Mitchell Demeter Podcast Transcript
Mitchell Demeter joins host Brian Thomas on The Digital Executive Podcast.
Brian Thomas: Welcome to the Digital Executive. Today’s guest is Mitchell Demeter. Mitchell is a recognized leader and early innovator in the global cryptocurrency and blockchain industry. In 2013, he co-founded the World’s first Bitcoin ATM, transforming access to digital currencies and accelerating Bitcoin’s mainstream adoption.
He subsequently launched Coin Trader Exchange, one of Canada’s first cryptocurrency trading platforms, guiding it to a successful acquisition in 2015. Demeter then served as president of net Coins overseeing its expansion into a leading regulated Canadian crypto exchange. Under his leadership net coins eventually acquired by big data assets, achieved significant growth, and neared a 1 billion valuation.
Currently, Mitchell is CEO of SonicStrategy. A public company that acts as a crypto treasury for the Sonic Blockchain by accumulating sonic tokens, running validator infrastructure, and participating in defi, giving investors streamlined access to blockchain growth.
Well, good afternoon, Mitchell. Welcome to the show. Hello. Thanks for having me on. Absolutely, my friend. I appreciate it. And you’re hailing outta the Cayman Islands? Currently I’m in Kansas City, so I do like traversing the globe when I do these. So I appreciate you making the time outta your day to come on the podcast.
So, Mitchell, jumping into your first question, you famously co-founded the world’s first Bitcoin ATM in 2013, A bold move when crypto was still nascent. What sparked that initial leap into building physical infrastructure for digital currency? And how did that innovation shape your trajectory?
Mitchell Demeter: Back in 2013, it was just Bitcoin at the time.
Not really crypto, but even though Bitcoin was the only one, the only cryptocurrency out there, it was still really misunderstood and we were essentially just trying to bridge that gap. Originally, you know, it was really difficult to buy and sell. There was one obscure exchange out in Eastern Europe that we would send money into and pray that it arrived and that we could buy our Bitcoin from it.
But you know, we kind of knew that for there to be broader adoption, there needed to be this infrastructure and it needed to be easier to buy and sell. And at the time, just like most people didn’t understand it, the banks and the regulators and payment processors of the world didn’t understand it either.
And so. Most of the dealings were done in cash. And so we had set up an in-person brokerage in Vancouver, BC back in March, 2013. And, uh, it was basically a, a learning center where people could come down and, and learn about, you know, how to set up their wallets and learn about and ask questions about Bitcoin.
And we also were able to let people buy and sell Bitcoin in the store in person. That was all done with cash. And at the time we didn’t really know what the response was gonna be, but it was. Massive. There was tons of demand for it. And, uh, and then so that led us to, you know, try to figure out how to scale the business.
And we figured out that, uh, you know, with a Bitcoin, ATM, you could actually scale up the business without having the human element to it, and people could go down and, and buy and sell. And so, you know, we saw that as a good way to kind of bridge the, the virtual world and the physical world, and kind of help make it something that people could understand.
Brian Thomas: That’s amazing. And talk about pioneering in this space. We talk about at a lot here, a lot of podcasts around blockchain. The fact that you were able to do that and totally get it. People change comes slow sometimes, but cash was king and unfortunately, that’s really the only way we could get buy and sell Bitcoin.
But for that broader adoption. I’m glad that you had that vision to think ahead and start building that infrastructure and how we can get people to adopt this technology and this currency, so I appreciate that. Mitchell, as CEO of Sonic Strategy, the Crypto Treasury for the Sonic Blockchain, your spearheading token accumulation, validate infrastructure and defi participation, how does this model differ from traditional crypto companies and what opportunities does it unlock?
Mitchell Demeter: Yeah, so I guess when we talk about traditional crypto companies in kind of the broader sense that could encompass a, a whole array of different businesses after the Bitcoin ATMs, I, I built a crypto exchange in Canada, which we sold into a public company. Then more kind of 2018 to 2021. I built another crypto exchange called Net Coins and operating a business like that is complicated.
We had about 70 or 80 employees in the company where you’re dealing with, you know, banks and payment processors and compliance and you know, marketing and all the different aspects that you would deal with with a traditional business and with this type of business, it’s a lot. Simpler to run. I would say compared to a more of a traditional company where we’re operating infrastructure, we’re running these validators that, that are securing the network and uh, you know, we’re deploying some defi strategies to increase our yield and we’re accumulating tokens and we’re kind of acting as that bridge between the traditional market and the crypto native market where investors can come in, they can buy our stock and get direct exposure to this ecosystem.
In more of a holistic way without kind of taking on the operational risk of a larger scale crypto business. And you know, we see this as an important piece and kind of the evolution of the crypto space in general. Like when we started Bitcoin ATMs and we were dealing just in cash, that was a great bridge and it was a good starting point for kind of where the industry was at.
And then the second kind of stage was. Building up the crypto exchanges where we had cooperation from banks and we had cooperation from regulators and payment processors and that kind of enabled people to come in and connect their existing banking infrastructure to get exposure to crypto. But there’s still this large pocket of capital that are invested in equities and um, and that’s kind of the last pocket of capital that hasn’t really been unlocked and is becoming unlocked right now and getting exposure to the crypto market, but more in a.
Traditional sense where a lot of people still don’t trust exchanges. They don’t know exactly how to secure their own crypto, and they don’t wanna be bothered with seed words or trying to find the best way to get yield. They just wanna call their broker or log into their traditional equity investing accounts and be able to buy a stock and know that that stock is regulated and audited.
And, you know, the, it’s, it’s just in the existing infrastructure. So. That’s kind of, uh, how we’re positioned right now and the operational complexity of a business like this is much simpler than a traditional crypto company, I’d say.
Brian Thomas: That’s amazing. I like talking to people, entrepreneurs, founders that are visionaries in this space, and it started out you had that vision early on.
Not only did you build one, but you build two crypto exchanges in Canada, which I thought was pretty cool. But your platform, as you said, is like a bridge from the traditional tradify to that crypto native environment. Building more adoption. And you did mention, I’ll highlight, you know, while crypto has penetrated most traditional investment markets and verticals, you’re working to get adoption around equities as well, which is certainly amazing.
So thank you, Mitchell. The Sonic Blockchain offers lightning fast throughput and developer incentives that rival Ethereum and Solana. From a technical and ecosystem perspective, what makes Sonic uniquely positioned for growth and how do you see it evolving? We’ve
Mitchell Demeter: been investing in, in this ecosystem for a few years now, both personally and, and in another company that I was part of as early as 2020.
And so we’ve got to know the team that’s been building this blockchain. They had another project or kind of the MVP of, of this blockchain was called Phantom. FTM was the ticker. Back in December of last year, they did a full chain upgrade to Sonic, and now with this upgrade, they can handle about 10,000 transactions per second, whereas something like Ethereum can do about 15 to 20 transactions per second, and those transactions are, are final after about 200 milliseconds.
Whereas with Ethereum, it it can be 10, 20, 30 seconds or even longer. And then there’s other blockchains like Solana that are, that are fast. But uh, but Sonic has kind of gone one step further and they’ve built in some really cool innovations where they’ve got a program called fee monetization, where 90% of the blockchain fees that are generated on chain by an application actually go back to the application.
So that structure is, is a little bit more like the YouTube business model, where the content creators that are driving the engagement and, and the ad revenue get a percentage of that revenue back. So that’s a really cool innovation that we like. That’s, uh, that’s driving a lot of adoption and bringing a lot of developers over to the, to the blockchain.
Also, the fact that it’s compatible with Ethereum in the industry. We call this EVM compatible. So basically, Ethereum was built in a specific language and the majority of the kind of activity that’s happening on chain right now is still happening on Ethere. Solana has been taking some market share from that in two different programming language.
And so for, uh, an application to move from Ethereum over to Solana, they would need to completely rebuild their application in a new language, which is a bit of a barrier. And so Sonic is completely compatible, but offering those faster block times, higher throughput and cheaper transactions, and overall just a better user experience.
On top of that, there’s a fee subsidy program that Sonic is rolling out. Essentially the application or the wallet can subsidize the on chain gas fees for the users. So anyone that’s used Ethereum would kind of be familiar with this pain point. But right now, if I were to send you a hundred dollars of USDC or U-S-D-T-A stable coin on Ethereum, I would actually need to send you a few dollars worth of Ethereum as well in order for you to be able to move that Ethereum out of your wallet.
So that’s a big friction point that a lot of people don’t like and it’s, it is not the best user experience and with Sonic, they’ve made it so that the application or the wallet can actually subsidize and pay that fee to take that pain point out. They’ve also innovated in a few ways where one thing that they call account abstraction, which basically removes the clunkiness of onboarding a user into Web3, where you’ll be able to register with your email or log in with your Google, your G Suite and kind of remove that need for writing down or recording seed words.
So a lot of the kind of clunkiness that has been in Web3 and hasn’t really been worked out over the last 10 years is being solved by Sonic. Additionally, their co-founder is a gentleman named Andre Croney, and, uh, he’s known as the godfather of Defi. He’s actually responsible for a lot of the primitives that, uh, that are used across all of the Defi projects and across multiple blockchains.
He’s been founder of multiple multi-billion dollar blockchain projects over the years, and he’s actually coming out out with another project this fall called Flying Tulip, which is basically a full on chain. Decentralized exchange that’ll compete directly with the largest centralized exchanges in the world.
Where we’ll have on chain spot trading, we’ll have perps have borrowing and lending options, and a few other features on there that, uh, that’ll all be built on Sonic. So, you know, Andre, he’s had successful consumer facing applications over the years and, uh, he’s had this vision for this kind of all in one defi exchange that would be a fully on chain.
But he says that the infrastructure, the blockchain to actually build something like this didn’t exist. So he had to go and build the blockchain first, and now he can build this consumer application with a seamless user experience. And so now we think that’ll be a big catalyst for Sonic in the coming months here.
Brian Thomas: That’s great. You have a lot going on, but if I could, I’m just gonna highlight some things that I thought were important and maybe important for our audience is you’ve always continued and still continue to invest into the platform. Taking the clunkiness out of Web3, as you said, but the fact that the platform can do 10,000 transactions per second, and transactions are completed in less than a second, I think you said 200 milliseconds compared to some of the other platforms.
Is amazing. That really excites me. But you’re incentivizing developers in the community to join, and I think that’s a big part of it. Obviously, faster adoption, better adoption, long-term sustainability, and your platform offers that compatibility between networks, and I think that’s really, really important, especially if you want people to make this easy.
So they will adopt this Web3 ecosystem that we now have, and the lower transaction or gas fees is also important. So just highlighting some things that I think would be important to my audience. So I, I appreciate that. Mitchell, the last question of the day I have for you. Looking ahead, what do you envision for the future of defi and institutional crypto adoption?
How will sonic strategy and your leadership play into that broader movement?
Mitchell Demeter: The future of Defi in general. I think that the entire world is gonna continue to move on chain. You know, we’re seeing the first very successful example of, of real assets moving on chain is stable coins. They’re gaining adoption that a crazy ace where they’re actually, you know, becoming central and, and pivotal key piece of the existing financial system.
We’ve got hundreds of billions of dollars of, uh, of stable coins on chain and essentially. You know it, it’s just more efficient to move US dollars on chain than in the traditional banking system. And basically it breaks down borders. And so that’s the first good use case. But where I see this going is having equities on chain, having insurance on chain, having real estate on chain.
Basically boring lending. Everything that we see and use in the traditional financial system will come on chain, and there needs to be a blockchain that can kind of support that massive option and handle the throughput. And you know, right now, Sonic is building in that direction. Obviously it’s a competitive space and there’s, uh, you know, there, there’s some other great tech out there.
But ultimately it’s a, it’s a technological race that, uh, that we think Sonic is well positioned for. And where we see. Our company kind of fitting in here is we’re taking that directional bet on Sonic and our investors are, are buying our stock and investing with us to get that direct exposure to Sonic.
And you know, right now, Ethereum being the leader, they’re sitting in around a 500, $550 billion market cap. Solana being, you know, number two is sitting in around like a hundred, $120 billion market cap. And right now. Sonic is kind of flying under the radar, sitting at about a billion dollar market cap.
And so the winner of this race that does get the adoption, there’s still massive upside even compared to, to where the leaders are sitting right now. And you know, we’re kind of here to help our investors get that wouldn’t want to go and buy the underlying token themselves, get exposure to it in this early stage where you don’t usually see these types of products or say an ETF.
For a specific blockchain or token until you’re kind of in that a hundred billion dollar mark. And so we want to give more traditional investors exposure to this tech before it. It goes through its first massive stage of growth.
Brian Thomas: Exciting news for that and you’re doing so much, and again, I think you’re one of the pioneers just highlighting a few things.
I definitely see, I agree with you, the future, where the world does really adopt this and everybody will be moving on chain with the faster adoption with these stable coins, and we’re seeing that, especially in the recent administration, we’re seeing a, just a strong adoption in this space. Obviously that means faster adoption, trading without borders.
A lot of great things out of this. The fact that you highlighted adoption really include those real world asset industries like real estate. I think that’s important as well. And I honestly think in the next five years this will kind of be the the norm as far as transactions and people just having a Web3 wallet and that’s kind of where the future is.
So I appreciate that, Mitchell, it was certainly a pleasure having you on today and I look forward to speaking with you real soon.
Mitchell Demeter: Beautiful. Really appreciate your time.
Brian Thomas: Bye for now.
Mitchell Demeter Podcast Transcript. Listen to the audio on the guest’s Podcast Page.
