From Traditional Finance to Building the Future: A Founder's Journey with Kevin Lepsoe

[00:00:04] This is the Crypto Hipster Podcast. This is not a traditional interview show. These are perspective-driven conversations with founders, builders, and independent creators shaping what comes next.

[00:00:26] We go beyond headlines, beyond hype, and beyond price to explore ownership, freedom, and opportunity in the digital economy, where builders talk freedom, not price.

[00:00:49] Welcome to another episode of The Crypto Hipster. Today, I'm joined by Kevin Lepsoe, who's the founder and CEO of ETHGAS. Now, Kevin has spent really nearly two decades in traditional finance before coming into entrepreneurship and working at ETHGAS. So instead of staying on the institutional side today, I'd like to really explore the founder's journey.

[00:01:13] And so the first question that I have for Kevin—oh, actually, Kevin, welcome. Thank you for having me, Jamil. You're very welcome. And let's kick off. And I'll ask you the first question I have is, before you founded ETHGAS, who were you and what was your career before that?

[00:01:40] For sure. So I'm from Vancouver originally. And in Vancouver, you don't have much industry of many types. It's a wonderful place. But I moved to Hong Kong, and I started my career in TradFi. So I had a bit of experience throughout college trading options. This is in the late 90s. And, you know, I just started trading options, learning a little bit more about this.

[00:02:09] I wanted to go to New York. I couldn't really find like an angle to kind of get on the ground and figure stuff out. But lo and behold, I ended up in Hong Kong, handed up my resume to people who looked like bankers on the street. And I eventually found a job trading options. And so that was my first job. I traded FX options. I got into increasingly more complex instruments like interest rates and credit.

[00:02:34] But for the most part, I spent 12, 13, 14 years in TradFi, the last six or seven of which was at Morgan Stanley, where I led their financial engineering, their global financial innovation team, basically. And so you have well within within that TradFi world, a lot of the complex products are actually built out of Asia,

[00:02:58] because it's more of a it's not as developed in terms of like the US as respect to like how big the market is. But it's quite complex. You have like different currencies, different countries, different bonds, whereas the US is just like huge equity markets, huge bond market. So it's a great place to test and iterate products. But that's where I started. And then 20, I had the pleasure or displeasure of working through Lehman kind of 2008 crisis.

[00:03:27] That was fascinating. But, you know, I was still young in my career and figured that, well, do I want to be doing this for the rest of my life? And, you know, around that time, I was thinking about what do I want to do? And I jumped into tech. So I jumped into tech and then started doing a bunch of things. I was mining some Bitcoin back in 2011. I should have gone a lot more, gone much deeper.

[00:03:53] But, yeah, I started at a tech company, built an enterprise SaaS, a cloud company with my wife. And then fast forward, you know, crypto was a thing. And Hong Kong, of course, was quite a hotbed in the early crypto days. And so met a whole bunch of people, went to a whole bunch of startups. But I had my regular business. DeFi summer comes along and I had this ETH gas idea.

[00:04:20] And, well, here we are today. Happy to dive deeper into it. But, you know, it's one of those I ended up kind of finding myself back into a part of tech that's also part of finance as well. So it's a pretty fun world to be in. So you came from, I was at AIG. Okay. You were at Lehman.

[00:04:42] What did that experience of the crisis teach you about, you know, the future at the time and now, the future what finance would look like and how you thought that you could make a difference? Wow. So I think there was a, I don't know if it was a subset at the time called AIGFP. Was it financial products? And I remember there was a team in Hong Kong. They all got big packages to join. And yes, I was jealous at the time.

[00:05:08] But it made me think of like how these huge companies could be, well, one, highly levered. But you could have in some respect thousands of employees. But from a risk standpoint, they could operate like a startup and like poof, they could just disappear tomorrow. And so, especially around like the 08 days, it's like, I forget exactly where Morgan Stanley stock was, but you know, the company as a whole was worth like four or $5 billion.

[00:05:39] And relatively speaking, like that's nothing for where these banks are today. And you think, well, here are huge companies with all this legacy, you know, big buildings, like, you know, good looking people fit people in suits and everything like that. Right. And it's just been reduced down to this, like, well, it's only worth like a few billion dollars today. And then, and it just makes you rethink like, well, what was I doing at my bank that was actually necessary or like, like actually move the needle?

[00:06:06] And you realize like, there's just so, so many layers of intermediaries, like, like a bunch of smart guys and everything in the banks. But like you have, within the bank, you have 20 layers of people to do whatever function it is you're doing, right? You have from front office all the way to middle office support back office. And so there's 20 people within that company itself.

[00:06:27] But within the industry, you might be trading with 10 different layers of counterparties between like the person who lends money and the person who borrows money. And so you have 100 people, give or take that are between the person who lends and the person that borrows. And at the end of the day, you could distill what you're doing into like a spreadsheet.

[00:06:48] And so, so, so that was this like, I guess, aha moment where, you know, in the early Bitcoin days, you're just like, well, I like the vision of Bitcoin, but like personally, I didn't see it at the time. But then you have Ethereum, where it's like, hey, we can actually turn these traditional financial institution spreadsheets into just like code. And that's where things started to click.

[00:07:14] And I needed to see a little bit more infrastructure, technical infrastructure, before we could start to build financial infrastructure. And so I felt like that was a very fun part of my journey where not many people, I think, could see that level of depth within the industry. Like, for example, in the mortgage crisis, you have, what's his name?

[00:07:36] I think his name is Zoltan Posnar, the chairman for the Fed in New York, and basically drew a mapping of the credit markets globally. Sorry, we're going off on a bit of a tangent here, but, you know, he drew a bit about a mapping of the credit markets. And again, you have about 12 intermediaries, financial intermediaries between like lenders and borrowers. And do you need all of these? Absolutely not.

[00:08:04] You could do all this stuff in a, you know, highly performing spreadsheet. And so that was my like, hey, we can make things far more efficient. And so, you know, coming back to ETH Gas, it was that, you know, we have in crypto, we have very strong technical infrastructure to transfer value tokens, create value.

[00:08:28] And then once you have that technical infrastructure, you now need to start building the financial infrastructure on top of the technical infrastructure. And so that's where I see my space and my company coming into the play, coming into play. And so, yeah, very exciting time for where I am with respect to my perspective on bringing financial infrastructure and bringing financial institutions on chain. Great. So what year did you, did you leave the traditional workforce and become the entrepreneur?

[00:08:58] Give or take, there's a transition between maybe 2012 and 2014. So somewhere around there about, I guess that's about 12 years before today. Yeah. And then so I got into, I built a cloud business. Basically, it's almost like a CDN, like a content delivery network. It basically just accelerates data delivery in Asia simply because you have fragmented networks. And so on the one hand, we have this low latency data business. And then I come from finance.

[00:09:27] So just kind of putting those two together, it lends itself very well to infrastructure, especially Ethereum infrastructure. Yeah, that makes sense to me. I think I came into crypto in 2017 and everybody around me was like, why are you leaving an established career? You know. Big name, AIG, right? Yeah. How could you do this? And they held like these phone calls with me to stop me from being entrepreneur.

[00:09:54] When you decided to make that leap, what did your friends think and how difficult was it for you? Well, it's relatively cushy. You know, you have, you get paid, I think, far more than what you should be paid relative to many other industries. And I'm thankful for that.

[00:10:17] But I find that as time progresses in a large company like that, you become more risk averse slowly over time. Like you become used to the maybe the money you're making and the lifestyle that you have. And life is good. It's super easy to cruise. But it's it just wasn't cut out for me. And so I figured the I think back to the decision making matrix that I had at the time.

[00:10:43] And it was that, you know, when you come out of school, right, you have like you have no money. You have like you have no no no experience and no resume like like no like no experience and no friends basically within the industry. And so if you spent five years or 10 years, whatever the number is, well, presumably you have some money, some experience and some friends. And I think as a fallback, this goes to my risk aversion.

[00:11:09] You know, like in a worst case scenario, you probably need one of these three to survive. Like if you have money, you could probably invest it and do something. If you have experience, you could go and find a job. And if you have a network, it's like, hey, Joe, hey, Sandra, like I'm looking for a job. Can you help me out? And you kind of grow together. So for me, you know, around like the early 30s, it was I don't have kids. No kind of like liabilities or nothing, nothing major at the time. So so long as I have one of these three, I'll be OK.

[00:11:39] And so burn through the money part because, you know, I'm launching my own company. But then, you know, the experience and the friends, I think people underestimate just how important that is as you take that risk and as you move forward to do whatever it is that you do, because those are the intangibles that you'll have cultivated throughout years. And they, you know, the the friends were the ones who had invested in our early companies, in our companies, ex-colleagues and whatnot.

[00:12:08] It's like, hey, Kevin, I think you're a great guy, smart person. And yeah, I'd love to support. Right. And so, yeah, money, experience, friends. I think if you have one of those friends who are friends who are employed, I should say, I mean, if they're if they're working retail, you know, maybe you might get some cheap clothes or something. But yeah, that's how I looked at it. So 2020 2020 comes around. You've watched me. It's DeFi summer. Yeah. Launched gas.

[00:12:37] Everything looks good. Then. FTX, then Celsius, then whatever happened this past October. Right. How like what's been harder than you could have ever imagined before as you navigate the space where, you know, for obvious gas. Well. I mean, having gone through 08, you kind of get perspective like these things will happen.

[00:13:04] And so, you know, you have what are called like black swan events, you know, things that happen, you know, every 200 years. And yet they seem to happen every five or six. And, you know, the market just happens to react that way. And so the price of assets and the way markets move, it never follows theory. And it follows a lot of just like, I just can't hold this position because my boss is going to yell at me. And does that make like economic sense?

[00:13:33] Like not like maybe personally, maybe because you don't want to get fired. But, you know, externally, you know, people are quite irrational in terms of how they move the market. So I just felt like the market will come back. And, you know, I'm in crypto because 10 years from now, you're going to have so much of TradFi on chain. And so you're going to have, you know, bonds, stocks, property, mortgages, like a whole bunch of things on chain. And we still don't have this infrastructure.

[00:14:03] And so like all this stuff can happen on the sides and it's just entertainment. You know, I'm on the train. I'm watching this movie kind of roll by. And so long as, you know, we have enough money to do what we're doing and we stick to our vision, nothing's really going to change. You know, it's like you're on the train going across the country and maybe there's a like a war or a riot as you take that train across the country in one of those states or cities. But you're not going there.

[00:14:33] You're going across the country to do what it is that you want to do. And so just need to keep your eye on the prize. I like how you frame that. Everything that's going on in the markets of entertainment. Yeah. I mean, unless it affects you directly. But like I think for entrepreneurs, like nothing should really be impacting you. Well, there's certain financial realities, right? And, you know, hiring too much or spending too much.

[00:14:59] But to the extent that, you know, you've bought your ticket and you have enough money to get you to where you think you want to go, the rest is just noise. And if you see a wonderful attraction in the middle where you want to hop off the train and, you know, raise some more money or take advantage of where you are, like go for it. But otherwise, you know, just stay focused on your vision. Obviously, you might need to pivot a little bit as things go. But, you know, if you're going from West Coast to East Coast, at least make sure you end up somewhere on the East Coast. Right. Right.

[00:15:25] So has there been a time where you have where you've deviated from your vision and made a mistake? And how has that made you a better founder? Yeah. So multiple times in crypto. Yes. I started in crypto with an initiative called Infinity Exchange. And I pivoted to or not pivoted, but I went down this other path of ETH gas. And so with Infinity Exchange, there is still an opportunity for that.

[00:15:55] And that's based on credit. And so when I look at the crypto financial markets or the infrastructure that we have in crypto, you can trade tokens like you trade stocks. You know, these things go up and down, buy and sell. But you don't really have debt. You don't really have credit. And, you know, like, can you get a mortgage on Ethereum? Like, no, not really. Hypothetically somewhere, I'm sure. Right. But like you'd still go to traditional bank for it. Can you get a car loan, student loan?

[00:16:23] Can you do all that on Ethereum? And like, no, you can't. You can't do that. So that's where I started. But that's too far ahead in terms of where the market is today. And down that journey, I realized, oh, in order for this to succeed, I need to do what we're doing now at ETH gas. And so that's where that pivot came into play, where, hey, I want to cross the country, get to my destination. But there's a bridge that needs to be built over this canyon.

[00:16:53] I need to go build that bridge first to achieve that goal. And so it's not fun switching direction because your investors, for example, will say, well, hey, you said you're going to do this and specifically that and nothing else. And so, you know, we talked to our investors and asked, well, hey, we're going to do this other thing. Can we novate you or kind of bring you over into this other project? And some people agree.

[00:17:22] But, you know, it's never fun and easy, but it's important for you to have that, the types of investors who are open to this and who are flexible to this, especially in your early days. Right. So you pivot away from credit and now your future vision for ETH gas in the long run is what? It's basically building this financial infrastructure in between the technical infrastructure and the financial products you have on Ethereum.

[00:17:48] So a couple of the issues you have on Ethereum are that it's, you know, it's one of the first blockchains, you know, ignoring kind of Bitcoin. Right. But it's very slow. Right. It takes 12 seconds to do transactions. You'll hit the button to trade. Maybe it goes through in those 12 seconds. Maybe it doesn't. But it's a little frustrating. You know, we like the Web2 experience where you hit a button and it's done. You know, you don't need one millisecond of latency, but, you know, 50 milliseconds. You just want to hit the button and it's done.

[00:18:17] And so we've managed to do that on Ethereum. We brought it from 12 seconds down to about 50 milliseconds. So hundreds of times faster. And I think that's very important for the user experience. You know, especially if we're going to bring AI agents like they don't want to wait, you know, to do all these microtransactions. These agents want to move like at the speed of light or at machine speed.

[00:18:40] And then secondly, we have this other initiative we call institutional block space where you imagine that. Let's say we have all these assets on chain, you know, billions, trillions of dollars of assets. And you are a big fund. You're an AIG. You know, you're a big fund manager, for example. You don't want to be buying some asset and then getting front run on Ethereum.

[00:19:06] And so there's a lot of this like MEV or, you know, practices where for better, for worse. And, you know, how we got here is a different discussion. But your transactions could be front run. So you're going to buy a billion dollars of this thing. And someone says like, oh, hey, Jamil's this big fund manager. They're doing something important. I want to get ahead of that by a split second. And I don't think that's fair. Right.

[00:19:30] You know, I mean, for the most part, I don't think anyone thinks that's most people don't like that, especially the people by the instrument because the price changes by the time you execute. But but separately, it's like TradFi and those big money managers are not going to come on chain if you have these gaps. And so that is some of these these technical nuances that we need to address before we get millions and billions of dollars on chain. Like, again, you might get the assets, but you want them to trade.

[00:19:59] You want them to be like trade at high velocity. You can't just tokenize assets, put them there and they just sit there. We need them to trade at the speed and at the fairness that you would expect on, you know, New York Stock Exchange, NASDAQ and so forth. After speaking with hundreds of founders, I can't think of one who enjoys being front run. Yes. Yeah. I mean, it just makes sense. Like who exactly?

[00:20:25] Like we we we accept that this is the way it is today because there was no better way. Right. Like like the ability to trade and transfer assets that really didn't exist at this level of efficiency. But now that we've addressed it, we we have we have that zero to one moment already where we can do this stuff. But it's these refinements that get us from trading, you know, a billion dollars across the market a day to trading a hundred billion or a trillion dollars of assets every day.

[00:20:53] And and that's that's a scale we need to get to. We need to get to the AIG scale. We need to get to the JP Morgan, Goldman Sachs, BlackRock type of scale to get those guys comfortable to bring their decisions on chain. Not only scale, but skill. Right. So like making decisions when you don't have enough information. Right. How do you like I think that's more of an art or how do you how do you do how do you do it?

[00:21:20] Uh, well, right now I'm I'm taking a little pause on the market because I'm trying to see where it's where it's going. But, you know, I'll maybe plead the fifth on that one in the sense that like there's I think there's different ways to making decisions. I'm not so much a highly agent driven type of trader. I have my regular business to run.

[00:21:42] But, you know, I think we're in this environment where, you know, what what percentage of trades perhaps are done by bots or are done by agents now. And it's I mean, bots and agents are, you know, interchangeable to some degree. But we're going down this path where you and I can have these agents that are trading for us. They're managing our portfolio or they're making certain decisions on chain and they need to run autonomously.

[00:22:09] And so, you know, we've gone from people like you and I like hitting buttons, you know, years ago to trade to within the next five years. Most of us will just be tweaking our portfolio. We'll be taking almost sliders, scaling them up and down, maybe from a risk standpoint or diversification or asset allocation standpoint. We'll just be kind of moving these sliders around. And, you know, bots will be making hundred dollar transactions, you know, like relatively small amounts to tweak and optimize that portfolio.

[00:22:37] And so, you know, as we as we go down that path, you know, we need to make sure that that infrastructure is there, not just for the sophisticated traders, but for the everyday people to have almost as much sophistication as the institutional traders. Yeah, I've been it's kind of funny. I started doing that allocation thing this year and that correlated to my getting off of X. Oh, really? Yeah. Why is that? Or what was the insight there?

[00:23:06] I stopped making decisions based on emotions and started making decisions based on logic. Yeah. Yeah. It's very easy to get caught up in like, oh, everyone's saying this today. And then, well, the angle is you could just do the opposite, be a contrarian. Like by the time you've read it, like how close to you, how close to the information are you? And if you're always and if you're not an insider, then the price has already moved. So that's one thing. You could just be the contrarian. But I totally get you on fundamentals.

[00:23:35] At some point, you need to just think for yourself. Like there's the people you've spoken to, the things that you've read, where you have insights that nobody else has. And it takes that, you know, that courage to just kind of go ahead and do it. Yeah.

[00:23:53] So if you were sitting across from the Kevin today, who was at Morgan Stanley, you know, and you wanted to save him some pain and some anguish over the decade and a half, what would you tell him? Well, aside from hold on to your Bitcoin. It's been a great journey. It's been a great journey.

[00:24:20] I would say invest more in your personal networks. I think that's something that doesn't require money per se. But coming back to my kind of matrix for going from an established job into entrepreneurship, it really is those people around you that really make the difference. And so you might have that network of, let's just say like 100 friends. Most people have more. You know, like 100 reasonable friends coming out of a company.

[00:24:50] And you might lean on five or six. And it's those that will really make the difference. And so, you know, I think it's important to have spent the years partying, socializing, you know. I don't know what people do now. Maybe like doing a bit of high rocks, right? But getting into these different like social arenas to build those types of relationships because, you know, people want to work with people who they like to work with. And they want to help people who have kind of helped them in the past.

[00:25:19] So I think it's just more investing in personal relationships. It sounds like you're wasting time like playing a sport or whatever floats your boat, basket weaving or ballroom dancing. But it's all important down the line. And, you know, the direct relationships, the second degree relationships through the people that you've met. I think that's the most powerful thing, especially in the AI age. We all have instant information on anything at our fingertips. And at the end of the day, I think people will want to work with people they like.

[00:25:49] Yeah. So those five or six people that you rely on, you've made some hiring decisions over the years, you know. So what, you know, what have they taught you about, you know, what have you learned about hiring and building teams? I'd say there's probably two parts to it. So one is, I'd say, a trust part of it.

[00:26:19] So, yeah, you have basically who are those people who will do anything at any time? And I think in the early stage, you need friends who are good generalists. Like if you're going to work with your friends, for example, friends who are good generalists where each of you can just tag team. You're totally a team kind of working through this together.

[00:26:44] And if something needs to be done late at night, you know, you're going to do it because you want to help them or they're going to do it because they want to help you. And I think having that team dynamic is critically important. So I would put that trust and sufficiently enough capability first. And then beyond that, then on the hiring front, well, it's really just like find great people wherever you are.

[00:27:08] But then get your circle of people to, your inner circle of trust to speak to those external parties to see if you can kind of bring them into the family, so to speak. So that's probably how I learned over time. But, yeah, it really just starts with like trust and having a shared vision and knowing like everyone has each other's back. And then beyond that, that kind of forms the DNA for the company following which, you know, you can kind of bring other people into it.

[00:27:37] Otherwise, you just have in today's market a bunch of remote employees who don't really get along, don't really understand one another. Got it. So trust, how do you like that's one area being in crypto over the past decade that I still struggle with is trust. Like who like being gone through Celsius and having gone through a different scam and stuff. How do you like getting to the place to trust and instead of building instead of untrust.

[00:28:07] How do you how do you get there? Like I still struggle. How do you? Yeah, I struggle as well. One of the things that I found useful is that many of the people you meet across the years are not necessarily happy with their current job. And so quite often you could talk to a whole bunch of your friends and just say like if the right opportunity came up, like would you take it? And honestly, a bunch of people, they just don't have capacity.

[00:28:34] You know, maybe they have family or, you know, whatever it might be where they don't have capacity to look for a job or even think about new things. But like if you ask your friends, like, hey, are you happy at your job if a new thing came up? Like would you have any interest? And that applies to the friends that you have, you know, outside of work. It applies to even the partners you have at work. Like, you know, there could be someone you already do business with. But, you know, grab them for a coffee and just say like, hey, are you happy? Or whatever it might be.

[00:29:00] But I find like that's a great way to deepen the relationship and find experienced hires. Just talking to some of your partners and asking like, yeah, are you happy? How are things going? Like, where do you see your life moving over the next, you know, three, five years, which is a long time in crypto. But, you know, just kind of going through that and seeing that, well, especially in today's market, many people, I think, are looking for new opportunities because the market's in a bit of a lull. So for us, it's a great time to consider hiring people.

[00:29:31] Awesome. Well, you're giving me a lot of great advice today. And I thank you for that. I want to find out what's the best piece of advice you've ever received from somebody? Oh, best piece of advice. I would think it just comes back to keeping your eye on the prize. Like, you know, there's a lot of distraction.

[00:29:52] I think coming back to your X point earlier, there's so much distraction from people who are either unnecessarily loud or like, you know, they're just they're too loud for the amount of quality that they might have. And I find that like the ability to distill truth and information is critically important.

[00:30:15] And so if there's something you want to do, how do you kind of dig through the fluff to get through? Like, what do you actually need to kind of get there? And so that comes back to like, just stay focused, be relentless. There's a certain amount of no, that's not possible that you should be able to put up with. But I think it's important to establish moments of reflection. So every week, like how can you be better or be different every week?

[00:30:45] But every month, like how have things changed every quarter or every year? And I think it's important to set these moments of reflection where you're taking your eyes a little bit off of the prize and just seeing how has the world changed? Like I may have had this vision five years ago. I've been working at it, struggling at it for five years. Is like, would I be doing that now if I were to jump into this industry? And if not, what else could I be doing? Or if yes, then how could I be doing it better?

[00:31:14] So yeah, just stay focused and set those kind of pivot points where you might kind of question yourself. Sounds good to me. Well, I want to thank you very much for sharing your story with me today. Thank you for having me, Javel. Yeah, I appreciate it. And yeah, best luck with everything you're building. And thank you for joining me. Thank you for having me.