Achieving DeFi Edge as an Institution - TOKEN2049 London 2022

so hello everyone uh today I would like to share a little bit about my experience scaling up D5 teams and different operations as an institution and I will share a little bit inside some ideas and some Concepts that uh um as well as a blueprint that you can take away to take advantage and make sure you can do the same achieving that defy Edge is an institution before I get started a little bit about myself uh once again my name is kiril and I'm the D5 strategist in nexo the Resident D5 guy and my background is in economics but I early on I discovered my passion for Tech and growing early stage startups this brought me on to nexo to become the first employee and if you're not familiar with nexo we're one of the largest European digital asset institutions providing the core Suite of crypto Finance products and crypto Finance Services Credit interest account a credit card and an exchange my journey at nexo started off at the institutional lending desk and I have a very weird Flex to share with you my first customer was SBF so um yeah I've been at the front lines of building up crypto Finance in the last four years I went and started my talk today with a con with a uh something that is uh called the Conway's law essentially every product or service that you get out to the market will replicate your communication structure within your company very simply put the way we talk with each other within our teams within our our company will reflect into the any output that we produce how is this relevant in D5 well in order to catch up with the non-stop Breakneck speed in D5 in crypto in general you need small very flexible and autonomous teams that can deliver on this that can keep up with everything that's going on I would also go one idea a little bit further and say wow the way we communicate internally will determine our outputs the ability of our team members to execute and to deliver projects by themselves would determine the end goal of uh of any D5 or more broadly web3 initiative that we have within a larger Institution the evolution in my belief is very foreign foreign institution is very similar to what you have as a user you start off buying your first Bitcoins you become a casual user you start to understand how exchanges work how to put the limit order before you know it you're more experienced you know every exchange which assets traded where and you uh know the ins and outs of D5 you know the ins and outs of uh on-ramps and make the most out of every transaction you start identifying problems and start building projects that solve these problems until you uh before you know it you're an innovator bringing New Concepts that are pushing the whole industry forward once again I think as an institution you can go to a similar transformation but it starts with a single small small step which is getting some kind of exposure it could be with a simple purchase becoming investor or somewhere along deeper along the way so here are a few of the things that come to mind if you're the ingredients in the in the secret sauce that allows you to uh to scale a defy team at the center that's people and once you have your team together everything else will fall fall into place of course this is not a full list but a few of the things that come to mind infrastructure risk management treasury management and tools and automation next to itself microcosm of the co-cryptos currency space we have bitcoiners yield farmers nft degents and traditional Finance guys all put together only this way we're able to keep and put the puzzle together on what's going on in the cryptocurrency space and build a single unified picture of what's going on I think a lot of the secret magic comes to uh to teams by putting on different mindsets different interests and also different aptitudes and I'm going to say what I mean in just a second of course every defy team will need to be entrepreneurial they will need to be able to start and execute projects identify opportunities and deliver on the on what they have started yes you will need to be analytical yes you need even uh different aptitudes like a conservative risk manager paired up with a internal Optimist entrepreneur who believes in their long-term success of crypto but I think the biggest and most important ingredient is to have people that have the ability to walk away from Easy Money if you look at what's uh gone wrong in the last few months in the space the work has Unified all all companies that have gone under is their willingness to win at all costs and risk everything and that's why I believe the ability to walk away from easy money is one of the most important thing that you can do when you are active in D5 but most even more broadly in the crypto space in general so once you have your right people you need to set up the different elements of your team and I think if there if you can compare the blockchain to an ocean you need a ride boat to Traverse the blockchain you need the right infrastructure to be able to access each and every opportunity that it provides so beer Relentless build out the exchange bank account counterparty OTC desk lending desk and so on infrastructure that will allow you to Traverse the blockchain that will allow you to access opportunity once they arise and once they are identified once once money flow freely asymmetric opportunity will come that is not available to others who don't have the right vote number two are tools find the right tools to get the right information at the right time discover new opportunities with defy llama check on chain data with your analytics automate your alerts via Missouri governor listen to every podcast every newsletter getting the right information at the right time and you will stay ahead of everybody else this is the most in the last few days this is the most important topic that you can uh that you can cover in any web tree uh company today without risk management without exposure risk without understanding second order risks of any of your engagements you are swimming naked in the ocean be paranoid be paranoid I think this is the most important thing I wanted to share with you today be relentless in criticizing every opportunity at every level ask the right questions and always question your reality let's take the example of FTX which is on everybody's mind today if you look hard enough the question what if the token goes to zero you if you started looking answers to your question you would find Clues everywhere borrowing against ftt tokens from other desks borrowing against ftt tokens on on D5 and most of all FTX having most of its equity in FTX tokens what if the token goes to zero could it mean the difference between between withdrawing your funds or not be paranoid this is Paramount so one last one last element I think is overlooked by most companies treasury management years of optimization getting a better product being better at what you do can be undone by a single bad treasury management decision every time you earn a token any chances are if you're in the space you are earning your your income your Revenue in some capacity in Bitcoin or any other currency you are making a proprietary bet on the future of the space and also on the price of those coins you're making a trading decision without knowing and making unknowing trading decisions you cannot be successful so the first step is asking the right questions what is your base p l structure and what is your cost base on if you're spending in dollars you would need to plan for dollar expenses you need to answer the question how long is my Runway can I survive four-year bear Market without any Revenue which coins do I sell and how often imagine if you're in exchange if you are a staking provider you might be making fun you'll be might be making Revenue in tens of coins each one of them staying on your balance sheet is a trading decision be mindful of what you keep on your balance sheet or you cannot do years of card work so once we have those elements I would like to share with you an action plan small steps that I think will help you get started and I think you'll realize very quickly that working as an institution is not as simple as popping off 10 million dollars to your metamask account you cannot just get started right away you need the right infrastructure you need the right tools not everything everything is not as simple as it looks like before you do it so here's a simple blueprint I think will make sense for anyone wanting to get in the uh in the D5 space first set up your infrastructure Exchange accounts defy wallets make sure you can access every Network and you have the appropriate Fiat on an offerings once you once you have that become a user an Institutional user that has bought an nft or has taken a loan you'll quickly realize what can happen and what the implications are for you as a company if you bought an nft your Finance team might want to know what what that cost today so they can post it up put it on your balance sheet if you get a loan your operations team will need to manage collateral and manage liquidations make sure that you get those right so they can go to the next stage and once once you're done now you can launch a product so launch a product for at least one customer one paying customer this can be a simple replica of what you do already for uh users off chain and replicate it on chain for one paying customer this will help you understand where your Competitive Edge is and will help you understand how to go to market and the final identify how you can improve and scale that you'll be ready to make a multi-year roadmap dispense from one month away to many years away to the Future so if you have one take away from me today I think I would like to repeat this thing one more time be paranoid always question your assumptions and always question your reality this way you always stay ahead of the curve and thank you very much guys awesome well done Corel that was really cool you've been dropping so much knowledge and I love the way that you went through get started get the trade on see how it works um are you impressed uh with how defy traditional straight up defy in the markets that we've seen in the last six months with the volatility that defy actually performed exactly like it should have compared to some of the C5 operators which might not have a uh organized and prepared what they were what's your vision on D5 going forward and uh were you impressed with how according to the smart contract that it actually executed like it should have yeah uh I think defect has been shown it's extremely resilient uh my main takeaway is the default is getting more complex as uh you have the money Legos you you have interoperability that's good for ease of use but there's also more systemic risk that you have to take care of so you have to think of D5 as a whole system and not as two separate platforms for example because I'll close for one platform might lead to inflows or outposts or another so the system doesn't work you know just like uh any other system it it has a lot of interconnectivity and introducing new elements to the system introduces new risk um so yeah my main takeaway here is that we have to be mindful about the whole system in general as well but obviously I think D5 has performed as good as you should and even better than everybody has suspected yeah I heard that big round of applause for Corel from nexo thank you so much awesome presentation thank you you so much