Transforming Crypto Data Into Financial Insights for Asset Managers| Mathieu Baril & Nadia Sergejuk

[Music] all right uh today we're going to talk about unchain data and asset manager I am with Nadia the chief strategy officer of Lagoon NAD welcome thanks for being here with me today you want to introduce yourself a little bit and then I think you have something to talk about go on absolutely um let's uh let's rock and roll so yeah now background in law trafi and defi so nice smooth transition so I've seen both worlds I've seen what works what doesn't and what's in between so happy to share my insights on the topic under your kind guidance awesome I am Matthew the co-founder of Co of octave um and yeah unchain an asset manager and I'm saying asset manager but Nadia I'm going to send it to you right away because I think I should not say that so I have a very strong opinion on the matter and I would advise entire ecosystem to uh keep keep track of this one so ultimately asset managers are the the funds and entities that manage other people's assets right it's a profession that existed since almost since money existed but in the world of defi we are different so we are not asset managers we are either vulcar rators defi strategists or Risk Managers the reason for that is of course that we are not traditional financial institutions we we are not regula it we are doing things in a completely different way we quite often do things in self custodial way we do not want to use Strat terminology we do not want to associate ourselves with that so please vulcar raters Risk Managers or defly strategist so the title is changed to unchain data and V creator so let's let's start like this all right so as a V creator or strategist um you need to use data and traditional finance a lot of data is available how do you use the Unchained data to how does it work in your your uh decision making process where do you use data in in your decision so we will use data at different points right so there's just not one answer for different reason depending where you are in the cycle and all that exactly so we use data for everything from uh net assets value calculation so it's the assessment of the assets within the Vault and I'm going to stop you right there cuz net asset value nav is something that every asset manager know what it is but not a lot of actually V creator or defi strategist know what is nav and the more we kind of work with at least at octav we work with like family office and Edge Fone and and then we talk with them and they're like hey can you show us your nav and you're like your portfolio so like in defi people want to see the portfolio value but there's a a name and and that's that's interesting because there's a lot of like wording that are totally different like you said at the beginning so so let's go let's go let's take a a step back and even look at what is a vault and why do we do it so ultimately a vault is used to pull people's crypto portfolios together to do crypto portfolio allocation at scale if you have a small crypto portfolio so let's say you maybe hold 100K or 5K or 10K or $10 you cannot have the same efficiency on chain as when you pull portfolios together and allocate them efficiently under professional guidance and supervision by people who actually people are Bots who've been having a very good track record in these activities so this is why you pull the portfolios then when you pull it into a vault what you want to do is is the value of these crypto assets within the Vault and positions are they going up or are they going down so ultimately what is your performance only only up hopefully but yeah not today this is for the good vul ratus you only go up and you never lose money but this is one of the main Main and critical points both for the users and for the managers to get the right data uh on the positions within the vaults for them to assess it quantify it and show it to the users and the managers themselves because for the managers it's super important to be able to take the fees so very few managers are doing it for from the goodness of the hearts how it function function is they take a fee on the Vault so it's a performance fee it's a it's a asset fee what whatever that might be so to calculate it correctly for them and for the users they need very accurate data on their position that can be super difficult depending on your 100% so so nav thing is the first thing and I think in in crypto defi we've seen portfolio platform for quite some time but then when we go deeper where you want to want to have more information historical data and so where else so we have the nav that's the first place where else do you need on chain data as a V creator so it will very much depend on theu of the uh risk uh manager or vator uh they would want to see they would decide on the metrics that are important for them and want to put the most accurate data at any given time so it very much depends on the strategy um it would depend on on the chain or whatever else they would want to implement um yeah so also when you decide the The Vault strategies yeah and like unchain data is one kind of data you can get as a strategist but correct if I'm wrong but if you can be a sentiment Trader you have Twitter like defi is Twitter we are always there forecast are coming there there's a lot of other platform a social platform are important for Trader because they need to understand what's the sentiment what's the trend and all this so the unchain data is just one part of the strategy there's a lot of other stuff and then now we go from like showing the value and then we go from like taking decision of where you want to invest in your strategy and then after that is the the part that everyone love reporting right so how do you do your report reporting why onchain data is important for reporting reporting oh the the beast in the room um reporting is especially particularly important for people uh when they want to file taxes it's particularly important for institutional managers to into this ecosystem what if I don't do tax because I'm in the Cayman then you're out of scope actually I cannot help you no yeah I'm going to help you there I'm going to help you there but like it's of question we get because like at octav a lot of people say oh but I don't need your data I don't do my taxes or like I mean came in but the problem is if you're going to have LP you're going to have users so you're going to have to still report and reconcile all your transaction to be able to show to your investor or your user what you've done in the past and what's what's your your performance of the past therefore you need some reporting um there's a lot of reporting platform from traditional Market I won't name name but people know them there's like few of them um but they're not that good in onchain data reporting they're still struggling a lot and there's a lot of unchain uh data platform and it's still quite noisy right I would of course never advertise neither tax avoidance no evasion please everyone pay the taxes but at the same time I also know and realize that for a lot of people the tax reporting will fall on their shoulders unless they specifically ask us to provide that type of data so what we see with institutional great uh depositors is that yes they are they need and they want to put the reporting obligation on us so not enough just doing the V coration but also providing the right type of data in the right format for them to enable them to do the tax reporting because they're used to it because in traditional if you have a broking brokage account or anywhere you trade you put the ATF you whatever you do at the end of the year they send you a slip and that's it you give that to your content and finger cross but in defi you put in a vault the Vault won't give you your $199 or whatever the hell you needed to do your taxes they're going to be like deal with it so I think there's a lot of Education that need to be done where the defi part every Vault I always say the same thing the beauty of defi is is decentralized the nightmare of defi is is decentralized because everyone can create anything at any point in time and therefore why would I care about giving your 1099 that's not my job right I've seen like we've seen some people try to do that a little bit but it's like protocol base doesn't make sense right but Matthew it's a huge barrier to entry so if we want more institutional great funds coming into the space and allocating deploying capital in the space in defi we need to give them the tools to actually comply on the on their end to do everything that is possible within our power and this is the reason why we partner with you for instance because I know that my users whether they are new vulker rors or their LP of institutional grade they will be asking me for either Partners or me to provide this service to make life easier for them if I don't do that of course I specialize so I need Partners like yourself if I I don't provide these Services they will just not deploy so it's as simple as that yeah it makes 100% sense like we have we work a lot with family office and Edge fund and all this and and they say we don't touch defi because there's no reporting there's no fund manager and all this and and they go see traditional fund manager and they're they're not able to get the information we have actually some investor that um invested in us to get the data and then you work with a uh traditional web2 fund manager and then the fund manager went to uh the fun and say we cannot do the our job because we don't have the data and then therefore this company had to come to us and say can you help our fund manager so clearly either fund manager need to start exploring the defi onchain data or onchain data company need to start giving like a larger uh Service Tool like giving reporting and stuff like that so now let's take that's exactly what you said and look at what's been happening in the last couple of years so in the last couple of years we actually got quite a bit more clarity in different jurisdictions on how to tax crypto and thank God for for that for the better for the worse it depends on the country but before that we we didn't even have this Clarity and still certain jurisdictions they are not crystal clear so you have regulatory issues you have data issues you have traditional let's say nav and fund accountant who do not understand defi space who do not understand blockchain data do not have the skill speak yeah who do not have the skills so you need to it's education access and Industry standards so let me ask you Matthew are you going and creating these industry standards yeah it's a question and we often get like because we talk like I said toed and family office and they say the tool is not there just build that or why can we just take standard or regulation and bring that to web 3 and then you just said the the answer is in your question question because you said we don't have guidance from different country and each country is different so what if I have a fund set up in in the cment OR Portugal wherever it is and I have user firm around the world how do I give them the information for their tax and for their reporting I don't have to do that it's complicated and even in traditional Market that's how I work uh it's not only like a pass through fund where the fund is not responsible for reporting for the for their LP or their user but their LP user or sophisticated player where now in defi you can have someone in a vault with 100 bucks they are not aware of all the burden of the tax and all this and that's going to be a problem moving forward I think one of the big problem we have also is that all the unchain data that we've been having since since the beginning is really just to get the number of the on the screen like all the apy and APR are hard to believe let's say that um and then there's not a lot of like sophisticated player that are really aware of how the web 2 works and try to find a solution I'm not saying bring Web Two solution to web 3 because it won't work you cannot regulate web 3 the same way you regulate traditional finance and you shouldn't otherwise you eliminate all of the advantages and the value ad exactly so that's why there's a lot of work to be done to create new regulation or new standard to work on this on the data side there's some company trying to do like standard of data uh but it's hard because you don't want to block The Innovation and the creativity of everyone you want to make sure that anyone can create anything at any point in time but you can understand what they're building so there's a lot of work around that it's a lot of work and I think it will be best performed as a some sort of soft industry standard where the type of companies get together and actually agree on High level standards at least because that will make life easier for everyone so another Paradox that I would like to highlight of this panel is of course the consistency of the different like data points and metrics so you just as a user in defin now it's very difficult to see how some of these rprs or performance metrics are um calculated and to compare across platforms you simply cannot I mean you open different like three four different portfolio you'll have different value because this one doesn't track this chain this one doesn't track this chain and I think one of the big thing that we've seen at octav is that a lot of people like I said are coming from the web to and there's different uh layer like there's the raw data then there's like enrich data the Explorer level there's the subledger level the tax platform form and all of these people are all trying to build the entire stack by themselves instead of trying to work together so that that's why there's a lot of consens like a lot of people working together to have a consensus on this uh but it's a I think it's a big problem that we should try to address and work on because as you said and as we've seen hedge fund family office and like the institution that we wanted to come in the market are not coming after all the meme coin stuff and sorry for every meme Trader but like if we want to in to come here it's not with meme that they're going to come we need to have like really a solid tool to get the information that they're used to get in web 2 in a different way because we cannot bring the web 2 tool in web 3 that's why Bloomberg is not in web 3 and all of these like really famous Trad fee platform are not in web 3 they don't know how to do it your spot on it's it's a barrier to entry we need to make it easy for them they are interested they are curious they want to see defi or they want to use D5 for the yield that it has potential to offer but all of the risks and all of the hassles like it's difficult for them to overcome how long do you think it's going to take to the industry to kind of get standard and recently I think like two three days ago we've seen um the CEO of Citadel they're wanting to do start some Market making in defi um and they think it's going to be bigger than Bitcoin and all of this and do you think that they they're coming now is it going to happen are they going to be the one that help us build that tooling or we need to build that tooling for them I think they've been coming for quite a few years and every year I'm encrypted they are coming but then not quite there yet um so this year I do hear rumors about new players entering the market with different products different offerings um well we see JP Morgan having their tokenized fund um both settlement and uh yeah settlement and transactions of instruments on uh on chain we see stable coins proliferation we see so much um so yes but at the same time I don't want so much but so inol like there's a lot of like interest a lot of people that say they want to come and say they want to like use the the the the value of defi because don't get me wrong when I speak with Edge fun family office they often see the yield and they often see that they can generate good yield in defi they just don't come because they're like we don't have the tooling to do our job after making the yeld right that's also one a big problem have you ever worked with very big institutions they're very slow moving beasts it's difficult for small starts up to service a big Behemoth and and for a reason I mean they have a lot of um of of reputation to care right we spoke with vanic we spoke with Fidelity we spoke with a bunch of big one and it all told us oh no I'm not doing it but I have fdus which is Fidelity but just for crypto that are doing it and therefore if something bad happened the shited the fan that's not going to be Fidelity it's going to be the other people right because they have a reputation of years and years of trading and and and being efficient and all this that they cannot go in this I think the biggest one or the most active or open to the idea is vanic we've seen them put a puny penguin and as a pfp and stuff like that so like we can see that they coming but I think that they need a lot more like like stability in the data and all this one thing I'm going also say is that it takes time like I've been in crypto for about 12 13 years right now my dad is an accountant and still do zero crypto um I think it's also a question of generation the people right now that are starting to take control or like be executive at the Black Rock and Fidelity and all this or people that are 35 40 they are in crypto for the last 4 five years so therefore they like okay let's move there I know how to do it because if you ask your 65 years old grandpa jump into crypto I understand it's a bit more complex for him to jump in and be like yeah I trust that so there also like a generation and it happen and I think that after like what 14 15 years but also the older generation at track fight they're not even interested in the new shiny thing they already made it they're nice and cushy they will not be putting the head on the Block for the new shiny product they're just waiting for retirement and it's fine I understand so take the ones who are ripe for it's opportunity it's opportunity for anyone that want to get in like Lagoon where like you're not part of fidelity or anything but you're you're creating vote for family office and Edge phone and that's where it makes sense because now younger people even young people from a family office are not taking the control of family office and that's where it's getting interesting because a lot of people are jumping in but let me give you another example of actually a midsize Swiss Family office that we've been talking for a long time and they're very bullish in crypto they've been allocating for a long time but whom they've been allocating to are uh the VCS mainly why because this is still much easier for them to reduce the risk also I didn't lose the money I put it in the VC That was supposed to be an expert and he failed it's not my fault exactly that is two so for them allocating to unchain VC creatus is still um a more difficult step to take rather than allocating into a a token investor VC so makes sense so there's a lot of stuff that we can talk about Unchained data and V creator or defi strategist um we have a boot octave here all week we're here until until Sunday Nadia is also here until Sunday if you have any question if you want to talk about taxes vult creation happy to discuss about this data on CH dat is what we do so we're happy to help thank you a lot Nadia to be here and then and the last final note is that while V vulker rates taking the defi Market by by storm the defi is actually getting complex and complicated and vka rers make it easier and perfect cuz you can use our data exactly awesome thanks a lot thank you