Lorenzo Ceppaluni - Decentralized Indexes & RWA Tokenization: The New Frontier of Passive Investing

Good morning everyone. Thank you for being here. Uh beside NextLabs, I'm also co-founder of Napolit. So I'm super happy to see you guys here enjoying the event. So thank you again for being here and joining us.

Hope you're enjoying. Um so today we are going to introduce a super cool concept in crypto that in my opinion should be you know addressed more and are decentralized indexes. Usually people uh in traditional finance invest in ETFs as you may know. So you know financial tools that actually gives you the possibility to be exposed to more asset doing one transaction. So you may know the S&P 500, the NASDAQ 40.

You invest in one asset, you're being exposed to 500 companies in the case of the S&P 500 to the top 500 companies by market cap in the US market. So we at next labs thought okay why don't we build something similar but we put it on chain. So we first of all noticed a problem that is the usual pain points of web 3 portfolio management. 70% of portfolio of crypto portfolio are overexposed to just one tokens or maybe to mecoins. here maybe we have more people that actually diversify but in the end you know the portfolio management is not a super efficient things to do um it's a manual management burden so you just have to go across different wallets uh bridges protocol uh risking a lot of uh you know risking the possibility that a bridge get hacked or you know a smart contract get uh get a hold in it.

So another big problem is the emotional decision making. So as you may know in crypto there is a lot of FOMO driven decision like the last trend that goes there like uh you know the new AI frontter the mecoin there and so on and then the technical complexity. So a lot of people actually start to invest in crypto but then usually don't know how to rebalance uh don't know they don't have actually a an investment strategy. So we thought that a solution could be an onchain ETFs. As you may know this huge trend of real world asset tokenization allow us to have for example stocks on chain, commodities on chain.

So we say okay since we are having a lot of assets that are also available in traditional finance and ATFs are one of the most used tools in traditional finance. They are still missing on the ATF concept. they are still missing on chain. So we said, okay, let's create a smart contract that can hold different assets and once you deposit these assets, it will mint you an index token that represent the underlying assets that you're buying. So I will make some example to let you understand better.

But what what are the benefits of this? You can get one click exposure to crypto and tokenize real world assets. So like gold, stocks, bonds, a smart token that rebalance automatically. So you don't have you don't have the struggle to you know stay there every month and say okay no this asset is increased more in price so I have to rebalance back to another asset and so on. Uh you don't have to bridge across a protocol and also these products the most important thing are designed for passive investors not day traders.

I mean you can trade with it but the concept here is to have you to give you a solution that gives you freedom. So you just have to invest maybe you do a dollar cost average on that and you have to forget about it. You know a lot of people do full-time jobs. You don't have time to manage your portfolio maybe spending hours a week to understand which is the best decision for you to make. So uh we designed this this this tool for people that actually you know wants to invest but they don't want also to spend a lot of time in it and also by the way the passive investment strategy uh proved by the traditional finance in the long term is the ones that works like a lot of asset manager try to you know overperform the usual indexes but they're not able just because you know an asset manager that actually makes this decision for you will never overperform the market even if they have like the best monies in the world algorithm uh resources in it uh they are not overperforming the S&P 500 and you know passive investment works so we said okay let's introduce this kind of strategy also in crypto and let's see how it goes another super cool point of course that since we are on chain our ATFs are fully transparent and composable so you can always go there check the smart contract bolt and see How many assets are there?

the fees that we are taking and the amount of asset under management and of course the index that gets minted is self-custody like I mean yeah you have it in your wallet and just that so we don't hold any money of the users that actually deposit on on the indexes uh real use cases the slide got up a bit but just to let you understand one of my favorite product is the anti-inflation index the one on top left here The anti-inflation index is composed by tokenized gold by tether and bitcoin. Now every index that you see here has a different logic behind in terms of rebalance in terms of weights of the asset inside it. For the anti-inflation index for example we have an inverse volatility uh logic. What does it mean that gold as you may know is way less volatile than bitcoin. It's like a more secure asset is a store of value and it doesn't get like one day like maybe an intraday change could be like a 0.

5% 0.3% for example while Bitcoin you know for sure that one day could be a 120 one day could be a 100k another day could be a 98 so it's way more volatile so what does it mean inverse volatility means that bitcoin in this case will be less present in this index so for example If you invest 100 USDC in this anti-inflation index, $70 will get to buy gold, 30 to buy Bitcoin. So right now I will uh uh we will see more in details the real percentages in live. Uh but we are around 70% gold, 30% Bitcoin. Going forward, another super cool one is Crypto 5 top five crypto by market cap.

The strategy, the weight logic here is like the S&P 500. So market cap weighted. Um with this asset you actually expose yourself to the top five crypto by market cap. So we have Bitcoin, Ethereum, BNB, Solana and XRP based on their market cap. And these indexes all the indexes you see has also a rebalance frequency.

This means that every month our u we built an engine that actually rebalance automatically these indexes. So you don't have to think about it. You just know actually in advance why while you buy the index what is the rebalance logic. So you already know that maybe every first of the month this index gets rebalanced based on the mechanism that you you wrote before to to buy the index. Um another super cool one is manage vision 7.

We made this in partnership with Dinary, one of the first um uh stock tokenizer uh with a license with the the SEC of the USA. Uh so we basically here took the top seven stocks by market cap, the the top seven tech stocks by market cap and put it in a in a in a in a vault. So you can buy you can actually expose yourself like a sort of small NASDAQ uh on chain fully transparent and self-custody and going forward as another one is the arbitum ecosystem index. I will spend like one minute more on this one because it's like a version of a wide range of indexes that we can build. It's a cool topic actually because you may believe that maybe the arbitum ecosystem is a super healthy ecosystem.

So you want to expose yourself to the to the AR ecosystem. How you do it? You buy ARB token or you start to buy randomly protocols that run on arbitrum. So we thought, okay, but if I buy the the arbitrum token, I'm not really exposing myself to the health of the arbitrum ecosystem because uh people dump the token. VC dumps the token.

Maybe tokconomics are shitty. So we say, okay, we need to have a token that actually represent the real health, the real performance of that ecosystem. Um so we structured it like this. We have 15% of the native token of that ecosystem that in this case is arbitum but could be sui or another chain and then the others 85% is composed by the top performance protocol of that ecosystem based on different metrics that could be TVL onchain activity wallet activity and others that you can maybe check on the docs or you can uh say hi to our booth there in the sponsor area on the left. So this can really lead to you know interesting things because we can go to the SUI Foundation and say hey do you want your ecosystem index you can go to the maybe you know a wide range of layer tools that actually have in their pro protocols that runs and you know make a lot of uh onchain activity and you can actually expose yourself to this ecosystem without doing any analysis like we did it for view and you can also have a look on that analysis before to buy the index in also another cool one it's capital protected node CPN but before to do that you may understand that you know we have the flexibility to build any index we want uh so these are just five that we are building since we are we just released our mainet but imagine like having thematic indices like in traditional finance You usually have you know ATFs for sustainability, ATFs for quantum computing.

So think about the same concept but on chain on trends that we have on on on blockchains. So maybe the AI index aggregating the top AI protocol in the crypto space the top tire one centralized exchange tokens. So you get exposed to I don't know BMBB uh coin u crypto of crypto.com and so on. So you can build actually thematic indexes and in our opinion um this was a product that was missing in the market and it was a product that we needed first not as founders but as crypto investors.

So we said okay we like are crypto investors our target our target audience could be crypto investors but but also institutional investors. That's why then we thought about okay maybe the anti-inflation index could be an interesting one for people that are not so risk averse and they maybe think okay I want to expose myself to Bitcoin but maybe not so much. I don't want to go all in in there. Uh I'm still conservative because maybe I'm 50 years old. I have a family.

I have a mortgage on me. So I cannot go all in in Bitcoin because it's really volatile. So maybe the anti-inflation index is just a pill that we can make in people mind. We can put in people minds to let them understand that actually you know this kind of mixed products can really help you to then get introduced to a wide range of of products and also to get introduced to investing into a blockchain infrastructure that gives you a lot of benefits that I'm not telling you now because you you already know. Um so going still on the same institutional you know path we thought okay let's also try to build a product that is perfect for the 70 years old.

You may know in Italy the 90% of the wealth is owned by the maybe 1% of the population and this 1% of the population is 60 years old or more. They will never invest in crypto in top seven stocks or whatever but they might invest in a product like this capital protected notes. What is a capital protected note? is a mixed product that have inside a bond and a super volatile asset maybe like Bitcoin or others. How does it work?

It covers you the investment. You have a bond that yells let's say 2% per year. You invest in that bond 100k with the 2% of the yield. Instead of receiving it back in fiat or USDC, you invest it in Bitcoin. So in a volatile asset, this gives you basically zero risk because you are covered by the investment that you made in the bond that actually is like maybe the most secure investment that you can do right now in the financial market.

Uh but then you're also exposing yourself with a super small percentages of course but uh into a crypto asset like Bitcoin. So when we talk with different institutional partners we have for example with bankella bankonella uh we also have a a founder uh that will have a panel about it um I don't know where you can check the agenda uh but Rosarolano is director bankella and when we presented this product he was super enthusiast like he was really really happy because like with this product you can actually leverage and say to people, hey, crypto investing is not just about mecoin. You can actually invest in uh assets that are not only crypto because the blockchain infrastructure is moving um away from just crypto investing, mecoin investing and that but a lot of assets are being tokenized. So, as soon as more assets are being tokenized, we can build more indexes. That's um that's a cool thing.

Of course, super short. I don't want to be too technical how it works. Basically, every index in is an AR20 index token. Um so every index is a sort of um let's say certification that um we give you once you invest in a vault. What does it mean?

You interact with our DAP. You want to buy let's say 100 USDC of Crypto 5. You go in the vault. You buy the index, your 100 USDC got get split in the five underlying assets. Uh we use the chain link cross chain the chain link crosschain interpability protocol uh that allow us to deposit this 100 USDC in every native chain of the underlying asset.

So for example, crypto 5 you have to deposit it uh on AVM chains like Ethereum, then you have Solana, then you have XRP. So usually without this chain link CCIP uh you should go cross your asset then deposit on the selected chains. Uh with this chain link tool uh you don't have to do anything. Um so you just deposit your 100 USDC. this 100 USDC get deposited in the different chains and then um a smart contract mint you the index token that is your let's say receipt of this buy action um opposite when you want to sell you take your index token you interact with our smart contract we sell the underlying asset in every chain and then we burn the index index token to give you back your USDC then of course based on how the underlying asset performed uh you may have a profit or a loss.

So it's really easy like rapid bitcoin like USDT you mint and burn is the same the same concept and then as I say to you automatic rebalance mechanism is a smart contract that periodically uh rebalance and adjust your portfolio based on the logic of the index that you bought. Now uh I want to show you super fast uh the DAP overview so you can have an idea. We spend a lot in UIX and UI design. So I really appreciate if you maybe can jump on the boot after and give us some feedback. Uh these are the indexes.

So these are the performances over uh one year. But just to let you let you understand we can go in details of the index and you can have like some information about it the market statistics the TVL the eventual fee that it gets and these are the ways live so we have 70% 19% of tokenized gold and 29% 81% of uh bitcoin native bitcoin um another one maybe here we can show you better. Um, crypto 5, these are the percentages now. So, based on the market cap and based on the last day of the rebalance, that should be maybe 18 days uh days ago because we do it um once a month. Uh these are the the weights.

So, you invest 100 USDC in this crypto. They uh this USDC get automatically divided and splitted by these percentages. So $73 will go into Bitcoin, 13 to Ethereum and so on. Uh these are the percentages for MAG 7. So you can have 90% for Apollo, Microsoft, Nvidia, Amazon, Google, Met and Tesla.

And then this is for RB. So this is just a a small example. Uh we can scroll down for the catalog because something really cool is to show you for example even though you may see uh um negative performance of the arbittor ecosystem index uh if we start to compare for example with uh maybe like arbitrum for example. So we can compare the performances of the arbitum ecosystem index against the ARB token. So doing that you can understand that if it works it should no it doesn't work by the way maybe you can check it later.

Um the arbittor ecosystem index overperformed by a lot the arbit token. So this concept of the ecosystem indexes uh really really works and are is super super interesting. Just a super short thing about the vision and our road map. So right now we went to mainet uh during 2025 we are building a vibe coding portfolio builder. This is one of the most interesting thing uh we are building in my opinion in the last three years.

So we said okay like ATFs are pretty composible. Uh you can think about you know creating any index you you may have in mind based on your uh strategy. So we don't want to take the struggle to create it for you because every investors has different uh uh profile risk. So we said okay why we don't give you the possibility you user you uh you know DAP users uh we want to give you the possibility to create your own index but everybody you know doesn't know how to code or build smart contract index so right now like the huge trend of artificial intelligence prompt engineering uh child GPT lovable like a no code tool uh are you know people are getting used to this kind of interface where you have a chat, you just want to type and prompt what you want and then you receive a an output. So what we're building is a VIP coding portfolio builder.

So you just have to write to this VIP coding tool what your investment strategy is and then it in the back end will build you the portfolio you're asking. Um so you can set up your rebalance frequency, you can set up the assets you want based on of course if the assets are on chain uh the the index is fully composable. So you can just click the asset you want and then of course you can you will make money out of it because if you're a content creator, a K or maybe maybe an influential people or just a smart guy, you can build an index uh put a fee on that and earn fees based on how many assent under management are inside that index. So if you are good in marketing and you are pretty influential, you can actually build an index uh expose it to maybe X and then get famous for because people are start to start to buy your your your indexes. Uh for 2026 instead we are aiming to build a white label for institution and treasury dows.

This means that we will have a sort of white label of our smart contract infrastructure to allow uh to allow uh institutional investors to build your index like you're doing in in web3. And then we are aiming also to have the maker licensing to uh start to issue uh legally and like on centralized exchange for example our our indexes. Um what we're doing uh cool promotion you can go in our booth and there will be Valeria our collaborator that will explain you better how this works but for anyone who buys $50 or any index you will add that to a short list and you can uh there will be a raffle a random raffle to win uh $500 of the anti-inflation index. Of course, uh you can sell it uh as soon as you receive it, but I don't suggest it just because we are here for the long term. These products are for the long term.

I'm pretty sure that if you're here at Napoli, uh you believe in the crypto space, in the blockchain in general, in Ethereum ecosystem. So, um you know, maybe you can still hold some anti-inflation index uh because beside the cool products, you know, we are here for the long term. And yeah, I hope that you got the point that web three investors are usually labeled like Den. I'm pretty sure that here in this room, uh, not everyone is just here to speculate and, you know, say about mecoin. uh we want to have also kind of not like an institutional approach but I think understand that uh blockchain investing in general blockchain as an infrastructure to invest in financial asset is becoming a thing.

So our goal now is to let this big guy understand that as they may invest in ETFs and traditional finance they can do it now in in crypto. So you just have to scan the code, access our app, uh explore our onchain ATS, maybe buy one. Uh you can go to the booth and uh tell Valeria that you actually bought it. They will sign your email and then yeah, we we just have a raffle and then you may win this 500 USDC. If you have any question, please do it.

Uh yeah, maybe someone has already an idea of which index you would build with the build your own index. So maybe we can implement it for you before the web coding tool is is ready. Thank you. [Applause] Any questions? We need

registration. Okay. All right. Well, thank you very much for the presentation. I like it.

I really like it. Um I'm investing on Bit Panda. All right. So, Bit Panda is a similar concept where they developed their own index fund I mean crypto index where you are they're located automatically but and also they rebalance automatically over there. So here with the next labs my question is can we create our own portfolio because because I I was missing this one because I just moved in nowhere.

So can we create our own portfolio and then we dedicated the allocation for each single coin or for single assets if this one is all right. So thank you. Exactly like the cool point of that is that these indexes and our smart contract and giant is uh super composible. So we are building this vibe coding tool that allow you to create your own index and then you can also you know put your referral on it. It means that if people start to buy your index you can also earn a fee on the asset under management you have.

So you will have like a chat GP interface really really similar to it. You just prompt the index that you want to build. The smart contract giant will start to create the smart contract. Then you have to set up of course the weight logic. So if you want it to be market cap weighted, inverse volatility weighted and the other logic that we saw before.

Uh then you just create your index token and of course it needs to be liquid. I mean you you like either you start to invest in it uh personally or you just have to promote it to let other people invest in it. Um but again like you will be the smart contact owner just for the fees so as a creator uh and then uh if the index is good people maybe will start to buy it and but you can use it for your also personally like I mean if you have your investment strategy you want it you you have like your perfect portfolio location you just create your index but right now it's not available. So we are building it and maybe around early 2026 it will be ready. kind of.

Yeah. Yeah. But still passive. I mean that uh

Exactly. Exactly.

Exactly. Yeah.

Sure.

Hi. Thanks for the presentation. There's just one technical aspect that uh I didn't catch. Probably was distracted. Um so technically the user send the USDT I think to the protocol.

They ask for a specific index coin to be mint. Then the protocol makes an oracle call to chain link. Then chain link what does it do exactly? So they they ask for a specific token to be bought but the token is not then transferred to your protocol or so where are the token

the tokens will be stored in a smart contract vault in every chain. So we have let's say like a sort of digital vault on every chain where the underlying assets will be sent. So you have USDC uh you may you want to buy crypto we have on every chain a smart contract vault that will store the underlying assets. So through chain link we actually split this USDC. We buy and swap the USDC in the underlying assets and in every chain native chain there will be the token that are like your your your underlying asset that you bought through the through the index and then as soon as the Oracle received the fact that uh these assets are in the smart contract vault it will mint you the index token as a receipt.

Yes, I understand that. But if many user

mint the same index

all the token they buy they buy will go to the same smart contract creating a big honeypot and we all know where it goes. Yeah, of course. Like

if you create a big honeybot, it will be hacked sooner or later, you know.

Of course, every smart contract needs to be audited audited and we it's not like a big one, but there are different ones.

So true dark nodes. So there will be many nodes in which the honeypot is split

kind of. This is what you say

not not like um I mean it's like having of course there is a risk like having smart contact vault and like every smart contact has its own risk to be hacked. Uh but this is the the catch to have like self custody and not uh you know we we don't want to hold people money. So the only thing to do that is to have like onchain smart contract that store these underlying assets somewhere and they need to be stored onchain of course because people may want to know you know how many asset under management are there for example and actually that their the funds that they deposited their underlying assets are there. So uh our work will be to audit these balls the more we can.

Okay. Sure. Thank you. Thank you. Hi, thank you for your presentation.

I have mainly one question that is about the tax issue. How would this kind of instrument being treated for the tax purposes being referring to Italian system? I mean are you operating as a sub substitute of taxes so imposter or are you planning to work on it in order to give this benefit to the users? Yeah, we of course have to work on it because right now there is no super clear uh indication how this can be you know uh labeled because it can be an asset reference token and then a type of low applies. Uh we spent a lot of money on low consultancy and the answer was not super clear.

So you may ask to your personal tax lawyer and understand how these kind of uh assets may be labeled one or or another. But of course our process is to being uh fully licensed and then um you know as soon as we uh proceed with our fundra uh for sure we have to you know be clear in what we are like these index tokens are 20s. So as you invest in Ethereum or another one is the same type of assets but have the catch that they are also representing other act 20s on chain. So it's kind of tricky and it's not super clear how we can define them at the moment unfortunately.

Okay. Thank you. Because I strongly believe as the case of 3D republic that once you implement that service you gain a competitive advantage over the competitors. But yeah,

another question that I had as a traditional investor maybe as a holder or bankard S&P or I share CMSI word. How would you convince me to shift from the traditional investment so you know the classical ETF to an ETF on chain to an index on chain? I mean we have still some limits um in this case because of course uh passive ATFs on traditional finance are super cheap right now gas fees uh are being super cheap but all these costs a bit in terms of gas fees. So our vision is that in a way or another uh the vision is that people will start to invest in blockchain infrastructure as we scale not as a protocol but as an ecosystem. Um so you know moving from traditional broker or probably traditional broker will move into blockchain infrastructure.

So in this case beside our own indexes that we build um that's why we are building also the white label solution because we're pretty sure and we want to be ready that as soon as these traditional big guys want to come on chchain and offer their same services that you're they are offering traditional systems. um we are already there to offer them our tech infrastructure and then you know start to also address the and help them to you know offer the same product that they're offering but on chain. So you know to answer your question in this moment um if you're not techsavvy you will not invest in onchain ETFs but also just the curiosity to you know shift a little bit your investment strategy and see that actually onchain things are maybe more transparent uh you can you know have some self custody on that you know you don't have to even though in Europe in general we are insertred up to 100k So if you're a small investor, you don't give a about that. But um the vision is like we are building not for this moment but for the trend that is arriving that is huge. So it's more a vision than like a uh not for the present but people maybe you know we also build u things for digence like also a mecoin index is under development so people can expose themsel in oneot transaction to all these shitty me coins maybe you know we we're building something for the present but mostly for the future.

Okay thank you so much.

Sure. One question about the act when you say the underlying asset uh I would imagine it's assets on different chains and then it would probably involve uh wrapped assets like uh synthetic assets especially when it comes to like stocks not not actual tokens. How do you then manage the issue risk or the bridge risk or the rep uh provider risk or you don't look into that at all?

This is this is where uh the crosschain interoperability protocol uh come into the into the game. So uh we also entered in the chain link acceleration program. So they're helping us in this uh transfer of tokens. Um so through this I'm not super tech guy so you can also there is also our CTO in the boot. So maybe you can ask him better.

Um but in general like um through crosschain interability protocol of chain link we have the possibility to move the assets uh safely and uh you know having the having the crosschain index without the user to you know without uh requiring the user to actually bridge the things.

Sure. Okay. A big thanks to Lorenzo.