CVA Podcast: Ilya Volkov, YouHodler

Transcript

[Music] hello hello this is your host trash ahmed ready to kick off another bite size episode of the crypto valley association podcast now let's discover together the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today we are joined by ilia volkov ceo and co-founder of uhodler a fintech platform focused on crypto backed lending with fiat crypto and stable coin loans as well as high yield crypto saving accounts so let's dive straight into the world of crypto lending hey yeah how how is it going yeah hi shadows uh how are you i'm good

i'm good it's it's rather snowy here in switzerland so it's it's great uh great to be here today and i'm really looking forward to to getting uh further into this uh into this episode maybe to start off with you can share with us your first blockchain related experience yeah perfect i actually have some interesting and funny story during the early days of bitcoin and during the global crisis of 2008 probably remember one of this global crisis so i founded a barter startup called b2b open partner system and the idea was to help businesses to deal with you know a lack of liquidity there was a system that helped to build chains of different exchanges of different

products and services without payments in traditional fiat currencies so instead we implemented our digital currency called b2b coin was pretty much similar to cryptocurrencies so again it was early early days of uh crypto and uh i think just just a few people knew about bitcoin and cryptocurrencies uh those days so but but it was our first touch of this space and actually we failed with this startup because you know our system was limited by number of participants and actually it was uh some kind of a closed system not like crypta uh that that basically has no borders but in any case it was our first touch stage

later i was working for the big trading firm we were providing services different trading services to trade commodities stocks currencies and we implemented it it was some kind of a test so we implemented trading with uh bitcoin and uh some other top cryptocurrency pairs and actually it was it was uh really successful so yeah so before you'll dive into blockchain i had first touched from different angle from this barter system from cashless fiat less payments and the another touch was from the trading space from broker exchange oh wow okay great and so uh now you're

the ceo of uh you hodler you co-founded the company maybe you can tell us a little bit about that initiative this this business and maybe a little bit about the name as well because it's quite cute okay yeah so you hodler it's a crypto backlining platform and we started firstly with just one product one service it was uh cryptobacclin and so the first client wasn't boarded back in 2018 so two years ago more than two years ago so and currently we have uh some number of services so we still have crypto backlining one hand on the other hand we have another and we have interest accounts clipped for interest accounts

for crypto deposits so we'll be interested in crypto for crypto deposits so and in the middle we have force uh conversion from crypto to crypt and from fiat to crypto uh as well as some trading solutions trading solutions actually are built on top of our uh lending products so yeah as for the naming and branding so you know this popular word word hoddle so this word uh huddle you can see our brand name and it was actually funny because probably you know the one of the famous uh famous swiss artists uh ferdinand hodler so and um actually he was a very famous artist

here in switzerland and uh in europe and actually globally and if you will take a look into some some of uh swiss franc banknotes uh some old banknotes you can you can even find some pictures created by an hodler so yeah of course we of course we created our name just by combination of two words you and hoddle so you coddler uh but maybe just a few weeks after we created uh this brand name we found some similarities with uh ferdinand hodler's uh pictures artworks and it was you know so nice to find this kind of similarities it's it's

like something you know spiritual so it's something emotional positive and um highlighting so awesome okay that's pretty good to hear it's like yeah you hold on to dear life of your crypto right i mean it's uh it's a really cool uh yeah cool acronym there and so okay great and so maybe you can tell our audience about the key advantages of lending as people normally nowadays i mean they'll go lending with their traditional uh bank i mean credit suisse ups or something like this so maybe to tell us what would differentiate okay so actually it's totally different product if you'd like to compare crypto back landing with the banking loans because of different nature and because of different purposes

so actually there are two main use cases behind this product so first one is quite simple so if you believe in the future uh growth of your favorite investment your investment of lifetime like bitcoin for example and you don't like to sell it you you like to huddle it not hold huddle right so but at the same time uh if you need some funds for your regular payments to pay your regular bills so uh you can simply use your crypto asset as collateral and uh get a fiat loan against it so uh you can still keep pulling uh and waiting for further growth for the value of this asset at and at the same time you can use traditional

fear to pay your bills so this is the first uh use case very simple second use case uh related mostly to trading actually so you can use your crypto escalator get cash and buy more crypto so basically uh using this crypto back planning solutions you can leverage your uh position uh opposition's encrypt uh market and uh your positions with the crypto assets so yeah two two main use cases well that's great and so it's a little bit like a pro porn brokerage right so we're exactly yeah exactly kind of put like some some jewelry

and you really want to buy something quick wow okay yeah actually they're funny very funny the first license we've got in switzerland was exactly phone broke your license and you know when speaking with some lawyers and with some local experts you know very interesting to see their reaction because when they see this license they are seeing a lot of compliments because it's actually a rare license it's something you know very traditional it's something very very in some cases the traditional conservative and i would say even cozy because uh when you see this license you you are you can imagine some small shop in the

center of small city yes with some antique furniture with old guys uh in old glasses you know you know doing this classic pawn brokerage job so so we have this license because uh this activity is pretty much similar to crypto because london activity because uh in traditional market the spawn brokerage uh license and this business you could use other types of assets or even some you know things like jewelry or watch as you as you said so and get cash against it uh with crypto so using the same model you can you can

use your crypto escalator and get cash so yeah i'm guessing yeah that you're not accepting all different cryptocurrencies with within the market either right as there are some that lose the value uh quite a lot is it like the top 20 like how many um cryptocurrencies do you accept nowadays so currently you can find 15 different points and tokens in our portfolio so of course we support all major uh points and tokens and we have actually all major blockchains integrated into the platform so of course all majors plus some new and fancy tokens like we we recently implemented some defy tokens uh into the platform the main principle is

actually based uh on the market so it's just supply and demand principle yeah and integrations with exchanges so basically we need liquidity behind talking in order to provide loans in order to manage risks so yeah okay there's a very interesting part tell us more about the management of risks as the volatility in the crypto space is quite high and of course if the if the value is going up then it's not a problem but if it goes down dramatically then it could it could create uh some sort of risk right yeah yeah so the key to this question is uh in one simple term uh ltd uh loan to value so long-term value is the ratio between of the current market value

of your asset and the amount you can get against this asset in the form of the loan so this ltb parameter uh could vary from um speaking about our platform from 50 to 90 so yeah and the the idea behind is quite simple if the current market value drops into the minimum level like if we speak about 50 percent ltv if it's a two-time decrease in the in in value we have to look at that position so if you'd like to get as much cash as possible and if you would like to take your risk you can you can choose 90 on tv so if you'd like to

be more conservative if you have not so big appetite to the risk you could take like 50 the good is that you can online manage your position like for example if value of your asset is growing you can get more so even if you have some open loan and you have already chosen your initial lte ratio you can even increase it and you can get more if you'd like to reduce the level of your risk you can add collateral and you can push the ltv and risk level down so it's always possible to manage like a lot of our customers uh you know during the last couple of months uh

during this bull run bitcoin will run from 10k to almost 40k a lot of our customers simply leverage their cash positions because they took more uh fiat from there or the open close uh because the values they collateral grew uh you know a lot yes okay i see and so if there if there is a certain point of risk do you kind of do a liquidation call whereby you send kind of an email notification to this person and then they have a certain time frame in which to kind of either increase the liquidity or increase their position like like how does that kind of process of course so we're sending notifications

uh so we're sending them in advance but in advance not in terms of timing because we cannot manage the the market so we can send them in advance in terms of pricing of of every single asset so and uh we are trying to do our best to leave some space to our customers to manage uh the risk at the same time you know the good point is that if market drops no need to repay your loan so so you still have uh your cash uh that means that if you don't believe in in the positive scenario you can simply use this cash and forget about the forget about this default with the with the loan

but if you'd like to enter market uh again you can use those cash to buy more and even cheaper okay i see and so what what about if there is like a flash crash uh yeah so it's it's it's exactly about this this scenario so speaking about flash crash of course we have to liquidate positions uh but again the good point is that customer keeps his feet and it's up to him to buy more even cheaper because of flash crash or simply you know leave fiat with him and that's it okay well so it's very interesting and i'm sure like the

security side of this is very important as you're holding a decent amount of crypto assets uh within this how do you make sure that um these assets are secure yeah so it's really very important question and um so we have a big system uh as for custody so we have own system of hot worm cold storage and even we have a freezer so yeah also we integrated with a number of different exchanges in order to to manage you know positions to buy and sell in order to help our customers with crypto to crypto encrypted field conversions

so and of course we have to keep some balances on exchanges in order to to uh to instantly to be able to instantly operate with with the funds in different market scenarios so now we also have a ledger world solution integrated i believe you know about ledger walls it's one of the top level solutions for custody so thanks to ledger world we also have an insurance currently it's uh insurance provided by by uh lloyd's syndicate yeah with the total amount of 150 millions so yeah so we have a pretty good package provided by ledgerwood and

supporting services so this is just one part of the security topic actually so another part of security topic is is about stability the liability of the system and the protection from any kinds of hacker attacks so yeah here speaking about security and protections from any kind of hunter attacks so we have a rule and the rule is to uh execute the ready pen test penetration tests uh every quarter so and the rule is uh always use different hackers for this so again every quarter we are hiring different

kind of hackers who are trying to hack us in different levels so not just technically but also we're testing some social engineering aspects so they're trying to trick our customers from the customers their employees teammates so this rule with regular penetration testing uh helps us a lot because it's better to be hacked by by tester instead of a real hacker right and you know step by step regularly working with this kind of projects we are making our system are better and better more secure yeah i think currently we're

at a very good level of security so as for stability uh and rail reliability we are investing more and more in our infrastructure in terms of capacity of our technical you know infrastructure of course in terms of our team so we are actually we recently increased our devops team our qa team so we are paying a lot of attention to this and i think here is very important point because during the latest bull run we've seen different exchanges even big ones who had to stop their services at the peak we were not able to serve uh

such an increased traffic we were unable to to to serve this high volume of requests to our engines so and that's why we decided to turn off uh some of our services we decided to sometimes uh switch to close only mode etc so and basically so uh they do not care about their customers because because they're big uh they can simply allow themselves to you know to turn off their engine for a few minutes or a few hours and and that's it so uh we're uh they don't do not care we care so because maybe if we are not so big yeah

but by but i believe that even we will be much bigger we will uh keep you know hearing stability yeah so i don't like to be like like those exchanges who can simply turn off their services so that's why we keep investing in our infrastructure and we are uh dealing with our customers on a case-by-case basis in case you know something happens in terms of stability we're carefully reviewing every single case and uh we are doing our best to provide every single customer with uh you know solution so wow wonderful that's great great to know that uh that you care and

uh that you you hodler is caring for for all of these different aspects uh security uh customer service etc and i think that's a great point uh when you discuss the stability that you just uh recently even last week uh launched in switzerland so congratulations on that yeah thank you uh yeah we finally have our swiss business up and running uh in the beginning i mentioned that now we have some number of services the back interest accounts and some trading solutions but in switzerland we started uh from just just two products first crypto back

landing and second conversion horse exchange so we can use our swiss company to exchange your fiat to crypto or crypto to fiat and of course from crypto to crypto so yeah currently we have two products here and of course many of swiss customers are asking us about interest accounts about trading solutions and we have of course we have this products in our roadmap but we still have to do our homework uh it's mostly related to some illegal steps and mostly of course related to our legal roadmap that includes getting of uh potential broker dealer or securities firm license or

probably even banking license so now we're in the process of analysis of all these opportunities and preparations for getting this license so yeah a lot of things to do yeah yeah and as soon as we will have uh progress with this legal uh steps of course we will implement more products for super sanity wow great well good luck uh with that of course and it seems like you had a very beautiful uh 2020 then amongst all this kind of covid uh 19 pandemic etc i mean how did it affect your core business oh you know in terms of business efficiency and volumes and uh

everything so of course we've got a huge push to our business so it's clear why because you know firstly of course people uh started to spend more and more time online because of sitting home working remotely etc so secondly because of um i would say significant changes on traditional markets and i'm here speaking about fear of hyperinflation for example because you know uh the printer is still printing i mean there are more and more dollars on the market so and people are afraid of inflation and even higher inflation and they are trying to find

other ways to to manage their uh savings their assets and that's why you know firstly you remember uh it was some moves for price of gold after gold it was a big push to the crypto market and actually it still continues right so that's why we we've got this incredible increase in market capitalization so still getting this and of course uh we got a lot of new customers even newbies so yeah uh i think it's it's not only about our company i think it's about entire industries so yeah and as for our company we were very well prepared because we have

distributed structure we have distributed on our team for applications so uh not so many things changed for our team actually and before uh we were working 24 7 365 days a year and now we're working 24 7 right so yeah it never stopped celia never creeped on never sleeps yeah but uh wow thank you thank you so much for that and now maybe if we if we move on to two to another side of uh kind of uh your life your professional life whereby you're also the chair of the western chapter of the crypto valley association i mean how's that maybe tell us a little bit more about that yeah of course

so uh you all know about the crypto valley association it's one of the most active and the most authoritative uh non-commercial organizations uh for blockchain and crypt in europe not only in switzerland so the association consists of some some parts including western chapter some some chapters working groups and uh so now we're speaking about western chapter so the initial idea was to focus on the development of our ecosystem and infrastructure uh in the western part of switzerland so uh but currently i would say that we have the most active and the most productive group

within the crypteval association and you know at least in my mind we're taking care not only about uh western part of switzerland but we're taking care of the region started from the center of switzerland and to the west up until the wild wild west so yeah so uh we have really great community we have great ecosystems so we have a lot of experts we have a lot of interesting ideas to to contribute to the market development and um if you'd like guys to join us even if you're located not in switzerland just feel free to join us we're very open-minded because

crypt is still a young industry and it really needs uh it really needs uh some creative approach uh it needs you know common efforts to push this forward and to uh properly integrate this industry and the the the benefits and advantage advantages of this industry to our traditional world so we are open-minded if you'd like to join open-minded creative and very active team feel free to do that so if you'd like to execute some even crazy idea um join us great i think you you just forgot to mention that it was the best chapter of the crypto valley association

it's a great uh community i can attest for it maybe a little bit biasedly as i'm part of the the chapter as well but uh definitely i can replicate a little bit what you said that uh it's a great place uh to get involved within riviera and uh well of course it's it's very inclusive to anybody around around the world so um wonderful thank you so much maybe if we start closing uh off here as we're reaching the time but as 2021 is here it's new year i mean what's your vision for the future of this whole industry maybe even past uh this year so you know first of all i always say that no need and tv shows if you work in crypto every day brings something exciting and

new right so it's really highly dynamic highly interesting industry with a lot of new things again coming every day and it was before and i think we will get even more interesting and exciting features and events and everything during the next years so as for 2020 it was a big push to the market not only in terms of volumes but also in terms of some some kind of healthy developments so we all remember the craziness around icos so i think market became uh healthy during 2019 2020 and market has already created some

really really valuable products in order to bring real values to the real world so as for 2021 i think uh these trends will continue and the most i think important point is that in line with general market growth uh we will see more and more products for real usage in the real world why because more and more traditional market players i mean from financial market joining the crypto market more and more banks are entering the markets more and more big bridges between of crypto and traditional finance are you know so we we we get more and more bridges

between traditional and then the world and again in 2021 we will i'm sure we will have more real use cases for our real life so yes wonderful yeah we can only hope so i'm sure that's the case and it was lovely uh hearing hearing from you about this lovely use case which i think is is really kind of taking that traditional uh sense of this kind of like uh porn brokerage and taking into the into a new new light so thank you so much and i mean do you have any final words for our listeners today so guys i'm very happy to work this industry so i really believe that this industry will bring a lot to

uh the entire financial market and um not only uh many people keep saying that crypto is some kind of revolution to financial market but i believe that it's not a revolution it's it's it's an evolution because we all live in real life with a lot of uh products and services that that are essential for our normal you know life like for example traditional banks with traditional banking cards so they're here we keep using them and the the purpose of crypto is not to replace traditional credit cards right the the purpose of crypto is to add more use cases

to add more utility to traditional financial services it's like with the apple pay for example right so apple pay is not replacing banking services it makes banking services more convenient to use the same with crypto so yes uh and again i i believe that our industry is is uh will bring a lot of a lot of value to traditional markets so if you're still out of crypto industry don't hesitate to join wonderful great so thank you thank you and uh if you enjoyed this conversation feel free to check out more on our website cryptovalley.swiss where we host plenty of events educational content and even provide information on how you can join our

growing community so thanks again elia for joining us thank you thank you shiraz and thank you everyone a pleasure so stay tuned stay safe and until next time in the crypto valley in switzerland bye bye