CTRL/SHIFT - 13 06 2026 PARTHENOPE STAGE - FRANCESCO BIANCHI - HOW DEFI IS EVOLVING FOR INSTITUTIONS

Yes. Okay. We have Franchesco Bianke who is going today to update us on the situation of institutional adoption of DI and in general how all the big companies and especially institutions are approaching D5 world. Uh Franchesco's very vast experience in the sector and he is representing KBK which is a leading treasury firm and web free space. So Franchesco, the stage is going to be yours and be very curious to hear what you what you what you will tell us.

Me Francesco as part of Spaghetti. We started I mean we supported from day one napolif then now is evolving to citral shift h encompassing you know multiple digital aspect other than blockchain. Uh so today we are basically going to deep dive into how the onchain finance or if you want to call it defi is evolving to uh adjust to the evolving market conditions aka to also incorporate uh AI into its own uh its own day-to-day activities. Uh where can I move a slides? there.

Perfecto. So, first thing first, I'm Franchesco. I'm active in the space since 20120. So, kind of an OG. Uh, first of all, I started my own D5 journey into optimization.

We are going to we are going also to to touch base on this uh pretty soon. Then I moved to credit markets. the there are kind of the new things on chain and then actually moving to a onchain asset manager basically handling in a decentralized way your ill generation for everyone who wants to deep dive into blockchain stuff. So the main point about this presentation is that uh okay is that uh defy is kind of mimicking the thread world. So no okay is mimicking the the thready world.

What does it mean? is that is following the same evolving growing pattern than traditional finance but at a at a 1,00x speed. Uh this slide for example the next one. Okay, the next one can basically show us what what what I'm saying. You know here we have from uh 2000 before Christ, 2000 before Christ up to almost today we can see the uh development of traditional finance from uh coin age to then credit and banking, derivatives, capital markets until today.

And the defi is basically following the same pattern although in a very super fast way and this is probably one of the issues of our own business. So we start I basically today I want to give you and I'm glad that you are here a a quick overview of the history of DeFi and how is basically facing the latest uh the latest uh issues adjustment that the traditional finance is pushing on the blockchain stuff. So we start from 2009 with Bitcoin and you see that in parallel it can be kind of parallel to almost 200 2,00 to 500 before Christ period where basically a new coin developed. In this case we have Bitcoin. Bitcoin is the facto store of value on chain is kind of the new gold the digital gold.

And then later on in 2013, well, okay, we know that Satoshi Nakatamo is behind all of it. And then in 2013, Vitalik among plenty of others nerds in Berlin also thought about Ethereum. Erh what is the biggest difference with with respect to Bitcoin is that Ethereum works on a chain that is programmable and this means that with we can program and create um mechanism automated mechanism that if this then that create automation with this the the financial world and this is the real deal about smart contracts introduced by the Ethereum because why so? Because the traditional finance has already its own rails but can find enhancement, improvement, more efficiency throughout automizing automatic smart contracts behavior discussion and so on. Uh so in 2013 there was the first uh white paper from the what we can now call Ethereum Foundation and then in 2000 uh sorry I missed it in 2015 Ethereum the Ethereum chain was deployed and now is basically working as we know.

Uh so as I was telling you already the uh idea is that we have smart contracts and smart contracts can create automation out of human and manual intervention to basically deal with multiple actions altogether. So uh if you can think about Bitcoin as an ice street, we can think about Ethereum with an ice street with plenty of stops to basically stops by and create alternative and additional experiences and uh we're basically going to follow on the Ethereum chain because we know that Bitcoin is still a bit lacking on additional use case but instead Ethereum chain created a lot of use case on top of its P2P uh distribution of tokens. First of all, we have the 2019 area that can be in parallel align with banking and credit. What does it mean is that we created basically we entered the P2P uh distribution lending. What does it mean that if I need to send some money to this lady in the front row, I can do so through the blockchain.

The point is that it was working only on a P2P approach. The first synthesis were maker DAO that is no more a case now because it it basically changed to Sky and then we have also at Delta that is now the super famous A. Um in both cases the idea was uh really rooted in defiats. So basically completely decentralization of the the the token and inter and no intermediation at all of the distribution between players. I don't know if you saw that last night anthro uh code was basically blocked by the American government because it was saying that we were distributing uh EI technology to foreigners.

Well, this 2017 uh approach to uh blockchain uh token distribution was exactly at the opposite of this approach. basically mean that uh everyone who can have proper use and fair use of blockchain can distribute tokens among peers. Well, this is at the first step. Then later on in 2018, so one one year after we understood that the P2P approach was a bit limited. So there was the need to instead pulling funds.

So you all users deposit funds in a poolled pools and then depending on the smart contract tools. These funds were rooted to different needs and different players. The clear example is unis swap is the fact pro most probably the most used defy protocols nowadays. According to the stats it has been forked around 300 times from the first time of deployment. So okay is something that is really is really kind of rooted in the defy uh in defy roots.

Uh the concept here instead of having as I was saying before so P2P approaches so banking and kind of radius so client approach if I know you I can give you uh funding instead in this case it was a kind of capital market. So everyone who wants to enter that pool and and accept the uh the entering price can basically deal with it. Nowadays we know that univ3 has sorry the unis swap has developed multiple new instances unibus with two unus with three with different nuances uh I mean uh within KBK where I'm working we are kind of still uh judging which one is the best one unisp seems to be the best one from our own perspective but from a disintered perspective instead seems to be the perfect one to let users basically interact with one another. Uh later on we have the derivatives period that probably is something we are going to take a lot of time during this uh short presentation. What does it mean is that we move up from simple if transfer USDC transfer from me to another person.

Uh we basically started wrapping this altcoin. So if or wrap DC to basically do some more uh sophisticated activities. In this particular case we have two uh examples. one that is really oral synthetics that was instead creating a stable coin that was not only pegged to the USD value of the underlying token but also to the activities on top of it and then we have securityize. We at KBK we are working a lot with securityize.

security is what he's doing basically is bringing onchain the um same ownership of a traditional finance equity. Uh we are not there yet. Most probably we will need to wait for the clarity act to have the full 101 presence but we are moving there. What does mean is that if I own a securitized LP token, I have the same uh equity distribution of a traditional finance player. I'm I don't have yet all the ownership rights of a traditional finance players, but this most probably will come at a later stage.

Anyway, uh so the derivatives period was a key one. we can see from let's say the parallelism from the uh the the initial period you see so we are basically in in 19 uh century to tell you how fast is evolving the the D5 ecosystem and basically what does it mean instead that just transferring token that has either a 101 pegged value or a valuable value to BTC to If we're instead distributing tokens that has a that have sorry a value that is related to traditional markets. What does it mean? Last day, yesterday there was the new uh Alen Musk SpaceX I ICOs that was also distributed on chain although there were plenty of uh blames against it because the onchain distribution was a bit capped with respect to the traditional market but players on chain basically had the opportunity to deal with a traditional finance ICO in the same way as the traditional players although not being super sophisticated certified players. Uh and then oh sorry and then we move to the basically the last phase the one of Eurodoras and retails.

We know unfortunately that the D5 echospace is strongly US-based but now we are seeing more and more other tokens other fiat tokens evolving. What does mean is that for the time being if I want to offer you a US-based yield on chain I have multiple opportunities but if I want instead to offer you a Eurobased one well this is a bit harder it is a bit harder to do so completely offchain I need sorry onchain I need probably to deal with uh centralized exchanges to wedge my FX rate or other opportunities this. Um so in this last phase the euroalization and the retail approach we have new opportunities. So in 2021 we have ono that uh basically started bringing onchain money market funds. What does it mean?

The money market funds are traditional funds. The point is that being almost as liquid as money, they are basically letting us respect the block byb block exit requirements that the D5 guys are having. What does it mean? It means that if I'm deploying my funds on a I know that basically I can exit almost the block after. So if I deposit now in 30 seconds I can exit.

This is not something that is basically happening with traditional finance. Instead we know that there are some delays. Well, these uh tokenizer uh protocols on the finance securitize centrifuge basically understood that if they want to really enter the DeFi game, they need also to abide to the rules of DeFi. And the rules of EDFI are that we need to uh not trust but verify. But on the other hand also we need to uh be able to exit whenever we want and not wait until the middleman decide that we can exit.

and uh on the market basically does did so uh at first in 2021 by bringing on chain money market fund with either T0 or T1 uh exit period later on we have it's also important to mention ETNA that start that at that boom uh basically by bringing on chain the carry trade the basis trade basically creating an arbitrage and a yield out of spot and future rates in in this respect most probably to if uh although now it's also true that the business trade is kind of uh lagging behind so we have multiple instead they are integrating multiple treasury bills to basically support the yield but nonetheless it was anyway a sort of innovation why so because they let us uh well they let users enjoy a character solution fully automated onchain without the need to be KYC uh fully u fully on boarded and this kind of stuff but basically gain about volatility in the market and last but not least we have Pendle that was instead a um that basically introduced the kind of treasury split. We know that the D5 yield works a lot on top of incentives. And on one hand, I'm a bit against it because uh the D5 game basically uh kind of inflated the the incentives games. Okay, we are new. So basically we we had to incentivize up to 25% new players.

But on the other side is part of the game. So everyone is incentivizing I we we all see new banks basically welcoming you to open a new account by just saying guys you can have one two extra incentives on top of your uh banking account so makes sense but on the other side I also glad to see that nowadays I'm unfortunately I'm missing a slide for it nowadays we are having I I say less and less interest on incentives. Why so? Because people understood that one thing is to have a base yield based on the either USD or euro in interest generation. Another thing instead basically betting on the governance token of Aina Pendle to basically be pressed up until the moment I can uh sell it.

And then uh I think that I'm I'm done yes with slides but we can continue the discussion. So what is happening nowadays? Nowadays we are basically moving away by the poor concept of defi. So the decentralization concept is a bit u I would say put aside from the incumbent players. Why so?

Because the incumbent players are traditional players. traditional players that basically are rooted into capitalism and what they say what they see they see that blockchain sorry okay we're here blockchain basically uh let them use another race that are way more efficient and way more automated with respect to traditional banking rays and and this is one probably of the key uh aspect of I mean the key the key is about blockchain that blockchain is here to stay is here to stay because the uh the banks the investment banks the hedge funds see a real deal in dealing with it because they see kind of better margins and better and better result. The point is that we shouldn't really lose all of our ethos at first in creating decentralized solution. Uh again going back to the example that I was creating that is probably you know really fitting uh the team of the citel shift conference that we have a new digital world where blockchain comingle with AI automation. Well, the US government was able all of a sudden to stop the approach to the new fable from code.

While the idea of blockchain is that you have full ownership of your token and no one can basically block you from use it, spending it online. Uh so um as I was saying we're losing a bit of uh ethos about defi but it's okay is part of the game. So this was the pros. What has instead this was the cons. What does instead the the pros?

The pros are we are dealing more and more and more with traditional players. Traditional players in particular dealing with ono or securitize are basically no it's not working but it's okay are basically seeing the blockchain as an additional distribution layer where they can find new funding. And this is what me as a KPK contributor are working. We just started some new markets, some new vaults with securityizer. These vaults are particularly of interest because they are kind of hybrid solution.

What what I mean is that in this hybrid solution, we have on one side the full pirate experience. So anyone with a wallet can deposit his USDC and earn a yield no matter the background the KYC or whatever. On the other side instead we have borrowers that instead are fully compliant fully KYC and only them can deal with the borrow side. And I see that I I mean on on one side I would say that I would love to see only permissionless approach to finance but it's also true that we have some incumbent players that have plenty of money spent on compliance that don't want to ruin everything. And so basically they are kind of happy with this hybrid approach where on one side you can have fully defiators but on the other side instead you have also compliance natures.

The key point about compliance is that nowadays we don't need no more full compliance. What does it mean? it that's is that I don't need to upload my ID my certificate of being a educated investor and so on but I can just I can just use ZK zk aka zero knowledge is the new technology brought up h we are done okay we are done uh two sentences h the concept is that blockchain nowadays can let us deal with compliance in a more uh decentralized way. So through CK and can also let us basically deal with token and e generation on chain without being fully compliant and so on. And my point is that compliance is not a problem.

The real problem is ownership of the data that we are sharing with traditional players that sooner or later are being leaked, hacked and so on. and we don't want so so basically ZK proof can be a solution to let us deal in a compliance way with financial market without spreading all around our uh private data. Thanks. It was uh chaotic but uh thanks to all of you that attended.