The Rise of Open Finance is Still Ahead of Us

Transcript

[Music] thank you [Music] thank you [Music] um

seven years ago [Music] is it actually organic is it usable is it safe what's missing what's missing for the next step to grow and that's why [Music] thank you

[Music] ability to interact with Finance with

the tool that they develop that's the first thing Finance as we know it is not open but there is another thing it's quite limited you know because we you have one app that does many things but then if you want to have another Services it's another app instance of a provider if you want to combine two things you know it takes a lot of delay a lot of struggle to to kids combination of application you have a lot of limitation due to the regulatory to the to the technicalities of building Financial Services together it's very controlled it's very centralized and it relies on a lot of intermediaries so you have a lot of fees basically it's not efficient by Design it's not something that can scale in the usage in the same way the different candles can do

that's where defy comes if I is basically creating open finance you define a service as a protocol and then reduce different protocols you can combine them with each other it's basically money legal as we call it and that's what's great that's what hyped to me people a few years ago because now all of a sudden you don't have to ask permission of Avi for example a lending Market to build on top of them to use them you can just use them as a protocol you can build a protocol on top of it and then protocol on top of it you can combine application combine liquidity and you can do that on a Sunday without asking the permission to anyone so that's why Define starting to hypolative people and and we started to

have lots of liquidity lots of noise around it and people are thinking oh that's that's it you know like finally we have a good usage for blockchain and uh and that's good and we have many different categories you know we have stable kinds we have real world asset exchanges different strategies so we have a variety of potential usage but are we there yet liquidity road to tens of billion more than 100 billion back in the days and so many users but you know like Market Exchange price started to get down and then all of a sudden you know we think well you know if I fail you know it's not it's not very it's not very useful where are we actually using it or were we just providing liquidity to earn interest

rates because of some rewards and some protocol like was it actually a thing was it actually sustainable and organical the first thing is when you think about it um if I is extremely volatile not just in the prices of the assets but for example in the relativity of the interest rates and if it's very volatile it makes it very difficulty practicable imagine you want to take a loan to to buy something then if that interest rate goes from a few percent to 80 in a day it could it create uncontrolled costs imagine you're trying to generate revenue is that and you have a lot of volatility you have a lot of uncertainty over your revenues basically it's it's interesting if you have another

alternative and so that's kind of the the stage where we are aware in defy where it's still very wild and very unpredictable so you have to be at the Gen you have to navigate through the things and you know that's just about the volatility but we all know the uncertainty and the risk that is attached to those protocols because it's not even you know that you're expecting your interest to be stable but also the same time you expect your money still to be there in a few months which is not always the case interest rate derivatives can sound very Niche but it's actually the biggest Market in finance interest interest rates is the time value of money and it's the basis of finances the price of liquidity it's what helps you

regulate liquidity and cost a very different different levels interest rate derivatives their tools instruments you know that can be allowed to speculate on the version of interest rate but also to Edge your risk against the variation they can be options swaps future you know we hear those terms um but that's what is making a financial ecosystem basically practicable that's heavily used in thread five by companies by by retail without not even knowing it it's it's what helps you managing your cash flow your cost revenues and that's that's where um almost three years ago we started building Spectra before called API

basically creating different instruments like Bond like a yield Market where you can trade interest rates and then building other product on top like fixed rate borrowing and lending basically to create a practical Financial environment to help defy grow and if I be becoming more mature um so we started two years ago and um I mentioned it's a it's a middleware in the sense that and that's the beauty of D5 you have a layer of protocols doing first of all lending exchange that kind of thing and then on top of it you can also protocol like Spectra that is enabling you to to basically supercharge your previous usage so now you can come

back to your favorite lending and boring protocol that had the best trades that's viable and you can have fixed ones so you can say I want to borrow that amount for that amount of time I cannot fixed rates generate revenues to that activity I can know my incomes in advance um and that's that's the first step it's making the file efficient another step is that it's not just about having all those combination of protocols that helps you having more and more usage but it's also redefining the way we build Finance tools and services I will take the example of Bones who is familiar with the terms of bonds in traditional Finance

okay a lot of people um so bones basically it's a it's a fixed income instrument and it basically represents a loan between a lender and a borrower and the principle will be exchanged at a maturity date so to put it simply let's say that I say I have uh when is when is um and I'm letting you one is I mean at least you will pay me I will pay you a nice at low like in six months uh we actually had kind of the situation when we had the in-stake queue and taking queue of a stake East that was uh not available yet to use and so people were buying a steak is at a price less than the East because they would speculate that eventually they would be

able to get a real Ace not just a representation of a easy State at the particular date so people were buying dudes at for example 0.98 is and because they were new they they respected anything that they would be able to get near East back and so they couldn't know actually if they got if they get their ease back or match they would have earned buying an asset at a discount bonds are extremely used in threadfy for example if you take a businesses like Tesla they have a lot of cash because basically you give them dollars and they give you a presentation of a dollar so they they use their they Reserve to make profits out of it so they buy bones they buy bones of dollars basically and for example short-terms maturity and so so

basically billion dollar for less than a dollar they wait a bit then they are able to to claim that dollar back because of the morning expire and they make a lot of profit from it it's the basis of cash flow Management in many institutions and that's uh that's a very cool tool but we here actually used bond to generate profit and that's the thing because trotify is building all the tools but you know you have to have access to those uh it's complicated and bonds can be issued by different institutions uh you cannot make a bomb by yourself right now if you need to create that instrument and that's where defy comes into play because now you can create a pool for example with Spectra and any kind of

field generation strategy you can create bonds with bones and coupons so you can trade the principal trade the interest rate and that's just a few clicks and everyone can do it from their computer on a Sunday evening and and from now a complex I mean simple and basic instrument actually that's a lot of new new about can be used by all everyone all in every one of you and that's the that's the biggest thing of like uh that the defy brings here is it's not only that composibility but it's making those instruments extremely accessible and you can build with that and so that's that's the first point um another thing is that we are kind of in a turning point because people are

speculating a lot about uh you know will defy be used the fact that you know it's just Define people are giving money to uh to defy like a liquidity provider and it's just a closed Circle but we're kind of exactly at the time where now we're even bringing a traditional Finance asset instruments on chain and we are trading with this so not only you can create Define native bonds because now you have a strategy that generate here then you create bonds with that but now you can actually trade them against uh traditional Finance Bond like treasury bill like a real estate uh real estate things and that's making that supercharger like Finance experience and creates much more possibility from there

um and that's I think today where we are and uh so not only we make Finance efficient we make finals open but then from the combination of all these things we create something that was not about to be done before by creating all those instruments I'm saying thank you if you have any questions I'll be very happy to answer them [Applause] [Music] foreign

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