Transcript: Coinchange Awards & Predictions Show 2023

Pratik (Research Analyst and Host): All right everyone. Welcome to the first annual Coinchange Awards and Prediction Show. Uh, we have a star studded lineup of guests with us today, including Maxim, our CEO, Oleg, our CTO, Vadim, our Head of DeFi. Uh, Jerome, Head of Research, and Serge, Head of Partnerships. Thank you all for joining.

Maxim (CEO): Thanks for having us.

Pleasure to be on.

Pratik (Research Analyst and Host): Awesome. The format is going to be, I'll throw a question on the screen, uh, you take the time to answer it, and then we'll discuss why each one of you chose what you chose. Okay. So some of the categories, uh, we'll be talking about are 1.Most successful blockchain company or a crypto entity, then 2. The biggest collapse of 2022, 3. An underdog company that you want to choose, 4. Your favorite crypto source for your news and 5. One big prediction for 2023. All right, so let's start with the first one. Question 1 is most successful crypto entity or blockchain and we have nexo polygon,

Maxim (CEO): Do we have to be serious about it, or can we, can we, can we, is it sarcasm or we have to be serious?

Pratik (Research Analyst and Host): Whatever you choose, uh, you'll have to justify. Okay? Be sarcastic. Okay. Most successful crypto entity or blockchain, I don't have Celcius here. for 2022, right? Or so far. So nexo, polygon, bitcoin, Ethereum, polka dot cosmos, or anything else comes to your mind? Here are the results,

Maxim (CEO): Pretty evenly. Except

Pratik (Research Analyst and Host): someone chose nexo. Who chose nexo.

Maxim (CEO): I did, chose nexo,

Oleg (CTO): whoever wanted to be sarcastic. .

Pratik (Research Analyst and Host): Exactly. Why is that?

Maxim (CEO): Yeah. listen, as I mentioned before, the call, I mean, I read the news today that, uh, their office got raid, so, uh, by the police with them coordination with the US uh, enforcement agencies.

Those guys been playing along pretty well. They're, uh, they've been trying to buy Celcius' assets. They've been trying to buy Vauld's assets. I mean, it's pretty much, I guess, uh, regular story in crypto. When you are, uh, under water or you're doing something that's not right by the law, you have to buy someone right.

And just to play it right. Buy someone bigger than you are preferably. . So, uh, yeah, I mean, we'll see for the next player buying Bank of America or JP Morgan, I guess. Uh, but, uh, they've been standing along pretty well. They published a lot of good collateral and, uh, they looked very legit and very true. I mean, I think they are still, I mean, I don't know the internal mechanics of the business or how they actually rehypothecate the assets.

Clearly they are a bank. They have a trading arm, they have a lending arm, they have a you know, um, uh, loan operations, credit operations, right? So, I mean, obviously it's a crypto bank and there's a lot about shadow banking right now that have been spoken about. And, uh, yeah, it's very hard not to be affected because all of them are, uh, very close inter-winded right, because there is no really arms length transactions, so majority of that book is commingled. and, uh, uncollateralized lending you know, starting with Three Arrows kind of affected everybody. they are playing like good guys and acting like, uh, true bank with the proper control systems and, uh, all the reserves, you know, has been there game for 2022 and that did great.

And then it seems like they misleaded everybody longer than anybody else. . So they got to get an award for that .

Pratik (Research Analyst and Host): All right, polygon. We have one person choosing Polygon.

Jerome (Head of Research): I chose, uh, polygon. I mean, uh, difficult choice between, uh, Ethereum and, uh, polygon. But I gotta say we covered them, you know, during our Q&A couple of times, uh, during the year, they have done a lot of, uh, different partnership, whether on the, on the brands on Brand adoptions, right?

Or with the Indian police station, on the bank side as well. Uh, on, you know, just community side, uh, was really exciting, uh, exciting to see, uh, all those partnership and essentially adoptions. And I mean, you can also argue that, you know, Polygon is kind of a side chain for Ethereum. So, you know, anything that, you know, goes onto Polygon, you know, is also benefiting, you know, Ethereum in some ways.

Pratik (Research Analyst and Host): So that's a good point. That's, that's my view.

Maxim (CEO): Can I ask you a question? I mean, listen, so I was debating with someone recently, I mean, they (Polygon) definitely have the best partnerships teams Serge, for your note, right? So they have the best partnerships teams. How does it really benefit the business? Is it just revenue?

Do they add revenue from that participation when that it's getting forked and, and set up by, I don't know, JP Morgan, uh, or Starbucks? Or do they just get awareness and trust?

Jerome (Head of Research): I think it's like awareness, trust, but also, um, I mean just, you know, adoption broadly of, uh, crypto, right? So. They just get the benefit of, you know, having all those different names, uh, building on their blockchain, right?

So ultimately, you know, it's more eyes, more people working on it, you know, regardless if, uh, obviously right, you know, JP Morgan needs to have, you know, dedicated developers. So then, you know, that's also more eyes looking at the code. So my opinion. , of course, partnership is like, yeah. Marketing, right? But then ultimately there's use cases behind it.

You know, the example of JP Morgan that we covered on the Q&A was very interesting, and it's like pretty much, you know, the next step in the institutional, um, institutional adoption of DeFi. So that, that we also covered.

Pratik (Research Analyst and Host): I think the other thing with Polygon is they are planning to increase their validators from a hundred.

Right now it's capped at 100 validators. Uh, they said they will increase it to 1000 or something and uh, these institutional players are going to participate on Polygon chain as validators. So then they would end up buying MATIC and the whole ecosystem adoption increases. So that's another thing they're targeting.

Got it. Okay. Thanks cool. Uh, Ethereum, who two people chose Ethereum. Who chose Oleg. Yeah. And Vadim. All right. Perfect. Okay. Oleg go ahead

Maxim (CEO): Grownups in the grownups in the room.

Oleg (CTO): Well, it's a boring choice. I know. And before Vadim provides a true insight, I'll provide the surface one. It's a, it's a boring choice, but you know. It has the, the switch to, uh, to the future of Ethereum has occurred this year and, uh, it has gone off without any major problems. Uh, so as far as the impact to the market, to the world in general of blockchain, Ethereum's success of doing the switch is many orders of magnitude bigger than, than any other success story.

Right? And, and the, the, the transaction costs have, have dropped by an order of magnitude and so on. So it definitely opens up a lot of new possibilities. And plus I saw Vitalik Buterin, uh, live, uh, you know, 50 meters away from him on stage on 2022. So that was, you know, part of the success.

Maxim (CEO): nice. And he's from Toronto.

Just like, just like you .

Oleg (CTO): He lives in our area actually.

Maxim (CEO): So yes, he lives in your area. Here you go. It's greater definite choice. And you see, there's no bitcoin maxis in the group. Fortunately, unfortunately, I don't know. Nobody chose Bitcoin, right? That is interesting.

Serge (Head of Partnerships): Oh, I did.

Maxim (CEO): Oh, you did? Oh, that's good. That's good.

That's good. Okay. So I guess Vadim is gonna continue on the Ethereum right? First?

Pratik (Research Analyst and Host): Yes, Vadim Go ahead.

Vadim (Head of DeFi): Yeah. Very simple. I mean, if talking technically, uh, then Ethereum Foundation, it's, it's the strongest , team of, uh, professionals that are not developing something, but like the, the enabling the development for others.

 The Ethereum Foundation or other projects that are connected to Ethereum Foundation, the, it's, it's fantastic. I'm talking about this like zero knowledge proofs, zkSNARKS and and that change, um, from, uh, proof of work to proof of stake. That, um, that the, the Ethereum is the platform that will enable others protocol developers, guys like us, to develop something really crazy and, uh, innovative and uh, uh, and fantastic.

Pratik (Research Analyst and Host): Great. And Serge, why Bitcoin?

Serge (Head of Partnerships): I agree with all of you cuz I was choosing between Ethereum, polygon and uh, Polkadot cause all those blockchains, you know, they're showing, uh, great performance in, you know, in terms of increasing the amount of, uh, products built on them, uh, uh, layer 2 solutions interoperability, bridging between, between each other and lots of things that they're offering to currently to the customers and. Uh, users. But, uh, in the end of the day, uh, Bitcoin is the father. He is, uh, the godfather of, of, of the whole crypto theme. And I think in this way I'm just showing my respect to the Bitcoin cuz this is the main thing that helps. In adoption, you know, uh, lots of funds were investing, uh, in Bitcoin first, I guess, uh, last year.

And, uh, they felt like this is a golden standard for the whole crypto industry, though it's, it's, uh, four times lower than it was, uh, at the highest, uh, level last year. But still, so this is my expression of the respect to the Bitcoin. And because this is the, you know,

Maxim (CEO): the respect to the respect to the Godfather , yes.

But yeah, I, I would listen, I, I'm surprised they're still holding at 15 compared to what we went through this year. So it shows the resilience of Bitcoin and the, uh, belief of the community and the asset and the value. Exactly. Right. And obviously it's the, the only true source of, uh, kind of, uh, value that still holds in crypto.

Cause a lot of, uh, skepticism around other coins. Right. Even Ethereum. So, but, uh, very little skepticism about Bitcoin. People already kind of, okay, it's a Gold, it's a digital gold, right? There is value behind it. So I think it's unshakable right now, ingrained into the understanding of financial market, that there is some value behind it while Solana, you see was hyping, hyping very well.

And then at the good community, great events, you know, good developers and when the trust is lost cause of one guy. It turns around and everybody's like, what is Solana? Is there any value fucking behind it? , right? That's it. This point is not gonna happen. That's, that's, that's the big point. That's, I think the big, uh, it deserves a lot of value because of that, uh, market, uh, test this year.

Pratik (Research Analyst and Host): Great picks everyone. I think we have a good, diverse group of choices for blockchains and diverse group of opinions. That's great.

Speaking of Fuckups, one person fucked up. The next question is, what was the biggest fuck up of 2022?

Serge (Head of Partnerships): This is obvious .

Jerome (Head of Research): Don't need to mention it. I think, oh, everyone pretty, pretty much knows.

Pratik (Research Analyst and Host): Here's the question. The biggest fuck up of 2022 .

Serge (Head of Partnerships): Like FTX or Sam Bankman. Yeah, that's the choice. . Yeah.

Pratik (Research Analyst and Host): Well we might have other, we have someone saying other. So let's wait. Let's choose the answer.

Two options are FTX or other.

and here are the, . So who chose other, Alright. Max . Go ahead.

Maxim (CEO): I, I did him. What's the other? Uh, the other, I, I, no, no, I think the other is, uh, pretty clear. I mean, it's a Terra, right? So everything started with Terra. Nothing started with FTX. So for me, it was pretty clear that Terra was, uh, at the, at the precipice of all the domino that fell, right? It was so large, so big. So, uh, mis engineered, I guess from the financial standpoint. Right. Uh, we can guess what happened there. Whoever wanted to take advantage of it, or just circumstances of the market or, you know, the market always wins. So, uh, somebody was hungry for profit and, uh, decided to, to make the profit.

We don't know. But , if we talk about the fuckups, I think, uh, there was a Terra that actually took down all those players who were greedy for yield and allocated too large of their book into the, uh, hypothetical, yield platform, right? Yield mechanism. So Terra is, uh, Celsius was there, you know, uh, , even players like Jump, right?

And many others professional players were participants and, uh, experienced some loss. So I think that was the precipice of everything that happened, uh, going forward. So, uh, that's my point.

Jerome (Head of Research): If I, if I chime in, uh, and, and support that, I would say, you know, uh, I voted for FTX-Alameda. But, I mean, if we compare, you know, the orders of magnitude, we can argue like Terra was, you know, higher, right?

 It was like, like engineered that way, right? Everyone knew, you know, was actually saying that it's mis engineered, right? There's, you know, something that, you know, doesn't clock round in, in Terra and a lot of people actually warning, right? Um, . Then on the other hand, FTX in my opinion, is much more, uh, important because a big company like that, you know, in the billion worth, right?

Not a, you know, crypto company, DAO and so on, a company that should be registered and so on. When you get, when you get this huge, you should be having all your, you know, security processes, accounting processes in place, right? And, investors that invest in you should at least look into, you know, those processes.

And if you don't have them and you are not able to show that, you know, you have them in place, then you know you should not be having this kind of valuation. Right. So in the first place, , I'm saying, is the biggest fuck up because nobody actually, has done proper due diligence

Maxim (CEO): I think from your standpoint Terra also had some good investors Terra also had some good backing. I think there was a lot of, A lot of capital mismanagement. There was a lot of FOMO, yeah. Right. So a lot of investors just follow on if you have a good lead. So one person you need to persuade is one lead

and even this guy.

What's his name? Uh, Sam Bankrun Fraud. Right. Uh, had knowledge that he was playing the media. He was playing the perception he was playing the game of, uh, visual perception from the investors playing like, uh, age of Legends, you know, when he's meeting Sequoia in their office, not giving a shit about any money, saying, I have a lot, you know, I don't need your money.

Like, uh, paying the journalists, making sure there is good coverage, you know? Very, very sophisticated, uh, perception manipulation. So a lot of that, uh, when there's abundance of cash, when people need to deploy and people bet on the winner, they're like, who the fuck is gonna win? And crypto, crypto is gonna stay.

Nobody doubts, crypto's gonna stay. Who the fuck is gonna win? Look at this guy. He's 21, whatever. I dunno. 25, right? He's a wizard. He made fortune, billions trading arbitrage. That's Alameda is just trading money. Everybody was thinking that, like we were thinking that, right? Like internally, look at those guys.

They must be like fucking swimming in cash every day in Bahamas, right? And they're a swimming pool. And then FTX is really a good success story. I mean, I just recently I read, I mean, uh, it was a popup, I think somewhere that they had a fractional, uh, stock, uh, trading. Right? First, first crypto exchange who offered fractional stock trading, right?

They had a lot of innovation. They had good API. They had good engineers. They had probably good, good technology, culture, I would say, in the business maybe, right? So, I don't know ter internal mechanics, but it, it had a perception and some substance to prove that they can win the market and then they can be the one that's gonna lead.

So people double down. They're like, we, we can't miss. We better double down on the winner and they choose the winner in their has cause of the perception and the progress that they were making. So a lot of DD is just, was secondary. There's like, I want in, I want in, I'm closing in two weeks. You're in or you're out.

That's it. No DD you know we have Sequoia. That's it. And they're like, okay, Sequoia's there. Well, we have Paradigm. Paradigm is there. They call Sequoia, they call Paradigm. Yes. We're investing fine. Like Oleg is investing. I know he's a great CTO, so he is a great, he did due diligence. I am in you know, well, fine.

Oleg (CTO): I, I think there's a difference between, uh, uh, failure and a fuckup. I mean, maybe it's nuance, but there is a difference. To me, Terra is more of a failure. While FTX was so mismanaged and deliberately that, that it was more of a fuck up.

Maxim (CEO): Um, yeah, listen, I'm not, I'm not, I'm not, uh, whitewashing his reputation or putting him on the fucking pedestal the guy fucked up.

Right. And he misleaded, he actually, I think, looks like committed a lot of fraud. Right. Did a lot of fraudulent activity. . But what Jerome is saying that the investors, uh, were the catalyst for that. Providing proof, social proof to them. To get the, uh, market share.

Oleg (CTO): Yeah, well investors didn't, the investors didn't make it fuck up. I think it's mostly, even, even like paying for good coverage and political donations. I think all that's icing on the cake. It's the fact that internally there was no just regular, proper, very boring procedures followed to run the company.

Right? And that's where the, the word fuck up is, is you know, really shines, you know, it's easy to do, it should have been done. It just wasn't done cuz they didn't.

Maxim (CEO): Yeah, grow too fast, too big. I think same happened to Celsius as well. I mean, I was talking to one guy, senior guy from Celsius, and he said they managed their positions in DeFi, manually moving into Terra through the bridges, into LP pools manually.

They had no execution. Some of it, they contracted out to the external execution, already provided them a highway as a service, pretty much, and they had some data automation, but they grew so fast, so big that he managed 6 billion. Manually with a bunch of traders, right? Because there was no sophisticated execution infrastructure in place.

Cause they grew so fast, right? You can't keep up. Like same with FTX and QuickBooks. I think that's how they started with QuickBooks and then they were growing so fast and building internally all those performance treasury accounting that they just couldn't switch. Right? And then at the time when they're like 30 billion business, they're still in QuickBooks.

Right? So I think it's just grow too quick, too fast and cut a lot of corners as you were saying not making, uh, proper controls.

Pratik (Research Analyst and Host): So I guess we can, we can conclude that the biggest, uh, mismanagement or failed experiment of 2022 was Terra, which exposed one of the biggest fuckups, which was FTX.

So speaking of, uh, fuckups, which resulted in blowups, a lot of companies filed for bankruptcy in 2022, and those that didn't, we'll call them underdog.

Some of them could be blockchains, some of them could be companies. So the next question is, which one would you choose as the underdog winner for 2022? You have three options. Coinchange, which survived 2022, like a Champ, MakerDAO, which was another stablecoin and Solana blockchain, which is 95% down from, its all-time high, but the developer activity is still going strong.

Your pick for the underdog company of 2022

Maxim (CEO): What about the US economy?

Serge (Head of Partnerships): what about Russian economy? In

spite of the predictions,

All

right. Then definitely not Solana. Projects and, uh, services are migrating from Solana

Pratik (Research Analyst and Host): all right, so we have three out of five people choose Coinchange.

Maxim (CEO): who, who, who chose Solana? No. Hold on, hold on. Who chose Solana? Question number one.

Pratik (Research Analyst and Host): Who chose?

Vadim (Head of DeFi): All right. Yeah. All right. Because I mean, it's the, it's the same story as with the Terra. Okay. So, uh, once again, uh, it's the, the, it's the professional team of developers who are doing great thing. Solana is a great team, right? There is some, some criticism on Solana in connection with a, like a true. , uh, distributed, blockchain or actually AWS based blockchain, right?

But, all the metrics for the blockchain , are really like, outstanding. Great. And, , the same was for Terra. Actually. Terra was very, very good blockchain, right? when, Terra Crashed, when something crazy happens for the first time, no one is prepared. So everyone is just, you know, becoming crazy.

But second time everyone is adapted, right? So when second time, same story happens, I mean, people just quietly, you know, leave, drop, the whole project. uh, for Solana, when that fight happened to, to FTX-Alameda, and, uh, SBF , was, uh, the roots of, uh, of Solana of Serum project on Solana.

So, uh, the, uh, the amount of, uh, of the pressure and negative, um, impressions on what's going on in Solana, it was like enormous. , the fact that they've survived. I mean, it's really, it's really, very interesting to see in some kind of phenomenon.

Serge (Head of Partnerships): Thank you for your answer. I thought you might have bought some, uh, STEPN sneakers on, on its all time high and, you know, still trying to

Maxim (CEO): talk in his own book, talking his own book.

So why Coinchange? Who, who chose Coinchange?

Jerome (Head of Research): Everybody else, right?

Pratik (Research Analyst and Host): Yeah. Well, Oleg, what's your answer? You, you didn't get a chance to choose

Oleg (CTO): Well, out of the choices there, I would've chosen Coinchange. I can't really speak too much about the other ones, but, uh, Coinchange is, surviving despite of everything, is pivoting despite of everything.

Is bringing on people, uh, and, uh, making, uh, other people, uh, interested in, in what we're doing, you know? thanks a lot to, to connections, Maxim's connections and bringing in new people and motivating them and so on. But, uh, the, the brand seems to, you know, not attract direct investment, but is re is recognized when we talk, for example, when we talk in meetings with other companies, they treat us as, as, as a larger company, as a company with, with, with resources, with, uh, with a market presence and so on.

I mean, you know, who knows? Maybe the companies that we feel are big are also sort of playing the same game. But, but it's, it's that, it's that position that I think Will, will, will help us a lot.

Maxim (CEO): We just had a call today with EY, uh, me and Jerome. I was on the call. Pratik joined as well later on, and, uh, we're joining right now.

Uh, Jerome can talk a little bit more about that, but, uh, Ethereum Alliance, right, and the risk, uh, foundation. And, uh, those guys like, it's so great. So great that you were joining. I mean, we're, you're, you're welcome to join. We're gonna make sure you join. Uh, we want your input. Uh, when we spoke about the interoperability research, right now the Pratik is putting together with Consensys, right?

And we did some other research before was Fireblocks and the other names, right? They're like, listen, it's great. So the perception of the business, like you guys Coinchange, right? Wow. You know, your stuff, you participate, you partner with the bigger other agencies as well and business and they generate valuable content.

So the perception I felt that was you Ernst and Young is like, wow, we need you guys, right? I'm like, holy shit. This is like, yeah. That, that's, that's kind of a good, good validation, right? This is for real.

So, and then in terms of the investment, you know, investment comes in gold, right? It's whole perception of the market, right?

The FTX got a lot of money. At a certain point of time cause there was a good perception of the market, good perception of the founder and the business and those, everything was in favor. Right? We're not really pushing too hard to get the investment. I mean, we're not really on the road show and buying politicians and journalists right now, or naming stadiums, right?

So we're early on, we're a small business. There's a lot to do. There's a lot to make and there's a long way forward. And, uh, we hope we're not gonna do the same mistakes as the other guys did this year. Right? So we're growing more organically right now. And learning through the process of everybody else in this, uh, environment.

Right? That's, uh, and I'm very, I mean, also I think it's great that we survived been smart about the risk. Especially in our business, DeFi investment business, uh, you have to make sure that you don't only understand the risk. You also understand the alpha, the benefits of that risk, right. And how to manage it properly.

And with the overnight interest product, when we crystallize earnings daily, uh, we'll have have a liability that we accrue to the customers, right? And the, the earn that we generate right on the other side in DeFi. So we have to be. I have to have pretty good systems internally to have performance tracking, treasury tracking, account management, uh, building good we're not growing too fast. I mean, we're not really growing as mushrooms today in this market. It's very hard to grow fast. Nobody wants, very few people want, uh, centralized, uh, stablecoin yield in Defi, right? So that's why we're API business. We use the other partners and their relationships. That's why Vadim and the team in DeFi are working on the non -custodial product. So you don't need to trust Max or Coinchange or Oleg or Pratik, you can just plug in your own wallet and earn utilizing the same quality system when it's off chain, on chain, off chain data, computation signals on chain execution. So yeah, I think we're doing the right things. I mean, it seems like we're doing the right things.

Like we don't know. We'll look from our own perspective, right? It's always kind of, you always miss some gaps. But, uh, the team is great and hopefully we can, uh, resist all the pressure from the market and, uh, and be able to provide, uh, the value to our customers. That's number one.

Jerome (Head of Research): If I, if I may add a one, one quick note on that.

Um, I, I think of Coinchange as the underdog because we obviously, you know, survived and then as you know, this purge happened. Hopefully we emerge as, you know, one of the survivors. We actually get, you know, highlighted as one of the survivors and almost like, you know, we've survived. Almost like in a stealth mode, but also we have this huge infrastructure that has been created.

We also have, a lot of, frameworks created as well. And, both either on the back end, as well, you know, with, uh, what Oleg is doing, which, hopefully as we turn more, open with the non-custodial, um, product, we start to share more of this information . Hopefully we get more organized, because we definitely, do not have to shy away I think from, you know, other big names out there.

Um, because what we, what we've created so far I think is really worth, uh, worth.

Serge (Head of Partnerships): Can I add my ...? Yeah. My piece as well. Uh, as I'm talking mostly as a, as a marketing lead to the people who are not really like a crypto native and crypto savvy. Uh, they're really impressed by some facts that I'm usually mentioning during the conversations.

Uh, first one is that we are completely market neutral, which cuz you know, people, they have this feeling that if, uh, Bitcoin is going up, uh, everyone is, uh, you know, having a success and a party behind on the boat. And if, uh, we are, you know, facing the crypto winter or some, uh, some bear market, uh, we supposed to be dead.

And, uh, when I'm mentioning that we are. We're not connected to market movements at all. Like people are really, really impressed. And this, this impressed me as well. Like we still are able to earn yield for our customers. Uh, doesn't matter whether Bitcoin is going up or down. And, uh, I think this is our, like a real unique selling point, uh, from the marketing perspective.

And another thing is that we're talking a lot that we are survivors, that we have survived this tough year. But, uh, other than that, we also managed to create additional products, uh, to our main product. Uh, from the last year, we have managed, you know, not just to improve our yield strategies, but build up a, a white label solution yield as a service. And, uh, now, uh, we're working on some other products that's gonna be implemented and, uh, presented, uh, later this year. So I think, uh, this is not about the surviving, but about developing in a really, like tough and hot conditions that we're facing.

Pratik (Research Analyst and Host): Great picks everyone. I guess from a technical standpoint, Vadim is, uh, choosing a blockchain as a, as an underdog, and from a business standpoint, uh, we can agree Coinchange handled it really well.

So, moving on to fourth question, we have five. This one is, next one is fourth. Your favorite crypto source for 2022.

Which one is your favorite crypto source for 2022?

Maxim (CEO): I don't see any options. Right. Question. It's you Pratik, so, and the options, options. Is there any, uh, options? I don't see anything on my screen.

Pratik (Research Analyst and Host): It's not allowing me to launch. So technical failure, just tell us what are the options? Just uh, the options are Twitter, which is your CT, crypto Twitter, CoinDesk, Cointelegraph, KBW Crypto Newsletter, which is by Paul McCaffrey from KBW, Coinchange monthly DeFi Research News, Messari, The Block or anything else?

Your favorite crypto news source of 2022.

Maxim (CEO): Yeah, we can just put it in the chat, I guess, right? So

Pratik (Research Analyst and Host): yeah, you can put it in the chat.

All right, so we have Crypto Twitter,

WorkLog and team members, Defiant. Okay. Newsletter.

Maxim (CEO): Okay. Serge didn't respond, I guess.

Serge (Head of Partnerships): Uh, well, it's quite challenging cause , I don't have like a single, uh, source of, news and information related to crypto in my life. You know, organizing all this, , crypto related information streams, uh, , can be very challenging and, you know, very laborous process and, uh,, To streamline this, I have created some kind of a system for myself.

And, , it consists of various information sources, uh, based on telegram channels. So it allows me to do the fact checking and, uh, receive information from different sources, which I trust. Especially some information that, uh, I can use later. There's some kind of a system built in Telegram that I, I, I, you know, I have created and I follow

Pratik (Research Analyst and Host): right on Max, uh, crypto Twitter.

Maxim (CEO): Yeah, I, I was a Twitter user since 2011. I found out, but I never actually used Twitter until last year. So in 2022, I started using more heavily and started kind of, uh, deep, deep diving into understanding how to try to use it. There's a lot of, there's a lot of thought, there's a lot of misinformation, there's a lot of, uh, , I guess, uh, non fact checking information as well.

Right? So not a single source for me as well. I like our newsletters. I mean, uh, it's a pretty well comprised documents, but, uh, twitter kind of try now communicate more, right? Put our name out. Put my opinion out there, not been shy. , also, uh, I see some responses, right? So also there's, when I participate, I see the other point of view, like just recently I was talking to someone on Twitter about the DeFi and they were like talking about the Bitcoin. So it was a Bitcoin maxi. He was like all against the DeFi un-regulated, pump and dump for the retail. You guys don't do anything. You just utilize, uh, your knowledge of market and then dump all these coins on retail and uh, you are all scam. And I was kinda proposing the other way, right and explaining why not. So it's sometimes there is interesting, right?

The conversation happen and, uh, I think there is a lot of insights. So like, let's say with the DCG and Gemini, I, you see the thread and you go to the comments and you can read some people familiar with the, with them, uh, inside information. Uh, usually reveal it through Twitter as well. , uh, or at least snippets of that so you can see different opinions.

And uh, again, I'm in the not a perfect place cause a lot of people are very similarly minded who use Twitter. Uh, like let's say Oleg is not gonna use Twitter, right? As an active user. He might really check it sometimes, but, uh, I think Vadim as well won't be really on Twitter and following and reading and spending his time there.

So like there's a certain type of people who do. and you get like a single minded, few viewpoints. But in crypto it's been pretty, uh, pretty deep in cryptos. You've seen crypto Twitter, right? Uh, like Reddit. We don't, we haven't mentioned Reddit. We haven't mentioned it. Uh, yeah. Discord. So yeah, discord. Yeah. So for me, uh, that's why I just like communication and, uh, I like it's a very short, I have a very short attention span.

ADHD type, uh uh, I can read a book for half an hour, for one hour, but I cannot read news for longer. So I usually, because of my attention span, I go to Twitter and you see the snippets. You'll go through a newsletter, you like something, you go deeper comments, you go a minute, you go away. So it kind of fits my personality.

Serge (Head of Partnerships): news as a, as, as just, uh, you know, something to, to, to be aware of and you end up with doom scrolling of a couple of hours.

Maxim (CEO): Yes, but I mean, to be honest, I try to, right now, I mean, uh, try to do less of it cause it doesn't really impact the business when there's something that can impact the business or can give an insight or I wanna participate and provide thoughts behind it, I do. Right. So that's why, that's why Twitter. But overall, I, I, I like, I'm not reading like international news, you know, on Twitter and trying to understand how geopolitics work through Zimbabwe, Russia, China, and US. Right.

Oleg (CTO): Well, you made an interesting point. I think that the news source, you know, there's certain quality to the news, but I think it reflects your personality.

These news sources are so different in, in just their dynamic and sources and the styles. . Um, I think they all deliver something, something similar, but it's really up to personality. Uh, one, one thing that I've, uh, heard recently is from a somebody, uh, very well educated in all kinds of technical areas, including crypto.

And I asked them what's their news source was, and uh, they said Reddit, that they get, that they really dive deep into Reddit for almost everything they need. With a little bit of a Medium now, um, you know, the Medium as a, as a company, but Reddit, I was really surprised from somebody who's extremely sort of educated, structured, and, uh, you know, likes the, uh, you know, facts and so on.

But there you go. It's personality.

Maxim (CEO): That's a good point. Good point.

Pratik (Research Analyst and Host): Vadim, can you tell us what's ForkLog and team members.

Vadim (Head of DeFi): Oh yeah, I mean, I, I use, um, a lot of telegram, um, groups and channels. Uh, so, uh, ForkLog, uh, it's also some kind of, uh, source for the crypto news, and they've got this, uh, channel.

So for me, it's quite easier to go through this channel and to read the quick news, but it's, it's all about, you know, this, um, how to say, um, quick, quick, uh, facts, quick news. . Um, there are news of different types, like new researchers or new, um, I dunno, some kind of analysis or, or anything else. And, uh, that's also kind of news, right?

But it's kind of like more deep. Um, and, uh, in this case, uh, really team members. , a lot of, um, interesting, um, news sources, articles, researches, these things go from, from our team members, from Quants, for instance, from Jerome, for instance. And I believe me, half of the news, uh, I get from Max from you who forwards me all the interesting things.

Maxim (CEO): Yeah. We have a chat. We have a chat, and, uh, we always share some news there every day.

Vadim (Head of DeFi): I'm, I'm hundred percent confident if something, you know, important happens, I'll get this from Maxim.

Maxim (CEO): I do the work. .

Pratik (Research Analyst and Host): Yes. Very interesting. Jerome, , you have chosen Defiant.

Jerome (Head of Research): Yeah, the Defiant, not sure if you guys know, know them. They're, uh, they're quite good. , I like them because, uh, of course, you know, they're, they're similar to, you know, your Coindesk and Cointelegraph, but they're less, you know, marketing. They're less, you know, they're more ruthless and they're more to the point as well.

And they don't just gloss on, you know, the pretty thing that happens on, on crypto, right. They generally deep dive. Uh, dive deep into the different project. And one of the key thing that I really like about, uh, what they've done is that they've, uh, partnered with, uh, YYC Trader and Defi Dad, and they publish a newsletter, which is called DeFi Alpha, I think.

And essentially they, uh, they provide, you know, every week or every month, every week, they provide a list of where you can basically have the highest APY out there on the different chain for different, different, uh, asset. So most, most of the time they list, you know, for stablecoin, Ethereum, Bitcoin and so on.

And, um, and they do the job of, you know, actually looking into them. You know, of course they will not list your crappy, you know, dApp, which just launched and is trying to, to scam um, so, so that's, that's in my opinion, a very good, uh, good source of, uh, information that I get.

Pratik (Research Analyst and Host): Amazing. So I, I guess, like we said, like Oleg was mentioning, it's up to, uh, different personality types to absorb different, uh, news sources.

That brings us to our final question for today, and the poll is working again. So I'll put this on the screen, which is. Your big prediction for one, big prediction for 2023, and I have a few choices here, but feel free to choose something else. The first one is the next bull market will be in 2023.

Institutional DeFi will shift from permissionless to a permissioned version. Regulations will categorize most cryptos as securities, and then that will result in prices dropping a. Binance gets wiped out. Tokenization of assets slash defi moves to layer two, secured by Bitcoin or anything else.

All right. The results are in and, okay, one of you chose next bull market 2023. I guess someone's hoping their portfolio goes up. Regulations will categorize most cryptos as securities. Okay, interesting. And then three out of five are others. All right. This should be a good discussion.

All right, so who's, who thinks bull market in 2023?

Alright Head of DeFi Vadim tell us.

Vadim (Head of DeFi): I'm an optimist, right?, what else can go wrong guys, right? So, uh, I was thinking from, from that perspective, I mean, uh, with DeFi we've seen this, uh, things with Terra in 2022. Uh, we've seen this economy slow down. Um, there, there was and there is war started, uh, between Russia and Ukraine, um, there is, um, uh, there is that FTX crash. So, uh, what else can go wrong? What, what else can influence crypto to go down? Right? I don't see any fundamental things.

Serge (Head of Partnerships): Uh, what about nuclear war?

Vadim (Head of DeFi): Uh, nuclear war. Alright. I mean, but that will be illogical and nobody will care anything.

Right. On the other side. Yeah. On, on the other side, definitely. Ethereum 2.0 will go live in March with. I mean there is kind of negative correlation between all this bond prices, which are quite high right now. Right? , I'm sure something will, uh, happen with this war so economy will kind of, kind of reshape. So, uh, I mean, I don't see any problems or fundamental things why crypto should continue, uh, move down. So, uh, and if it's not moving down, then it's moving up. That's my predictions.

Pratik (Research Analyst and Host): Fair enough. And who is predicting regulations are going to categorize cryptos as securities?

Yes.

Oleg (CTO): Um, yeah. Well, it's, it seems that, um, with so many, with so many nuclear explosions in the crypto industry, and so many casualties, especially regular people, not just institutions, I don't, just don't see for authorities to, uh, to move in, in any other direction. It might be slow, but I don't see any other direction, especially in the US

um, there's still, they still have a lot of gap. , um, you know, it's inconsistent with what one state is doing or how SEC is categorizing things. Uh, but, um, but just in terms of protection and, making sure that all of the existing, all the existing laws and regulations and, and enforcement and systems, uh, can now be used on this new asset type.

Um, it, it just, they don't have a choice. They would have to create a whole new financial world for this, and I don't think they will. I think that will slowly reign in and then the crypto would have to adjust as well in order to fit into, into this model. Right.

Maxim (CEO): Listen, I think to the point, uh, Vadim is making, uh, I mean, a little comment, right?

Uh, if you guys don't mind, uh, I think there's always something that can happen. I think we, there's a lot of things that we don't know, uh, we know that we don't know, right? So there's always, uh, I mean there, there is a concentration of power, right? In Russia and, uh, seems like there're doubling down. US is not really trying to negotiate much as well.

I mean, there's a lot of unknowns around the war, but we don't know how it's gonna continue, right? Or it's gonna settle down. Uh, Taiwan and China, right. Uh, China Polit bureau right now, and, uh, have more power than ever, right? And it also concentrated in a single person. So we don't know how this is gonna wind down, right?

So geopolitics over, Brazil just recently stormed the parliament, right? And, uh, there's a lot of unrest and, uh, I think there's a lot of, um, like our mission was originally bringing Wall Street to the main street, right? So narrowing the wealth gap, letting little guy earn. with a sophisticated, uh, asset management approach, right through a new asset class DeFi, right?

It's not for nothing because there is really b big wealth gap People have becoming richer and richer. Poor people become poorer and poorer. Right. And that's also polarizes the nation, polarizes the people, not only in the US but elsewhere as well. So I think there can be a social unrest in some countries, right?

That's boiling in, nobody knows the Russia's gonna unveil against South America where the inflation rates are off the roof. US, where there's a Trumpism, right? And some other, uh, movements. called that we Right. MAGA and so forth. Right? So there's also a big division. So, I don't know. There is a lot of, and then recession, like all the big banks right now acknowledge that the, this year is a year of recession, right?

And, uh, there's a credit crisis. There's a, a lot of, right now repos already in the secondary car market, right? People are pressed on their mortgages. Commercial real estate is sitting empty in San Francisco, 28% vacancy rate. It was 3% before covid. So there's a lot of shit going on in the world, I mean, for sure.

So is it gonna tank the crypto even more? Crypto's a risky asset. It's correlated, right? For now at least. Is it gonna tank DeFi. I mean, we don't know. Cause DeFi is kind of, you are like self-sovereign. You manage your own asset. DeFI help, like this all turmoil helps to prosper DeFi because people are like, fuck it, I'll just have my own funds.

You know? I don't trust the banks in Argentina. I don't trust the banks in the US anymore. You know, I'll just save my own funds. Right. I'll, I'll transact on stable coins and I'll, uh, swap in the DeFi and I'll use my DeFi banking. So I think it's hard to say where it's all gonna go. And obviously it's like a dim picture.

I mean, unfortunately, the years of prosperity and free cash and the last 20 years that's propelled the growth. So all this, you know, RRSP and, uh, I call those investments pension funds, I mean, is over. At least for now, I mean, looking at, Citadel, it's not if made fucking 28 billion on 56 billion under management last year.

So there are still people making good, good, good, good money who knows the markets and, uh, know how to play the markets. But in reality in general, in general, the picture is, uh, not very, not very bright. Um, so I agree it's hard to say what else can happen cause fundamental things. and there's so much uncertainty, like what else can bigger happen?

But, uh, there is still a lot of variables at play and Oleg to your point, uh, I don't know. I mean, it's also, uh, seems like right now there's a hammer already came down to crypto industry and a lot of uh, uh, especially yield platforms that getting scrutinized by enforcement. So exchanges are definitely feeling the offshore exchanges are feeling, are not feeling, uh, the love. Right? People don't trust them anymore. Uh, so the outflows are high. So, uh, is regulation gonna help? Is are people pro, pro-regulation right now in crypto in general? Is there a tendency of crypto natives and crypto businesses understanding that regulation is good?

Maybe, maybe it's kind of, uh, maybe people thinking, fuck it. And just DeFi is good, you know, DAO is good, DeFi is good. No regulation still, right? So there's, I think, different groups, but, uh, overall regulation is also gonna be tough. A hundred percent regulation is gonna come down and, uh, anybody who is quasi centralized and uh, works with the retail market, is gonna have tough time navigating through it.

So my two points,

Pratik (Research Analyst and Host): So, so what's your one big prediction then? Or, or you don't have one? It's

Maxim (CEO): my prediction. Yeah. I chose other, my prediction, uh, for the other was there's more casualties to happen right now. DCG group, right. And, um, Gemini and Genesis. Gemini market share was 4% before this happened in the US.

Right now it's 1.25%, so it's already shrinked more than half. Uh, even though custody business should not be affected kind of right, trading business should not be affected because of their earn program. It, it did affect the brand. Uh, DCG is a huge, I mean, uh, empire, right? Uh, that, uh, uh, similar to FTX that has investments all over the crypto world.

So, uh, we don't know. I mean, there's still probably. I think it's for the better. I mean, at the end of the day, there's gonna be smaller players like us who's gonna raise up, and it's really gonna be a marketplace. Like it's not gonna be very monopolistic oligopolistic , right? And, and concentrated. And everybody's not gonna know each other and deal, uh, shadow banking with each other.

More kind of the independence. Smaller businesses are gonna emerge and grow slowly, right? Are gonna be fragmented market. Uh, I think it's for the better because right now what happened is everybody was just pushing through the money through each other. Leveraging more, leveraging more and undercollateralizing right?

And, uh, rehypothecating in various ways, just through a small book and with no controls. And that's how they grew because of the bull market, right? As an empire. But I think it's a kind of whole of the empires. And then, uh, the. Uh, smaller businesses. There's a lot of businesses that are well funded. I today came across a list, like even Blockdaemon, they have 200 million that they raised Fireblocks, 900 million. So industry's not going anywhere. I mean, there are, I think 50 well, well, well funded businesses that can sustain 10 years of winter, right? Five years of winter, right? But cuz they'd already adjusted and their spend, their strategy and all that.

So the industry is coming back. I don't, I, I just don't believe it's this year. And maybe I'm wrong, I hope I'm wrong, right? Because I am, as everybody else, I'm pro uh, pro adoption and pro as adoption happens, the prices go up. So, but uh, I just don't see much of the bright light, you know, right now there is bright light at the end of the tunnel, but how far is the tunnel?

That's the question.

Pratik (Research Analyst and Host): Got it. All right.

Jerome, what's your prediction for 2022?

Oleg (CTO): Not very motivational Max, but that's okay. ? ,

Jerome (Head of Research): I chose, uh, I chose others. Uh, so I mean, my prediction is kind of, uh, we can argue a boring one. You know, your typical cycle, right? We go from those innovation cycles, the FOMO, everyone invests.

You know, a lot of people get burned and then, you know, you basically have this kind of winter, everybody starts to then understand, you know, what blockchain really is. You know, what is important, what is not, what we need to put some efforts into. And my prediction for 2023 would be, you know, we will see a lot of, uh, adoption of the money side of, you know, blockchain technology, especially on the bitcoin side.

Um, and I think pertaining specifically to Africa. So Africa right now has a lot of people actually transacting with Bitcoin and actually using the blockchain with, uh, what happened recently with Bitcoin and the taproot upgrade, right? And uh, the ways to issue stablecoin and tokens. I think, you know, next year, you know, this year we essentially see Africa, you know, really starting to shine and really starting to, to, to retake a lot of space, you know, in the cryptosphere in general, around the world.

Maxim (CEO): Very interesting points, very interesting angle.

Oleg (CTO): Well, poorer countries, I guess, um, you know, will, uh, try to use it more cause they have bigger value gap to fill. So the Africa and, and South America, central American countries

Maxim (CEO): Southeast Asia already big player, I think.

Um, yeah. What do you see?

Like also we can look at the CBDC, right? Like, uh, China launched CBDC, Russia right now is propagating, uh, internally as well to launch their own stablecoin. Uh, dollar is losing its power internationally for the trade, right? Obviously, Saudi, uh, influence from the US is the lowest level ever.

Biden can barely move and fly down to Saudi and talk to the young Prince, right? And do some deals. So Russians and the Chinese are acting pretty aggressively and getting the footprint there. So that's how US became a world reserve currency through the world trade, right. And, uh, who knows what's gonna happen.

Maybe Ray Dalio is right, maybe just another cycle, right? And US is losing its, uh, grip and, uh, stable coins and electronic payments, right? It says electronic payments right now. I mean, stable coins, right? Because I mean, uh, let's not, let's not fool ourself. Money is not under the mattress. Money is not cash.

Money is just a database Right. Entry. So, uh, but Ledger is different. Right. Ledger, Central Bank Ledger that controls the other bank ledgers that controls the retail money. Right. Or just the ledger that's distributed. Right. It's completely different systems. So, but uh, yeah. Good point. Anyways,

Pratik (Research Analyst and Host): Serge. What is your prediction for 2023?

Serge (Head of Partnerships): Yeah uh, as you Pratik know, cause we were discussing during our calls, uh, last couple of weeks I've been exploring the wonderful and bizarre world of, uh, AI tools. I was playing with GPT 3, Dall-E, uh, and other, uh, services that, uh, guys that are developing AI services, uh, offering to us.

And, uh, I'm so bloody impressed with everything it can do. Now, already in the data I have, I, you know, my expectations to the main release is really, really high. So, uh, my prediction for 2023 would be, development of, uh, any kind of artificial intelligence, technology and machine learning. Uh, I'm pretty sure they're gonna be used for like a big data forecasting or analysis, which will affect like crypto trading strategies, uh, any lending services that, that will be, uh, you know, supported by some AI, uh, strategies, uh, any kind of invest investment, uh, services that will be analyzed also. And, you know, all this, uh, risk management will be done by AI, I'm pretty sure. And, uh, any kind of automation that can, that we can think of, you know, um, Um, I do believe in AI and I think it's gonna be a trend for the next year.

Oleg (CTO): So that's interesting. So just, just uh, uh, 15 second diversion to my prediction then on what you're saying. So, you know how business cycles go, you know, you get seven years of, uh, of growth and then there's like some problems. Then there's a recession and sometimes there. , there's a big growth, and then there's a depression, right?

So, and then there's these business cycles up and down, but that's all done by humans because humans are a little slow. You know, if it takes you a minute to read the news, another five minutes to trade, you know, the accumulation of those trades, you know, takes days, weeks, months. So therefore you have normal cycles.

Now, if you just learn the history into AI, and it does it, it can repeat 10 growth, depression, uh, recession, depression cycles, probably within three months , you know, just going through the whole thing, but much faster. What else do we have to learn from them from the past, right? Like the AI, what, what can it do that we cannot teach it?

Not much. So it can just repeat the same thing, but a million times faster. ,

Maxim (CEO): I'm interested what we are building in AI and DeFi, DeFi and AI and mean sounds like a super, super mix. Vadim, are we building anything AI ML related? ML and AI is different things. I understand. But, uh,

Vadim (Head of DeFi): I mean, our genetic algorithms, our genetic algorithms for carry trade sequences, it's the, uh, it's at the core of AI

it's AI genetic algorithms. It's AI

Maxim (CEO): clearly. So, so, so we are already using to write about 'em and we are the AI of investment.

Serge (Head of Partnerships): Yeah, no doubt. I. when I'm selling Coinchange to other, like, uh, event organizers or anything else, I'm saying that we are AI based machine learning, all those fancy words, you know,

Maxim (CEO): and it's not really fairytale.

It's real. Yeah. No, you're not selling the vapors. . Okay. Pratik what about you? I mean, you, you never actually participated in any of the predictions or No, that's, that's more, what do you think? What do you think?

Pratik (Research Analyst and Host): I think Bitcoin is going to get more traction. In terms of, uh, layer two solutions. So I've been, I've been, uh, seeing a lot of VC money flowing into Bitcoin, uh, lightning network and a lot of, uh, uh, non tokenomics related projects are being built.

So there's less scope for Ponzi Nomics, less scope for failure, uh, and uh, and more technology and more infrastructure being built for the sake of utility. and I'm my 2023 betting is that we'll see more layer two activity, more payment rails, uh, being built on Bitcoin layer two network.

Maxim (CEO): You know, it would be hilarious if we look at this, uh, in January, 2024 and everybody's right.

Yeah.

Pratik (Research Analyst and Host): We have two, two opposing ones, right? We have one, uh, we have em saying, yeah, 2023 is gonna be, and uh, max is gonna saying we have a lot more pain coming up. So,

Maxim (CEO): uh, depends on the time horizon, right? Vadim is saying 2023 might be November. Right. I'm saying like the first quarter, the first two quarters is pain

Oleg (CTO): but, but Max has been the devil's advocate on almost every point here, so that's, yeah.

I'm trying to .

Pratik (Research Analyst and Host): That's good. That's good. Yeah. Okay.

Serge (Head of Partnerships): Unless some black swans will come and ruin all our predictions once again.

Maxim (CEO): Yeah, who knows? We'll look at it back in time. It's good to record that sessions like that, so you can always, you know, look back and see what you were thinking.

Pratik (Research Analyst and Host): Yeah, absolutely. This is great.

So this, this concludes, uh, this, uh, prediction show. And, I thank you all for joining and pitching in all your valuable insights. I hope the listeners and the watchers gain some insights as well. And, , we can do this again at the end of the year, beginning of next year, and circle back and see how we all did.

Sounds great. Okay, pleasure. ThanksPratik yeah. Awesome show. Thank you guys. Thank you everyone. Thank you guys. Bye-Bye. Bye.

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