In this episode of The Smart Economy Podcast, host Dylan Grabowski is joined by Satraj Bambra, CEO and co-founder of Rails and managing partner at Round13 Capital. Together, they explore Rails’ hybrid trading model, its collaboration with Kraken’s Ink layer-2, and what these developments signal for the future of decentralized finance. Satraj unpacks how Rails blends on-chain user custody with centralized execution for speed, compliance, and transparency, while offering a candid take on post-FTX lessons, institutional market entry, and why Ethereum’s rally is powered more by momentum than fundamentals.

Satraj Bambra is the co-founder and CEO of Rails, a hybrid perpetuals trading platform combining on-chain custody with centralized execution for institutional-grade speed and security. He also serves as managing partner and CIO of the Digital Asset Fund at Round13 Capital, a Toronto-based venture and growth equity firm investing in high-potential technology and blockchain companies. As a seasoned builder and investor, Satraj previously co-founded BlockEQ, a Stellar-based wallet later acquired for its mobile innovation, and has led engineering teams at TWG and Deloitte Digital. With deep experience across product development, venture capital, and crypto markets, he brings a rare dual perspective as both a hands-on builder and a disciplined fund manager helping shape the next phase of digital finance.

[00:20:59] Crypto as a Tech Stack, Not a Philosophy

Satraj draws a clear distinction between ideology and practicality, arguing that crypto should be treated as a technology layer, not a belief system. For him, the future of finance depends on merging blockchain transparency with traditional compliance. He believes that as TradFi and crypto converge, regulation will harmonize, not disappear. The lesson for long-term builders is to design systems that can operate within global financial standards, not outside them. Deregulation, he reminds listeners, never means zero regulation.

[00:24:18] The Hybrid Exchange Model: Centralized Speed, On-Chain Custody

Rails was born from a lesson learned during the FTX collapse, that speed and control must coexist. The platform keeps user funds fully on-chain through audited smart contracts while executing orders via a centralized matching engine for high throughput. This hybrid design gives traders self-custody without sacrificing performance. Every 30 seconds, transactions are mirrored to the blockchain using Merkle proofs, ensuring transparency and tamper resistance. It’s an architecture built for scale, security, and trust.

[00:26:45] Compliance as a Competitive Edge

While many DeFi projects run from regulation, Rails leans into it. Satraj explains how full KYC/KYB and licensing have become key differentiators for attracting institutional traders and market makers. Traditional firms no longer view compliance as a burden but rather as a prerequisite for entry. Rails operates like a financial-grade exchange that happens to use blockchain, not the other way around. The result is a structure that meets regulatory standards while staying true to crypto’s core values of openness and auditability.

[00:33:10] Integrating Zero-Knowledge and Merkle Proofs

Satraj breaks down how Rails leverages ZK proofs for privacy and user validation, layered on top of Merkle trees for transaction integrity. This dual system ensures that while data remains verifiable, sensitive user information stays private. It’s not decentralization for its own sake, it’s cryptography engineered for trust and efficiency. By combining verifiability with discretion, Rails offers a blueprint for compliance-ready transparency in the DeFi space.

[00:42:16] Roadmap: Prop, Cross-Chain Growth, and Institutional Vaults

Rails’ next chapter focuses on accessibility and expansion. “Prop” will let aspiring traders learn the ropes, trade with test capital, and graduate into funded accounts on the main platform. The team is also integrating new blockchains to widen liquidity access and developing institutional vaults where professional firms can trade and return yield to users. Each initiative reflects Satraj’s belief that hybrid models, bridging DeFi innovation with real-world financial discipline, will define the next era of crypto trading.

[00:44:46] Ethereum’s Rally: Momentum, Not Fundamentals

In one of the episode’s most striking takes, Satraj calls Ethereum’s 2025 surge a momentum trade rather than a sign of renewed fundamentals. He argues that big institutional inflows, not technical breakthroughs, are driving price action. This kind of speculative lift, he warns, signals a late-stage market cycle. For builders, it’s a reminder to focus on product, not hype; for traders, it’s a cue to prepare for volatility. The insight lands as both a market analysis and a cautionary forecast for what lies ahead.

Previous guests include: Rusty Matveev, Chief Strategy Officer at Calaxy; Andrew Lawrence, CEO and Co-Founder of Censo; Zac Townsend, CEO and Co-Founder of Meanwhile; Jesper Johansen, CEO and Co-Founder of Northstake; Tama Churchouse, COO of Cumberland Labs; Holly Wood of Boson Protocol; Sid Powell of Maple Finance; Chad Barraford of THORChain; and many others.

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