Crypto Derivatives & Asia's Role in the Future of Blockchain | Unitize Day 3

It.

Good afternoon, good evening, good morning everybody. This is Gabriel from Block Show. I am back. I think I last saw you guys on Monday. We are now into day three of Unitise which is co organized together by Block Show San Francisco Blockchain Week as well as other co hosts from around the world. Actually talking about co hosts, I have one of them with me for day three, which is basically the theme of the whole entire day tree is the enterprise Day. And right beside me right now, which is a little bit social distance as well, is IMing from Track Accelerator or rather better known as the OpenNotes guys as well. Yiming, thank you for joining us.

Thank you so much for having me.

Yeah, so maybe just as a start a little bit, Right. I think a lot of people know you from your Track Accelerator days and everything, but I think the key thing that you've been using to kind of like build up the enterprise adoption and the enterprise education and understanding of blockchain usage, especially in our part of the world, is the OpenNotes. It's essentially opennotes.com actually, I would say. So maybe you want to share a little bit more about what OpenNotes is for those of you who are watching who are probably not familiar with it.

So OpenNotes was an initiative started between Tribe Accelerator together with IMDA. It's basically a hyper connected ecosystem platform where corporates, governments, startups can all come together to really understand more about the blockchain ecosystem in Singapore, understand what projects are there in the market itself, understanding how do they get to collaborate with corporates, certain grants that are available in the market as well. So I think this was our intention to build this hyperconnected ecosystem platform and.

I think the embodiment of that was actually announced on Monday. Just now, it was just flash on the screen, I think for all our viewers is essentially the 2020 version, right? If I'm not wrong, 2020 version of the blockchain ecosystem map, which has grown substantially since 2019 as well.

So in 2019 we first launched the Singapore Blockchain Ecosystem map because we realized that, oh, there's really a lot of companies in the blockchain ecosystem, but everyone's like, oh, are they in banking only? Are they in supply chain only or are they in crypto assets only? And we really want to map out the key ecosystem players to really give international audience a flavor of what's there in Singapore. Blockchain is more than just in a specific industry, it's cross industry itself. And we are proud to relaunch the 2020 map earlier this week with IMDA here at Unitize and I think it's garnered quite a bit of traction over the last two days.

Nice.

Feel free to check out the link on Brella itself to access the map.

So just to follow up on a couple of things, I think IMI just joined with us. So if everybody's in the Brella platform right now, if you look at the live chat which is on the right hand side of us, you will see that we've shared a link to the IMDA website. We essentially view the map. Actually on that note you mentioned about international flavour and everything. Maybe let's let the international audience have a little look at the three topics we'll be covering for the Enterprise Asia section. I think it's pretty interesting that we are covering something called for example we talk about the future of blockchain, especially from the Asia's perspective. Another thing as well is the east and West. It's not really a pure east versus west, we're going to compare or whatever, but it's like we're trying to showcase people the differences between how ecosystems are actually built and evolve which is very different from what happens here in Singapore. I think Singapore, I think IMING mentioned it just now as well. We are very inspired by the support the government actually gives, you know, whereas I think in certain parts of maybe in the US for example, which is very community, corporate driven kind of thing. Last but not least, we'll be also talking about the future of finance, you know, especially from an infrastructural point in Asia. Right, so, so that's kind of like the things which we are focusing right now onto the first panel. I think it's Asia's role about the future of blockchain. Yiming, why don't you just share a little bit more about the panel? What can you expect for the next 30 minutes?

So for this first panel itself we will have Alan Lim, the head of Blockchain Competency center at IBM Asia Pacific as well as Eric Chen, the Chief Architect of WeBank, the Tencent bank digital bank, as well as Veronica Tsun, the director of next generation platforms at Singapore government's imda. And I'll be moderating the panel itself. So looking forward to get more insights with the various panelists today and hopefully they can share with the global audience itself more about what Asia has to offer in the blockchain ecosystem.

Okay everybody, we'll be right back. Hope you enjoy the panel.

Daniel.

A very good afternoon to all in this first panel discussion to kickstart the Enterprise Asia segment of Unitize 2020 we have invited various key leaders driving ecosystem development efforts in Asia. Let me first introduce our esteemed panel members today. Today firstly we have Ellen, the Asia Pacific Head of Blockchain Competency center for IBM Veronica, the Director of Next Generation Platforms at IMDA Singapore, a Singapore government agency. Eric, the chief Architect of Open Platform at rebank. But before we begin, maybe we can have a short introduction by each of the panelists. We can start with Alan for this.

All right, thanks Yiming and really great to have this opportunity to talk about the work that we do and really exchange opinions and views with my fellow panelists. So what I've been really focusing on last couple of years is looking at the adoption of blockchain as a technology starting from initial phase where we've looked at applying blockchain really outside the cryptocurrency space, looking at what else can do and quite encouraged to see its development from some of the initial ideas and concepts to where it is now in terms of some of these projects and initiatives come to fruition into actual pilots and productions and some have grown out to be full fledged companies on their own and full fledged networks. So really excited about the work that I had the opportunity to be part of together with the rest of the of my company, but also more importantly I think the rest of the ecosystem. So really encourage and look forward to see how the space evolves.

Thank you Veronica.

Hi everyone, nice to be here. I'm from the Infocomm Media Development Agency imda. This is a government agency in Singapore that is overseeing the digital economy strategy for Singapore. So naturally in any areas of technology and digital applications of technology, this would be something we would be keen on personally, Personally for myself, I come from the technology and infrastructure group. So within the organization we tend to look at the so called newer and upcoming emerging technologies of which blockchain is one of them. Been in this space for about two plus years now and have seen tremendous growth of blockchain applications, particularly interest and take up by enterprises. So clearly an exciting space to be in. Looking forward to working with the rest to understand more and unravel more about blockchain applications, particularly for enterprises.

And last but not least, Eric.

Thank you Yimang. Hi everyone, I'm Eric. So I'm from webank. So Webank actually is a digital bank in China and then one of the focus that we have is really on technology. So we have AI, blockchain, cloud computing as well as big data. So When I joined WeBank I was excited to see how webank actually treats technology, how important it is, especially on blockchain. So at that time When I joined WeBank, a lot of focus were on bitcoins, not talking about investment, but when I joined Webank, it's all about enterprise. How do we use blockchain? So I'm glad to hear to be here talking about how the future will be kind of changed, reformed with the technology blockchain. Thank you.

Amazing. I think you guys have seen a short introduction of the panelists, especially for guys that are outside of Asia that haven't met Eric, Veronica and Alan. Today you'll be listening to more of their insights. So Asia as a whole has been one key focus area for blockchain development. Within the last 10 months there have been a greater push by countries such as China, South Korea and Singapore to drive more blockchain developments. And today we hope to get some insights on the role that Asia will play in the future of blockchain. So let's start with Alan. I mean, through your work at IBM, you have been working with companies all across the globe. What are your thoughts on the role that Asia will play in the global blockchain ecosystem?

Well, I think one of the broader observations that I've seen and I think continue to play out, especially in the current COVID 19 pandemic situation, is that we see industries, governments really across the world continuously looking at ways in terms of how they can optimize the movement of goods, data and really the exchange of value across the global supply chain. And Asia is really at heart of many of these supply chains, whether on the consuming side or on the producing side. Asia has been a really key part of this global supply chain. And with the COVID 19 pandemic and the resulting impact and changes to the economy, I think one of the key things that's really come up very strongly and apparently is the importance of digitization of trade and looking at new ways of working. And that has become a top priority in a lot of economies, a lot of countries. And it touches, I think, the very heart of Asia today. A lot of economies in Asia today are dependent on some of the export driven areas, for example, in the area of food, for example, places like Thailand, for example. One of the studies that was done by Kasikon Research, for example, states that the food and beverage exports worth about 26 to 27 billion dollars. And for it to continue to grow, one of the key things that's important to look at is, number one, the aspects around transparency and quality of Some of these goods that are actually exported out from countries like Thailand, but more broadly across the the ecosystem itself. And if you look at places like Singapore for example, a lot of focus is around things like being self sufficient, sustainability, and that probably could be extended to other parts of Asia as well. And where blockchain comes to play very strongly in some of these markets and economies is how can we leverage the idea of blockchain to introduce greater transparency in some of these areas. How we can provide an avenue for less of a wastage of the food supply chain, how we can provide better visibility on the supply chain side. So one of the efforts that we've been working on is this project called IBM Food Trust, which really looks at enabling a digital, essentially what I would term as a digital information platform that connects various parts of the supply chain together and that involves basically connecting players in Asia to other participants around the world, be it in North America, be it to Europe, by really touching the value chain, ranging from the farmers to the producers to the retailers at both ends of the supply chain. Other examples that I can think of stretching beyond the goods itself or the food example that we spoke about, if you look at the supply chain of mentioned earlier on the other thing that I think is worth mentioning, especially in places like Singapore for example, which is at very heart of the global trade network, a very key aspect of the global trade network. I think one of the key things is how do we eradicate as much as possible the notion of friction that exists today in the supply chain, whether it's dealing with customs paperwork, whether it's looking at things like cross border payments or any other barriers to trade. And that becomes even more important. As I mentioned earlier on with the COVID 19 pandemic, how can we enable stronger digitalization of the existing trade ecosystem? So one of the efforts that we've looked at is looking at Trade Lens, which is a joint development effort between IBM as well as MERS to establish an open and neutral industry platform underpinned by blockchain technology that really connects the different players in the global shipping industry. So we're heartened really by the contributions and efforts by major players in the supply chain in terms of how this platform comes about, ranging from ports, terminals, customs authority shippers and ocean carriers. A significant number of these participants in this tradelands platform actually based in Asia itself, really reinforcing the role that Asia plays within Asia itself, where blockchain could contribute, but also a reminder that Asia is a critical part of the global ecosystem. Not just from a blockchain perspective but also from a tree, from a supply and potentially from a finance aspect as well. So I think these are some of the things that come to mind as I look at where Asia sits in the global ecosystem. But more importantly I think with the current COVID 19 pandemic, I think that reinforces the importance that economies, countries especially in Asia needs to look at how they can improve, how they collaborate, work with each other, ultimately survive and be relevant in a new market economy. Great.

So yeah, Alan spoke a lot about the role of Asia to the world and the various initiatives that you guys are working on at IBM itself. Eric, you have been working on various cross border initiatives including talent engagement. Can you share some thoughts on Inter Asia activities that you are seeing that is helping to accelerate the adoption of blockchain technology across the region itself?

So let me start from a little bit of the webank's background. So webank started in 2014 and then 2015 we actually see the potential of blockchain and then we actually have our own blockchain ledger physical because we even open sourced it at that time, 2016 we actually use it in production. You can imagine having a blockchain in production in China. It's actually quite challenging. So we actually have a syndicated loans working with other banks. So this really wouldn't happen if we didn't have support from the regulators. So we were very transparent and then we even helped the regulators to create tools to monitor transactions. But if we look at Asia at that time, 2016 a lot of focus were still on bitcoin so making collaborative business quite hard at that moment. People love blockchain when they think of bitcoin, right. But those that really hates it, they think that is kind of a scam at the same time. So it's really hard to kind of talk about blockchain at that moment. But in the past one to two years we do see a shift that starts from investment now on how do we use blockchain as a technology where we can build business on on top of it. So we actually worked with Macau in 2018 because they have a vision of a smart city and then we're actually helping them to build the infrastructure which is based on our open source identity. It's actually a decentralized identifier on blockchain. So this wouldn't really happen if we don't have great collaboration on the government side. So if we look at during the pandemics we identity actually gives some lights to the recent release Health Cosystems which allows Macau as well as Guangdong to actually mutually recognize the QR code and then pass this data from one area to another. So take for example, if you take a lab test in Macau and then if you go to Singapore, Singapore can actually validate the test results. And because it's actually recorded on blockchain, the important thing I see is actually, you know, we need to have the regulatory supports in the governments as well as the student ecosystem. So that's why we actually work with OpenNotes. And then we actually went into Singapore and then we joined a few universities to actually kind of give kind of blockchain courses on fiscal because as well as some successful stories within China because there's lots of cross borders potential solutions that can happen. But when you actually go to the regulatory or government side, it's going to be a big wall for them. So we need to actually put more education as well as explaining the benefit of blockchain, not just on the investment side.

That's really interesting. Thanks for sharing. So I think after we listen to two leading corporates speak about the efforts of them driving in the blockchain ecosystem, maybe now it's time for us to shift it a little onto the role of government. So one key topic that has always been brought up in blockchain discussion is the need for governments and organizations to collaborate. Veronica, you have been driving various industry development efforts in Singapore to support the growth of the ecosystem. How do you think this supportive role of government will evolve moving forward with a fast changing blockchain landscape?

So this is a very apt question. I was listening to what Eric shared about how it's important to have regulated support in order for them to develop and advance in their own journey. Actually, if you look at the role of government from different countries, you do see some variances from country to country. There are countries who have a very rich history where there's a very strong industry led innovation. In these countries you may see that the governments may not necessarily play a very active role. However, increasingly we do see that strong government support is actually coming in in many countries to drive blockchain. Especially in the past two years, two, three years, we have seen quite a few countries actually actively driving blockchain strategies. Based on what I recall some of you that have been in this space for much longer. I recall the earlier governments could probably be in Dubai where they were one of the first to come up with a blockchain strategy all the way in 2016. And I think since then they have published something like a completion or success achievement report that was literally Quite a few years ago, about five years. And now in the last two years, 2019, 2020, you do see quite a lot of activities. In China, for example, President Xi made a speech about the importance of the blockchain technology late last year. Then between late last year and early this year, Germany, Germany, Australia and India all have published blockchain strategy and roadmap documents to talk about their role in innovating and driving this ecosystem forward. So if you look at the trend the past five years, I think increasingly governments are starting to pay attention to and put emphasis on it. And perhaps it also makes sense because in the past five years the technology has been advancing and seen quite a few applications by different corporates. As the networks become increasingly large and participants become increasingly participating across borders, there are some macro issues that tend to be cross border, for example data protection, differences in jurisdiction across different countries and geographical boundaries. And this is probably also an important place for governments to start talking to each other to actually make sure that Some of these G2G issues can also be addressed at the macro level. So I think increasingly you do see governments paying attention and wanting to also be a part of the conversation and driving this role together with the private sector.

So Veronica shed some light on her perspective of the future and I think that's really interesting. But coming from the corporate perspective, what's your thoughts Alan, on the role that government can play to support organizations both big and small across Asia?

I think the governments or governments really play a very critical role in making this happen and enabling success. I see from a few aspects. One, I think some of the trends that we see, we see governments being involved in driving industry wide experimentations, coming up with thought leadership paper. We see that in places like Singapore with various experimentation that was done around Project Ubin, for example, we see efforts in places like in Hong Kong for example, where the Hong Kong Monetary Authority, the HKME was actively involved in the trade finance platform involving the different banks they have since launch ETrade Connect and continue to basically expand on that. In fact, one of the efforts that we are involved in, We Trade, which is a trade finance platform which started originally in Europe, there was a recent project that looks at basically the connectivity between the east in that sense represented by the E3 Connect platform as well as connectivity to We Trade. So really at the start of global efforts to connect basically different networks and that's an example where a government body really helps to drive some of those experimentation and some of the top leadership efforts as well. The other thing is around, I think establishing national blockchain infrastructure. And we've seen how some of the economist industries have taken active positions to establish a common foundation which some of the experimentations and some of the use cases could actually come in, really removing the friction that exists in terms of incubating and starting out use cases. The third aspect I think where government and the rest of the ecosystem can really play a role around helping to drive standards, fostering standards, understanding the technology and adoption. And one of the great examples I think we see is some of the efforts around what IMDA is doing through the efforts of OpenNotes and tribe establishing a platform where I think different parts of ecosystems, corporate startups really come together and gain a better understanding of blockchain as a technology. Improving skills that are available in the market, but also creating a venue, I would say, for the interactions and the participation between different parts of the supply, different parts of the ecosystem. I think that plays a very critical role if we want this to succeed. Of course, the other aspects around regulations, the other aspects around providing the infrastructure that supports the invention and innovation of technology, that's also very, very key. But I think we need to consider as well the role that the government plays in driving some of the innovation efforts and bringing industry together. I think that's a very key role, perhaps understated in some of these areas, but I think we need to recognize and really appreciate some of the efforts on that front as well.

I think that's really very interesting sharing that you did mention. And I think with that I'll go back to Veronika first. So I mean IMDA has been driving a lot of blockchain related initiatives on ground, including the blockchain challenge itself. And I think Veronica herself have been working with different governments across the world, talking about collaboration and have also been working with many companies across Asia. They have seen their research and they've done a lot of developments, industry development efforts in Singapore. So Veronica, what do you think it takes for new companies to succeed in a fast evolving blockchain landscape in Asia?

So firstly for any new company, not necessarily just a blockchain company, the typical considerations for them to be able to grow quickly and to grow well would be typical things like the commercial operating model, their unique value proposition of their technology, the ability to attract investments and to attract good talent. But these are fairly generic considerations I think specific to blockchain. Probably one key thing is the ability for the company to build a trusted reputation. Now if you think about it, blockchain technology, the whole idea about the technology is that it does Away with the middlemen, the trusted people and the institutions that form the intermediary to placing the trust in the technology. And if you're the company behind this technology, either developing it or operating it for your customers, for example, then to a certain extent you tend to have to play a certain level of trust. And it probably depends on the details from company to company, what the product offering is. But general ways would be maybe the governance of how you run the network, the parity and equal treatment of members participating. Others could be the technology governance, how new product features or technology upgrades and enhancements get introduced. Others could be even right down to code implementation level. When you say that the solution does what it does, does it really do what it does or not? So these are a couple of, I think quite important considerations specific to a blockchain company in order to be able to gain a certain reputation and therefore be able to be trusted to be the ones operating the solution where you shift the trust away from the people and the institutions to the technology itself.

Great.

And for the last question before we wrap up this panel itself, what are the exciting developments within Asia that you hope to see within the next three to five years for Eric?

So I think blockchain itself is actually moving very quickly. So the past few years I think a lot of focus has been changed. There's still a lot of talk talks on cross border payments where central banks are involved. So I do actually want to see that commercialized within next few years because this will actually benefit everyone in the public. So you can imagine that I can transfer some money to my friends in US or Singapore and then the actual movement could be instantly, and then the charge would be actually quite low or even nothing. Right. That's the ideal. And I mean if you look at besides money related, right. I do want to see decentralized identifier, which is actually a quite a hot topic in W3C area, is actually being commercialized as well. Because if you imagine that in the next few years there's going to be a lot of iots coming in. You can imagine that each of these devices would have its own identity in a blockchain and then the owner of the device can actually provide consent to just share this data. At the end of the day you have lots of these kind of device collecting data as well as exchanging data. So this will be where the blockchain will be one of the key technology in the space.

Okay, thank you so much. Unfortunately we have to cut the panel now as we're running out of time. But Would definitely love to hear more insights from you guys next time. And I think with that, once again, thank you so much for taking time out to join us for this panel this afternoon itself and we look forward to seeing you all again. Thank you.

Sam. It.

Ladies and gentlemen, welcome back. And for those of you who have just joined us, a very big welcome to you. We are at Unitize once again. This is Gabriel. This is my co host Yiming. He's from OpenNotes Powered by Tribe accelerator and we are live from Singapore earlier just now. For those of you who have already joined us, we are actually on day three of Enterprise, day three of five actually. We've still got two more Enterprise Asia sessions to go and I think the next one is a little bit close to Yiming's heart actually. It's kind of like the east versus west, the culture you use to build and everything about that. Yiming, why don't very quickly just give people a little bit of insight into what we're going to be discussing.

So the question that people always ask me is that, hey, what's the difference between blockchain ecosystem building here in Asia as well in the western world itself? And we often say, oh, there are some similarities and differences, but of course cultural nuances are different in different markets itself. So today itself we are actually thankful to have the support of Dutch Blockchain Coalition that we partnered up with. So Dutch Blockchain Coalition, it's under the purview of the Dutch government itself to grow the blockchain ecosystem in Netherlands itself. And us at OpenNows, we work closely with IMD and the different government agencies in Singapore. So we play the similar role in different markets. So we've invited Marlow, one of the liaisons for Dutch Blockchain Coalition to join us this afternoon to really share about her thoughts on similarities and differences and how ecosystem will progress in the coming years itself. So yeah, yeah, nice.

All right everyone, enjoy the panel and we are going to disappear and reappear on the panel very shortly.

Enjoy.

All right, Good afternoon, good evening, good morning for some of you. We are now at day three of Unitize. We are on to the what we call the Enterprise day and this is the Enterprise Asia session which is co hosted together with OpenNotes by Tribe. For those of you unfamiliar, OpenNotes by Tribe is actually one of the managing partners is joining us for the session. That's Yiming Iming is one of my closest friends in the blockchain industry here in Singapore. Actually joining us is Malous Pom. She's Calling us all the way from Amsterdam, literally halfway on the other side of the world. And today we're going to be talking about the blockchain ecosystems, east versus West. We're not going to really be comparing.

You know, it's, it's.

We all have different cultures and everything. We totally understand that. But it's kind of like comparing how the east works, how the west works, and how essentially we end up working together. I think that's a very important, important conversation to be had. The reason for everybody watching right now why we brought these two people together is they do things very, very similar, which is they have been able to stitch government initiatives together with the corporate world, the enterprise world together, and they act actually as a medium, they actually communicate, combines these two worlds together. Very similar to how it is when the tech startup ecosystem started in Asia 10 years ago, where obviously a lot of government initiatives started with that. And I believe actually on that Maluz, you've been involved with the Dutch government pushing innovation and pushing the latest technology and trying to. And being a strong advocate in it for quite a number of years.

Right.

And I'm just gonna start off and we'll make this as part of the introduction. So what made you. When was the first time you actually noticed this blockchain thing? And like, okay, wait a minute, this is the next thing the government needs to look at or, you know, the whole infrastructure in the Netherlands, if I.

Can say look at.

Well, for my. My blockchain journey started in 2016. It was the year that Dubai presented the blockchain strategy. And of course, I've already read a lot about blockchain and other crypto coins in 2015, 2016. And I was really inspired by the Dubai strategy that the government was launching their own strategy. And I thought we should do something similar in the Netherlands. And I trained the top managers of the Dutch government in new technologies, not only blockchain, but also artificial intelligence and Iot and so on. But they didn't like my blockchain part program because understood, how can we use this technology? What is it? How shouldn't it be used? So when I came up with the idea of preparing a similar blockchain strategy as the Dubai government did, they didn't like this idea at all. And that's why I suggested to start some pilot projects to make it more concrete. What is this technology and how can it be used in the Dutch government? And that exploded a bit. I did 35 different pilot projects within the Dutch government, so within ministries.

But.

Also for tax authority and after this pilot program, the Ministry of Economic affairs, they launched this Blockchain Coalition in 2017 and that was the start of this public private collaboration between the government, a lot of corporates and universities. And there we brought together the blockchain teams of all the. Yeah. Of all these organizations and together we made a program with use cases, with working groups and we're still working on a lot of use cases which started as a pilot. So that's, that's how it all started in the Netherlands.

Ah, okay.

All right, so. So similar stories. Yiming for you I think as well. Tribe was also conceptualized about 2016 as well. Actually no, sorry, slightly later, 2017, 2018.

Right.

If I'm not wrong and I think you faced quite different, probably less challenges as Malouz. I think by the time you put up your own ideas to ESG etc etc which is Enterprise Singapore for those of you who don't understand, there was a really a mindset that hey, blockchain is something we should be looking at as the next phase of that whole SG innovate govtech phase. Am I right to say that?

I think back when we first started the whole conceptualization, I think the idea space came out because at that point in time there was the rise in cryptocurrencies and a lot of these corporates became extremely fearful or they are afraid that there's a loss scams, there's a lot of negative stuff that might impact their business if they touch the word blockchain or if they start doing blockchain related initiative market itself. And that's one phase where we see people saying the word fud right, as in fear, uncertainty, doubt F U D So I think at that point in time a lot of our friends that have been in the startup space, they've been doing extremely well over the last couple of years like the guys like dj, some guys like Ako and stuff like that, they have been doing quite a bit of good work in the ecosystem since like 2013, 2014 but down to 2017 they started facing problems with things like your bank accounts. Banks are starting to say hey, like why are you in the digital asset space itself? And I think there was a lot of fear but because I think at that point in time there was a lot of uncertainty of what is this actually? Why is bitcoin flying to $20,000? So I think that whole narrative itself was just non positive. But how we look at blockchain is that hey, isn't blockchain just another technology like AI, like machine learning, like so on and so forth, this sort of frontier technologies itself that people are using. And blockchain has been in existence for quite a number of years already. It's just that only recently over last year, it picked up because of this entire wave itself. So why are we looking at technologies from a speculative angle, but not looking that can generate more digitalization push to make things more efficient, to make things more secure, which are more enterprise driven use cases? And we wanted to help more enterprises and startups get to demonstrate what they have to offer. Because some startups, they don't exactly deal with cryptocurrencies or anything they've seen in a negative light by they have solutions and blockchain is just the technology powering it. So how we look at it, and that was the reason why we wanted to bridge the gap between governments, corporates and startups, to really give them that space for them to showcase their use cases without any fear. And that's how we started in 2017. So I think my challenge back then was definitely more with the corporate itself because the word blockchain is very closely linked to cryptocurrencies.

This is actually a very good point because I remember we've had this conversation before when you mentioned blockchain. The first thing that people come to mind in 2017 was that, okay, it's bitcoin, you want me to have bitcoin in my business?

It was really that.

It was really that kind of lack of understanding or lack of appreciation of blockchain technologies as well, if I can say. So I wanted to narrow in on one point with regards to that.

Right?

So obviously there's been a lot of interest from the government, not just in the Netherlands, but in Singapore as well, about the use of blockchain. So just to explain it to our audience, and maybe for a lot of startups who are watching right now, why is in one very simple sentence. Why is blockchain important? It's important, okay? It's important to businesses. That one we can all agree on. But Malus, the why is blockchain important to the Dutch government? Like what exactly is the benefit here, if you can say it in one sentence?

Well, in the Netherlands, I think it's different than the explanation of yingme in the Netherlands. We weren't afraid of the crypto or not so much because we also didn't have a lot of bigger crypto companies in the Netherlands and we also didn't have a lot of ICOs or we did a lot of startups dealing with crypto problems or problems with the banking account in the Netherlands, it was people were, they tried to understand how can we use this. And a lot of discussion was of course about why should the government use blockchain or what's the business case and the government for us, a lot of business cases, they are for common goods. For example, it's about a lifelong supporting a lifelong learning or it's about digitizing the bill of lading billions of dollars. So it's not a. A clear business case for one company, but it's for the common good. So most use cases we're working on, the government is involved and plays a role in this already. And that's why it's interesting for the Dutch government. It can solve or it's a puzzle piece in societal. To find societal solutions, which we try to find anyway. But blockchain is an enabler to force organizations, also governmental organizations, to really work, develop a common process. And a good example is I think the know your customer or know your client process of the banks. Of course, it's important for the Dutch government to, to prevent fraud or money laundering. And it's also a problem of the banks. And blockchain helps them to work together on this topic. And it was already a big problem and they already understood we should work together on this. But blockchain is an enabler to make it more concrete and to build together on solutions. And that's why for many use cases, it's really interesting for the Dutch government to be involved player in this issue already or in this. Yeah, they play a role in all these processes and blockchain can help them to solve the problems they face today.

Interesting.

Would you think it's the same approach evening that tribe is taking with your. So for everybody who again I'm gonna circle back on this. E. Ming runs a very unique accelerator program. I think traditionally anybody in the tech space, if you hear the word accelerator, you think of the likes of your Y combinators, right? You spend three months, six months, whatever it is, and at the end of the day you pitch hoping that somebody writes you a check for whatever your company is worth and somebody invests in your company. I think that's a very clear goal. Ebingxcelerator is a little bit different. It basically prepares you, I would call it enterprise corporate preparedness, where the accelerator prepares you and helps you connect with enterprises. And actually it's an accelerator for business reasons. Right. So based on that, this is batch number three already Yiming. So let's talk about batch one to batch three.

Right.

Has that evolved. I know we've got more corporate partnerships now with Tribe, but has that really been a clear representation that more corporates are interested in blockchain and are willing to work with the projects? And on that note, how many projects have went through Tribe already so far?

I think really good question that you've just asked. And for us itself it's really clear that who we are serving, we are serving startups at potentially post seed stage, looking at growth, looking to get more corporate support. So we serve startups from post seed stage all the way to. There's one or two that were subsidiary of listed company. There has already been for more corporate engagement. Some of them are looking because they are good companies but wanting to use blockchain to make their business more efficient from an enterprise point of view itself. So till today, since the start of Tribe it's with Accelerator about 29 companies and we'll do the next batch in August itself. So now it's coming to yeno, the third batch. So we've done 29 companies. They range from healthcare, mobility, fintech, supply chain, food, stuff like that. So I think it's really diverse. And the corporates that are coming on board, I mean from the start, apart from NW Singapore, that has been a great supporter from day one for the program itself there's PwC, BMW, Intel, Nielsen. Today we have gaming companies like Ubisoft, big tech conglomerates, IBM, intel, banking like Citibank and so on. Really coming to support the work that we do, which I think it's heartening at the start it's definitely much harder. When we first started engaging them, when we were much smaller, I think there was a lot of are you sure this will work? Like it's accelerator still the way to go from 20 back then I think was 2019, early 2019 or like late 2018, like they were always accelerators still a way to go forward and stuff. I think DL globally has started changing, but I think we took a different approach which was that and that's why people, when we explain our model to people, people always say hey, you don't seem like the traditional accelerator. They are looking at early stage startup. We look more like a scale up. So I think the word that people are using now is scale up. So how do we help growth stage companies accelerate their growth, get more capital, get more corporates, which is what they need. Because startups they usually need two items, right? Either capital from investors or capital from corporate clients that pays for their services itself, basically business. And that's like fundamentally how Long run, which is getting good clients. If you are B2C a B2B type of startups and me to see them, your paying customers, probably the regular consumers itself. So we've seen extreme positivity, able to cut down the corporate timeline. A lot of times startups Runway is about a year, a year plus. But the engagement with one corporate or two corporate usually takes like maybe six to eight meetings right before you start really doing something because you meet your first team, then they say, oh okay, wait, let me bring the second team. Then we bring in a lot more teams itself like total you meet and everyone wants to have consensus, right, okay, going to work with this. This is the startup that we've chosen. So the process takes about six months on average itself and the fastest usually before the program restructured was about the fastest, about four months. So that takes up like the entire Runway of the startup by about 30%, 25 to 30% which is a very long time. And if it stretches even longer, six to eight months, that's probably half the Runway or even more.

I mean let's be honest, I think that's always the risk, right? Like a startup six months, six months.

To close a deal.

No matter how big the deal is, does a startup even have the cash flow to survive six months as well? I think that's always going to be a challenge as well. And, and I would say in short that maybe what you guys are doing is to shorten that process and to break down that barriers as well. Like it or not, I think there's one thing that's very apparent, especially in Asia, is the need for a very fine middleman in a way. And I think that's what you guys are trying to achieve as well.

So.

And I want to bounce this off Malouz very quickly. I know you've had many chats with Yiming. You guys obviously talk about collaborative opportunities and everything like that very quickly. Based on what you know of what opennotes and Tribes actually doing, do you think that model would work in the Netherlands or how different do you think it would be there?

It would definitely work in the Netherlands and also in singapiring for the data government but also for organizations like Tech Leap. In the previous years we were focused on building a startup ecosystem and for what we've seen in Singapore we should focus more on several scale ups and help them to increase faster. And that's something we've seen at OpenNotes. And another thing, with an eye opener for us, the Singaporean government is really involved, but also invests actively in blockchain companies and that's something we are not used to in the Netherlands. But yeah, I think the COVID 19 crisis is changing this a bit because it's creating an extra awareness in the Netherlands but also in Europe that we want to keep a number of critical technologies or critical companies in house, at least in Europe. And last week the government has invested in a company in smart photonics and it was in all the newspapers because we are not used to these investments. And I think the Dutch government and also the Dutch blockchain ecosystem, for them it was an eye opener when they visited Singapore last November. So yeah, we tried to learn and some elements, I think they would really work in the Netherlands as well. And that's also why we're really interested in this collaboration with Singapore because I think it's really helpful to exchange these approaches with each other and something I think what we can bring to Singapore is the collaboration between the governments, corporates and universities. Some things in the Netherlands go a bit slower, but it's really, yeah, when we built the solution, it's really adopted. Yeah, it's a broad adoption so it's easier to bring it into practice and for me it's the ambition and how they try to scale up faster. That's really inspiring for us. But we can, yeah, we are more used to, for example, to work with blockchain teams. All the bigger corporates in the Netherlands, they have their own blockchain teams and they work closely together also with blockchain startups. And that might be something which is interesting for Singapore. Interesting.

So we've got about seven, eight minutes left. So I just want to focus on a couple of key points. Right. Can we talk about data points? Can we talk about tangible achievements? E Ming, maybe we can start with you first. So we've talked a lot about like corporates, we've talked a lot about all this, but we haven't really given any real examples. I mean E Minx, obviously, name dropped, the BMWs, the Ubisoft and everything like that. Right. But just for everybody, everybody's benefit because this is what every question everybody's gonna ask. They'll be like, oh yeah, these guys are working and you know, like what exactly are they doing?

Nobody knows.

Right, so Yiming, maybe with you first very quickly, like what do you think, you know, from your program perspective, what's the key achievement you've. You guys have achieved over the last couple of years with regards to what you guys are doing? Malu, I'll definitely ask you the same thing.

As well.

But yeah, please.

So since we first started we've grown our corporate partnerships from I mean corporate supporting us from three companies. We have more corporates tier one supporting us. So this includes your Fortune 500 companies which I mentioned early on. We've helped the startup raise about 14 million Singapore dollars in follow on funding since we started. So that's about around US$30 million itself. Within a year and a half our corporate to startup engagement rate have hit 90%. So that means every startup that's coming through the program, nine out of ten of them ends up with some form of collaboration with a corporate itself that's in our network. Because I mean the corporates that we have is pretty diverse itself. So I mean every startup stands a chance to work with the corporates and with the startups that we select on board the program and this actually help us itself. And startups have actually come from all around the world. Even though we are based in Singapore, we have startups coming from like us coming from uk, coming from Hong Kong, doing stuff in like Cambodia, some doing stuff in Cambodia, Indonesia and stuff like that. So all around the world we've done eight demo days itself. We record demo tour four at a time. So we flew from Singapore to Shanghai to Seoul, San Francisco, Dubai, Abu Dhabi over the last one year itself to bring the staffs to increase the exposure.

Malouz, he didn't say Malouz, he didn't say Amsterdam.

Yeah, so yeah, that's right. I think the great stuff is, I mean we are pushing to head to more cities of course now with the situation at hand, of course it's harder to travel but we are in discussion to see how we can take this forward itself.

Malu, I'm going to word your part.

A little bit differently.

So you mentioned the pilot testing and everything like that. Where is the first place you see or has it already happened in the Netherlands or even just in Amsterdam where blockchain is actually being applied currently? Are we seeing a rollout? Is something really rolled out that we're unaware of?

Yes, I think what's completely changed in the past years is the knowledge in the government itself, in the corporates, at universities, for example, we've built train the trainer program for schools and universities. So most schools and universities they have their own curriculum and the teachers, they help each other to teach their students in blockchain technology. So that means the government blockchain, every ministry has their own contact person for blockchain. All the bigger cities have their contact persons, the bigger corporates, all the Banks, they have their blockchain in teams. They have grown from five persons when they started to teams of 30, 40 people within one company. So that changed completely and they all did a lot of pilots also. Most of them were at the smallest scale. But for example, with the Career Wallet they tested it between several companies or between the banks. So we tested a lot and some of these use cases were implemented at a small scale and now in the middle of building around these solutions and also to build standards or expand them at the European level, for example, the diploma use case or in the Netherlands, it's called the Career Wallet. We have now notes in Europe in several countries. So we can now test it between countries and we hope to do something similar with Singapore as really nice students can travel again. We have also implemented a tool for grants. We have some energy in the energy sector, we have some working use cases but they all have to scale up and we're in the middle. And then you need to build new companies, new spin offs with many stakeholders and that's a complicated, complex process. And with most use cases we're in the middle of this and can learn from each other how to deal with these issues, legal issues. It's also about the codes itself. So a lot of agreements in these new spin offs or new consortia. But we're in the middle of this and I think we need to do our homework on this to implement it at a larger scale. So it's not the most exciting part of the job.

I think you raise a very good point. A lot of work which the both of you do, it's not exciting but fundamental. Right?

I think everybody would agree it's not.

About the, it's not being the famous.

Cool VC with a weird T shirt anymore.

I think what you guys do, to.

Be honest, it's really, you know, fundamental to the ecosystem and everything as well. We have about 60 seconds left. So very quickly both to yiming and balus.

Three years from now. Three years from now.

Just very, in a very short 10 words, three years from now, where is Tribe gonna be? Is it still gonna be in a.

Blockchain space or is it gonna expand.

And evolve into something else?

I think definitely the focus is heavily on blockchain. That's where we are heading towards. We definitely see more collaboration with corporates and trying to really anchor down more leading projects globally into Southeast Asia, into Singapore and work with global players or governments like the Dutch government, the Dubai government and stuff like that across the globe.

Malouz, what's. I'll just Be very, very. I know Dutch people are usually a.

Little bit more honest so I'm just.

Going to be very honest.

I'm just going to ask you a.

Very honest question just to wrap up.

They're direct. Yes, very direct question. What's more, what's more, what's more?

What's what to you?

To you what, what?

Where does your passion, do you think your passion of what you're doing with blockchain to collaborate with more countries like Singapore in Asia versus the rest of the eu?

I'm not asking who is it better.

To work with but, but where does.

Your passion, where does the direction actually lie?

Well, actually, yeah, the honest answer is I really like the combination and I really, I enjoy the collaboration between Netherlands and Singapore more than the collaboration at the European level because those meetings are quite boring and it takes a whole day to have one meeting. So it's not fun to do. But it's yeah, we must collaborate at the European level so it's really important. But it's more fun to work with like minded countries like Singapore and to bring the best of both countries together. And because we are both small countries and we're flexible and we have a high level of expertise, we both have interesting blockchain startups, we both have the government on board. So I think we have, yeah, great building blocks to work on some really ambitious projects and maybe to set world standards for several sectors. So I really enjoy this collaboration but of course I'm also convinced that the collaboration at the European level is also really important because as soon as, for example Singapore, it would be terrible if they have to work together with all European countries separate, for example to implement a diploma use case or some logistic examples. It would be, yeah, it would take years to implement international use cases. So that's why you have to work on both collaborations.

All right, so I think we're just.

Nice, we are out of time.

I think in closing I can say.

That I really appreciate the sharing and everything that both of you have done. I wish you all the best as well.

Yiming and obviously Malouz. I hope to see you guys soon in better times obviously.

And I think on behalf of entire.

Blockchain ecosystem, we appreciate what you guys.

Are doing and for everybody watching, you.

Can find, if you want to connect, Singapore, Netherlands, go. If you're in Brella, go on the.

Speakers, you can find them, the details.

Are there, get in touch with them.

I think if you're really passionate and you really want to understand blockchain from.

A business perspective, Talk to them.

Right.

They're not going to be able to sell you altcoins and everything like that.

But if you really want to do something in the blockchain space and you.

Own something in the blockchain space, should.

Definitely talk to the both of them. You can find them there with that. Thank you very much to the both of you. It's been a pleasure once again.

Thank you.

Thank you for the time. All right, man, thank you guys.

Bye bye.

See you guys soon. Bye.

Got your Match Stick reaction.

All right, that was an amazing panel discussion. It's even more amazing that we're back here again. And once again everybody welcome. We are on day three of unitized conference, day three of five actually, and the theme for the entire day is actually all about enterprise. So we've got the Asia Enterprise sessions happening now and I think in roughly 9ish hours or something like that, you will have the Enterprise US session that's happening live here actually on this platform as well. We actually have one more panel to share with you right now which is about the enterprise side of things as well. Yiming, maybe we could touch a little bit about.

Yep. So in this final enterprise panel we have Ben from Managing Director of Stacks, Vinay, the Chief Operating Officer of niza. Vinay was formerly the Managing Director of Consensys in Southeast Asia and Caleb the head of Tezos Southeast Asia. They will be talking about the future of finance infrastructure in Asia itself and we look forward to having them on this panel.

Anyway, just so everybody knows as well, since this is the end of the enterprise side of things, Yiming just want to say a very good thank you, very quick thank you. Thank you for joining us. Thank you for all the support. I think for all of you who have seen some of the introduction slides and have been to both brella unitize.online which is the events website, you will see Tribe is also a co host. They've helped to put this entire content together, they've helped us spread the word, etc. As well. Just maybe to sum it up and then after we'll go into the session, Yiming, is there anything you can share about opennotes or Tribe what's happening over the next six months?

So over the next six months we will be ramping up more initiatives across our OpenNotes platform and for Tribe accelerator we will be starting our batch four in August itself. If you visit tribeccelerator.co you'll be able to see the sign up link. So do check us out and if you have any startups to recommend, feel free to put it through and we look forward to seeing you at the next event and thank you so much to Unitise for having us as a co host today.

Thank you.

All right, thank you very much Yiming. We'll see each other soon and do reach out to us if any of you are in Singapore. If you want to know more about the Singapore ecosystem, definitely go check out tribe and those of you who can't basically physically be in Singapore, which is kind of like 80% of the world right now, also do check out opennotes.com and don't forget about the Singapore blockchain ecosystem ecosystem map. I think it's bloody amazing if you ask me. All right, we'll be right back after this for a very special trading spotlight that talks about trading in 2020 but for now let's wrap up the enterprise one again siming, thank you very much and everybody enjoy the panel please.

Hi everyone and thanks for your time today at this unitized panel. Hello. So my name is Caleb and I'm going to be moderating this session together with Benjamin as well as Vinay shortly I'll let everyone start to introduce themselves but the topic that we are going to talk about today is about the finance infrastructure in Asia in particular. So you know we've had a lot of growth in the last few years, we've had a lot of promises and today I guess what we're going to do is to deep dive a little bit into where are we at and what are we going to be tangibly looking for in the next couple of months. My background is as a short introduction. I'm from Tezos Southeast Asia and we help to build awareness within the community for the Tezos platform, the Tezos blockchain platform. My previous background was that I used to work in data centers. I used to help manage the domain name business of one of the world's largest wholesale domain registrars. So very much infrastructure related, data center related and obviously being in Singapore I was fortunate enough to grow up with the industry as well. So today my questions will be more evolved around what are some unique trends and how do we make sense of it it not just from an industry point of view but really how does it trickle down to the end users. So with me today I'll start to hand over to introduce Benjamin first before Vinay. So maybe Benjamin you can start off by a quick introduction.

Thanks Caleb, thanks for having me here. So my name is Ben, I'm from Singapore, I'm the co founder, managing director of Stacks, a Singapore based blockchain company. So our company is developing and deploying live blockchain infrastructure which consists of our own proprietary blockchain, the entire suite of APIs and front end platforms for capital markets. So our clients are banks and stock exchanges, including national stock exchanges, global investment banks and asset managers who are using our blockchain infrastructure to use the blockchain effectively. Yeah, so that's from me.

Great, thanks Ben. Maybe we could go over to Vinay now?

Sure thing. Thanks Caleb. So my name is Vinay. I'm also from Singapore, at least I'm supposed to be. I'm currently stuck in India thanks to the COVID crisis. With borders closing. I'm a former management consultant. I was fortunate enough to be part of what is now known as the fintech Wave Fund back in the the early days of the 2000s. And about five years ago I found myself, you know, exploring the early stages of blockchain in Singapore. I was the founding member of Consensus Asia team and also led the Singapore office of Consensus for the past, for the past four years. And more recently I'm now the chief operating officer of a payments infrastructure startup called nzia and interestingly enough, also using blockchain. So my sort of evolution has been to see the more traditional thick client, crude platform style fintech, which emerged 15, 20 years ago and more recently with a focus on blockchain and enterprise and public sector blockchains in particular.

That's a lot of experience. So we definitely will be asking you for a lot of opinions as we start tackling the questions.

Great.

So without further ado, maybe I'll just start off this whole discussion by asking.

Everyone.

We'Ve often talked about the state of finance infrastructure and this term finance infrastructure, is it new? Is it something that inherently is very different? Because obviously Ben, you've been involved in setting up infrastructure for corporates. How does that differ, be it a cloud solution or be it a bare metal solution? And what are kind of the factors that have led to this growth within Asia?

So finance infrastructure is definitely different from what we would call traditional or other types of infrastructure, quite basically because the capital markets is highly regulated. So many of the institutions that we are dealing with, they have very strict requirements on how, for example, data is handled, for example what open source license are they using, and example what code goes into the platform itself. So they are really scrutinizing every single detail such that it's actually form a kind of operations model whereby it is largely very conservative. So the problem about this, of course, as you might know is that the financial institutions are mostly using very dated software. Because such technologies are usually very established, they have gone through a long process to be able to certify them. And back to your question about finance infrastructure and Asia. Quite frankly, the Asian capital markets is definitely younger than the US or European capital markets. So that's why you see that most the of of the technology providers in the traditional capital market space are usually from Europe or the US So even in banks in Asia or stock exchanges in Asia, we are all going to use this, what we call Western technology even today. So that is quite different from the rest of the infrastructure of other industries out here in Asia, where we see a lot of growth and innovation in Asia in the traditional infrastructure platform, E commerce, for example, digital payments, telcos. A lot of investments and a lot of innovation have been made in these industries in Asia, even more so than in America or Europe. But conversely for finance, we are still using a lot of the existing incumbent software that originated from there.

Right, right, yeah.

Thanks for your input.

Vinay. Do you think that's symptomatic or of like because there's technology transference or is it like, you know, awareness or is it governments more within the region are more willing to push these things? Like you know, what's triggering these?

You know, I think it's all of the above. But just to take a big step back one and I want to build on what Ben was saying earlier. I think there's a direct proportionality between maturity of finance infrastructure, as we call it, and the political landscape of the region. So if you think about it, Asia is politically perhaps less mature than let's say the EU Common Market or North America for that matter. These are established economic centers that have retained much of their current shape and much of their current legislation and their interworking for more than 200 years at least. Singapore, for example, found its independence and its sovereignty not too long ago. India, another major world economic center and the center of finance infrastructure, is also young country, old regions, young country. That's the difference I'm trying to make. So we cannot forget the political backdrop under which Asia itself has emerged. And I think that has largely guided the maturity of Asian financial infrastructure. Because if you look at it, if you look at all of the infrastructure that we have today, whether it's central banking infrastructure, capital market infrastructure, it's all started with publicly owned, government regulated and almost government owned platforms and infrastructure. It's the steady breaking down of that and to the point where we're now talking about peer to peer infrastructure with our about private market, we're Talking about how SMEs can potentially become money transfer businesses. All of that was very centralized if you think about it. So it is also the age of the political landscape in my view, which determines the maturity of infrastructure. But that said, Asia is a very, very complex and we quite easily associate Asia as, as one region, but it's such a complex marketplace. If you think about Asia, you have Saudi Arabia on one side, you have the Arctic Circle of Russia on the other side, you have Papua New guinea over here. So it's in that triangle that we talk about the context of Asian finance and it's such a vast spectrum. So it's very hard to actually say that Asia has happened because of the following reasons. You have Singapore trying example of maturity and finance on one side and then you have let's say Jordan, which is a totally different part of the, part of the world. Also Asian, let's not forget. But they hardly show up in the mainstream narrative. So I would say that what we're seeing in Asia is the resurgence of the way individual nations want to reinvent finance. And I think a lot of it is guided by political and economic maturity. Individually it is very hard for us to talk about Asia collectively because let's be honest, there isn't one common market called Asia. ASEAN is the closest we have to that. So it's going to be very hard to characterize Asian maturity as a whole. I think it's important, and this is perhaps a slightly contrarian view that I will take that we talk about individual country wise development or perhaps even more region wise development.

Yeah, for sure. I mean like Asia as you've mentioned very accurately is so huge and everywhere is, you know, even different countries are trying to carve out their own unique niche areas, you know, based on their strengths and their various policies. What do you think or which country do you think is currently countries have a good plan for building applications on top of their financial infrastructure?

Well, the easy answer there is Singapore simply because if the operative word is which country has the best plan, I think Singapore hands down is, is a shining example of how Asian planning or Asia centric planning and planning from Asia is working really well because not only is the country looking at maturity of its own finance infrastructure, Singapore has pretty much led the way for a lot of cross border initiatives, a lot of transnational initiatives, simply because it's been such an open to trade country throughout its life. And also it's got exceptional planning capability, exceptional application of technology and perhaps what it lacks is the gateway to a major market like what Hong Kong has with China, or a backyard like Indonesia, which is a huge volumes market. But I think in terms of planning and in terms of preparation and in terms of the evolution of fintech and financial infrastructure, Singapore is definitely up there. But the shining lights for me in Asia would be all the usual suspects. So, so we talk about Asia, we talk about China, we talk about Singapore, India, Japan and Korea for their own reasons in terms of the way they evolve. But I think the trick for finance infrastructure in Asia and its maturity is how quickly can we jump from what we have into perhaps saying what can we do now to extend the same sort of facilities that are available in Singapore?

And we are.

Which incidentally, another great story to talk about separately, but that is important and that's why Asia is so diverse and so fragmented. You don't have a state of maturity that's consistent across these countries. They're all very different. But yeah, Singapore is definitely one that comes to mind.

Okay, Ben, what do you think about the applications that you're seeing people build on these infrastructure? You know, do they vary from country to country? Are they driven by certain initiatives within the respective country governments or like, are you seeing like groups of, you know, people coming together, banding together because they're trying to tackle some problems?

So I absolutely echo Vinay's point. And to answer your question, yes, a lot of these governments or different countries, they are actually aligned for the common objective. The way that they might get there might be different or the focus on a certain industry might be different. But basically they are all focused on one thing, which is digitalization. And also adding on to Vinny's point, ASEAN while it's younger or Asia while it's younger. I'd like to bring the focus on ASEAN Southeast Asia or ASEAN plus three, because I think this is the closest we have to a kind of a regional partnership. And it's really quite interesting that many of these countries, ASEAN plus three, I mean, it's a huge population, it's 850 million. Disregarding China, it's 850 million people. It's highly digital. There's a lot of technologies that are being adopted right now in these countries. And the most interesting thing is that because we do not have as many legacy inefficiencies as the more mature markets, even in Singapore, many of our existing infrastructure are considered new as opposed to the European or American markets. So such that we are quite able, quite nimble enough to replace some of the processes with new ones. And of course some of the infrastructure with new ones. I think that there's been quite a lot of effort from a top down approach. So answering you, what are the applications that's being built right now? I do see a lot of governments and central agencies getting involved from a top down approach. And there is a really good whole that one day we might be able to have a harmonized market in ASEAN 3 using the same form of infrastructure. So maybe, perhaps even rivaling something like the eu, because the EU is another example of a common market that we can see. So over 20 countries in one single market. Possibly, quite possibly, we might even have something like this in ASEAN plus three. It's not for us to say, but at the very least in terms of technology, we could create a standard such that each country, while retaining its own jurisdiction, regulatory rights, they may be able to have a cross border trading market on the same standards. So that's something that I see that's very promising and that's being led by many governments right here, right?

Yep. And so like, one thing that I'm also quite keenly aware of is, you know, the Singapore government's initiatives around electronic invoicing. You know, that could be one example of how a government is trying to take the lead, but it's not necessarily just a nationwide effort because if you digitalise enough within the country itself, then it also facilitates future cross border trade. So that's kind of the first thing that came to my mind as you were talking about different applications, especially from top down. I want to quickly build on this point because we've been talking about infrastructure in terms of, of maybe hardware in terms of technology. And I kind of want to get everyone's opinion around, are we missing other soft factors, things like legislation, things like recognizing central bank digital currencies, things like looking into how ready people are to embrace electronic wallets. And is there anything that's preventing applications that have been built to really go out mass market and to gain massive adoption? So the kind of example I'm trying to bring everyone to relate to is like in the good old days of when Skype first launched, everyone thought this is a new way to make calls. And obviously there were regulatory barriers, there were a lot of challenges in terms of even, even the underlying bandwidth, whether the pipes were capable of carrying high fidelity audio over the Internet. So I kind of want to liken that example to what we are going through now. We might have the infrastructure, but what are we missing to allow anyone and everyone to embrace a financial world that is built on top of this infrastructure. So this kind of like open question for anyone to answer.

So interestingly I actually think. Oh, sorry, Vinay, you go first, please.

Okay.

So interestingly I actually think that where we are right now, we are the closest to getting the new DLT infrastructure in place as the main infrastructure for finance. Because if you ask me, besides Switzerland in EU for example, I, I don't think there's any other comparable jurisdiction that's as supportive as Singapore and of course asean. I mean, it's not just Singapore, if you look around us, Malaysia, Thailand, Indonesia, there's been various efforts by various entities and governments to push through the use of dlt and of course Hong Kong, China, Japan and Korea. So I do think that where we are right now, we are actually in the location that's closest to having widespread use of the blockchain. But of course, when you're talking about real massive adoption in the masses, I do think it has to be driven by institutions rather than on a B2C level. One reason why we are working with banks and institutions is because when we influence a bank, so the bank, if it's on the blockchain, all the users will be actually on the blockchain without them knowing it. So the approach that we see that will be taking off in the near run is that where these institutions representing millions of end users are actually on the blockchain and they are actually, if I'm holding a bank account today, I don't really have anything in my wallet, the wallet is inside the bank. So similarly, if I have a blockchain based wallet or blockchain based account, actually if it's in the bank, all the currencies are in the bank. So that's the closest to getting efficiencies done using the same DLT infrastructure. Just that the portal is still the existing gateways that we know. Of course, that's just the first step to have a real propagation of the blockchain technology in all the use cases around us. I do think that there's a necessary first step before we can evolve further.

Yeah, and just to build on Ben's excellent points there, we have to keep in mind that Asia will always be a volume game. Asia is not small like we've discussed. It's the most populous region in the world. And the more we can enable democratized finance access to SMEs and to retail users, I think the better off finance infrastructure maturity Asia is going to be. And this is why blockchain and DLT and CBDC in particular becomes Very interesting because what Bitcoin did in terms of providing an elegant way of managing value without having to go through the really complex piping network that's been evolved over the last hundred years, that's not being taken by central banks and applied. And just to give you an example, NZ is building one of the world's first CBDC projects in the Bahamas. Very interesting use of CBDC technology to enable ownership of value at the lowest levels. And this is important, I think, for developing economies especially because. Because as Ben mentioned earlier, there is no legacy, there is no baggage in one sense. And there's an opportunity for nations like in the ASEAN region, Cambodia, for example, They can completely leapfrog a lot of the effort put in by more advanced nations and creating technology by using something like Lakshmi. But ultimately the aim should not be let's try and use blockchain because it's cool, or let's try and do CBDCs because it's cool. There's a need for a fundamental assessment or reassessment of the philosophy of money and why we're doing this. If we can achieve some degree of accessibility at the SME and retail user level. I think that for me is the magic ingredient for Asia because. Because let's not forget that is a big, big part of what makes Asia move. It's the sheer volume of people, it's the population and also the unbanked SME. 70% of Southeast Asian SMEs struggle with digital options and banking access, that needs to change really quickly. I think that sort of fundamental infrastructure is what's required to be in place.

Right?

Yeah. I just want to quickly pick on the point you've mentioned about rethinking currencies and you know, that's kind of what the promise of bitcoin was initially. So like, you know, even opening up to the masses, not having central intermediaries and control mechanisms now, how does that really fit in with the whole, you know, we've just talked about a while ago, the whole concept of governments are now the ones that are leading this initiative, this rollout. So is there a balance, is there in between that we have to be aware of?

Yes, but again, I think it's important we contextualize this.

Right.

So as somebody who's grown up in Asia, worked in Asia, sort of seen the emergence of fintech and infrastructure in Asia, I've never had this problem with government leading initiatives. I'm also a very passionate crypto enthusiast. I understand where the, perhaps a bitcoin maximalist might come from saying Satoshi Nakamoto's vision, which is central banking has failed and we need to build a new kind of payment settlement system. I don't necessarily buy into that view too much. And this, I think is the stark difference between an Asian way of thinking, if I can call it that, and a more Western school of thought in that we actually need government in Asia. In many parts of Asia. Saying they're done with government and there's no way the government should be doing this is extremely detrimental to the cause of the people. So it's philosophically very different, first of all. So from my vantage, I think it's absolutely the right thing that we have government working on this from day one. As long as you believe that money is a sovereign privilege or privilege extended by the powers that and not something that the people of the world just perceive for themselves, you are pretty much stuck with a government centric view of finance. And it's important the government gets on point. We're seeing this. We're seeing this happen at scale in India, we're seeing it happen in China, we're seeing it happen beautifully in Singapore, which is a shining example of how public private partnership can work in finance. Infrastructure maturity, where cloud computing has such a fundamental need, is literally driven by the government. Imagine if we didn't have that in Singapore, for example. Imagine if we suddenly opened up Singapore and said government will no longer be involved. What would that do to our systems? So I think it's fundamental that the ecosystem be centered around a regulator first and a government first approach. It's dangerous for us to even assume that we can do this exactly like how Bitcoin was as. But to your question, Caleb, I think the balance is forming and I think it's forming beautifully in Asia. Singapore, again is a great example of how government does not try and overstep its mark. But at the same time, it's there as a silence of word in the background. And I think it can lead to something very beautiful. And this is why Asia is exciting. This is why I think the eyes need to be on the region. Because CBDC again is a culmination of that kind of thinking. It takes the best of what Bitcoin had to offer and it builds a better kind of native money supply system, something that hasn't been tried before. And that's exactly the sort of balance that I think we'll see happening.

Absolutely agree. I also think that there is a balance forming already in the sense that these are entirely two different use cases too. If you talk about A peer to peer money transfer service versus a securities or capital markets use of money. It's entirely two different business models altogether. And we can definitely coexist. I mean even in Singapore we all see that how Temasek has so called participated in Libra, you know, which is a classic, I would say retail coin that will be coming, I don't know when, sometime soon. But at the same time, you know, we are also participating in the MAS project Wubin, where is the foundation of a future cbdc? So that's something that can coexist because it's quite frankly for different use cases where one is on a larger scale commercial application, industry application, while the others could be more on the retail money transfer type of service.

Right, yeah. So what I'm really hearing also is like, you know, that it's always healthy to have some form of clarity, you know, in terms of government led initiatives. But it also doesn't mean that, you know, it's going to swing all the way to the other extreme, which is what some people are fearing because they see more of these initiatives being rolled out. Okay, so just, yeah, I wish we could continue this because the discussions are very, very intriguing and I'm learning a lot as well. But in view of time, you know, I just want to wrap things up by asking everyone one question, which is that in your mind, what do you think is an application that's ready to take advantage of the infrastructure that's right here, right now? Or maybe it's already an application that's already there that you like and you see as a shining example of how this financial infrastructure can unlock the next potential. So is there something in your mind that you can immediately bring up?

So personally we have been involved in providing a digital ledger for different institutions in different countries such that they are able to have the same information at the same time. So this will actually allow them on the various different use cases to be able to harmonize the information. And this is actually very critical, especially when they talk about finance or capital markets, because a single piece of missing or wrong information can actually lead to losses of a few millions or even more dollars. So this is something that we been working on and it's actually live in production right now. A platform where multiple banks and institutions are sending trade information in real time. Noting all the previous points that we mentioned about the finance infrastructure being relatively young and the various banks and brokers in this industry having different locations and different systems, now they are able to harmonize all of it together under one shared ledger, which I think is the classic use case of the blockchain.

Perfect.

Yeah, I echo that completely and I'd love to, I'd love to say CBDC and blockchain based payments, but the question was, since the question was about readiness and maturity and something that's ready to go. Open banking on cloud is something that Singapore has led the way for a long time now. It's tried to proliferate this technology throughout Southeast Asia. I think it's worked to some degree and this is why we need more political will and capital behind these sorts of movements for governments to work together to build systems, transnational systems. On open banking, for example, I think that infrastructure is there, it's available, it's ready to go and it should really be deployed in greater degrees. But yes, that's the instant available answer. But I'd love to see how blockchain can be a bigger part of the Asian success story.

Great, Perfect. So, yeah, so thanks for everyone's very healthy discussion today. I wish we had more time, but I think we're on to something for sure. Everyone has brought up very good points that I'm sure a lot of viewers would have more questions on. So we're going to wrap up now. Thank you again everyone for your time. I hope that we can catch up when this whole thing is blown away and we can all come out for a nice drink together.

Thank you Keda. Thank you Vinay.

Thanks everyone. Thanks Benjamin.

Thank you. Thank you.

Hello everybody. Welcome. And we are right into day three of the Unitize Online conference. I think if those of you who joined me earlier, you'll probably see me with another gentleman. He's none other than e. Ming from OpenNotes, powered by tribe. And what we presented for the last three sessions was essentially the blockchain enterprise take and trend that's happening in Asia, specifically in the Southeast Asia region and obviously having a very Singapore flavor to it. The Enterprise content will carry on again in about eight hours time. That's happening at about midnight if you're in Singapore and I think it is UTC time. I think it's something like 4pm or something like that. And that will be actually the Enterprise US session. So besides the Enterprise us, we also have the. So we've got Deloitte, we've got the World Economic Forum, etc, etc, they'll be participating later tonight. However, right before that there's actually a couple of very special announcements I'd like to make. Number one, for those of you that, that probably have missed some of the sessions because you were busy or the Time zone problems or anything like that and you probably couldn't catch us live. Just to let you know, if you go back into the Unitize platform, which essentially it's Brella, login into your account, go to Schedule schedule. You can see the Schedule tab on my left and then if you filter by past content, you would see that day one and day two content is available on demand for anybody inside there. For those of you who are watching on YouTube or any other platforms and you want to see past content from day one and day two. And we've got a lot of interesting things. Day one, day two because we've got a global leader session, we also have the regulatory day etc etc that will be on Brella exclusively for anybody who signs up. It's free, just go to. For those of you who have not signed up Unitize online, sign up for our account, jump Into Brella, Search Unitize 2020 and if you go to schedule once again filter by past content, you will be able to see every session from the last two days available, especially for you. Right, on to the next topic. This is a very special topic and I think one that's probably one of the most popular activities that happens in the blockchain and crypto space, which is essentially trading. And we've decided to put together a very special, I would say three way discussion about essentially trading, especially specifically narrowing in on crypto derivatives. So this is actually a trading Spotlight session. And joining me on this trading Spotlight session we have Kevin Cho from Galacios, we've got Darius from QCP Capital as well, we've got Kyle from Three Arrows Capital and the three of them will be having a very open three way discussion about their thoughts about everything that's happening in the trading space over 2020 so far. All right, enjoy.

Hi everyone, this is Darius from QCP Capital. I'm here today with Kyle from Three Arrows and Kevin from Galoa. And we are here to talk about crypto trading and specifically crypto derivatives. I've known these guys for a long time. I've known Kyle since before crypto days and Kevin since a couple years ago when I first started in the space. But yeah, maybe I'll let Kyle and Kevin do a quick intro as well.

Yeah, appreciate it. So actually Darius I've known since we were trading FX together. He was at the largest FX macro hedge fund in Singapore and we were trading a bunch of FX as well. But it was, it's interesting how the past kind of changed over time and now we both trade almost exclusively crypto so that's kind of interesting.

Yeah. So I'm Kevin, you know, I know these two from a while ago. I actually knew Darius first when he was starting up the OTC desk at qcp. And we've definitely done quite a few trades together. Always been a great counterparty to have. And then Kyle at three arrows. You know, I think we met a while ago when you guys were, you know, still, I think right before I think you guys did the whole deribit round and which I'm an investor in. So, you know, really good to see all of you guys. I think we've all been in space for quite some time now and I'd love to get your guys thoughts on, you know, just trading in general. And I guess derivatives is the big, is the big new topic in mind.

Yeah. I think the interesting thing is that I think even though three of us are all in the crypto trading space and it's not that big a circle and there are definitely overlaps between the three of our three firms, but at the same time we have very, very different approaches to the space as well. So maybe that's a good way to kick off. Sure, yeah. Why don't you go ahead Kevin, Why don't you start?

Sure. So I think one thing that we do that's pretty distinct is that we're purely a quant firm. So you know, mostly, you know, math, physics, stats guys and you know, we try and approach the market in as systematic a way as possible. And what I mean by that is, you know, I think there's generally different kinds of these quant firms. You know, some are pure black box and some are more gray box. You know, I guess the ones where, you know, you see, you know, traditionally having, you know, six, seven, you know, nine screens, you know, they're manually adjusting the parameters in real time to their trading algos, that would be more on the gray box side, I think for us, you know, much fewer screens, we're much more black box, you know, writing just a bunch of code and we're never really changing the parameters up in real time. You know, if there's some way to codify the logic of what we have in mind, we try and do it directly in the code without, you know, manual intervention. So, you know, that's sort of our approach. And I think, I think within the space you have different firms taking after different traditional finance prop shops and hedge funds. I would say the gray box approach is more like Sig or Jane Street. And I think our style is more similar to John Poor Tower. So I think that's, I think something fairly distinct about our way of trading.

Definitely.

I can build on that too. I mean, Kevin, bringing up a good point, that PROP is a spectrum. And the spectrum is from, let's say ultra low latency, putting in the best tech, really just trying to make the microseconds all the way down to broking. I would say that's the spectrum. And broking would be guys on a chat making a bid in an ask price, and then there's a whole spectrum in between as well. So for us, I would put us somewhere in the middle. Maybe Kevin's a little bit more on the automated side. Maybe we're somewhere a little bit towards the middle where we're very involved in the borrow market. For example, borrow is very much an OTC market. You're on chat negotiating deals. And then on the trading side, we try to automate as much as we can. So we try to be algorithmic there, but we're not the fastest shop, we're not the lowest latency, we're not market makers for most spot or derivative markets. So there's something for everyone. And basically everyone has their own alpha. It could be the tech, it could be the people, it could be the OTC axis. But PROP is a large spectrum.

Exactly. And I think Kevin's on one end, Kyle's in the middle. We are probably on the other end of the spectrum. We focus a lot on local markets. So we're very active in Korea, Thailand, Indonesia, Malaysia, and we're trading crypto in local currency. So, you know, we take a lot of local currency risk as well. And besides that, we are also extremely low latency, almost, almost. Pretty much manual in terms of more structural trades on options option strategies.

Yeah.

So, you know, I think pretty good. Nice. Every part of the spectrum is represented in this conversation.

Yeah, I definitely think that way too. And I think it's important to identify it this way because if you think about other investing, so let's say early stage venture capital, I don't know if there's as much of a spectrum. It's much more of like a region focus or a product focus, something on that order. But it's not necessarily a spectrum of tech to broking. And PROP in general is shrouded in a lot of secrecy. Right. Because you generally don't have a lot of investments. So you're not openly advertising what you're doing, except if you are trading with OTC counterparties. And then you absolutely do have to because you need to build a relationship Right. But yeah, I think that I like the idea of the spectrum and we all fit in different parts, which is kind of nice. And also in slightly different areas.

Yeah. And you know, just jumping on that, Kyle, maybe you could clarify a little bit on your side. Are you guys actually running prop right now? Because I know that for ourselves and Darius, we do take outside capital. We do have investors. But for you guys, are you guys running prop or do you guys have outside investors?

So I set up the firm eight years ago and all my bosses set up hedge funds. Pretty much that left the smartest guys did. That was the thing to do at a bank. So I did the same thing and I set up a master feeder hedge fund, regulated and Singapore. And we still have that structure, but we just over time realized that it didn't quite make sense to have lots of outside capital for the strategies we were running. So we actually don't run outside capital right now. We've thought about it, ways we could do that. I think I actually made a post yesterday that got a little bit of traction on Twitter where people talked about the difference between a borrow market and a high fee market. A lot of firms think about this differently. So some firms, they decide to charge very high fees. Like normal hedge fund fees are 2% management, that's 2% of the assets charged per annum plus 20% performance over some hurdles. So like you make 50% return on capital, then you have to pay 10% as a fee to the manager. Right. 2 and 20, that's the normal hedge fund fee. If it's capacity constrained, a lot of people will charge much higher fees. They'll say, okay, we're going to do that model, but we only can take 20 million of capital total. Thus we can charge 4 and 40 or whatever they can get away with. Right. And for them, the math is always that versus borrow. Like what is your borrow cost and what is your fee? There's a slight, there are some nuances here in terms of investor protections and upside versus downside scenarios. But generally speaking, that's kind of what people's math looks like. And so when we did that math, we just, you know, we came up with our.

The returns are that high, huh? You don't want to share it with the investors.

We did when we first started, you know, we did when we first started and we returned capital pretty quickly.

So.

Yeah, I mean, the dream and. Prof. Is to run your own capital someday. Right. And to get to that point, there's always something more you can do. Right. To get to that point. Sometimes you have to take investor Money on a 2 in 20, sometimes you can charge higher fees, sometimes you can do it as a borrow. It's kind of a mix. And you actually have some very interesting share classes in your fund that I think are quite innovative for hedge funds. And I think you've done a particular angle on that one.

Yeah, definitely. And I completely agree with you that I think it's all comes down to the opportunity cost of capital. If it's cheaper to get borrows, then you know, why, why take on more investor capital? Investor capital could be really expensive. You know, maybe they're taking 80% of the upside, you know, 70% of the upside. So if the borrow is like 10% annualized, I mean, if, you know, if your returns are good enough, it makes, it never makes sense to take on more capital. You know, it's, it's always better to take a borrow. So. Completely agree.

Depends on your Sharpe ratio, how much you're making, what your downsides are, are how much you have versus investors. There's a bunch of math that goes into it, but at the end of the day it's just incentives and a negotiation with investors.

Definitely. And how about yourself, Darius? How do you think about capital allocation and just figuring out where to source it from, opportunity costs, that sort of thing?

Yeah, just to clarify, we actually don't have outside capital as well.

Yeah.

I completely agree. And the reason for this, I mean, just to sort of segue into this topic. Right. The reason for this is that you're right, invested capital is actually the most expensive form of fundraising from our perspective. You know, if it's 80, 20, you're giving away 80% of the profit is insane. And you know, to touch on what Kyle mentioned as well, that with crypto the biggest concern was actually not cost of capital. The biggest concern was capacity constraint. You know, in hedge funds. In hedge funds, you know, part of the hedge fund game is always Aum game, right. You manage, you manage $4 billion, $5 billion. Even if you don't make money, the hedge fund manager still gets rich. So you know, you know, you can't do that in crypto at all. You know, in crypto if you have a billion dollars, you have no idea where to put it. With that said, you know, the landscape two, three years ago and now in terms of capacity constraints, I think it's vastly different. I think the growth has been exponential, whether it be options, perps, futures, even defi.

Right.

I mean, you know, the capacity has grown a lot and I think, you know, I think we're going to start to see exponential growth in terms of capital allocated into the space. You know, especially, I think, you know, this year especially, we saw news that Renaissance was thinking about deploying or Tudor Jones is thinking about deploying. And you know, with that, there's been a very huge jump in interest from the traditional, traditional market. Guys seen a couple of, couple of banks starting to step in as well. And the interesting thing to me is that these banks, you know, the banks that we've spoken to who want to step into the space are not taking the usual path of like, you know, you do the Delta One Spot products or what, they're going straight into options and straight to exotics and the kind of thing, right? So, you know, I think, you know, some interesting thing.

I.

Interesting stuff happening this year for sure.

And how much capacity do you think there is right now for like the strategies that you're running right now? You know, if you had unlimited access to capital, at what point would you say, okay, we're full, that's too much. You know, there's nowhere to deploy it anymore.

I think the number in my head, you know, I mean, let's say just for us as an individual firm, the number in my head, I would probably put it, you know, I think 100 million the market can take, no problem, probably about 250 to 300. You know, then we start feeling strained and you start having to diversify into different kinds of products. But I think, let's say specifically for options, you know, I think 100 bucks, I think the market can stomach back. You know, I think Kyle can answer this as well, and he's in the boring lending side. That probably has been the most scaled up section of the crypto space in terms of products that are similar to traditional markets. I think that space has grown a lot and the sizes are very institutional. Probably like Kyle, take a bit more on that.

Yeah, well, one thing I would fill in this is, I mean, we run firms, right, that have like multiple people in them and have scale to use, that deploy even 100 million. To a lot of people. 100 million sounds like a lot of money, right, to manage a firm. But you have to remember if you're starting your firm with smaller, like let's say 1, 5, 10, you have to believe you're going to get to 253 or like a really high number to accumulate assets. Because even at 2 and 20 on, like if you raise 50 million is not like if you're a VC, it's fine because VCs can launch multiple funds. In fact, they can, you know, and they can lock it in for a long amount of time. But for a hedge fund, you have two bad months, you lose your capital. Right. Very quickly. So yeah, I think that those numbers are approximately similar for almost everyone's strategy for any prop strategy in crypto. And I would say if bitcoin were 50k, then maybe we could all try to raise more money. But it is nice to think, and I certainly agree with your other point that we're seeing a lot of market entrance and I think we're going to see a lot more very soon. Sophisticated banks. And I think people in crypto tend to underestimate the sophistication of people, of new investors into the space. And sometimes it's easy to forget that you may be crypto native, you may have been around since 2012 or whatever, but some other guy might have been trading exotic equity options for like 20 years. I mean, he's pretty sophisticated guy and if he decides to go into crypto and he's going to be very comfortable with accumulators, knock in knockouts like products that maybe a crypto native person is not quite familiar with, like they have the tools to build it, especially in defi or on chain, whatever, but they may not have the 20 year experience of seeing what that product looks like in the real space. And I think that's the exciting part. When you bring in new people, they're not noobs. It's not always a noob or a pleb that joins. It's sometimes very sophisticated managers. And I agree we're going to see more of that.

Yeah, I completely agree with that, Kyle. I think, you know, the real competition is yet to really come. You know, you look at all these prop shops out of Chicago, there's plenty of smart people in the world. You know, it's just, you know, one of the reasons they haven't come full force into crypto yet is just because the market isn't big enough for them. Right. But when they do come full force, I mean, with the infrastructure that they built out, with the experience that they've had over the decades, you know, certainly that's not going to be easy. And I think the game only gets harder over time. Hopefully also we're getting better over time too, and we'll be able to compete. And same for you guys. But I think, I definitely agree. I think there's a lot of competition sort of looming on the horizon that I think a lot of crypto people discount And I don't think that like you said that these guys are newts. I think these guys are quite good at what they do. But I wanted to touch on another point, a really interesting point that you brought up, Kyle, which is that you said that basically for VCs, they get to lock up this capital for a really longer period of time, right? And you know, they could raise multiple funds, this, this and that, while, you know, for a fund or like a prop shop, you know, we live or die by every month. Right. So in your opinion, are you, are you suggesting that, do you think it's harder or easier to be a VC versus running a trading firm?

I think it's an unfair question. The point I was trying to make is if you raise $100 million hedge fund in traditional space, on average, you're losing money. The average hedge fund is break even on management fee at 250 million AUM. $250 million. So if you raise $100 million, given the fee breaks you're going to have to get and the deals you're going to have to cut for equity, on average, you're losing money. Well, in crypto, how many hedge funds can you name over 250 million? Like very, very few, right? I think I can name them on one hand, but a VC is very different. In the real world or the non crypto world, if you raise a VC with $20 million, that is totally fine because that capital is locked up for, on average, let's say, I don't know, five to ten years and you can raise every three years or so. You can raise a subsequent fund if you want. So on your total AUM over a 10 year horizon, you could be running, let's say $80 million of hard capital that's fixed there, right? And you can really gun for the fences if you put in some really big bets and they go sour, your capital still locked up, Right? So yeah, I would say a $20 million VC locked up for 10 years is probably more lucrative in the long run than a hundred million dollar hedge fund that has monthly redemptions. So maybe that's one way to phrase it. But it's not to say one's better, one's worse, like totally different skill sets, you know, unlikely one, one person can do both, you know.

You know guys, I think when I'm a bit older and you know, just a little bit more world weary and just tired of the daily hustle, I think I'll just be a vc. You know, I think it's a, it seems like A nicer life. You know, you can be wrong for a very long time and still look really smart.

You know what I mean?

What do you think, Darius? Do you think it's. Do you think it's harder running a trading firm or being a vc? What do you think there?

Well, I mean, I've always been on the macro side.

Right.

You know, the VC side has always. I mean, I always have this conversation with my partner, Josh.

Right.

I have no idea how this VC thing works.

Right.

You know, you know, to me, to this day, I mean, we've done some VC deals as well, and it's still very, very alien to me.

I know.

I. I still think the macro side makes a lot more. The market's a lot more efficient. The market's a lot more efficient. It's easier to understand. I still don't know how you justify some of the valuations that you have in bc. So I sort of agree with you on that part. You can get away with things for quite a lot longer than you did.

I think I can tie this together real quick. So anyone with a million dollars can try to start a hedge fund. I sort of try to start a high frequency trading firm or try to start a prop trading or a vc, or try to get into property development. They can try to do many of these things because the capital costs are by definition not that high. Right. Like, you would never try to found a car company, or you would never try to design a new iPhone, or, you know, things that are even cheaper. You can try to be a novelist. You can go try to write, you know, the, you know, epic foam if you want, that will cost you $20,000 a year. You just have to pay for your expenses. But the reality is all of these things, the alpha is not the capital. Like there is a capital component, but the alpha is not the capital. The alpha in prop is your market knowledge, your tech or something. Right. The alpha for VC might be deal flow or other things. Right. So I think that looking at the capital component of a business is like looking at their, their working capital. Like, you wouldn't look at the working capital of, you know, a restaurant and then say, hey, I can also run a restaurant. You'd say, oh, wait a second, who's the chef? Like, what are we making here?

Yeah, definitely, definitely. Cool.

Well, you know, I got one follow on for Kevin. So you mentioned all these market entrants and you mentioned them as potentially competitors, and I'm thinking of them, yes, they could be, but I'm thinking they can also be Partners and extend the space. Right. And one way I'm thinking about that is right now for exchanges. For example, most exchanges are run in AWS cloud. It was designed that way because in crypto it can just like everyone to connect from everywhere in the world all at the same time. That's not so good for a lot of things like throughput, latency, other things. So for example derivative metal exchange, high volume, high throughput. It'd be hard to have tons of retail all connecting at the same time. But it's wonderful if you want to have really good pricing, best execution, high volume. Are there any other. So this is a clear trend for me anyways. Like we're going to see much more co located metal exchanges, which is really important. What other things do you think are going to happen?

Yeah, I definitely agree with the colo part. I think Deribed already has colo right at LD4 and you can do a cross connect with them. And I think maybe the way the space evolves is much like, I hate to say it, but maybe just exactly like traditional finance where there's going to be brokerages that handle all the retail flow and then it's just really the brokerages who have seats with the exchange who then directly connect with the exchange right on the same rack in the same data center. That seems to be a lot more scalable than having these millions of retail connections all over like aws, everything going through Cloudflare. So there's another extra jump. It's just the whole thing doesn't seem too efficient. And I think maybe the reason that this hub and spoke model evolved in traditional finance is exactly because of this reason. And maybe we don't need to reinvent the wheel, but could be wrong. It's really hard to say. I think in comparing the crypto markets with traditional markets, sometimes it looks like equities, sometimes it looks like forex. I mean you can definitely compare contrast a lot of details. For example, I think with Forex, for example, there's a lot of fragmentation of liquidity which we also see in crypto. It operates 24,7. It's a lot like crypto and I think for the most part there's not much central clearing. I think only like 25% of trades are centrally cleared. I think in the forex market, don't quote me on that, but that's from what I remember. So I think it's possible that crypto goes that route or it's possible that crypto has a lot of these characteristics of Forex but also ends up having some kind of giant OCC or some kind of clearinghouse that everybody goes through. So it's not clear, you know, exactly what way crypto is going to go. And that's why, you know, I kind of think of it as a completely different asset class. That was a little bit of a tangent, but, you know, just, just a random talk there.

Yeah.

To me is it's going, it's going. It's like it's not going to remain in an AWS cloud. I don't know what it's going to end up, but it's definitely going somewhere. What do you think of. You're right.

You know, I mean, crypto is similar to Forex in a lot of ways. But let's say you look at crypto options specifically, it's not going in the way of Forex. If you look at FX options, that's 99% OTC, completely fragmented prime brokerage.

It'S.

All bilaterally traded, whereas crypto, you already have that centralized on certain exchanges. So that part is very distinctly different. So you're right about that. It's going to be a completely different animal sort of mix of both.

And how much room do you think there is for, let's say, multiple options exchanges in crypto, you know, deribit right now, being the market leader, extremely dominant in open interest and volumes. Do you guys see that changing over time? You think there's enough for, you know, two or three players? Or you think it's just going to be, you know, pretty much winner take all, just, you know, in my opinion, you know, I think maybe just to share that a little bit, I think there's probably room for a few, but I think it's going to be fewer than the spot exchanges just because the way to replicate liquidity on an options book, you know, there's so many different dimensions calls, puts different terms, different strikes. It makes it a lot harder to defeat the network effects of the incumbent. But, you know, I don't know, maybe I could be wrong. What do you guys think about that?

I think of it as a funnel, actually. I think of it as a funnel where liquidity is tranched. So if you're, if you open up a derivative screen right now, as a retail person that's never traded an option before, it's gonna be a really uphill battle for you to figure out how to trade options. But if you were to open up Finance's platform, they have options, it's a mobile app, can't trade it on the screen. It's a Mobile app only and you can only buy. But maybe if you're a retail guy, that was easy for you because you already had a Binance account and you only wanted to buy anyways, who knows? And so that's a new user. And there's a couple other examples I can give too.

But.

But basically liquidity could be tranche because different exchanges could go after different kinds of clients. But at the end of the day, if you want to trade high volume, low latency, all cross margin to one account. Because if you trade a call with a client on one strike, you might hedge with a different, then you might delta hedge that too. And you need all that collateral in one pool with the best liquidity. I think that should be one place that is the most efficient way to do it. If it were two, I don't know, maybe there's like a one that's better suited for one time zone, one for another, but it would be more efficient to have that as one. And I see it more as a funnel.

And I think just to add to what Kyle said, the current situation is exactly that if you trade on cme, the risk is getting cleared on Deribit. If you trade on OKEx, that risk is exactly being one for one being cleared on Deribit. So the funnel is the case right now. But I would say, you know, in terms of the coin settled, unregulated exchange Deribit will retain dominance there 100% for sure. I would say in that little tranche funnel, right, Binance might launch their options product or various other exchanges might launch option product and that will funnel to Deribit. What I think is a critical tranche would be the regulated exchange. CME has started to take up a lot of volume and I think that trend will continue as well. It will still come to Deribit, but there will always be a whole tranche of people who can trade on CME but cannot trade on Deribit. You know, so I answer your question directly. To answer your question directly, if you're saying two or three, I would say, you know, maybe Deribit plus CME plus maybe one more. But you know, with that said, Deribit is still very dominant in terms of what we are seeing, where the flows are going to.

Yeah, Darius, you know, I think you bring up a great point that, you know, really all of this other options volume across all these other options venues outside of Deribit, a lot of that is being crossed on Deribit. Right? So like how much organic volume do you think there is outside of Deribit.

Right.

I mean there is a whole bunch of other volume, but how much of it is actually organic versus how much of it is just people de facto or literally cloning over liquidity from Deribit? What do you think the actual market share is right now of Deribit?

So I would say, I would use our own flow as an example on our book. I would say 25% is crossed off Deribit either internally or with other venues. But derivative easily takes up 75% of the volume. So I mean using, using our own flow as a sort of guide, I would say 70 to 75 to 85% easy.

Darius, a bunch of people have been for a long time talking about an OTC clear. There were numerous firms that tried, couldn't get either the credit, so they didn't raise enough money for people to want to face them or couldn't get the cross margin capability or the master clearing agreements, whatever it is. Do you think we'll see one of those someday? How close are we?

I mean, as you know, I was also intimately involved in some of these.

Right.

And I thought, two years ago, I thought, you know, I was very confident that crypto is going away of fx. It's going to be central clearing, you know, it's going to be standardized rules, ISDA for everybody. But two years later, looking back at it, it has not worked out. I think the space is to some extent not ready for it and not ready for it, not because they don't want it, but because it's actually quite easy to cross under a bit. So, you know, there is almost a case of there's no need for it.

Right.

You know, we were looking at, we've been talking to some counterparties for many years and we're trying to get ISDA going through and you know, these kind of standardized things going through. In the end we just looked at.

Each other and say, you know, why.

Don'T we just cross the Arabic? And then that's an easy solution. So there's almost no need for it. So I think, you know, to answer your question, you know, there are still guys who are trying to put these things through, but I think to some.

Extent so in fx, FX has that and, but it's very top down, like the banks own the central clear and they forced all of it to go there and they probably burned a lot of money to get it to go there to start with anyways. Right. So I guess the question would be like crypto generally is bottom up. Like FX is very much top down banks control everything they own. The top clears and then the liquidity is tranched downwards. Right. Customers can participate in that market as the banks see fit, as they define it. Right. Whereas crypto is the opposite. Right, Crypto. Someone wants a new option, they go to you, you'll probably quote them, you'll probably make them a price, and you don't force them to clear in a certain way. You just trade in the most efficient way. It's more organic.

I would say.

So, yeah. I don't know. Like, I also thought someone would just pony up and say $50 million in the Central clear. I'm paying everyone to join it. Everyone has to clear here now. And in the end maybe that would work out, but in the interim, that would be a serious money burn, right? And given the excesses of 2017, I actually thought someone would do that because there was so much more money that was burned doing other useless things, right? But like, maybe now people are much more rational and so it's harder to get that. And the oligopoly is spread too thin. So maybe, I mean, I mean, a.

Simple case, a simple case of if.

One of these guys comes to you and says, hey, why don't you pay $100,000 for a seat on my, on my, on my, on my clearing, on my clearing, you know, or whatnot, right? You're gonna ask him to buzz off, man. Because, you know, it's just, you know, we're just not used to paying the kind of fees, right, the banks pay.

For their seat, you know. Another major difference in FX is prime brokerage. So you have the central like liquidity, which is governed by corporates, trade with banks because they have a banking relationship and all that funnels down, right? But you also have prime brokerage, which is like a whole nother stranglehold that banks have. So, you know, when you were trading fx, you had an FX prime brokerage account, right? And that was the only way that you could clear. And if your FX is prime broker said, hey, we don't support this venue, or we want you to clear on this venue, or we make it cheaper for you to trade, then you would trade on that venue. So it's kind of like forced in a lot of ways. Citibank, for example, was for, has been for the long, a long time a huge percent of the prime brokerage business. For every major FX trading fund. You had an account there, we had an account there.

Everyone did, right?

You had.

And they recently just came out and didn't support some venues, right? Some ECNs which are clearing because they maybe they weren't as friendly to Citi or whatever. Right. You can't do that though. In crypto. That doesn't fly. You don't have that stranglehold of prime brokers and that stranglehold of like the corporate flow. So you can't govern it and you don't have 50 million to blow on a project for like the next five years to see if it works. But like, basically, I don't know, I think crypto is all bottom up. FX is all top down. And so I agree it's not going to pan out the same way.

In that way, actually. I think, you know, this is one specific area where the ideals of, I wouldn't say decentralization, but democratized finance has come true. Right back in the day when you wanted to set up three arrows. You know, you have like a whole laundry list of like prime broker, custodian, and they all cause a bomb. I mean, today if you want to set up a $50 million hedge fund in crypto, you just set up a few accounts and you're good. So I think there is definitely some very strong democratization in terms of the way serious capital is managed in the space. And for that reason, I think there would be more inflows very easily and very quickly as well.

And I just wanted to add one other comment about the whole clearinghouse situation in crypto. You know, all these guys making these plays, you know, the answer is always the same, which is that, you know, I'll join your network once everybody else is on, you know, and it's just like this kind of chicken egg problem. Nobody wants to be the guinea pig, nobody wants to pay 100 grand, get a seat for, who knows, you know, what, how this thing will play out. Right. It's a lot safer for me to just watch everybody else get on the network and then, yeah, then it has some value. So, yeah, I mean, I think unless they're willing to put down the very heavy fixed cost to get it going. You know, there's no marginal cost, there's no marginal benefit for any individual to join before anybody else does. So I think there's a very serious chicken egg problem there.

Yeah. And there are other network effects that are probably more important and more organic. So, for example, moving funds around in a secure way, Fireblocks has pretty much nailed that market at this point. Right. And that is a true network that is truly scalable. And there's, I mean, there's a couple other examples I can give too but basically there are networks which can organically grow. It doesn't have to be like, you know, no one wants to join until there is one. Like it provides immediate benefit and then more benefit and incremental benefit and then it just, you know, becomes the de facto network that everyone uses. So let's see. Second derivative options. Darius, when are we going to get those? Everyone's been talking about these, especially in Asia. Asia is a huge exotic derivative market in the US A lot of these are not standard products for the everyday person. Accumulators, knock in knockouts, trigger redeemables. But to everyone in Asia, this is a very well trodden path. The average person in Korea, for example, will go to their local bank and maybe put $10,000 in a trigger redeemable which will pay out a fixed coupon over time if certain things happen. Very, very normal product, very retail oriented too. Why don't we see those in crypto? When will we. What's holding us back?

I think we are on the brink of it right before this. It's a question of who's willing and who's willing to price and whether there be a market for it. To this day, if you ask me to price something like that, I would.

Be a bit careful. Right.

You know, when you have events like Black Thursday happening, these things can blow up your face really badly as well. But I think we're on the brink of it because the private banking style of customer structuring is starting to happen, especially as these things get more regulated in Singapore and the rest of Asia, where, you know, in Thailand, Singapore, Indonesia for example, and Korea, that's coming up. The regulations are setting the way for these products to happen because the regulators are stepping in, the finance ministry is stepping in and saying that, you know, these are okay. And then, you know, you have retail guys starting to look at these products and then you have banks like Nomura and all starting to look at it as well. I think we're on the brink of it happening.

How do you guys feel about binary options? You know, I think retail really likes to trade binary options, right?

Yeah.

Binary options in general have a very high edge to the market maker. So they can sometimes be a little bit toxic for retail. Right, That's. I mean, obviously if it's a liquid market and you can have like a good tight two way price, then it's less toxic. But generally speaking, I think my thought process on this is there's two things that need to happen. One is you need the underlying liquidity to be strong. And the underlying liquidity for exotic options is vanilla options. So puts and calls and that's deribit. And if you look at their volumes and their liquidity, it's gone up huge the past year, especially in just not BTC but also eth soon to be others. So that unto itself will provide a foundation as upon which people can build. Right. That's number one. But number two is what Darius was saying. Distribution. You've got like all these banks coming in. They're sophisticated, they're not noobs, they're not plebs. They're sophisticated. They know all about exotic options and they know how to pitch it and commercialize it in a way that it's hard for someone to organically start with. Like if I approach someone for, you know, an accumulator, it's going to be hard to convince that distribution channel like to do to go well. But if you're talking to Nomura or whatever, they can absolutely push that distribution channel because they already do for so many other products. And it's huge. It's a massive market. Right. So if they can do that distribution and you have the underlying liquidity, I think that solves it. But yeah, we just haven't. Like we're at the beginning stage of it.

Yeah.

And I think one thing to add to that is that the yields in the crypto space, like you know, just the implies on Bitcoin and Ethereum, when you tell the traditional private bankers what kind of yields they have this market is producing, it's becoming too hard to ignore for them.

Right.

In the global market you are seeing a negative interest rate environment and it's harder and harder to generate yield. This is sort of like a little untapped island for them and they're all going to come hungry very, very soon.

And you know, just to touch on something that you said, Kyle, I found very interesting and this is sort of more of a philosophical question for you guys. Kyle, you mentioned that, you know, with these binary options, the edge to the market maker is really big. And you know, I agree that's the case now for the most part. You know, a lot of these retail guys, they want to speculate, they want to gamble. Should people be allowed to trade things that they want to trade or should they be protected from hurting themselves, giving up too much edge to these market makers? Like what, what's sort of your philosophical.

View of the market there?

Very philosophical.

I agree.

And my philosophical response to that would be we in crypto self govern ourselves. We don't have largely we do not have regulators largely. We do not have, you know, big risk departments that are telling us what to do or what not to do. We rely on ourselves. So if we see something that looks like a scam, then people regularly do on chain analysis and call it out, right, put it all over online. And it's very much like a trust community based system. So I would say the same thing goes with binary options. If we see someone ripping off customers massively, which is entirely possible for binary options because it's hard for retail to understand how much edge is in a trade, then we, the community should probably say, hey, you know, check out this other venue which has better pricing. Or maybe you should design the contract in another way. But we should self govern. That's the whole point of crypto. And I think that's the way I would think about that.

And I think through competition over time, you know, the edge will diminish, you know, there'll be more competition between market makers, you know, that sort of thing.

Yeah, 100% agree.

Yeah, I completely agree with you guys. Let me add to that.

Cool.

Well, I think we're almost at our time limit here, but how do you, how do you want to close off?

How about we all just go around, maybe just give one trading tip that maybe we wish we knew when we first started trading. How about something like that?

Specific to crypto, right? Specific to crypto.

Specific to crypto or in general, you know, however you guys want to do it.

I got one right now. I'll start. Your first trade should be to buy Bitcoin. It should be either to lend tether or it should be to buy Bitcoin.

Those should be.

When I say lend tether, I mean lend dollars. Those should be your one of your first two trades. And when you're lending, you should be lending it to a large intermediary, someone like blockfi. If you are. And if you're buying, you should probably be buying on as the largest regulated exchange you can, something like Coinbase. You should be buying Bitcoin. You should not try to make 10x. You should not try to buy something small. You should not try to do an hour of research online and then put your money in a startup. You will get burned. You are new, you should recognize that people have been in this for a while. If you don't follow this rule, you're going to end up buying the top of a pump or something else. You should either be lending dollars to block buy or buying Bitcoin on Coinbase. I think those should be the first two trades.

Darius.

Well, I think, you know, I would probably add to what Kyle said, right. The misconception that most investors have of crypto is that it's volatile. You know, it's very speculative. I would say the biggest opportunity in the crypto space right now is the yield space.

Right.

Both the credit market lending, like Kyle said, as well as implied yield and options. As a new entrant to the space, you don't have to be taking directional risk. There are a lot of other lower hanging fruit that can make you good money without taking that much risk. And that should be something to explore.

Absolutely. And I guess for mine, I think one thing that that's really important with trading is to have a lot of, I think, emotional control. And I think a lot of people will get wrecked from being too greedy or too fearful. Well, maybe not too fearful, but you might not just make any money at all. So I think, you know, having very strong emotional control, trading the markets, you have a bad day, tomorrow's the next day, and not to let it affect you and not to go on tilt. And I think, you know, if you can manage that, you're already halfway there.

Sounds great.

Sounds good.

I really appreciate it. Good talk.

Thanks, guys.

Yeah, good seeing you guys.

Thank you, gentlemen, especially to the QCP guys for helping me put this together. And after getting Kyle as well as Kevin, I think that was a very, very, very insightful conversation. I think that was extremely good for. I hope everybody enjoyed it. Everybody learned something from it, especially I think the last three minutes when they're talking about. For those people who are looking to trade or to try something out like this, it's just. Listen, I think these three are probably three of the most respected organizations and fewest people really in the trading space when it comes to derivatives, crypto derivatives, essentially in the space.

Right.

We've come to the end for now for the Asia side of things. We have just finished the Enterprise Asia. We've just finished Trading Spotlight. Once again, everybody, we are just on day three of five of Unitize Online. Right. Before I let you go and before I go as well, a couple of things we need to talk about. First and foremost, I think in approximately an hour and a half, two hours, we will be having the developer track. Yes, that's the benefits or the downsides of being live. I tend to forget a couple of announcements once in a while. Yes, we have a developer track that's happening right after this in about one and a half to two hours time. And as well, I would like to put the focus on the Enterprise US edition together with the World Economic Forum, Deloitte, etc. Etc. All these things are going to be happening over the space of the next 12 hours, actually. In fact, for the enterprise conference, enterprise US conference is going to be happening midnight Singapore time, or rather say 9am Pacific. That is UTC GMT 7. For all of you who are trying to adjust the calendars and everything like that, Right Agenda is obviously available under Schedule. If you're in the BRELLA account talking about Brella, don't forget, if you go to Schedule in dibrella section, you will actually realize that there is going to be a option for you to choose past content if you go there. Day one and Day two's content is actually available on demand for you right now exclusively on the BRELLA page if you sign up for it. If those of you who are watching or not on Brella right now, then just go to Unitize the or just go to next Brawla IO unitize 2020and you'll be able to view all the content from the last two days given account of the time zones. I myself didn't watch everything. Can't stay awake for 24 hours, can we? All right, with that, we're just going to go for a short break and we'll be back with you for the developer side. Stay tuned. Thank you very much.

Sa.