Buy Tickets

TradFi

When DeFi meets TradFi: Alliance of MakerDAO and Societe Generale-FORGE

by
Rajiv and Sylvain share their insights on DeFi and TradFi at EBC23.

Rajiv Sainani, Head of European Business Development of MakerDAO, and Sylvain Prigent, Chief Product Officer & Co-founder of Societe Generale-FORGE shared their unprecedented journey of innovative collaboration. Read on to learn what happens when DeFi meets TradFi!

Rajiv starts the panel by saying that the future of finance will be traditional finance (TradFi) and decentralized finance (DeFi) coming together. MakerDAO has been cooperating with Societe Generale-FORGE to issue security tokens for more than a year. In this panel, Rajiv and Sylvain share their experience, learnings, and challenges along this incredible journey.

The collaboration started when Societe Generale-FORGE proposed to issue a native blockchain-based security token on the Maker public forum in September 2021. Their main goal was to bring liquidity to security tokens and they partnered with a DeFi protocol, Maker, to find an innovative solution.

The technical integration was fast and smooth, but the real challenges lay in the governance of a decentralized autonomous organization (DAO) and the legal processes. Know Your Customer (KYC) and jurisdiction were necessary, and the team had to find solutions and educate the regulators along the way. 

Watch the full panel to learn more about MakerDAO and Societe Generale-FORGE’s unprecedented collaboration!

Amazing Things Happen When DeFi Meets TradFi

Regarding the next steps, Rajiv and Sylvain both hope to scale up the collaboration and bring the project to the next level, rather than simply experimenting. Societe Generale-FORGE is planning to open this service to many of its investors through Maker by the end of 2023 or in the first quarter of next year. They believe that both the TradFi players and the MakerDAO community can benefit from this project.

Throughout their cooperation, Rajiv thinks the key to the success of a TradFi-DeFi project is to have people that can navigate successfully both worlds and find the synergies. It’s easy to imagine a financial space when these two worlds collaborate, but the process is not only rainbows and unicorns.

Rajiv acknowledges the difficulties for a DeFi to cooperate with a TradFi. Therefore, he hopes their collaboration can pave the way for other projects as they have proved to the world that despite having different cultures, ideologies, and processes, TradFi and DeFi can work together to create something amazing!

Articles that you might be interested in:

The Future of Crypto Market-making: What’s the Role of Regulations and AI?

by

The increasing adoption of artificial intelligence (AI) and the ongoing discussions surrounding regulations are two important factors shaping the future of crypto market-making. How will policymakers’ decisions affect the crypto industry? How is the crypto industry using AI?

A very enlightening discussion took place during the 8th European Blockchain Convention with Joseph Hall, Reporter at CoinTelegraph, Guilhem Chaumont, Co-Founder & CEO at Flowdesk, John Murillo, Chief Dealing Officer at B2Broker, Patrick Heusser, Chief Commercial Officer at Crypto Finance AG, Stef Wynendaele, Head of Commercial Strategy at Keyrock, and David Tunian, Head of Business Development at WhiteBIT.

How Is Crypto Market-making Different From TradFi?

In a cocktail party analogy, market makers are the party planner that manages the risks, provides the necessary support for participants to enjoy themselves, and handles the logistics of the event. They play a crucial role in maintaining order and stability in the market.

Market makers in the crypto industry are more open, transparent, and willing to cooperate compared to players in traditional finance. In TradFi, market makers operate in a highly competitive and fast-paced environment where speed determines performance. However, the crypto market is more decentralized and fragmented. Crypto market making is often offered as a service and the risks are shared among several different stakeholders. Market makers need to collaborate to manage risks and advance the market.

“I’d rather have a collaborative approach and not an “Us v.s.Them”. At the end of the day, the market will decide what is most efficient and the market will decide what’s most interesting to have on the balance sheets. So let the market decide, but we have to do it together!”
– Stef Wynendaele, Head of Commercial Strategy at Keyrock

The panel “Market Making is Key for a Crypto Market Recovery” at the EBC23.

Regulations Can Help Bring the Industry Forward

All panelists acknowledge the importance of regulations, but clarity, transparency, and optionality are the key elements that they hope regulations can bring.

“I’m actually looking forward to regulation and clarity. It will at least be clear about what are the rules and the boundaries. It will help the market be more liquid and more people be comfortable going in. I’m really looking forward to it!”
– Patrick Heusser, Chief Commercial Officer at Crypto Finance AG

Despite being supportive of regulations, Patrick believes that there should be two parallel ecosystems in the crypto industry. One is the decentralized ecosystem where users can trade any token without restrictions. The other is a system for users who may not want to manage their wallets. He envisions that the decentralized system will be the innovative one that helps make the traditional system more efficient.

“In the end, it would be very Darwinian. The actors that are bad and not transparent will be mechanically excluded from a business perspective and those who bring value will obviously have more business and they will make progress.”
– Guilhem Chaumont, Co-Founder & CEO at Flowdesk.

Click here to read more about MiCA and regulations at EBC!

How Are Market Makers Approaching AI?

When looking at the quantitative market-making and technical perspective, a lot of machine learning and AI technologies have been implemented for years. 

Patrick also views AI as a potential support for crypto businesses as the technology can be used to follow updates on multiple protocols, monitor blockchains, and evaluate risks in smart contracts, which are time-consuming and challenging if done manually.

However, Guilhem thinks it’s very unlikely that AI will disrupt the crypto market-making in the next five to ten years. The crypto market is heavily fragmented and there’s a lack of ground infrastructure and a high necessity for less scientific discussion and cooperation, so he thinks it’s hard for AI to make groundbreaking innovations in the short term.

Watch the full panel to learn more about the future of crypto market-making!

DeFi Or New Ways of Blockchain Implementation: What Will Lead The Next Bull Run?

by

On the 16th of February, a panel discussion of the participants of the European Blockchain Convention 2023 took place on the topic “Why market-making is key for a crypto market recovery.”

The panelists discussed the crucial role of market-making in the crypto market’s recovery, highlighting the challenges and opportunities that come with this practice.

WhiteBIT is one of the largest centralized cryptocurrency exchanges in Europe, with 3.5 million customers worldwide, has shared its insights and opinion with us on the following questions:

What is the difference between a CEX and a DEX?

CEX, or centralized exchange, is a traditional exchange operated by a centralized authority. It acts as a middleman between buyers and sellers, holding users’ funds in its custody.

DEX, or decentralized exchange, is a newer exchange built on a decentralized blockchain network. Unlike CEXs, DEXs do not rely on a central authority and instead use smart contracts to execute trades directly between users. This means that users remain in control of their own funds at all times. DEXs often have lower trading fees and are less susceptible to hacking attacks, but they may have lower liquidity and a less user-friendly interface than CEXs.

With the rise of decentralized exchanges, what do you see as the value proposition of centralized exchanges in the crypto ecosystem?

Despite the growing popularity of DEXs, CEXs still play an essential role in the cryptocurrency ecosystem and offer several unique value propositions.

While DEXs are decentralized and do not have a central point of failure, they are not immune to security risks such as front-running attacks, smart contract vulnerabilities, or malicious actors. On the other hand, centralized exchanges typically have more sophisticated security measures in place, such as multifactor authentication and cold storage.

Besides, centralized exchanges have a more user-friendly interface and offer more advanced trading tools than DEXs, making them more accessible to novice traders.

Moreover, CEXs are subject to regulatory oversight. They must comply with KYC/AML requirements, making them a more attractive option for institutional investors and traders who require high compliance.

Do exchanges need licenses to operate in every country they offer their services?

Exchanges must comply with the licensing requirements in the countries where they operate to avoid legal and regulatory issues. Failure to do so could result in fines, legal action, and reputational damage.

Is KYC a must or a plus for exchanges? Should DEXs include KYC?

Whether KYC is a must or a plus for exchanges depends on several factors. For example, the regulations in the exchange’s jurisdiction, risk tolerance, and customers’ preferences. First of all, the KYC implementation regulates the requirements and protects the exchange from unscrupulous users.

As for DEXs, there is no clear consensus on whether they should include KYC. Some proponents of KYC argue that it can help to prevent illicit activities on DEXs and promote the adoption of DEXs by more traditional financial institutions. Others, however, believe that KYC goes against the fundamental principles of decentralization and user privacy that DEXs were designed to uphold.

Is there any insurance to protect retail investors operating on an exchange, as we may find in TradFi?

There is not a widely recognized or regulated insurance scheme for digital assets that could offer retail investors the same level of protection as in traditional markets. While some exchanges may offer their insurance policies or other forms of protection, these are generally subject to a different level of oversight or regulation than traditional finance.

As a result, retail investors should be aware of the risks involved and take steps to protect themselves. It can be performing their own due diligence on the exchanges they use, using strong security measures to protect their assets, and diversifying their holdings across multiple exchanges and assets.

Do you have any advice for retail investors?

We don’t provide trade advice, but there are some basic hints for retail investors:

1. DYOR

Before investing in any asset, it’s essential to do your own research and understand the risks involved. Don’t rely solely on the advice of others, and be sure to verify any information you receive.

2. Diversify your portfolio

Don’t put all your eggs in one basket. Diversify your portfolio across different assets and asset classes to spread your risk and increase your chances of success.

3. Invest what you can afford to lose

Investments always come with risk, so it’s essential only to invest money you can afford to lose without causing significant financial hardship.

4. Use strong security measures

Keep your assets secure using strong passwords, two-factor authentication, and other security measures. Don’t share your private keys or additional sensitive information with anyone.

5. Be patient and disciplined

Investing is long-term, so don’t expect to get rich overnight. Stick to your investment plan, be patient, and don’t let short-term market volatility or hype influence your decisions.

6. Keep learning and stay informed

The cryptocurrency and blockchain industry constantly evolves, so staying informed about the latest developments and trends is essential. Keep learning and improving your knowledge to make informed investment decisions.

Investing can be risky. However, it can also be rewarding for those who approach it with caution and discipline.

It was first cryptos, then NFTs, and followed by Metaverse. What is the booster of the next bull run?

The market is volatile and unpredictable. Hence, it is difficult to forecast which assets or technologies will become the focus of attention. However, some potential areas of interest for investors and traders include decentralized finance (DeFi) applications, blockchain-based gaming, and other innovative use cases for blockchain technology. Ultimately, the next booster of the next bull run will depend on various factors, including market sentiment, technological developments, and macroeconomic conditions.

Articles that you might be interested in:

Watch the panel “Why market-making is key for a crypto market recovery” to learn more about crypto market-making.

Investing in Crypto Assets: How to DYOR?

by
Panelists present how they analyze crypto assets at EBC23

This panel was moderated by Alex Wenham, Digital Asset Product & Strategy Lead at Bloomberg. Vangelis Andrikopoulos, Investment Analyst at CoinFund, Anais Rachel, Independent Analyst, and Matthew Sigel, Head of Digital Assets Research at VanEck, share how to DYOR when investing in crypto.

Taxonomy of Crypto Assets

Matthew states that from an end market perspective, the crypto assets can be categorized into three main markets: finance (worth $3 trillion), tech infrastructure (worth $500 billion), and an emerging metaverse market (potentially worth $2 trillion in 5-10 years).

He also points out various categories of crypto assets, such as consensus layer, execution layer, app-specific blockchains, and decentralized finance (DeFi), with differing characteristics like product-market fit, network effects, and cash flow.

How will MiCA regulations influence crypto? Read more to find out!

Pay Attention to Blockchains Mechanisms, Tokenomics, DAO Governance, Userships, Developer Activities, and the Whole Ecosystem

Vangelis emphasizes the difficulty of coming up with a standard analysis method to value and invest in crypto assets. These tokens are programmable and there are a lot of variables that can change the equation.

Focusing on Ethereum, Anais reminds the audience that each blockchain and protocols have different tokenomics: burn mechanisms, token supply cap, or monetary policies. She states that the burn mechanism of the blockchain, such as Ethereum and Avalanche, is a direct result of how much the network is being used.

It’s also important to see which network has the most vibrant developer activities (such as the number of commits per developer on a quarterly basis) and daily active addresses (instead of the daily number of transactions).

Anais also highlights the importance of investigating the whole ecosystem. When she analyzes Ethereum, she also takes Layer 2 protocols, such as Polygon zkEVM, into account.

Vangelis recommends considering factors such as the estimated market share in five to seven years and decentralized autonomous organizations (DAOs) governance to see how the networks are kept safe and how the rewards are distributed.

A full house at the 8th European Blockchain Convention learning about crypto analysis.

Anais thinks the first step to investing in crypto assets is to understand what you are looking for as an investor. Researching the application layer will be different from investigating a consensus layer.

She uses data platforms, such as Token Terminal, to acquire relevant data, download it, and make assumptions. However, it’s important to keep in mind that road maps change, hacks occur, and there are hard forks. She shares that she wouldn’t project anything more than 10 years ahead of time, not yet in the crypto industry.

Not sure how to DYOR? Watch this panel to learn more about investing in cryptos!

Terms and Conditions

Privacy Policy

Linkedin Twitter Youtube Instagram