Michela Silvestri, Alain Kunz, Adriano Bertini, Markus Haemmerli, Frederic Volpe - From CeFi to DeFi

Transcript

um hello hello everyone um good afternoon a pleasure to be addressing this room today um we have a very exciting panel uh with very exceptional professionals I have uh the pleasure to work with many of them for over three years now um the panel is going to cover specifically the chief of traire investors to both CI and defi uh and before we jump into the exciting questions we have prepared for you today um we we will I'm going to allow my fellow speakers to introduce themselves their companies what they do um and how are they impacting the industry at this a specific Moment In Time thank you Michela Adrian bertini head of uh strategy and product Ledger

Enterprise how many of you know Ledger okay if you're otherwise you were in the wrong conference um Ledger Enterprise is the Enterprise arm uh we manage about double digit billion uh under security using our technology we like to emphasize that we're not a custody provider we are a security provider so we are a software as a service and we'll be excited to speak to you about Defi and CI today hi everyone uh my name is frederi V I run the institutional sales effort for binance in Europe uh binance for the one who not know it's uh as of today the largest crypto exchange uh by trading

volume uh it was founded in 2017 we can we usually forget that it's actually a young company uh as of today we have uh over8 million users uh and it's obviously well known for uh for the exchange uh but it's actually a whole ecosystem we on the side also run the BNB smart chain where we have dabs also that that is being built on it currently it's the the fourth largest uh um well uh defi platform and uh and then we have several other other products like binance P uh and yeah many many else that you know I'll happy to to be discussing after after the conference good afternoon my name is Marcus I work for Signum Asset

Management I'm actually heading the liquid strategies part within Asset Management which covers basically everything except for Venture Capital um for the ones who don't know Signum we're a a bank in Switzerland and um a service provider for crypto as uh services in Singapore as well and we're basically a full value chain service provided within uh the crypto assets base thanks my name is Alan and I'm responsible for the European Business Development and say a GSR um GSR is the oldest and probably the largest market maker out there what's a market maker we ensure

basically that every time you want to buy or sell some tokens on new prod project we make sure it's possible at the same time we also like act as a corporate Venture so that means across from seed to late stage we invest in different kind of token projects excellent um we will start right with the first uh question of today's panel and that's going to be what approaches are traditional institutional asset managers employing to incorporate exposure to CI and defi stru IES want to make a distinction here in the panel we do have companies that are acting in Defi and many others that are acting only in CI so they will

provide their approaches in with us distinction ad J perhaps or Fred would like to start yeah so I think it's uh I think everyone is at different stages in in their crypto Journey uh I know joined binance uh two three years ago and I'd say most of the trader firms we're dealing with were mainly crypto natives uh and obviously now the space you know is is is growing we're not in we're not at the adoption uh phase but in more to mass adoption now know crypto ETF uh spot ETF now has been approved uh so yeah it's pretty much accessible to to everyone so we're seeing a lot more institutional firms um now Jo joining the space and for the ones that were not

trading they were actually you know watching from the sidelines preparing on how they can trade crypto uh what would be the best venue so there is a lot of due diligence that was that was done um before uh and usually they tend for for traditional asset mag mainly they tend to uh you know to to take a bit of time before starting really testing the matching engine if they were looking to trade on binance see how long it would take for for the trades uh to go through how they can have a proper setup segre segregating their client's asset to uh to themselves uh ways to reduce counterparty risk and all this takes takes takes a lot of time uh for the more traditional ones as well they they're looking to uh you know they looking to do what they um you know what they do in in the traditional space so

they'll be looking to manage their Capital more efficiently um reproduce the same type of trading strategies that they did they do in traditional Finance on on bance so through the years we've been able to you know enance and and produce new products that would allow them to to do that on uh with us so maybe my view is starting a bit you know also in the past but if we look at the ecosystem it was a fully Crypton native ecosystem when it started right and I think in the last couple of years we have been we've seen much more dominance coming in from the needs and

um requirements from the traditional assets spacee and that has shaped a lot the way how you know C5 and defi is accessed nowadays compared to a couple of years ago and um with that awareness I think and it's also about not just from CI to defi it's also to some extent from defi to CI what happened in the last uh uh months and years um the the way you can access is basically today almost the same as you would think about it in traditional asset but just with new technologies to some exent but also with very known ways of approaching and investing and and accessing the space so

I think what while maybe a lot of traditional players still say you know it's very early stage and a lot of things are not around to creative for um professional and institutional needs I would say the more you're into the space and the more you know about what's actually out there and how you can um engage you figure out that a lot of the need and requirements can already be covered today and therefore I don't really see as a as an inside out view maybe too much difference and a lot of speed and Pace towards really covering also the last angles of of institutional investors already in that moment of time

okay yeah so a ledger we basically always have like a technology uh point of view as you know we've been the longest standing out there about 8 years plus and counting on the Enterprise about 5 years and what we see toward the ends of 2022 is really like a shift in the market um yeah counterparty risk as Frederick mentioned is one point uh what we have seen is also a shift in terms of uh the way trading is conducted and the trade life cycle and how we can use cryptography and cryptographic method to ensure uh each step of the way that that assets don't get lost so entering 2023 we really focus on reducing counterparty risk but also

providing solution that reduce cost of trading and cost of trading you can measure in two ways one transaction cost including onchain cost as vendor usually quite expensive but second also on speed to trade uh so every time you need to reallocate trading that is time consuming so we come out with uh solutions that address that and today's I I hope to speak more about this but on the micro level you see old sale asset manager sweeping the market uh primarily to offer uh easier more less friction products like ETF or etn to to traditional investors uh but I would not undermine and I think we still have a

lot to see uh on exposure to the underlying there is still a very strong Demand on the underlying Bitcoin specifically the stock to flow is reaching the same level of gold so I think we're up for a ride and I think uh the underlying crypto will still play a significant role and very excited to discuss this today um yeah to add something for my part um on the geosource side we like I would say a bit between CI and and and and Defi and trafi I mean I think it gives you a lot of edge or opportunities if you basically can move between regulated and unregulated space and then at the same time if you can move move between let's say CFI players and more

let's say Crypton native player and I think the easiest way to break it down I think a lot of the trat five players especially with Capital Market backgrounds have a very good understanding about the consequence of the fragmentation we have in the def SP defi space and what kind of opportunity that exists and they want to attack it and they want to trade it sometimes and I would say it's not even the technology or the access or their understanding I think that the biggest blocker is really the regulatory the lack of regulatory Clarity how to access especially the D5 space and I think the most interesting let's say V diagram of overlap space we're seeing is really like the AP role in ETFs B see B like if you think about you have ETF which is the most retail

product you need to Source it so you have on it's listed on a stock exchange or a security exchange the same time as AP to HED you basically need to be able to deal in the underlying in crypto Bitcoin in that case and so when you basically can access not only the CME future to hch but also direct venues like binance and other ones it gives a lot of opportunity so we see ourself a bit as like access and solution facilitator for all the people that want to play in one or the other domain I would like to follow um the road of solutions and each uh for presented in this panel um do provide their own um Solutions in different ways

but the point I wanted to make here was in specifically with the First with with first steps that trat five firms make or need to make when they jump into the space what what procedures do you they usually follow in order to start using your own Solutions and that first step is usually the hardest it's usually that that that takes the most amount of time the stage between okay I want to use this solution uh and I'm ready to try or I'm I'm ready to use the your services what is how does that Frameworks look like that set of steps for their own different firms and Ventures and how do you convince them to pass through those stages faster or helping to pass those

stages faster yeah I guess I can start so from our perspective we launched TR link which is our new uh let's call it off exchange product but it's really like a middleware that connects multiple off exchange solution out there in the market so in our case we have seen a very uh disperse and not clear path for the end traditional investor and client because each one is trying to basically replicate a different method in order to onboard such client now what we propose is to have a unified method so in our solution you know because we're not custodian ourself you can use Signum you can use any other custodian out there uh binance seu like we're very open so in our solution the client would just need

to onboard with the custodian so once he's onboarded in the custodian what we do is basically allow them to use our solution to pledge assets that then will be reflected uh and mirror at the exchange like binance so the experience will be simil as for the end client uh the steps required in terms of you know uh being ready to trade is simply getting an account with a custodian moving assets from a reserve account to a collateral account and once he there being able to pledge assets and evid mirror at binance or any other uh solution out there so the the the steps are quite simple I think I think what we have right now is a very um disperse Market with different solution out there

and we need to find cohesiveness and having one single middle layer or middleware solution and he's a technology solution he's not a new custodian he's not going to be the solution um that will allow them to have the same experience the same ux potentially across multiple platform and that that I think what is the missing point the missing part of the Mosaic I don't know if yeah so for when when you know a firm wants to set up again it really depends on you know what type of firm it is uh and if it's if it's a traditional firms probably what they'll be looking at first is not necessarily if the The Exchange is the largest Exchange in the world but rather it's security so

they'll be very concerned about again counterparty risk um so yeah they'll be looking at ways to to reduce their their exposure so whether it be through through Ledger through seu which is the institutional custody partner of binance and that allows them to trade uh on binance with their assets sitting off exchange so this is something that uh they they're really looking at closely uh so security rather than than liquidity for the most traditional firms um but other than that you know binance also we try to provide we're a centralized exchange but we try to provide as much transparency as we can uh so you know we have our proof of Reserve out there you can see that every um you know every client's asset that are on Exchange can if tomorrow everybody wants to rraw then you you'll

you'll have them uh so you can follow that uh on the website we have our safu fund which is our Insurance Fund as well uh so if you know if anything were to happen we have last time it was uh it was valued it was valued at1 billion dollars uh we have an Insurance Fund for futures so you know it's it's a combination of things um that in institutional asset managers look at uh and it's yeah it's you know security but it's not only uh solutions to to trade of exchange but also being C with the exchange they they trade on so I mean for me the way I look at that is basically you know to decide

which way you want to go and you mentioned that Mikel at the beginning is probably the the most important step at the beginning and therefore I think you need to know what what purpose you're uh trying to fulfill and and what do you want to offer your client what do you want to have as an investor as a direct investor for yourself in terms of Market access in terms of security in terms of technological integration in terms of you know your own effort and resources needed for for that part and once you you know what your objective is and maybe also what your investment objective is is it just you want to have um a direct exposure to bitcoin or do you want to have just a bit of exposure

to the broad Market or do you want to be able to to yield form do you want to be able to invest in early token projects that maybe not everyone can Cadiz you know therefore I think you need to be aware of what you're aiming for and then that allows you to take a decision on what your needs are and then maybe also to decide whether you're going to go for a make or buy approach because depending on what you want to uh um achieve as well in terms of brand positioning or in terms of um flexibility you might have your own way of doing that or you might work together with service providers and then when it comes to service providers I think and that's the way we look at it it's it's for many of the traditional

players it's about trust against um the the counterparties they're working together and then it's about technology and technology means what can I do how safe it is but also how can I integrate with that and make sure that my processes that have been proven for many many years and my clients are relying on can be covered in the future as well right not everyone is able to read positions out of onchain data but you maybe can integrate an API you maybe can use different types of Technology but you're maybe not using all the types on your own so it's also a question of depth of integration and uh therefore I think uh these are kind of the first

questions you should ask before just jumping into finding a cool solution and and and investing because otherwise you maybe build a lot and and finally don't um end up in a in an open field but rather in a dead end which doesn't really help you uh to to progress into the future um yeah I try to add something that hasn't been added and I think what Marcus just mentioned really knowing what you do and why you do this is actually a very good starting point because sometimes people tell you I want to have a crypto offering but the crypto offering can be very very broad it's just going to be on one side you just want to give access that can be done with an ETP or an ETF so you don't even

directly touch the the the asset of the commodity itself which is very simple you can Implement that very fast if you're like a a trat five player now when you basically decide to interact with let's say the asset directly you basically have to think about two layers you need to put in place I would say on one side it's a technology infrastructure it can be something like you you have electric just to store your asset to to put e into staking solution and then probably another layer you need to solve is is the liquidity to if you interact with you can use binance you can trade with also on the otcc just making sure you can buy and sell that I think that's a very simple and probably the more entertaining um part of the job if you have a tra five player Implement

something the other one is a bit more complexome and challenging is essentially make sure you're legal and compliant in whatever you do and that's going to be very tricky and it's going to be depending on what kind of of offering you want to you want to provide it's going to be much easy if you're just a bank and you say okay I just give exposure to bitcoin and E and it's a closed Garden it's very easy with AML and kyc because there's not that kind of danger if you're like okay we're going to offer our client Defi and everything else you're going to have token coming in and out you probably need to be very good in what you actually do otherwise you're going to end up having troubles with the regulator and I also think a bit on the on the asset management side

it's just like yeah numbers go up market cap go up so if you have any product with performance fee it's probably a good bet but the other thing is like again do you want to provide just a wrapper is it a question of access or you really want to develop competency and then also on the competency level there's like different thing because a lot of let's say fundamental TR trading related there's enough exchanges that provide you an easy way and it feels a bit similar like what you have from the trust five space if you go into the def5 space everything becomes a bit more tricky and even harder so basically understanding where you're on the spectrum is really helpful and you would be surprised it seems to be a very very simple question that you would expect most people to answer before they start

a project but hopefully they found it out much later down the the road when they started to do some project stuff and obviously spend a lot of money on consultant and something else is also like do you need to build all by yourself or aren't there play like leer binance or Signum another bank in Switzerland that provide some let's call it le Lego pieces that you can put most of it together because I think most added value on the chaty side is really like the education and the knowledge part that they could transfer just because people have some yeah the human has a bit more U let's say a tendency to trust if they talk to a human Banker than if they have some weird d and Avatar that tells them how it is even independent of the

competence but I think really understanding what you want to do why you want to do and special also how you want to do because a lot of the stuff is actually already available just for you to put together great insights as you as you can see is the depth that we can reach today is squ out standing and and probably I will leave some space uh in a few minutes for questions because I can see some of you taking notes and it will be good for you to um approach the speakers directly here today um so please um if you have questions uh keep it keep it at hand um I would love to make some specific questions to all of you based on your own personal experiences and the first question will be specifically on the

banking sector and for that I'm going to start with Adano Marcus just based on on their experiences Marcus could you highlight a little bit on the role that banks will have in the next wave of crypto adoption there are the solutions that they are already providing and more importantly how are they going to interact and work with the rest of the players in the ecosystem both yeah thanks for the question I I think for us um as as we are positioning ourselves exactly at the intersection of you know traditional finance and and and future of Finance as we call it I think we see a lot of different angles where we where we uh are can be active I think you know

first and foremost there's always uh the the question around what are you what are you wanting to do again right and a lot of people do have just very simple basic banking needs it's about paying bills it's about bridging investments from traditional space into um decentralized or crypto assets and I think that's also what we have seen just recently um that you know the crypto ecosystem is not a standalone closed Circle uh ecosystem it needs and it should want to engage with the broader

to make real world use but also to attract more activity to to turn into a next generation of technology and that's maybe a second thing right um also traditional banks have been fulfilling some Services quite for the same in the same way for quite some time and we see ourselves and therefore we also have you know technology knowhow inhouse in different in different fields we also see as as a technology bridge to allow people to engage with defi with CI with investing into projects and I think there's also a big role to play for us not just staying

around and do payments as it was done for years or um offer same Financial products it has been done for years no we're also looking into onchain solution we're trying to make much more engagement we're running validator notes we're doing things to just be a you know because a bank is basically if if you look back you now know in Wild West you know you wanted to have your assets in a safe place and that's basically that hasn't changed the trust in having your assets in a safe place and managed and handled in a safe way that doesn't really change with with with Defi and crypto com into play that's still a big need and I think that's a role where

where we can play uh uh that we can play and then also the the regulat landscape right is something that is quite complex and quite broad to handle and and we're going fully regulated path and with that also support a lot of uh clients and Prospects on how to approach and how to integrate with with certain Technologies or or use certain services in a compliant way and just push the frontier in that that area so I think um that's where I see also our role in in techn technology in compliance in trust in safekeeping but also um making services or bring services to the next

level I would say yeah just in line to what you just mentioned on my side I spent about 14 15 years in Banks so I've seen on the technology front how things develop and what I witnessed is through time the core competency of banks they keep it in house and everything else is is uh vendor provided and the reason is simple obviously there is a high maintenance cost on keeping technology in house and if it's not your core expertise probably you would not do it in the best way so the the co the opportunity cost is very high um what what you mentioned is exactly right so banks are there for

simple purposes first of all cost in your assets so the same is true for crypto uh assets like Bitcoin or ethereum or any other assets so we are going to see and we're seeing from Ledger side Banks being more and more interested in giving basic service but I think the most interesting part which will go hands in hands inh hands with the regulatory landscape changing is Banks start to offering more interesting product on the trading side going back to they can hold the assets and then use a service like binance for trading so that's something that it's a little bit far away yet like you know probably few

months or every year or more but we already see in the rear mirror kind of coming because it makes natural sense banks will go uh to get as much Market as there is available at any given point and the Bitcoin market and the crypto Market in general in general is becoming more and more uh relevant as the price of Bitcoin keep rising and as I mentioned before as wholesale asset manager start to sweeping the available Supply so to summarize I would see cost business being the first step they're going to enter we have a lot of conversation already and we're going to see more sophisticated uh use cases on the trading side for which we expect a

vendor solution perhaps a combination of vendor Solutions bundled together as what they will use in order to access this market and offer service to their end client I don't know who else wants to like I mean you can add something for the banks a bit from our perspective I I think as what mentioned before banks are somewhere to safely store your assets on average compared to self I mean yes you can say we can do self custody we can all going to be big boys and or big girls and going to write down our seat phras and do all that stuff but if we just look at the numbers how many people that have significant value in cry to still just store it on an exchange which

can be just from a risk management perspective considered to be a bit like yeah not the smartest Approach at all and also I think when you think about like okay you going to have kids you want to give them the crypto so just having proper custody and then the other things is also the counterparty risk especially of the 2022 where we all had this centralized entities that were basically acting as some kind of banking entity with a banking license I mean Celsius blockfi they all over everybody else just having your asset with the bank just takes away that risk yeah they can blow up like a credit swis but as a custodian you're still going to survive and they're not going to steal your asset that's very valuable and then the other thing is just being able to move the money

around you want to do that through a bank yes you can do a lot of funny payments with crypto to crypto but it still is less so I really think it's like we don't need the bank with the current technology they have but we for sure need Banking and where they Incorporated I just hope like the old generation in Banks goes into pension and braises the new one and then we actually going to have the best one we're going to have like the human trust or the Trust In The Entity of Bank on actually a nice technology layer thank you thank you for those approaches and my last question for uh the two remaining speakers before we open the space for questions it's going to be as specifically on the systematic side of crypto trading and again um um

it's an utor for me to be shareing the panel with with Fred and Al because they do already work with some of the biggest firms in the space on this front so we'll try to wrap up three questions in one uh apologies for this but they were too too much interesting for for me the first is what is the current status of or current pace of adoption among chatify systematic hedge funds um and high frequency trading firms how are how are the most conservative high frequency training firms jumping in the space um has this pce a at after Bitcoin ETF and prehab expectations or it has pretty much remained the same and then the last question is how binance and GSR work

with systematic Firs Alan Fred the floor is yours yeah so I think we we all agree that uh well adoption Mass adoptions come in uh We've seeing um record volume I mean everywhere but I'm speaking about uh binance over you know the last quarter we registered 7 trillion of uh of transaction across spot and Futures uh that's that's record volume we've seen so far um on the daily average we we see uh we see over eight billion uh orders going through the exchange across all products so it's definitely you know adoption is here uh it's going mainstream um in terms of uh firms so

high frequency trading firms more traditional firms um again as mentioned we have several products trading products for them to to trade on Exchange um to replicate trading strategies that they had on in traditional markets so we have portfolio margin that allows traders to uh to to put their collateral as um to to open positions across spot margin and Futures to be more Capital efficient uh we have a whole set of uh of features to segregate their trading strategies through several uh sub account accounts they um we put a lot of resources into um developing our reports Center as well which is um to respond to um um you know any audit obligation reporting

obligations um hedge funds have nav to report as well so we have this portal which uh which is which works as a selfservice and they can they can literally just download statements uh and send them to their Auditors with binance stamp on it uh from a binance authenticated email address all these type of things are you know are are needed for traditional firms in order to to to to operate and so with a lot of feedback uh we've been able to yeah enhance the products that we had develop new products to cater for for yeah for this new uh new TR traditional firms coming into the trading on the exchange my colleague already said a load from an exchange standpoint it's

probably the best one um and that would just say like I think most well-known or not wellknown high frequency trading firm is probably active in crypto in one form another one I think it probably started out being Prop Shops first moving in that just because if you deploy your own funds from own from your own balance sheet you basically have the most Clarity what you can do and how you can do it the more you go to into hedge fund and managing third people money everything becomes a bit more complex but we saw it and and the example for for binance and the other exchanges the products and the instrument they're building up are getting more and more to the standards we we see in traditional markets and then the other thing is basically if you look at the majority of

the market structure itself we probably still 20 30 years behind of of the trafi market so there's actually a lot of way that let's say strategy that could have been employed 10 years ago in in traditional financial markets they don't work yet anymore there can still easily be be deployed and restarted in Crypt and actually make money and then the interesting stuff when we look at crypto I mean yes we have to centralize aspect but we have Within Crypt an additional fragment to the defi space and the more inefficient or the more fragmented the market is the more money there is to pick up for strategy like prop and high frequency trading great well that ends the set of questions we prepare for you but that

opens the Q&A so I was um I wonder is there any questions in this room for the panelist any questions um yeah so um we know quite well that you know us there's a bunch of organizations that are trying toate Regulators about crypto and about use cases about private wets and things like that um I was just curious if you guys looked at you know the M regulation in Europe and you know how Europe is kind you know quite far behind the US and if there's any sort of you know hard effort made in educating people about you know crypto and privacy and private private and like

I can take that I guess even though we are the one that have the least uh is I me the least contact with Regulators as you have you're a bank and um from our perspective what we have seen is opportunities to be honest so with maika coming uh toward the beginning of next year we're going to see a lot of clarity on the regulatory side which will open up business business in Europe so we're looking at that as an opportunity more than anything else there is some clarity that needs to happen around uh you know what you call private wallet I I guess you're you're talking about like on the retail side more than institutional um that's that's that's an

issue and you know we have different way we are uh lobbying and and you know pushing for regulation to go in the right direction uh year in Switzerland as well as around Europe um but you know that's the extent that we can operate from you know Ledger perspective um we really need all the industry to be aligned with uh you know pushing back on regulation that doesn't make first of all economic sense but second you know not being in line with privacy value so we we are there like Ledger among everybody else probably the

most vocal about we've been speaking quite aggressively we have our GC in Washington very often we have our GC around Europe like speaking if you go on YouTube you you'll find many of his uh um you know uh Speech and discussions with different Regulators but that's the extent that we can operate I don't know if he answer your question but anybody else wants to I probably just would add bit more a positive spin I would say like I mean compared Europe and you mentioned MAA I mean Europe and I think there's two level for business or Market it's always bad to have uncertainty so to have less uncertainty

or more clarity is always going to be better so if we look at Europe with maika we actually have a framework that gives at least people that want to I mean it's not perfect and it's not finalized yet but at least it's more than to the US because yes the US is a bit ahead but it's also like talent pool it's a bit more scalable to approach to regulated in Europe which is fragmented and at the same time it's the biggest Capital Market on that side so I would say Europe and also especially in Switzerland I mean we had the first two um crypto banks in Switzerland we had the ethereum foundation so so we give Clarity I mean it's not it's not helping that which is so small and Europe is still small but I think it's more opportunity or more clarity for Builders

and people that actually want to do stuff in Europe than the US additionally on top I would also say if you do misstep or something doesn't work out as the regulator liked in Europe in Switzerland you're probably going to have a discussion with the regulator in the US you probably going to just outright phase Draconian punishment so it actually gives you more opportunity to to build on that side here now the other stuff what you mentioned with the self-hosted stuff with the Privacy I think that's a very philosophical discussion I'm probably much more in lined with you but I just think privacy is probably something people talk like to talk about it but most people don't really give a about their privacy how they behave so it's a bit like yeah everybody talks about crypto security but they keep everything on exchanges

it's not nothing bad it's just what people saying do it's not always the the the same so we need to take that a bit into consideration but I think the Privacy stuff will be gone it's the same thing there was like I think in 17 all the Privacy coins at one point were very hot most of them just got kicked off exchanges it's much more access so I think privacy is a privilege of humans we're just losing everywhere just at a different space any other additional questions yeah which is self of your assets and trading what you

want with who you want fre really we've heard a lot about is decentralized financing into wealth management okay oration your assets last time I terms of business sign sign aced zero liability of your assets and you took action to recover your assets so you know talk about trust and making we feel like we can trust our organizations but should we lot of people trusted credit Swiss billions were lost right so it be great we have some more conversation benef own and

Def can I can I say something about this and I think it's for you but first I I will answer uh just just following up what what was just mentioned so this IND this industry exists because you're able to self- custom your assets otherwise doesn't make any sense you can use any other Financial product replicating the same behavior and yeah you can buy Tesla right so we believe in self- custody that's you know not your key not your coin is our motto uh now it is complex and we're working very hard every day to improve the ux the ux still sucks like we have to be honest like many of you here might

do multi might know how to do you know self- custody in the proper way but it's a very very small percentage of the of the total right so you need to use service if you're not I mean you don't need to you can learn but it's going to take time so the the easiest way and the way it's happening right now is they're using Services right now when you're using a service I would say 99.999% of the cases you're trusting them in some way at some level right so we have to be a little bit more pragmatic understand what makes our industry right and second how do we solve current problem and we've been in the center of it right with recovery and

everything else like we we heard you know people and what they think right and you know most of them agree right like we we want to be people to be self- Sovereign but there are people that cannot so how do you solve that problem so to to your point you know there is an opportunity here how we're going to solve this and how we're going to evolve in the next year or two is the question so just to kind of rephrase the point but there's always some level of trust so for I'm not going to speak probably Frederick you're better yeah sure I I mean I I would like to maybe pick the point up what what you said right you know it's

always um safety or or trust has different levels right and if you trust to a service provider more to do some uh activities or Services than if you would do it your own and even pay money for it then you're probably that that's probably meeting your need needs right and you could also say you can keep some of the some of the Assets in traditional space Also in pay performant at your home right still no one is doing it because the value of having access to a broader set of services to have safety taken care by someone else having also Innovation taken care by someone else instead of yourself then that's maybe

just also linked to the need that people have but over time to have the option to have the possibility to use both ends of the spectrum to Safe saf keep your assets on your own or take someone else for for that service that's maybe also the beauty of that Innovation that is happening and the question now is how will regulation and how will the whole setup uh together with Regulators clients service providers how will that interact and build a framework that you can use in different ways and still be kind of part of the broad to benefit from the whole ecosystem and not be kind of you know in the unregulated

untransparent way and then maybe you have issues with tax authorities or whatever and on the other hand side not just being reliable necessarily for a centralized service provider but but benefit from both ends I think that's also why we see ourselves not just as a bank we're a company with a banking license but but we see ourselves also as a technology provider to allow for different versions for example we're having our uh cold wallets where you have very segregated asset custody not Omnibus so you have some sort of carved out more personalized safekeeping we're also working on proof of concepts with

onchain Asset Management solution so where we're just providing the investment insights and the Logics but not necessarily the same saf keeping of the asset so you have transparency you can you can interact with the smart contract but using our knowledge with it so we're trying to move towards that direction to allow and also push together with the regulator the boundaries to have a a sound and proper framework so we can offer it to clients in a in a way that maybe satisfies both needs in a way maybe if that ansers your question understand the level of trust anyone put yeah I mean look I'm I'm not the the

legal specialist here on the on the floor um but there's definitely a reason behind that um and we would maybe need to take that separate to answer cont yeah I mean but but you know even even what you're saying if if that's the case right then the question is still who takes who makes use of such uh legal um situations and and and and that's the level of trust you want to have right you maybe have some some uh some some some uh wording there but the question is still would someone use that or not that's also if you have a technological

solution if you're using any onchain SM contract type of of solution can everyone read the code and make sure that you will not be treated the wrong way is that the same level of trust maybe you you prefer to have it written and and counter party to interact thanks just a colleague if I can ask something I don't want get signal but I think it's two level that we can say I think I mean if you run a business you want to have terms and condition which basically are completely asymmetrical for the company against the consumer and that's basically everywhere if you basically looked at the risk disclaimer with all your covid vaccine or some other stuff you can die you can do which is even worse than facing

the money situation then I think the other point is very I mean can we live in a world without trust because what he mentioned is at least with Signum they wave all the rights you probably take a high paid lawyer you you become a bit loud they're probably going to find some kind of middle ground but at least you have the chance to have a discussion or go informed of court now the question if you do some some self custody I mean wallets get hacked Bridge gets hacked so there a lot of money gets lost in that way and so there at least you're basically just trusting some random unon guy that is online so I really don't know if you can navigate the space without trust because I for sure can't do it that most people one person at least I see can do it but most people

won't really understand what they click if they confirm a transaction on metamask so we see it with all the pishing stuff we saw with the board ape so I think there's almost in every kind of interaction some kind of trust it's a bit different one but the bank can sue with some unknown developer you can do actually nothing at all now what what I basically see you argument very in and then you see that also on the use case especially when we talk we people being in the vest we're very spoiled and privileged because we completely over banked and we have very good functioning services but you see much more defi usage in like you say turkey Nigeria and some other country which really have no viable alternative to that but I believe

that if they would have a more trustworth banking system and basically working monetary policy a lot of the people move over just for convenience and some other stuff and then I think the most important stuff is like if the uix gets better on the self- custody stuff I think there's going to be more people using that or less fuckups but I think at the end of the day we're still going to have probably 80% that going to Outsource that kind of stuff because why not you cannot be an expert in technology and you wallet and finance and then have a day job that's just really not working I think but I think just having an option that you legally can move your money out of the Fiat system into an alternative just changes a lot how the Dynamics work so I think

just having that option makes it very very powerful even if most people will never ever use it thanks Alan um unfortunately the time has come to draw the cordance of this great session however there are two possible options from here one is you connect with those incredible speakers after this session I'm I'm sure they're going to be around and secondly they're also Super Active on LinkedIn so please do go ahead and connect with them directly um if that pleases you thank you so much and yeah hopefully till the next session till next time