And so, we have always believed that, is just one recent example, but we have always believed that decentralized governance if done right, and we have some growing pains with that. And that is why, as we start to discover more and more of these talented people and we build bigger and bigger data sets on them, I think the next step is really trying to help them succeed. $5 Trillion AUM Represented Insights into accessing DeFi opportunities in a compliant and institutional friendly way I would say that to protect decentralization, we feel that known parties and qualified parties, there has to be an eligibility and a criterion to let people into the Dao. Enzyme is a kind of DeFi operating system. And I think that they were, I do not remember the exact number, but they were probably receiving one or $2,000 of compensation a year for pretty substantial amount of work, and not saying it is a full-time job. Friederike Ernst: Why did you end up, changing your name from Mellon to enzyme? So how to strike, say the dollar value of a councils participation with the volatility we have seen over the last three four years has been really challenging. Can't make it? They have all occurred because of too much opacity. The innovations of on-chain investing and how it can protect against counterparty risk Omni is your new favorite multi-chain, mobile wallet. Friederike Ernst: Yes, back then were called Mellon. Every smart contract has some chance of breaking. Enzyme intends to fill this gap by functioning as a DeFi operating system, enabling anyone to build and scale an investment strategy that suits their needs. So, we are working on a project which is still in stealth mode, which will hopefully announce in Q4 this year, which will be pivotal to helping managers beyond just the tech but also in a much more holistic way, whether that be on the legal side, on the fundraising side, on the marketing side, everything. We have technology that works and were growing fast in terms of user adoption., In order for DeFi to really scale, she went on, we need to focus our efforts now on security and insurance. A having your own website, and being able to send that to your own network of investors. If you look at the new players coming into the market, there is hardly any, even if they are performing much better, they are often must shut down because they are not able to scale in order to cover the costs. So, there is no way to kind of just cash out in the whatever. And so, this was a good step. but we felt that it was because the parties on the council have to be known, anyone who meets the criteria is eligible to join and become a member of the council. The Uniswap decentralized exchange, for example, needs very little governance its only a contract you interact with. She holds a BS in accounting from the McIntire School of Commerce and an MBA from the Darden School at the University of Virginia. --------------------- I recently listened to the episode you recorded ages ago, it must have been late 2016 or early 2017. And they, decided to do this via enzyme, or a subset of their team at least, decided to do this via enzyme by launching across chain liquidity product on enzyme. And they have OCD personalities and just want to get it done, this is something that, again tooling could help with because it is at the moment, very manual to go back and reconcile all your accounts from the last year, mainly so that you can report to stakeholders transparently over what happened and how you spent the funds. Friederike Ernst: So basically your take on a Dao is in a way More permissioned, but basically excels at transparency, Is that a fair way of putting it? But there is a solution. Here are some of the key innovations that DeFi offers market participants. The network collects access tokens in MLN. And it becomes challenging, the more complex Defi becomes, the more types of assets and the more types of standards that we see becomes more difficult to adhere to those promises. Friederike Ernst: And what kind of decisions does the DAO make? So, with traditional financial systems if an update or an upgrade is pushed, it is usually forced on you with enzyme. So, so we try to flag on the front end which ones are 24/7 redeemable, and the way that you can guarantee to the investors that that 24/7 redeemable is there is a policy that says that this vault is not allowed to interact with any external positions, external positions being these more complicated less liquid types of positions. Friederike Ernst: And there is, also a lot to be said for having different approaches to the same problem, just to see what, because as kind of an arena for experimentation almost, I mean what we kind of see in the token holder governance projects is the rise of the protocol politician, and there is also the question of this something that we want? But dont just take our word for it. In 2022, we will continue to develop Enzyme as a DeFi operating system and offer solutions to anyone managing assets in DeFi. You already kind of alluded to this, so there is a management fee, or the management fee can be set and the performance fee can be set and so on. And we have seen a lot of interest in people using gnosis with enzyme, so that they can give full transparency and reporting to their community at periodic intervals and even in real time, be so that they can delegate trading efficiently. Conor Gilmore, Head of Growth at Avantgarde We believe the solution lies in using *more* DeFi technology, not less. And three, they can monitor and evaluate the team, and kick them out at any time if they are breaching any of the parameters that they were given. But nobody really needs to know about the trade until after the fact. But it was an interesting use case nonetheless, that we have seen withdrawn because of recent events. And there was just too much, complication and lack of clarity around the regulations. This means that the space has plenty of exciting room for growth! Tired of having a different wallet for every chain? Friederike Ernst: That sounds incredibly powerful, but also incredibly expensive to deploy. So what parameters are updateable, in the protocol? On the other side, the transparency that you enable, is that also dangerous to the vault managers. But three and a half years ago, we were not thinking about that. Friederike Ernst: I kind of understand, how the vault manager operates. It was in February 2019. ------------------- So we established a governance council consisting of both technical experts, including auditors for smart contracts, and users, she explained. Fiole extolled the blockchain as a groundbreaking technology, singling out its "trustless" quality that is, the trust is built-in through code. Shortly after the launch of our v4 Sulu, Enzyme reached a new all-time high assets-under-management of $230M with more than 1,000 unique vaults created and over 2,500 deposits. And so, we decided that we should introduce minimum participation levels and measure KPIs of various participants. The Shanghai Upgrade introduces liquid staking, allowing users to unstake their initial deposits along with all consensus layer rewards. Mona El Isa: They were a user of Enzyme, they were our largest user until recently. And when we thought about what do the users need in terms of their representation, we decided that that would be people who know what they are voting on, in terms of contract upgrades and technical decisions in general, which is what the governance really looks after. Did they go into stablecoin, or did they reduce their risk, or before if there is a big spike, I like to see if they bought volatile assets to, and it is interesting to have all that data at your fingertips. Mona El Isa: It was not easy as last time round, although last time was a huge opportunity for us because we did manage to keep building despite our tough financial situation. Back then you came on with your then co-founder, Reto Trinkler. This is something that, suits your particular risk profile and you might want to protect against, for example, assets below a certain liquidity being touched or being traded in a vault so that you know that if you redeem, because you can always have the right to redeem, you will always be able to find liquidity in the underlying assets. Do you want to have a management fee, a performance fee, entrance fee, exit fee? So that you can buy yourself as much time as possible, and they will benefit more longer term, the other thing is as stressful as it is, also do not forget to think about the opportunities around you. In keeping with decentralized values, they are not forced to upgrade. And they can also configure that, they can put a cap, because you do not want all the ETH to be drained without rebalancing the portfolio. I do not know about you because, you have probably been in this space as long as, if not longer than me, but I personally am sort of a little bit relieved by this bear market in the sense that it is kind of just bringing everybodys, bringing some sanity back again, because I feel the last year or two has been a little bit insane. A never ending chain of institutional failures Celsius, Three Arrows Capital, FTX, Alameda and others defined the crypto markets in 2022. It did become expensive to use enzyme and it did paralyze trading activity to a large degree. more information Accept. You can delegate trading to someone on your team if you are a bigger company, for example. It is another key principle around the enzyme vision is keeping this trustless relationship between investment manager and investor. With DeFi, you are the responsible person: Theres no one to look after you if things go wrong.. And that is what we want, we need people who can commit time, we need people who can contribute and add value to our stakeholders. And so, this is really, a diversification, there are the different risks you are looking at, single points of failure and custodial risk on one system, is as being the risks on the other system, you are looking at smart contract risks, primarily. Using Enzyme Smart Vaults, individuals and communities can build, scale and monetize investment strategies that employ the newest innovations in decentralized finance. We look forward to seeing you there! We had floors of operational people at the big institutions where I worked previously, but I never actually knew what they did, she said. The immobilization concept and techniques have been recognized as classic and powerful strategy for tackling such challenges (Hanefeld, Gardossi, & Magner, 2009). Some of the most exciting things weve seen in the DeFi space (all of which you can do through Enzyme, by the way) include: With Enzyme, you can easily access dozens of DeFi protocols and more than 250 digital assets from the comfort of one platform. In this roundtable, we discussed how Enzyme, Avantgarde and Agio Digital are building institutional-grade DeFi investment opportunities for a variety of institutional investors. And, his fees were very reasonable, but it just performance has been consistent and solid. So, your background is in trading, you were a Goldman Sachs star trader in your previous life. So, another change that we are implementing, we are halfway through implementing this but we are strong believers now after three and a half years of operating this, we need to kind of Divide and specialize into subgroups and delegate certain powers to certain specialists, that is something that we have already started implementing. Even when you are halfway through, usually you think, oh shoot there is a better way to do this. Something that the Angel list has done very well for venture funds for example, just does not exist for hedge funds today. Sign up to receive a copy of the webinar recording at the email address provided. We have seen some DAOs, even giving full control and blind trust to a single wallet for example, to manage things more efficiently. And just when we thought that the bear market, we were coming out of the bear market, covid hit and suddenly everything kind of collapsed again. We have the on-chain pricing, which we get from the Chain-link historical prices, and we have something that gives much more granular tick data, which is centralized, and we use Crypto Compare for that. So, we are now pricing it based off of VWAP and we revisit whereas before it was a fixed amount that was dedicated to each council member. And that is how we have always built enzyme with this in mind. We are 14, 15 people today, but in general I would say that the really key area I think of differentiation that we have compared to other governance models that I see is that it is not a token holder governance. Were seeing real usage and traction. But ironically, they were trying to move towards a much more transparent on chain process just before, everything unraveled a few weeks ago. The EY Future of Asset Management Study | EY - US Carrier-free immobilized enzymes can increase the yield of the product and the . Jean-Marc Bonnefous (Tellurian Capital Management LLP) You'll hear from: The 24/7 reporting I assume, this cannot happen on chain, you need to have a backend service somewhere that kind of runs the sub graphs that you have for people, who runs these? This helps you save money on gas fees, since these transactions are conducted as a community, rather than individually. Enzyme Finance, previously named Melon, is a decentralized protocol built on Ethereum (ETH) that allows users to create, source Friederike Ernst: That makes lots of sense, let us stick with the investor for one more second. In addition, well-known trade-offs among accessibility, usability, and scalability are on the decline. This time around its more oriented around features and usability. Mona El Isa: Enzyme - The Future of Asset Management - Scribd It is received God knows how many audits in three and a half years. Especially if their reputations are attached to it. For example, when an investor deposits money into an Enzyme vault, the vault mints an ERC-20 token share representing their underlying deposit in the vault. There is going to be huge opportunities, something that I like to bang on as an example, is if you are building something, an asset management product, in this space and you are funding the product development and the infrastructure development, in asset management, look around and see what solutions you could plug into that are plug and play like enzyme. Again, collecting that data is still a challenge and still quite manual, but DAO tooling is getting better by the day. Previously she was the lead content director for a number of annual and specialty conferences at CFA Institute, including the Fixed-Income Management Conference, the Equity Research and Valuation Conference, the Latin America Investment Conference, the Alpha and Gender Diversity Conference, and the Seminar for Global Investors, formerly known as the Financial Analysts Seminar. I would say that obviously the more granular the permissions are, the more expensive it becomes, but I suppose now that we have other deployments we have an alternative, other than Ethereum, we are sort of less concerned by that because. They called it CX Celsius, CXETH on polygon and give back to their users CXETH. Friederike Ernst: On the other side, the transparency that you enable, is that also dangerous to the vault managers. And the cool thing about that is one of the pushbacks we had from managers is, I do not like sending the enzyme link to my vault to my investors because then they get to see my competition which is kind of funny because we are trying to advocate for transparency as well. And there was just too much, complication and lack of clarity around the regulations. Maybe let us stay with the retail customer, the user for a bit. Michael Silberberg (Alt Tab Capital) One is transparency, we have seen with recent market events, what happens when there is opacity in the financial markets and the contagion impact that can happen when you do not understand the risks or the leverage or the or you cannot see through the lies that certain counterparties are telling you. You just said council and enzyme, if you look towards this path of decentralization that a lot of original Defi projects are on, enzyme is at the very spear head of that movement. And from then on they were going to decide on how the council grew from there on, we did eventually add the user representatives and we had some changes on the council. DAOs can leverage treasury management solutions that enable them to manage their funds in a more agile and efficient manner while remaining completely trustless. We have many different kinds of users, including: Unless youre thinking about becoming an asset manager, chances are you probably fall into the investor or token holder category. Then while determining her next move from a beach in Brazil, she began reading about bitcoin and became hooked on Ethereum. Avantgarde's Founder & CEO Mona El Isa has been invited to participate on the DeFi panel, alongside Harry Yeh (Managing Director at Quantum Fintech Group), Olga Feldmeier (Chairman at SMART VALOR), Pat LaVecchia (CEO at Oasis Pro Markets) and John D'Agostino (Senior Advisor at Coinbase). It's been a. 2023 CFA Institute. They were a user of Enzyme, they were our largest user until recently. Find out Our vision has always been about, related to lowering barrier to entry, democratizing access to finance, but that also it does not just come with investors, it also comes with investment managers. No, she told him. I am having a blank but anyway, Robinhood just single-handedly decided to pause trading probably because it was pressured by its largest hedge fund clients. So, it is not that we cannot provide a variety of assets but yes, we cannot provide everything because every time we add something, we have to think about the risks that this would introduce to the pricing of the vault, to the attack vectors, to the risk management policies in particular. With Enzyme, users can easily access yield with Yearn Finance, Idle Finance and Convex Finance, Lend and borrow via Aave and Compound, trade with the likes of Paraswap and 0x, and stake via Curve Finance and Uniswap. Friederike Ernst: And this is also how Avantgarde Finance is financed. Mona El Isa: I do not have aggregate data, but there was a vault manager we were looking at last year, who really has been a very kind of exceptional example, one of has done well through bear markets and bull markets. I kind of understand, how the vault manager operates. you are all very much at the forefront of decentralized governance, I think you were one of the first projects to have fully decentralized, and I want to talk about this a little bit later in the episode. All within one simple and trustless platform. Enzyme (@enzymefinance) / Twitter The asset management industry is undergoing profound change that has only been accelerated by the coronavirus pandemic. And so, we actually need something a little bit more measured and all the Mellon is paid out to the council is vested over two years, so that aligns a bit for the longer term. Enzyme is non-custodial, which means you retain access to your funds at all times. And because of the bear market situation and because we were actually caught on a pretty bad treasury management I would say, in the last bear market we decided to preserve our capital and take the opportunity to rebrand actually in the market, take an opportunity to rebrand and freshen things up a little bit as well. Enzyme enables Depositors to interact with Vaults in a way that is non-custodial and requires minimal trust between parties. But investors need to understand this risk., Fiole noted that today DeFi has $76 billion in total locked-in value and over 7,000 coins and counting listed on exchanges. So, I think the decision we had to make quite quickly was, what is the point of continuing during the bear markets? So, I mentioned this white label product that we are in beta testing right now. But as the complexity of Defi has increased over the last year or two, we have seen new types of non-fungible or illiquid positions come into play like NFTs or when you borrow on Aave or compound or when you create a CDP, you are not always getting back divisible ERC20 token which can be redeemable at all times. Mona El Isa: Well, exactly, and also without naming any protocols, a lot of token holder governance, if you go and look at the distribution of the tokens, they are typically are owned by four or five of the largest VCs that, they are very concentrated. For example, only interact with searching protocols or only interact with certain assets or not act with certain, or not trade against certain assets, not trade with certain protocols. Its no longer just about the token price.. But we have always avoided taking the shortcuts to not compromise on those promises. In DeFi, you have to assure both integrity of the protocol and investor protection, Fiole said. So, we really hope that that feeds through to investors too, because that means that they have better alternatives than whatever the three or four options are available today. what does the token do? And we have all that emitted data collected on seven different sub graphs. Register for free using the link above! It does feel ages ago since I was here, and certainly it was very different times, I was kind of less experienced founder, we got into a phase where Gavin and Uta were advisors to our company, Mellon Port that built Mellon V1, we were very close to them, still being close to them. This is big news, because our Polygon deployment means its up to 1,000x cheaper for users to create a vault. So, everywhere we have tried to think about how to preserve that trustless relationship. Ivan Herger, Head of Product at Avantgarde So, let us go back to the to the vault operator, I am putting on my vault operator hat again, so now I have created this vault and I have deployed strategies, how do I make this known to people? business technology entrepreneurship investing. So, you can imagine those same packages were worth over a million dollars. You can also have prohibition or stop losses embedded in the smart contracts. So, if you are a retail investor coming into the platform right now, it is very overwhelming, there is hundreds and thousands of vaults and sure we have filters and we have data, and we are about to roll out APIs so you can filter that data, but it is really not an experience for a retail person coming in. But, to this day we have been quite slow to roll out on other chains. Friederike Ernst: The reddit people but I do not read, I do not remember what they called themselves. And this was especially the case during, the yield parties that we saw a few months ago when a new protocol would launch and there was a yield farm that was 400% for a day or two, and you had to be quick to get in to get that 400% for the first few days, and then it would fold quite drastically and obviously we cannot move that fast. Your goal is to kind of achieve a user experience that is good enough that people are no longer willing to sacrifice on security just to kind of make it workable? Since many DAOs keep their treasuries in stablecoins, a de-peg poses a significant risk to the safety of treasuries and the perpetuity of DAOs themselves. Tags: Alpha Summit, Bitcoin, blockchain, CFA Institute Conferences, cryptoassets, Ethereum, fintech, Investment Products and Asset Classes. CFA Institute is the global, not-for-profit association of investment professionals that awards the CFA and CIPM designations. So, it had never really been done before and we wrote one of the first, proposals for how decentralized governance should look in practice and actually implemented it. For example: youre interested in digital assets and have been experimenting with various DeFi protocols. So, if you have granular permissions management on a smart contract level, how does that play out in terms of gas on Ethereum? Discover how you can build, scale and monetize an investment strategy that suits your needs.
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