, Ira Auerbach (Head of Tandem, Offchain Labs) as they go deep on the scalability and innovation challenges and successes on the Ethereum blockchain.

Ira shares the initiatives at NASDAQ and Gemini that bridged traditional finance products to the crypto market and how his focus has shifted at Offchain Labs, where they are fostering blockchain innovation, solving complex computational challenges and emphasizing stablecoins’ impact on market dynamics.

A great episode for founders, investors and compliance folks in the crypto industry.

Quote of the episode

” AI is an interesting use case because it has, like, a really shiny exterior, yeah. And then underpinning that there are really deep, deep technical problems to be solved, especially on the blockchain, yeah, and most of it comes down to compute power.” – Ira Auerbach (Head of Tandem, Offchain Labs)

Minute-by-minute episode breakdown

2 | Lessons from many crypto bull and bear markets

4 | Focus on institutional solutions and stablecoins

6 | Offchain Labs and Arbitrum improve scalability and usability on Ethereum

8 | Blockchain gaming, decentralized sequencers and fully homomorphic encryption (FHE)

10 | Tandem’s partner studio and venture capital Approach

12 | Current crypto investment landscape

14 | Camelot and the industry’s shift to DeFi after centralized collapses

16 |Future of investing in blockchain and AI

18 | Thoughts on stablecoin infrastructure players in the industry

Related resources

Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.

• Website: Offchain Labs: Scaling Ethereum Without Compromise
• Blog: Bringing Interoperability to Arbitrum and Ethereum

• Announcement: Tandem by OCL Invests in Camelot, the Largest Native DEX on Arbitrum

Speakers on today’s episode

• Caitlin Barnett *host* (Director of Regulation & Compliance, Chainalysis)
• Ira Auerbach (Head of Tandem, Offchain Labs)

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Transcript

Caitlin

Hi. I’m really excited today, so I’m joined by my friend IRA, who is the head of tandem at off chain labs. Me and Ira go way back to 2018

Ira

I think 2017

Caitlin

at Gemini. So this is gonna be fun. Thanks. I’m excited to be here. So it appears you started your tech focus career at Palantir before joining Gemini, you were at Gemini between, oh, here it is 2017 and 2022 which means you experienced two bull markets and one bear market. What did you learn from those highs and lows in the crypto space?

Ira

I think the general theme throughout every bull market and every bear market is keep building, right? We have an amazing community of people who are focused on the mission of bringing decentralization to everywhere, and regardless of the polar bear market like that, mission is the same, and people keep chugging along building. And my advice to anybody through whatever market is, keep working on your vision, because it’s going to turn around. Yeah, absolutely.

Caitlin

So you became SVP of digital assets at NASDAQ for two years. Can you share what projects and initiatives you were working on when you wrote NASDAQ? Yeah,

Ira

of course, we had two main initiatives, or two main umbrellas. The first was to build out a custody solution focused on institutions, and the second was to bring the NASDAQ products that are in traditional markets to the crypto world. So that’s the matching engine, the anti financial fraud tool, and the transaction monitoring, et cetera. And work with crypto companies within the ecosystem to change those products ever so slightly to suit their use cases. Awesome. So

Caitlin

was there a particular focus at such a traditional player in the space when it came to digital assets. You kind of alluded to this a little bit. Yeah, it

Ira

changed over time. The two years that I was there. We worked with institutions ranging from every big name you can think of, but I would say there are a few things that stuck out. Blackrock obviously listed their ETF on the NASDAQ exchange, so we worked closely with their team over the years and their interactions with the SEC so institutions were really focused on the ETF and bringing the access to Bitcoin to essentially everybody with a brokerage account in the US. And the second focus we heard from institutions was long stable coins, particularly yield bearing stable coins, and the capital efficiencies that those can bring to the traditional financial markets. So if you are to purchase a US Treasury and sell it out, there’s a multi day delay, if it’s over the weekend, with a holiday. You’re talking even longer and stable coin infrastructure, as I’m sure every client of yours is asking about allows that to happen in block time, which for the Ethereum blockchain, is 12 seconds. So you can change attribution of interest within 12 seconds. So institutions were really focused on that.

Caitlin

I don’t think I can have one conversation these days. For stable coins don’t get mentioned. It’s really

Ira

in vogue from institutions to crypto NATO firms to people on the Hill like that is all

Caitlin

people. And we were one of the first stable coin issuers at Gemini.

Ira

We’re the Gemini dollar. Gemini dollar. I think that one was 2018 right?

Caitlin

I think so. Yeah, us and Paxos got approved that same day.

Ira

Yeah, that was an exciting time. Yes. Okay,

Caitlin

so let’s jump into what you’re doing at off chain labs. For those that aren’t familiar with off chain labs maybe provide some insights into what you’re building over there, including arbitrum and prism,

Ira

sure. So off chain Labs is the main contributor to the arbitrum blockchain, but that is run by the Dow. So off chain Labs is not arbitrum, but is a main tech contributor, and we work on things like bold and stylus and helping to scale the Ethereum ecosystem and make it more secure. On the prism side, prismatic labs, they’re focused directly on Ethereum, allowing people to interact with the consensus mechanism of Ethereum, or, in other terms, helping to add tech power to secure the Ethereum blockchain. Okay, very

Caitlin

cool. So off chain labs appears to be solely focused on scaling Ethereum with so many different layer ones, building their own blockchain and the constraints they felt on the Ethereum network. Why do you and the team feel it’s important to build out the Ethereum ecosystem?

Ira

Yeah, so the Ethereum ecosystem has a smart contract basis to it, which it allows people to do computations. On top of it, these computations, at the moment, it’s a giant shared computer, and it’s not where anybody wants it to be in terms of the ability to do computations or handle different use cases. So we’re really focused on the scalability of that from two perspectives, allowing more computation to happen on it and allowing additional use cases to happen within it. So additional use cases could be something like AI, where they need more processing power, or could be something like a traditional financial transaction where you need COVID. Confidentiality, and that needs to be built into the system. And we’re working with some really cool teams at tandem that are working on these use cases that we can potentially talk about. All

Caitlin

right, this is exciting. So what are some of the biggest challenges on the Ethereum blockchain that you’re solving for

Ira

I think we touched on two of them in the usability, confidentiality space and the decentralization space. So at tandem, we’ve invested in two companies focused or three companies focused on these use cases. The first is the Zai gaming platform. When we talk about the scalability and usability, Zai is bringing gaming to the blockchain and as such as expanding the computation and speed and usability that that allows for these games to move over from your Xbox or your Playstation or your PC onto the blockchain. Second we’re working with is espresso systems working on a decentralized sequencer, which is exactly what it sounds like for those listening a sequencer puts things in order, but has been very centralized to date, so we’re working on some research that will allow anybody to participate in that sequencing, and thus bring interoperability among the projects built on top of Ethereum, and then the last one that We’ve invested in publicly is Phoenix, who are working on fhe, or fully homomorphic encryption, just a fancy way of saying we’re going to run computations on top of encrypted data. This allows for confidentiality. So if I make a trade at Morgan Stanley, for instance, in my brokerage account, you can’t see it, right? But if you do a trade on the blockchain, everybody can see it. So this is one step in the direction of bringing that confidentiality to the blockchain, yeah. And as a result, opens up these use cases for financial transactions, but also for healthcare, anything to do with PII, etc.

Caitlin

Super interesting. So although Ethereum definitely had its moment during defi summer of 2021 with many using the blockchain to power the NFT movement. It seems currently that people are flocking to chains like Solana, who have captured and ignited the meme coin height. How do you think Ethereum gets back a little bit of the luster that it’s lost these last couple of years?

Ira

Yeah, I mean, there’s, I’m not here to tell anybody exactly what blockchain to use if you’re a developer. Do your own research, of course, but we’re super focused on the Ethereum blockchain and bringing that scalability and these additional use cases, and we hope that that will attract as many developers as it possibly can to come build with us and help grow the community. Awesome.

Caitlin

So tandem is a unique partner studio and venture capital arm of off chain labs. Can you describe the different approaches the partner studio and the venture capital arm have?

Ira

Yeah, of course. So tandem is the broad umbrella term that we have for our investment arm, and within that, we have essentially two two divisions. They work closely together, but but two separate initiatives, the first being our venture capital initiative, which is the same as any other VC out there, in that we participate in rounds. We work off of off chain labs as balance sheet. We don’t have, we don’t have LPS in the fund, and we’re focused mostly on pre seed, seed and series A companies, and our blockchain agnostic within that, within that investment mandate, we’re focused on companies that are looking to grow, not just Ethereum, not just arbitrum, but anybody tackling really novel blockchain scaling problems. And the second is our partner studio, where instead of giving that monetary capital on a traditional VC relationship will give human capital. We have the researchers, the developers, the go to market specialists, the marketers, et cetera, that have helped to build and launch the arbitrum ecosystem and the prism layer one client, and oftentimes the companies that we’re talking to that are looking to scale, are struggling with some deep research problem. Yeah. So we could set milestones with them and work towards them jointly with our researchers or developers, and once that milestone is hit, that’s how we would earn our equity or token payout, rather than giving them the monetary capital. Oh, that’s

Caitlin

a super interesting approach. So head of tandem seems like an extremely broad and difficult role, covering many parts. What is your mandate as you go into the office every day at tandem?

Ira

Yeah, it might be different tomorrow and the next day, you ask me again, but I spent a lot of my time meeting with teams, building within the ecosystem, working internally with our product team and our business development team, understanding pain points, yeah, and then trying to turn that into some sort of investment thesis, and actioning that through either venture capital investments or with the partner studio

Caitlin

so heavily relying on your background as a product guy and now just a jack of all trades with it. Yeah,

Ira

I hope, I hope it’s successful, but yes, very reliant on my background in product and the work we did together at Gemini. Love it.

Caitlin

So you have a team of experts across research, product of engineering. So what is the latest in blockchain innovation that you and the team have been focused on? We’ve touched

Ira

on a little bit, and I don’t want to overuse the term, but really scalability, we have this shared computer in Ethereum that we’re all using, and there’s a lot of work that we need to do to make it what it’s capable of actually becoming. So I think 99.9% of our researchers efforts are pointed around that, whether it’s around confidentiality or having more compute per block space, or making sure that the security is properly decentralized and there’s no censorship, etc. So so these problems, they have like a wide birth of what they can be, but they’re all focused on the same thing, and making this shared computer bigger, better,

Caitlin

faster and more robust, awesome. So after what seems like a brutal two years in crypto, after the hype of 2021 bull market, it seems like cryptocurrency is getting back on its feet. What does the current investment market look like? Are VCs focused more on AI now have projects moved away from VC investing into other avenues, including crowd sourcing and token launches. It’s a very long, loaded question. Yeah, there

Ira

are a few questions in there. I’ll try my best. But just like interrupt you if I don’t get to all the points, we lost a lot of traditional VCs posts like FTX, three arrows, capital, et cetera, that were kind of inching into the space in 2021 and super excited, and then this all happened. Didn’t really have the staying power, but in talking with other VCs in the space and other players, such as off chain labs, like the view is cautiously optimistic, had a nice run up in price that’s kind of settled back down a little bit. But I think more macro than that, there’s a lot of optimism around the new administration what they’re going to bring to the crypto world. And we started the conversation around stable coins and regulation there looks like it might be here in a matter of weeks, potentially. So all these stable coin infrastructure projects that have been, you know, heads down, writing code for the past couple of years are now, you know, cool kids. Well,

Caitlin

you heard a rumor at links that stable coin will be before Easter, and market infrastructure will be by August.

Ira

Yeah, the August, the August recess is what everybody’s focused on. Yeah. So that would be

Caitlin

so are there any specific criteria or characteristics that companies looking to seek investment from tandem need to have

Ira

we invest across a wide range of companies. I would say the general theme is that they’re looking to tackle difficult blockchain problems. We like the meaty picks and shovels. We have a great research team. That’s kind of our advantage, I think, in from the investing point of view, is that we have a deep understanding of the problems out there in scaling Ethereum, and thus we can see in the companies what they’re what they’re attempting to accomplish, and how how like meaningful it is.

Caitlin

And that’s so fun for the researchers, like they will never get bored, because they’re constantly being shifted from project to project. So yeah, pretty interesting opportunity for them, yeah, and

Ira

it, it’s a two way street, so from the companies to the researchers asking questions of them, but also a research team is doing their own work. Yeah, that is bleeding into the investment thesis that then we have as a resource to come help these companies grow very,

Caitlin

very cool. So tandem announced earlier this year it invested in Camelot, the largest Native decks on arbitrary after FTX, Celsius and other centralized crypto issues, it felt like there was a shift to defi and Dex. Is that what interested you in Camelot? Yeah.

Ira

Camelot is a great company with a great founding team, seamless UX, which was one of the big things that attracted us to the team, growing user base, deep liquidity, kind of all the things that you want from an exchange that you would describe in a decentralized or a centralized fashion. And they just, they keep innovating, whether it’s yield generating strategies or swaps or ways to provision liquidity. So we’re extremely bullish on the team that’s

Caitlin

awesome. So you kind of touched on this a bit. It’s not your average Dex. It also is a launch pad for other projects and has over 75 partners. Can you talk about the importance of the importance of these partner relationships, and how this drives projects like Camelot?

Ira

Yeah. I mean, crypto is an incredibly community driven. And ecosystem. So the rising tide raises all ships, and Camelot, reaching out to other partners and helping them. You know, whether it’s get listed or etc, helps everybody. Yeah,

Caitlin

so we can’t expect you to pick favorites. But are there any other projects that you’ve invested in that have interesting use cases or that are sort of seeing unique areas of blockchain,

Ira

like asking me to choose between my children. Yeah, exactly. You know, we’ve been fortunate enough that the three deals that we’ve done on the partner studio side have all been great partners, all looking to scale Ethereum, all very novel approaches to deep technical problems. So I have a complete inability to choose between the three of them. It’s a good problem to have. It is champagne problems. Yeah, exactly.

Caitlin

Can you talk about any deals that you have in the pipeline, even if you can’t give us specifics, just like concepts or areas of the industry that we haven’t already covered?

Ira

Yeah, there’s two that we’re working on right now. One to play to our theme from earlier is a stable coin infrastructure project that we’re very, very excited about, and another looking at censorship or the lack thereof, or how to prove out that there was or was not censorship of a message that was sent to the blockchain. Super interesting. Yeah, that one’s a super cool one, you know. So we’re, you know, working with our partners there spin hope to have some, you know, potential announcements for you soon.

Caitlin

Awesome with everything happening in AI and even quantum computing, what do you think the future of investing in blockchain for tandem and the industry as a whole looks like, yeah,

Ira

AI is an interesting use case because it has, like, a really shiny exterior, yeah. And then underpinning that there are really deep, deep technical problems to be solved, especially on the blockchain, yeah, and most of it comes down to compute power, like these training modules for large language models you hear about like Nvidia selling out of chips every other week, and Elon Musk trying to get his hands on more and more, and Sam Altman and him, you know, debating over Twitter, who’s gonna get who’s gonna get the next shipment. So the processing power is really key. So from a blockchain infrastructure perspective, like that is what you need to work for to enable all of these use cases. And the team at off chain Labs has worked on a product called stylus, which is not where we want to end up, you know, at the end goal, but is slowly increasing the amount of computation you have per block on the blockchain, which is unlocking some of these use cases, whether it’s aI training models or, let’s say, a value at risk calculation for a large financial transaction. Yeah, these are all now plausible within the Ethereum ecosystem, where, you know, just a few months ago, they weren’t necessarily, yeah.

Caitlin

So after seeing the lack of due diligence, many said, went into the investors of FTX. What are some areas that you focus on during the due diligence process, and what are some of the obstacles or challenges that you see companies have that make them not the right investment? Yeah,

Ira

I can’t speak to the due diligence on an FTX. I wasn’t in that room, but for our investments, we certainly do know your business, or know your customer, due diligence on on all of our partners, and try to read into their if they’re public, smart contracts, we’ll read into those as much as we can, and try to take a robust approach to to doing background on our partners before we invest in them. Yeah,

Caitlin

I think everyone learned a few lessons after FTX, right? So you’ve been at TANF for less than five months. Can you explain for those looking to get into crypto as a career, the differences for working for a crypto service provider like Gemini to a tradfi company that touches digital assets like NASDAQ and now to off chain labs? Yeah, I’ve been

Ira

on a few sides at the table. They seem to be converging. I think, this conversation when we first met in 2017 there’d be these like huge gaps in the market, but now it seems to be converging. So I very much think it’s a spectrum. But on the ends of that spectrum, you probably have an institution like NASDAQ or other traditional companies that are looking at bringing crypto through the traditional rails, whether it’s listing Bitcoin for trading via the ETF on the NASDAQ Stock Exchange. So it’s very much taking crypto and putting it into traditional rails. On the other side of the spectrum, you have somebody like off chain labs that are quite literally building new rails and trying to make them as fast and as robust as centralized systems are, with the added benefits of security and decentralization and this lack of censorship. And I think in the middle of the spectrum, you have companies like Coinbase or Gemini or Kraken, which are trying to connect the two pieces and be the bridge from I think this is, this is the slogan of many of them, be the bridge from tradition. Finance to the to the decentralized ecosystem. I

Caitlin

mean, it’s so funny. Links over the years you see, like, how many more traditional players are even coming here every year? Like, it’s so crazy. Especially, I think post the new administration, everyone is getting really excited and really bullish that they’ll be able to interact a little bit more.

Ira

And you get a lot of personnel movement, oh yeah. Attitude now from traditional finance to crypto NATO, but also crypto native back to traditional finance. So I think those lines are blurring and are only going to become more blurred over time. I agree.

Caitlin

So back to stable coins again. They’ve gotten a lot of attention by both the crypto industry and regulators in 2025 What are your thoughts about the stable coin infrastructure players in the space, and the integration of the technology and many of the payment platforms like PayPal and Stripe. Bullish,

Ira

we could go into more details, but overall, bullish, I think it’s a great first use case. It’s very, very understandable. And you know, once the last day that you didn’t use $1 or some derivative of a US dollar. So there’s a huge total addressable market for this product. And as we talked about earlier, I think we’re cautiously optimistic in this industry about the new Congress pushing through some sort of law so that we all have a concrete understanding of what the rules are and can push forward. Yeah,

Caitlin

that’s the big question we always get when we’re talking to a lot of the traditional financial institutions who are really interested in stable coins, but they want to know, like, what the law is, and it’s not there yet. So we’re, I think we’re all like waiting with bated breath. Can you share where or what is next on the horizon for tandem and off chain labs, more generally, and how you’d like to position yourselves in the current market?

Ira

Yeah, so tandem has an investment target for the year with dollars to deploy on the VC side, and then we’re targeting seven partnerships on the partner studio side. Obviously these are, like, in depth, very involved relationships. So we have three right now. We’re looking to add four more, and hopefully I could come back at the end of the year and talk about them with the same same level of excitement that I have for these three. Yeah,

Caitlin

absolutely. So what is the best method for listeners to see what you’re working on and connect with you on social media? Yeah, LinkedIn,

Ira

Twitter. We could maybe post it in the comments potentially, but it’s at Ira hour back, and then I would also follow the the off chain labs Twitter account as well for For updates from them. Awesome.

Caitlin

Well, Ira, this was so fun. Thank you so much for joining us here, and hope you’re having fun at links. Thanks

Ira

for having me. I certainly am.

Caitlin

We did it awesome. I.

AIArbitrumBlockchainCryptocrypto complianceCryptocurrencyDeFiEthereumGeminiInteroperabilityIra AuerbachOffchain LabsPodcastPublic KeyRegulationscalabilitystablecoin legislationStablecoinsTandemUSAventure capitalWeb3