EthCC 2: Juan D Mendieta

I'm gonna be giving now don't you worry it's only ten minutes and I promise I can answer any question very fast for the sake of timing so just just to give you a bit of an insight of the topic we're gonna be talking about liquidity in a tokenized world so for that matter I just want to make something very clear that I'm not gonna enter into discussion of should we use a decentralize or not the centralized system at the end of the day everything that I'm gonna focus on is it gonna be simply what is that capital infrastructure C that is needed in order to transact digital assets so it be centralized capital infrastructure decentralized capital infrastructure mix infrastructure whatever it is so that I can focus really on the topic at hand which is gonna be the liquidity on the on the assets okay so just to give you a small introduction about myself my name is Juan David I'm the CEO of a company called key rock we are a liquidity technology company that develops all kind of algorithms and systems to manage liquidity across multiple digital asset exchanges my background has been on on an algorithmic trading I work and everything that I do is under the principle that financial infrastructure and financial systems are at the end of the day the most impactful thing in people's lives and of course I believe in the tokenization of the world and that's why I decided to enter into this topic which is how do we make liquidity scale in a tokenized world where we want all of us to have hundreds of thousands of assets that are there tokenized so in that regard something that is very interesting I mean when I look at what is what is an asset and how does it transact why do people buy and sell an asset he's very interesting when when you look back and you don't think exclusively about assets as of what happened with the ICO bubble what happened with any any type of asset in the last two years if you actually look at it in a more macro perspective you realized that has been a trend that regardless of the technology has been happening already for very long time since the creation of automated trading by by Nasdaq in the 70s we have more and more type of assets that get tokenized in the sense that can be digitally credit of course at the beginning this starts with stocks we start to have bonds we start to have ETFs carbon bonds forex markets that start to get digitalize and people can trade them and the continuation of this trend of course comes into the ICO so we have utility tokens and what we are expecting is a lot more type of assets who get that liquidity grade where they can be traded in a in a digital platform what is interesting about this is to think why is this happening and it's not about blockchain or blockchain it's just the simple effect that people want their assets to be easy to transact in the sense of not costly and very fast you want to get rid of your asset or acquire assets very fast very cheap that's what everyone wants no matter what dust is and the technology that we use today enable us to do that with more type of asset which is the reason why we all believe that the tokenization of the world is the next step for for us so ultimately what that means is that if you think about the value proposition of majority of the projects that are out there in in in the tokenized world both security tokens utility tokens whatever it is at the end of the day if you are building a issuance platform an exchange platform an investor you are a factory that makes assets and you you have an incubator whatever it is at the end of the day the value proposition of everything it's liquidity why to do it this way instead of another way because they asked it requires liquidity and that's actually very interesting because you can liquidate the assets that's why I dedicated the last years of my life to try and understand that that is very specific problem because I found it at the core of what everyone in the industry was looking for so on the matter of of why liquidity and the value proposition of liquidity we we look at it on how what what's happening today and of course everyone wants their assets to be quick to transact but on the other hand what we see is that due to the inefficiency of the market there is a mismatch between between the reality of the and what people want people want them to be liquid but the reality is that we only have few assets at the top like Bitcoin or etherium or XRP which acquired that liquidity grade and even those tend to have majority of its transactions on the on the OTC market so what what has the industry been doing to solve that and of course it's a problem that a lot of people are trying trying to fix traditionally both in the traditional financial industry as well as different approaches that people have taken into into the digital asset industry we have digital systems that have been used to try to solve the problem like you you've heard of course of what is a market making and the concept of building a market the problem with majority of these of these technologies and the systems today is that there is just not transparency and they are common to cumbersome to use generally it is luxury service with a company sales a tailor-made solution for a very specific problem and it requires a lot of human interaction and that problem of a scalability makes it to be something that cannot be easily roll out in a tokenized world where we're gonna see many many assets getting tokenize so you have a we have a contradiction between how we're trying to solve liquidity and what we want as an industry in in the future and and of course that's a problem because we can just continue the way that we're going where we have a lot of small groups of people trying to tackle every specific problem time at a time where even different companies in the industry have gone on building their own in-house teams to solve liquidity problems that's generally been the trend in the in the industry and what that tells us is that basically no matter what system it is if it's not a standardized standardized and if it's if it's done by by a large company small company at the end of the day solving liquidity is nothing else than having a well thought mathematical model and I can manage risk and present prices that's what it is no matter if it's done through a reserve system like Bank or no matter if it's done through a system that gets rid of order books in exchanges well no matter if it is done through algorithmic trading at the end of the day it's just simply that it's just how do we build mathematical models that we can deploy in such a way that they make a market useful for the investors that are engaging in that market when I when I personally started to understand this and understanding that is all about that of course the next question is okay but is it is it something simple or what is the complexity behind behind this so what I started to realize of course is that all markets are not made equal and on top of that they they evolved through time and that's where the complexity of these and the reasoning why in both the traditional industry and our industry today this works in a very honest and wise way because ain't no market is similar to another market but on top of that it evolves through time and there is no even technology standards each each basically each exchange for each venue where you could trade digital assets today have a complete different way of looking at their API a different technology infrastructure different way of processing the data different functions different everything then the market a cell like a like financial psychology is very different time to time and it evolves through time very different so how do we really cope with those problems and and today I'm not here to to basically give you a solution to the problem my intention was more to come here explain a little bit of why I believe this is a problem that we should be thinking about and making a very small call to action if any one of you want to talk about or have a very interesting ideas to go over it so when it comes when it comes down to it the way that I look at it and the way that we look at it in our company it is simply put into three characteristics we need to build a model that has a capacity for transparency where everyone in the industry understands and it's being educated on how do you solve this problem and what are the steps that you should take there is self adaptability where we need to start looking at mathematical models that are not fixed into something by the other way around our feed by data and react to data towards the understanding on how to model a world how to model a market and of course it needs to be processed under ization there needs to be a way in which any liquidity system can be deployed in a matter of seconds these are the problems that we work at and at kirik we try to solve all the to three aspects of the puzzle for doing that we between many different tests and prototypes were with many different types of algorithms from liquidity systems market making systems RFQ systems optimal liquidation systems whatever it is but at the end doesn't really matter what a system does or if it's a need of a broker and Exchange founder of an IC o---- talk in the ones liquidity at the end of the day it all comes down to the same how do we make systems that are self adaptable and they provide that are transparent and everyone understands how they work and what they provide another standardized so they can very quickly deploy it through markets so that's what we work on if you guys would like to talk about it you can contact me directly we are key work and we work to solve the problem of liquidity because we strive for democratizing liquidity in the digital asset world thank you very much [Applause] very useful yeah hi so just just your your vision is it better to have a order book or something like unislope or docx is proposing like some auction mechanisms for a price discovery and for trading in the future do you see that we have let's say in the next 5-10 years where we still look at the order books or we will just you know avoid them and have just one transparent system for price discovery mechanism yeah thank you so I think I mean it's a very interesting question what I was saying at the beginning that I actually believe that no matter this is the system that we use the problem isn't doesn't go away because we stopped using all the books as a matter of fact during the last year I've been in a very close contact with the Knossos team talking about the project and if you can you can check it with them but but basically they they managed to build this whole mechanism to try to avoid the use of further books but at the end of the day their biggest problems the liquidity so an algorithm that interacts into auction system like the one of the Dodge Exchange might not work it's at all like a market making algorithm but still follows into the same criteria basically how do you build the quiddity availability of prices according to a mathematical model and how do you do that for thousands of us is very fast so it's going to be exactly the same at the end of the day is all about infrastructure is all about deployment and if it comes down to using or not using order books of course I'm a finance guy and I always believe that humans are an animal of habit and we're already used to it so it's gonna be very hard very very hard to convince people to stop using the order book because it's already very ingrained on how transaction occurs of course systems like that have their space and they might take time until they have adoption but in the meantime I I do believe that order books are something that not gonna we go away soon at all oh thank you very much [Applause]