Unlocking Value in Digital Assets for Institutions

Transcript

hello everyone and welcome at the unlocking value and digital assets for institutions TV virtual session my name is Emily Lawrence and I have the honor to be the president of the crypto Valley Association as well as working for Talos in my full-time that's my full-time role and today we are diving in into staking lending lending not so much actually amms and also how institutions can benefit of all these products and services and we have today with us Eva from figment we have Justin from bullish customer from crypto Finance ragi as

well as Mark Richardson from Vancouver I will invite all of you to introduce yourself and say a few sentences about your company and uh I encourage also the audience to post questions in the chat we are trying to make it um as as interactive as possible so Ava would it be so kind to enjoy yourself and kick this off yep sure thank you Amy and thank you for having us all um hi everyone my name is Eva Lawrence I am the head of Amir for figment we are the complete staking provider for institutions we help uh platforms and assets owners launch staking strategies

I've been in crypto for around five years now prior to that I was in the traditional Finance space as an equities Finance Trader and headed up European flow trading for Morgan Stanley's security lending's desk thanks so much Eva Justin you want to go next oh yeah sure uh Justin short I'm head of trading product at bullish I've been in crypto for about 10 years and prior to that was traditional Finance investment banking for 15 years um bullish is a regulated centralized exchange designed for institutional access to crypto we're regulated out of Gibraltar we have a unique liquidity

model perhaps we'll cover that later which combines a centralizing order book in an amm we've been live for one and a half years and growing pretty fast to just about to hit 200 billion dollars of traded volume thanks for packing us some stats there I asked all of you to to bring a lot of data and stats today thanks so much um then on to mark from carbon Vancouver thank you Amy oh yeah my name is Mark Richardson yeah you're the lucky one Mark here because you're in hopefully sunny Australia thanks so much for tuning in now I'm sitting in a gloomy rainy Zurich so uh

it's it's always gloomy and rainy in Melbourne unfortunately um but yeah my name is Mark Richardson uh in a previous life I was an organic synthetic chemist uh I joined the Banco protocol um as a full-time researcher in 2021. um I uh soon thereafter I was the the head of research and I've uh since taken over leadership of the project as of um October of last year uh Banco has had a very long history um in in an Institutional sense I think that we used to serve predominantly uh the liquidity needs of uh of new projects it's something that we used to collaborate with institutions on um but with our most recent product

offering which is carbon uh we are catering much more to active um trading arms and um certainly we're speaking with uh with institutions about how they can leverage their uh liquid token funds and similar um to achieve financial goals in defy thank you so much Casper would you like to go next please sure uh thank you Amy also here in Gloomy Zurich but quite high in the Prime Tower in our headquarters here at crypto Finance um I'm the head of product at crypto Finance so I look at the development of all our new products and services uh crypto Finance is a regulated asset manager broker and a custodian we have

offices both in Switzerland and also in Germany because we are part of the Deutsche berza group we got acquired back in 2021 so we're also now Building Services for the European market out of uh out of Germany together with Deutsche berzer we are serving regulated financial institutions and recently we've also launched a tokenization as a service offering to also start looking Beyond cryptocurrencies thanks so much super living the High Life High in the Prime Tower nice um Casper I will I will actually direct the first question to you when we prepped you were saying that it's really important to shed lights and a bit give

a refresher on what staking is because maybe not everyone in the audience is aware so why don't you why didn't you go ahead and explain staking please and why why is it um big innovation of web3 and then we can talk about staking strategies for institutions sure I'll kick it off and if I miss something if I can I can bring me back on track um so yes staking is a is a new phenomenon it's a concept which is native to blockchain um and it's actually quite interesting because it enables shareholders of a network so token holders to participate and help secure the network

um it's a little bit of a misused term uh in the crypto industry because staking is being used for all kinds of different products which promise uh some kind of return to investors for locking up their assets but the way we Define it is that you actually lock up your stake to be able to participate in the consensus algorithm of a blockchain which is actually actually what is securing the blockchain and as blockchains grow and more value is being created on those blockchains also the security needs to be upgraded and that's why I actually blocked blockchains need token holders or shareholders to participate in this security of helping provide security for the chain which is something very new so you can actually

help grow a network and because you are using your assets to help grow the network and help secure the network you are actually getting rewarded for that which is quite interesting um and Bitcoin was one of the very first chains that still uses Mining and therefore it uses mainly like energy electricity to secure the network but all the newer blockchains that we see today and even ethereum who recently moved to proof of stake has actually now shifted over to to look for Capital uh actually to start securing the chain and that makes it very interesting for crypto investors who are holding some of these tokens to start to participate in the security of the network and actually get rewarded for that obviously there is

a trade-off because your assets are as the word suggests at stake which is also something that is not always as clearly explained by kind of some of the uh the providers who offers taking services but yes you could lose some of your assets or you you might get penalized for doing certain things so it's important to understand that as well there is a trade-off you also have a little bit of lockup period sometimes depending on the network you are you are so it is a conscious decision that investors need to make but it kind of enables you to to look at tokens as a kind of an Internet bond that gives you some rewards for helping the network grow and help provide the security to the network

thank you so much I think that's quite a comprehensive overview and a bit of a refresh for the audience and um evil like I would love to hear from you uh with your fragment head that how uh digital or how a staging strategy fits into a digital asset strategy an institution strategy yeah of course as Casper said what we're talking about here is non-custodial protocol staking which should be confused with kind of defy lending pulled staking um or other kind of things to get lumped into the staking category but in terms of non-custodial protocols taking that

that we um supportive figment we've seen two categories of Institutions get involved firstly the the asset holders so those with proof of State tokens on their balance sheet um who are looking to stake and then the other side we've looked we've seen involvement for from um counterparties offering digital asset solutions to their counterparties who want to provide this as an additional service so um it's both the the asset holders themselves and those providing these services in both instances they're looking at staking to earn a return on existing assets and generally these are clients who have a long-term strategy uh

in relation to digital assets so maybe they're not short-term trading they're more long-term holders and they want to stake as part of a treasury management function to secure the blockchain whilst earning returns whilst continuing to hold their own keys so there's no transfer of title uh in in non-custodial protocol staking and less less counterparty risks because of that so um we see institutions considering staking as another feather in their cap for for diversifying risk continuing to hold the assets themselves and to invest in a long-term future of a proof of stake tokens

thank you so much um Eva I'm wondering because from the point of crypto Finance is there something something to add here yeah what I could say is that um as crypto adoption kind of continues and more investors are starting to add uh crypto as part of their portfolio I think we will see kind of more and more interest from investors to also uh start you know uh getting into staking um and a lot of the providers that we work with like financial institutions they started with a fund which is her holding certain assets but it's not necessarily staking them or we have banks that have a retail offering towards their clients or a wealth

management offering where they offer uh sports trading and custody and staking I see it as one of the kind of the services that will that will become very relevant very soon for a lot of these providers who have a first offering out there and now want to add more value-added services to uh to also give kind of some return to investors because investors will start to demand some return or they will they will want to put their assets to work in some regard like we're doing with traditional assets as well you want to look for opportunities to grow your crypto assets and staking is a very good entryway into that to do it in a in a relatively risk controlled Manner and

also by contributing to the growth of these networks which is eventually essentially why we are investing into this asset class in the first place super thanks so much then let's navigate now to Justin to bullish bullish has been around for a while now and you guys also are a member of the CVA for a while we are really uh proud and happy to have you um a spirit of um our pool of members which are the ways bullish helps its clients to unlock the value of their crypto Justin okay um yeah no glad to be a member uh so I think from the regarding unlocking the value of crypto uh bullish was really

set up to be a partner of choice for institutions so institutions do face certain challenges trying to access uh Define defy sort of value opportunities um we're trying to provide that in a way that makes sense for institutions so we we can solve some of the legal and compliance concerns or our counterparties we're a centralized exchange so uh or our counterparties have gone through strict kyc all the coins have done the kyt uh assets are fully backed or audited by Deloitte that kind of thing as uh you know hopefully gives a lot of comfort to institutions um so I think regarding the value of crypto they're really kind of two uh institutional

um uh you know customers that we could consider there's active Traders and then more passive kind of long-term investors an active Trader uh what will this can offer is a very low cost of execution um we have deep liquidity it's Unique uh because of the amm instructions that we use to um that we use to provide liquidity it you won't find our liquidity on another exchange via an amm via a traditional Market maker um so you see very low very uh good slippage very low slippage um our fees are low so zero maker one take and in fact even you get zero taker fees for a claiming between stable coins um

yeah it's already the sort of best x uh is is the attraction for an active Trader and your single order book has all liquidity unlike in a more um D5 where you maybe have to look at multiple uh different spreads to to access that a m liquidity um then for a more passive long-term uh strategic Trader uh yeah we've mentioned you mentioned at the beginning um the the staking lending and Market making lending there's opportunity costs um we are going to bring a lending to the platform later this year staking we we're actually waiting for institutional demand but we're actively watching that space but really bullish offers right now is the revenue opportunities from

automated Market making so um there we've we've taken the ideas of that that you've seen popularized by defy including Bangor and others uh in uniswap um but rebuilt them inside our exchange it's it's we're not accessing liquidity on those uh contracts or on those platforms all the liquidity is inside the exchange um and that that's removes a lot of the concerns that institutions might have uh regarding who they're interacting with and what the the you know rug pull kind of various kind of uh potentially concerning um situations they might have with the defy traditional defy experience

thank you so much Justin um I will take questions from the audience after my question to Mark which is um which is the following by the way if you guys haven't realized uh carbon the newest product of bancor has the same letters as vancore it's just different over there so Mark tell us about what's carbon's USB and what sets carbon aside from for instance the uniswap um these three type of type of strategy suddenly so yeah carbon is a a fairly um a fairly profound step away from what Bangkok used to do so I'd say uh

traditionally uh Bangkok has been there to support new token projects and this was our original mission statement and remember that it is now quite old right this is uh dating back to 2017 when getting uh initial token liquidity on chain was somewhat of a challenge but I think that you know D5 has come a very long way since then and uh we are now sort of building uh products that are catering more to the selfishly motivated if I can put it that way I I still see the uh the Legacy Banco products as being something that was built to provide a bit of a backbone for the industry to um to get behind and I think that it did in many ways accomplish that task and so now we're kind of turning

our attention to more competitive products uh where people are choosing to take very specific positions on Market movements and have the agency to see those plans through to fruition so carbon is much less of an amm and it's much closer to something like eBay so the thing that it distinguishes it I think from things like uh like uni swap E3 and and other competitors um is that the positions inside carbon first are asymmetric so you're no longer forced into what is generally referred to as a short gamma strategy which is the way that a M's rebalance themselves and um the specific Financial instrument that's

implicit in that kind of behavior carbon is much closer to being something like a grid Trader which is a um a trading strategy that has been used in Forex for decades and it's just recently sort of risen to prominence in crypto trading as well but exclusively in a centralized context and what we've built is a a much more General realization of kind of trading strategy at a smart contract level so that these things can be executed um you know permissionlessly but another thing that distinguishes carbon from other amms and I don't consider carbon to be an amm um is that because the user's liquidity is discrete and it's not cooled in in

any sense um you have a much better uh view of the regulatory landscape while using it so for example uh carbon's positions can be individually permissioned if you want them to the user can elect which addresses they will allow to um to transact with them and they can also you know choose to observe um you know certain uh address blacklists or whitelists or whatever they like and with emerging kyc products such as from kyc Dao and others if you wanted to use existing kyc infrastructure or emerging kyc

infrastructure to choose who you trade with then that will be allowed as well so carbon is it really isn't an amm IT offers a a a completely different uh Financial instrument compared to the status quo and you want no longer in that uncomfortable territory of having to um you know having to blanket oblige any Trader or any liquidity provider who might want to exist alongside you or or transact with you which is very helpful given the emerging regulatory landscape with respect to institutional use uh carbon was actually developed or inspired by conversations that we've

been having with market makers served for years now because they have been very reluctant I think to use defy resources uh directly we saw a little bit of experimentation when uni swap B3 was released but I it kind of taped that out a little bit and after interviewing them it was things like gas costs and and other concerns that that was really limiting the way that they interact with blockchain resources and so carbon is designed to be extremely gas efficient when it comes to managing your positions so for example in competing products if you want to change the way that your liquidity is distributed or the the the price action that you're exposed to

you're forced to like withdraw all of your liquidity from the protocol and recontribute it to a different range whereas on carbon it's a very simple matter of just updating um a single value or a collection of values on the nft that represents your position um and this is uh I think a much more efficient way for um for professionals to interact with on-chain trading resources as makers not necessarily as as takers um and so yeah we are um we are targeting that sort of professional audience although I expect you know adoption will be uh relatively drawn out as these things are um as well with the institutional side

of things uh carbon has no internal or external price oracles and so when you want to contribute your liquidity you can do it literally at any price there is no um prescribed uh price point that you have to obey when you are interacting with the protocol and this means that token funds um that have accumulated very large uh collections of certain tokens especially through rewards programs or early seed investing and things like that often find it difficult to scale out of those positions um you know through tiwap or or other processes whereas with carbon you can literally just set the your asking price and sometimes that might be below the market rate and you can rely on such a

networks and arbitrages who have access to literally every centralized exchange and every decks to pressure the market for you so we're finding a lot of really interesting use cases with the infrastructure that we've developed and I'm very much looking forward to developing our relationships with institutions now that we've launched just an hour ago congrats cheers thank you yeah I I would have asked a follow-up question mark that since when is carbon live but yeah today today is the time today is the the date super then I would love to answer the question of Thomas from the chat which is the following what should a token holder

look at when choosing validators um Evo I feel like this is this is a perfect question for you yeah so happy to take it I think from my perspective I always look at this as who to look for in a staking partner rather than than just a validator there is so much um more that encompasses staking and just provisioning uh validators provisioning notes um and it's about a partner that can provide you with the the level of security that you expect uh figment we prioritize safety uh security over liveness so what does that mean that means that we focus on avoiding um slashing risks rather than just uh

promising and promoting uptime so the the validate is staying online so that would be a key thing to look at what is the the staking companies um track record in terms of slashing what other security methodologies how do they manage that internally what are the expertise of the team how do they end understand the governance of a particular protocol and the updates of networks how is that managed from a devops perspective so I think those are very key areas to look at um and then just in general their performance how how have they performed as a both their validators and from a security perspective and then look at

the expertise of the team outside of that so regulation tax compliance coverage do they have people that understand those factors of staking and provide you with with support in those areas too thank you so much I think this is a very maybe if I can add one point let me um I think uh most of us are aware what what happened with one of the the larger Platforms in the US uh who actually had to unstake all the assets of their customers so that's also quite an important point to look at is like uh have they you know have they got the right setup is it really staking um have they got regulatory approval or did they at least talk to a regulator

um to make sure that they have an offering which is trusted and that is also a bit built to last because the last thing you want is that you're forced to kind of exit all your validators or all your stake and move it somewhere else and lose rewards in the meantime or even worse like a platform could go down if it's a if it's a non-custodial setup and the assets are not segregated or it's not clear who owns the assets after you stake them those are also very important factors to keep in mind when you're looking to stake your assets personally agree and I think the importance there is also as you said Casper a long-term partner that's thought of this um staking strategy for the future and how things might evolve and how they're positioned for any changes from a regulatory perspective or otherwise

thanks so much um it's next I will take the question of paper Street Capital and they ask what do you believe is the primary hesitancy for further institutional adoption into the crypto space so I understand that which are the main um adoption breaks for institutions who wants to take this yeah oh go ahead Justin okay well I mean from outside I think regulatory uh Clarity would be tremendously helpful um do you think people have concerns about um what seems to be changing views of of what were previously accepted

um you know whether it's SEC or whether it's you know whatever regulator is involved this the the views seem to change it is not clear um to people what how it will be treated both now and in the future so those kinds of things do do cause people to to worry to have concerns um regulated out of Gibraltar we don't have that issue but um nonetheless I do see that being a bit of a restrictive thing um sorry now I do want to maybe to add like Mika just passed the European Parliament vote today uh which will be quite a big thing for Europe I think to bring regulatory Clarity it

will still obviously take some time to come into effect but at least in Europe we're seeing steps in the good direction I think in Switzerland we're already pretty good but yeah the US is definitely still quite difficult for uh for some providers today Corbin launch Mika over to you yeah there's I think that um there's always been this discussion about regulation and I think in the the years leading up to right now um especially with the uh with respect to the United States it has been about um a lack of clarity I would say that right now we actually have pretty good Clarity and it's a an extremely hostile

uh regulatory environment one that doesn't um reward uh people for compliance but rather chooses to to rule by enforcement and I think that there is a um you know it's a it's a backwards scheme um with that in mind uh I think that that certainly has been the the single greatest um you know deterrent uh for for Mass institutional adoption but having said that there are still you know it doesn't affect every institution the same way and from the institutions that I've spoken with they don't even all have the same not neces I don't want to say you know interpretation

um of the law but it seems that not all laws apply to every institution the same way um and they don't all necessarily have to observe the same uh regulations and so you know to say that there hasn't been institutional adoption I think is kind of missing the point I think that there is pretty good institutional adoption it can be a lot better but it's not like it's it's zero um but I think yeah though in terms of opening the floodgates and and uh crypto being as welcoming as it could be certainly the the hostility that we're seeing in the United States is a pretty big um a pretty big deterrent and can't be ignored thank you for um for adding here more

caveat to answer this question fully I would love to take Jerome's question but in the meantime I also want to highlight for full disclosure that I have the honor of being on Bankers Council and I forgot to tell this at the beginning at the intro so um being super neutral here however well participants have equal air time that's one of the golden rules of a good panel I find and Sharon's question is what kind of added value do you add for staking as an institutional evil I feel like you're the best you can answer the best you're the best but also you're the best who can answer this question yeah so

the key benefit is obviously obviously the returns generated um on staking so the the returns determined by the protocol that are passed through to the asset owner after they they State their proof of State tokens um this is used as as I mentioned before often as a way to to manage treasury for assets that would otherwise sat on the balance sheet essentially not doing much it's a way to utilize those assets um it's also a way to prove ownership and some other benefit is to think about it as a proof of ownership of the assets if you didn't own 32 East you wouldn't be able to stake it so while it's not exactly proof of reserves it can be used

to to demonstrate proof of ownership um in that if if you didn't have those tokens you couldn't stake them um and I think the the benefit um as well is just the the involvement in the ecosystem so so continuing to secure the Block Chain participate in governance be an active member of that particular Network and encourage the uh you know the progression and the success of that Network by staking those tokens thanks so much I can maybe add a little bit because I'm also a home Staker so I do some uh some self-staking and I can compare the two um and and definitely you can stake uh yourself which is one of the great

things about web3 you know you can you can be your own Staker you can run your own Hardware um but it does require quite a lot of attention um and a lot of you know devops you need to have some experience you need to monitor it you need to make sure it's up and I would say what an institution can bring is like peace of mind you know it's managed properly you know it's up you know you get the The Highest Potential rewards from it you know they will follow all the chain upgrades etc etc and to me that's worth quite a bit I mean there are obviously enthusiasts like myself would like to Tinker around uh but also but if I would have like a large pool of assets I definitely would be a bit scared to do it myself because there are also some

risks involved if you make some mistakes yourself where you can lose a significant amount of your of your assets and it's also a bit the same like with self-custody you can be your own custodian which is great um but then you know the counterparty risk is against yourself if you lose your keys or if if you don't store them in a proper way and use you lose your assets at your it's your fault so that's not uh good for everyone and definitely if you have a large amount of assets you might want to look at something which is a bit more professionally managed and I think that's where like institutional setups are quite useful to bring peace of mind to give you a high return and also to be able to manage larger pools of assets without having to you know do a lot of research yourself and if you

have assets if you have a diversified portfolio where you stake a number of different currencies you need to understand a little bit the differences between all the chains and they can be quite profound like ethereum is a very different Beast than polygon or then Solana and in ethereum the risks are quite complicated there are a lot of different risks that you need to understand and stay provider or an institution obviously studies those risks and makes them transparent to you and also manages them and I think that's that's worked quite a bit Casper I love that you highlighted that ethereum's taking is much more complex also just the Machinery you need it's it's so much more uh Power 4 versus running a Raspberry Pi

by uh for Bitcoin so um we still have a lot of sticking questions coming in we can take them for a bit later but let's go on with um with EVO and and maybe even we you if you like you could answer where this one is validation or commodity service but before that let's talk about uh the big uh happening in ethereum's history last week the Chapala upgrade this is a massive Milestone and um what has changed after Shanghai maybe you can unpack a bit What chappello in in Shanghai meant and or more counterparties looking to stake as part

of their treasury management yeah um so maybe just start off by talking about what what Shanghai and what nurse Shanghai and capella or chappella are and why why should people care um so the the chapel upgrade was a withdrawal functionality um addition to the ethereum network that occurred last week so it allows for both full and partial withdrawals um essentially maybe there's an oversimplification is is to describe it as a system upgrade that allows for ethereum to be unstaked and withdrawn like a a cash out ability being switched on on the network now of course that is

a huge simplification and if my head of uh ethereum research well here he would probably be throwing things at me saying that it's not quite that simple but maybe that's the the best way to think of it for for today's uh webinar and it's another piece in the puzzle uh following the transition on the network from proof of work to proof of stake it's been important for customers who need liquidity so if an asset manager or a hedge fund uh had a certain mandate in terms of access to tokens and liquidity and tokens not locking up funds for a long duration um they might have been prohibited from staking their eth prior to

uh their withdrawal functionality being enabled because their shareholders stakeholders um didn't like the fact that that they wouldn't have access to to these tokens as they would be staked bonded to the network so it opens up uh is staking to to a whole new group of institutional participants it makes it easier to build more products around ethereum we're seeing interest in Structured Products etps around state so it increases the the access there um to to staking ethereum for lots of different and new participants um and I think just the success so far would

um of the upgrade continues to build confidence in the network um and although we're seeing withdrawals I think overall we're seeing lots of people come to stake their ethereum and increase both you know from a liquid staking perspective and a general non-cost um staking perspective we're seeing both types of participants come into the staking marketplace now I don't know Casper if you've seen you know had a lot of phone calls since since last week about East staking asking you um asking you about it now that it's it's been a it's been enabled with rules have been enabled yeah definitely I think interest picks

up and we didn't offer it previously because you cannot effectively you couldn't terminate a relationship with a business counterpart because you couldn't get your assets up and um the the party who you staked with essentially would always have a copy of your validator keys because you couldn't exit the validator so that's something which uh which changed now and I think that will uh also encourage more investors to uh to look at it and but also on the flip side I think you will have more companies now uh who are going to offer each staking and that will hopefully also decentralize a little bit the uh the difference taking parties in the in the ecosystem so that we have less stake with one big party and we the stake will be a bit more spread out which is good for

decentralization of the network so I'm hopeful that uh now that this is available that that indeed will alleviate some of the concerns that some of the uh the Hawks head towards proof of stake where a lot of the assets were being pulled for instance with some of the larger uh like for instance coinbases quite a big share or Lido and hopefully we see that go down a little bit and get more spread out also between others taking providers to to promote a bit decentralization of the consensus mechanism foreign thank you for answering the question let's chat also about other ways to unlock your um the value of your digital assets then staking and then we can Circle back to

staking uh Justin um I'm curious this as per now which of the bullish services are the most profitable what is their main Revenue driver uh sure um okay so um profitable for who for for us or for our customers both hopefully quite aligned um the Traders bullish is a great venue um we've done some studies uh to sort of compare ourselves to coinbase or binance um if you include uh you know reasonable assumptions for for taker fees and um the the liquidity or demanding of clip

sizes are up to sort of 30k 50k dollars bullish on average beats finance and coinbase uh for Bitcoin and ethereum slippage when trading um and of course there are other benefits of using centralized system I've mentioned the gas costs you get with defy um yeah it's it's it's a it's a nice place to trade uh if you're if you're a relatively high frequency Trader um but for for bullish um and for our uh more uh longer term investors the automated Market making is the primary revenue stream the model we have is quite unique we certainly within

centralized exchanges so we've tried to align as much as possible our interest as a platform but also our customers interests so we take a share in the overall profitability of using amm instructions that's how we make most of our Revenue um so those those are built from the spreads contained the spreads chosen by the customers for their a m instructions and to take your fees that they get paid when they provide liquidity so to take your fees to be clear go to the amm instruction providers not to the platform other than through the percentage share um and it seems to be working as I said we've traded 200 billion dollars uh as

of this week I think the the expectation is um so both customers on the supply and demand seem to be pretty happy with that um that arrangement uh I think um in terms of profitability moving forward or even just now um our goal with with with bullish was to to take some of the best ideas that D5 that that have been it's a constant Improvement Mark's got a great one today um very interesting kind of range orders and things like that um so there's this constant Improvement constant enhancements our mm is not just a uniswap clone um it's uh you don't have to route between different fecals and single

combined order book and we have Dynamic spread features that um if used correctly can dramatically impact your uh the profitability of an automated Market making strategy so yeah um back to the original question uh and then instructions are definitely the primary revenue stream for the platform and for many of our customers I find it super that um you enable in a centralized environment a decentralized uh product in a way and um I was curious if uh if um crypto Finance like what's what's the main Revenue driver Talos customer

sure I mean no I also want to record that it's quite interesting to have an amm as a centralized setup to kind of make use of the technology but also if you're a regulated party it's still quite difficult to get into true D5 because you don't know who's on the other side so this is a bit of a list of both for regulated institutions um from our side obviously I think the whole Market is it has been through quite a difficult period but we have seen that some of our clients moved assets away from kind of unregulated uh platforms into our custody so we've seen an uptick in in custody assets because clients are looking for regulated custodians who fully segregate assets and are supervised I think we've seen

that across the entire industry also with some of our competitors most of our income still comes from brokerage but also here we've seen an uptick in interest where a lot of the banks or or other institutions already have a trading setup now come to us because they want to have a regulated kind of part for trading so and there's not that many providers in the market today I think that will probably change over time but that's really where we have a good selling proposition today and where we see quite a lot of demand and brokerage is still one of the the biggest Revenue drivers for us then when I mean we discussed it before already staking and some of the other added value services are still in early stage

but we're continuously working to develop them to also offer like later when clients are ready for them to have also quite a good offering there which is built with the same regulatory standards institutional standards as the custodian and the broker super thanks so much for um answering my Curious questions then I would love to go on with uh with the next one dedicated to mark and um that's about Karma's multi-chain capability I think that Corbin will be a multi-chained product is there a realistic expectation to have carbon deployed on um or on other chains than ethereum may

not yes absolutely so um historically we've been um I think skeptical about like moving to uh other blockchains because of the systemic risk um that was inherent in the the way that our previous protocols were designed I should point out though that you know banquil had a a cross-chain deployment uh with the launch of the OS um and so we've kind of been in that uh that situation before and I think that in a way um that made us even more skeptical of um you know the developing layer to an alternative layer one uh stuff that was um you know that was developing around

D5 summer and since then um in many ways I think carbon is in fact better suited to some of these faster cheaper chains uh there are features that I have um envisioned for for carbon that I think or even you might even say contingent on um on faster cheaper transactions um and again you know speaking to the the institutional side of things I alluded to the fact that um we have designed this with institutional use cases in mind and a lot of the the market makers for example that we speak to are used to um you know managing their liquidity

positions on microsecond time scales um on the centralized exchanges and we can't certainly can't offer them that on ethereum the the 12 second block time is an eternity for them um but on um like directed acyclic graphs like like Phantom and there are um that kind of finality is is there so that uh you know we expect that kind of use case to be at least a little bit more attractive and then on um ethereum's scaling Solutions such as optimism arbitrome polygon and so on um I do think that it will be even more attractive there arbitrim has got a um a very significant DFI following already I think GMX has kind of lay the ground for a um

um let's say um it has cultivated a very active community of Traders there and so I'm very interested to put uh carbon in the hands of um of the people that are already there so yes absolutely it's a um it you know where I was once reluctant I am now extremely liberal about where I think carbon should go so if there's any any blockchain with with DFI activity be it um you know in an evm chain or a non-evm chain right we're agnostic to programming languages um I fully expect that we will that we will see carbonate deployed there if not immediately then eventually super I didn't know you were reluctant uh when it comes to to uh being with a

chain or yeah disrespect interesting um cool then I have two more questions to all of you and then we can Circle back to the audience questions so uh we always tend to say that bear Market are forbidding and bear markets are where you can really be a long lasting Partnerships and um when you are partnering with another service provider an exchange or on-chain protocol um anyone you partner with what do you best or how do you best decide uh who to partner with a long question either you want to go first and and give a bit of a

viewpoint of course yeah um so I think you always judged by the company you keep right so you want to partner with firms who have the same ethos as you so focus on Integrity security compliant Market structure um so I think that that is at the Forefront at least a figment's mind whenever we're looking at Partnerships um partnering with firms building on the same foundation so that we are we have security at the heart of everything we do and we look for that in our partners as well who is working to um improve the ecosystem who is working to secure the ecosystem

um and you know generally better the crypto markets so I think that that's although it's quite General that that is kind of what it comes down to to begin with and then expertise you know we're looking to work with the best people in the industry um we hope to employ the best people in the industry and we hope to partner with them expertise matters so from our perspective we can't be all things to all people and we don't try to be we specialize in staking that's our bread and butter that's our focus and we bring in the the best people from the protocol team research team sales Engineers devops across the board but but we focus on staking so in Partners we want to

partner with you know exchanges custodians trading platforms that are the experts in their fields um we're not trying to become all of those things we're sticking to staking um but we're looking for the the leaders in our partners in those respective fields thank you so much um Justin you have anything to add bullish point of view or your personal point of view um I mean um head of trading product I'm not really Business Development or that kind of thing but I think as a firm we are um obviously very keen to find high quality Partners uh to help us with our goals and help us move forward um we we do look for help for various

parts of the system we've built for instance we work with bitco as a custodian that ensures we can have um certain guarantees for our clients when they're you know in terms of what would happen in a bank in the case of a bankruptcy or something like that um so those kinds of things are always in Forefront of our mind our CEO uh Tom Farley it's X noisy he's obviously very steeped in this kind of space in in the sense of you know what institutions need and understanding um sort of table Stakes for for how to make institutions comfortable and also in in terms of you know looking across the space to see who might be a

potential future partner for anything we're looking at in the future thank you so much for adding uh or sharing your Viewpoint Mark I see you unmuted yourself already yeah so I think uh yeah a lot of the points that have already raised I don't have too much to add to oh I think what I will say is that um you know as a D5 project um sort of much closer to I guess the the turbulence that you kind of um you know that the markets experience and we're also exposed to a lot more of the you know the variety I suppose um of the the different characters that uh you

know arrive on the scene and and want to produce projects and I I found that during the the bull market phase it was a little bit less obvious for the the good actors were right it was um you know some people are very good at hiding their insincerity um but since then um I would say that the the market ShakeOut has meant that the people that kind of remain and are still you know that we're still having conversations with regularly generally are really committed to what they're doing um and these are the kinds of people that I like to partner with after that you know there's always the um you know the uh the overnight layer of a test right if you had to imagine yourself uh

trapped in an airport terminal with someone overnight um you know is it someone that you could speak to are they friendly um you know do you like working with them I think that the it's almost the same way that you might approach um an interview right for a new candidate um I I prefer to work with people who are good you know individuals and that are um you know that I can uh imagine myself sharing a beer with or something after work but other than that you know I think that all of the major talking points have already been uh have already been mentioned by the other guests thank you I'm curious if kosper has something else to add and it's a good point that yeah uh in this bear Market

sometimes there's quite some filtering happening and and uh we know we learn who are in this uh for the long run and we're really believing in the principles of uh of crypto and blockchain Tech Casper what what did we not mention here no we also look at partners with a similar mindset I think the the recent history has taught us that going slow but do things properly is the way to go uh that's the way how you you know remain relevant how you build something that lasts and now you know you can weather a storm so when we look at uh Partners we also look at Partners who will look a bit into the future some things are The Regulators are a bit

behind maybe some things are not fully regulated yet or there's a bit of activity where it's a bit unclear but we we try to kind of look for partners who have the right mindset who do their due diligence who engage with Regulators also for things which are maybe not fully regulated yet like we engage with finma to get approval for our second offering for instance um so yeah you want to have Partners who have a similar mindset with you and who are also you know willing to offer a sacrifice maybe a bit of uh short-term return for long-term stability or or gains or having something which is um a bit more longer lasting and that will also um you know make uh Regulators comfortable

super thank you so the we arrived to my last question which is what does it take that we have an uptick in the market and if you could wish just for one thing uh for the next uh months quarters to come what would that be and I'll shake up the the order now because uh yeah we can we can go across per a quick response to this one what what does it take for adoption to accelerate and we see more and more institutions coming yeah so I mean I think from a tech perspective we are definitely not in a bear Market uh maybe from a revenue uh perspective I mean there's so many good things going on we had the merge we

have nfts on bitcoin we have Roll-Ups uh we have breakthroughs in zero knowledge proofs um I think if I could wish for one thing it's maybe the chat GPT moment for uh blockchain that would be great where we get like 100 million users in one go um but yeah I think from a tech perspective we are steadily making good progress there's more applications coming um and I think once trust comes back into the market we have the right regulation we have the right providers I think the market is set up to grow and um and then and then I really believe into the into the future of this of this whole ecosystem because I think the foundations are there and the you know the the principles of decentralization community building etc etc I really

believe in those and I think that will bring um adoption in any way like yeah people want to have it and so yeah it's going through his great phase and we'll get there eventually super thanks so much Mark I'm not really sure um I think there's there are so many things that I want to see happen so I'll try and keep my answer short um but I would like to see I think um a slightly different attitude um from the United States with respect to its crypto regulations um I think that um you know the rest of the world is setting a good precedent um we've seen for example I was just in

Hong Kong and it's um you know it there is sort of a uh almost I I heard it referred to as a type of uh Chinese virtual machine for for different markets and crypto is is really taking off in a pretty big way there we've um I also heard about the um the Hong Kong um centralized um digital currency was was supposed to be announced around about that time I'm not sure if it's been announced since um you know even with the uh the uh Mika um proposal being accepted by European governments and I think that these are all good precedents however you feel about the maker proposal or not it's still a step in the I think in the right

direction um if I had to choose anything I would like to see at least that kind of Progressive thinking from the United States and I think that a lot of the uh backlash we've seen against the um the hostility that I referred to earlier um in recent days I think is a very good sign that there are um critical Minds paying attention to what's happening there and um will not allow the United States to relinquish its title as Innovation capital of the world um so if I had to choose anything I think that that would be the the number one thing that would uh benefit us all in a very terrific way

super thank you so much Justin I will let Ava go first what do you think and then last last person at least thanks um so what what do I think it takes to see an uptick in the market I've been thinking about this a lot recently and I think maybe it's either much more stability or absolute instability in the traditional markets um we've seen the US government trying to cut off access to Fiat rails for for a lot of the crypto or the you know Tech web3 type Banks so cutting off those access to Fiat rails has actually pushed people into crypto and we've seen a

slight uptick in the markets there if they continue to do that maybe that will be a pivotal moment for for crypto or also if we see you know um inflation stabilize things calm down will will that be something that will restore confidence and what do I wish for crypto um maybe for it to become boring um let me qualify that by saying no we don't wonder so I think that once crypto starts to fit into our everyday lives and there's something that um is just accepted and people don't question it people will start making payments uh transferring ownership via

the blockchain without even realizing what they're doing um I think that that will be really pivotal in the same way that people send an email and they don't figure out or think about how they're sending that email it's just part of their everyday lives I think um that that will that will be an important step whether it's just ingrained in everyday life even more so than it is now thank you so much and Justin what is your take I mean very good points raised just now um I do think it being boring is an important part of our future uh it will be uh when you don't have to put the word crypto because it's assumed that's that's going to be an important time

like when you don't have to put word mobile because everything's mobile now um so yeah that's coming it's not coming the next few months though so we have to wait a bit longer for that one I think uh as Mark was talking about with the US regulators and there's there's a there's so much uh such a mixture globally of expectations and and situations that it does cause difficulty for uh typical institutions who aren't steeped in this or aren't doing this day to day um to understand what the current situation is and and it does frighten people away I think so um I even mentioned the Fiat rails you know we we wish you had to have to Pivot pretty quickly to to support you know adding

um properly supporting usdc and usdt you can now convert quickly but um so yeah it's been challenging I think what I'd like to see is just a return to more stable situation that we had six months ago and I think we'll get back to pretty soon with uh Regulators we're very happy with our Regulators in Gibraltar but um other Regulators are willing to work with organizations to to move forward responsibly and Foster Innovation not prevent it thank you so much um I invite everyone in the audience but but I will just do myself to to um thank you all evil Justin Mark and

Casper this has been super informative I also encourage the um the people who asked questions to reach out on LinkedIn or Twitter to the panelists they will be happy to respond we didn't have time now for that but we have in six months another session like this we can meet again and then we can see if you're uh if your wishes came through or not thanks so much bye for now thanks a lot