WEBVTT - Fixing Traditional Finance 0:00:04.600 --> 0:00:07.680 So the big question is this, how do investors like 0:00:07.880 --> 0:00:11.800 us get access to the ideas, information, and most importantly, 0:00:12.039 --> 0:00:14.840 the right people that give us the tools and information 0:00:15.000 --> 0:00:19.000 we need to make informed and educated decisions to have success. 0:00:19.600 --> 0:00:22.360 That is the question, and this podcast will give us 0:00:22.360 --> 0:00:25.520 the answers. This is Mark Moss, your host. Let's get 0:00:25.520 --> 0:00:28.319 this started, blow and welcome to another episode of the 0:00:28.320 --> 0:00:31.920 Market Disruptors podcast. Today I am joined by Mona Elisa 0:00:32.120 --> 0:00:35.400 and she is the CEO and founder of Melanport, which 0:00:35.440 --> 0:00:38.360 is working in the decentralized finance space. She has a 0:00:38.360 --> 0:00:42.800 really unique background working in traditional finance and raising money 0:00:42.840 --> 0:00:46.120 through hedge funds and dealing with the bureaucracy and the 0:00:46.240 --> 0:00:48.840 high expensive costs it takes to do that. She saw 0:00:48.880 --> 0:00:51.320 those massive problems and figured out there's got to be 0:00:51.360 --> 0:00:55.160 a better way, and she has since worked on decentralized technology, 0:00:55.600 --> 0:00:59.200 using the blockchain to build new applications to cut down 0:00:59.200 --> 0:01:02.000 on that red tape, cut down on time, and save money. 0:01:02.320 --> 0:01:04.520 You got a really unique perspective. It was a great conversation. 0:01:04.680 --> 0:01:07.880 Let's goad just jump right into it. Hey, everyone, welcome 0:01:07.920 --> 0:01:10.560 to another episode of the Market Disruptors Podcast. Today. I'm 0:01:10.600 --> 0:01:13.600 sitting down with Mona Elisa. She has the CEO and 0:01:13.680 --> 0:01:17.520 founder of Melanport. Um there in the decentralized finance space 0:01:17.560 --> 0:01:20.080 a really exciting area. I'm excited to sit down and 0:01:20.319 --> 0:01:24.679 and talk with her this morning. Somna, welcome, thank you. UM, 0:01:24.959 --> 0:01:29.240 great to be here, all right. So, UM, yeah, I 0:01:29.240 --> 0:01:31.360 know you're in the decentralized finance space. You kind of 0:01:31.400 --> 0:01:34.319 have an interesting background. UM, that's led you here. Why 0:01:34.360 --> 0:01:36.680 don't you just fill everybody in and kind of what 0:01:36.760 --> 0:01:39.080 you've been doing, um, and that brought you to the 0:01:39.080 --> 0:01:43.720 space and what you're doing currently. Yeah, sure, so UM, 0:01:43.840 --> 0:01:48.880 I mean I I started my career in London working 0:01:48.920 --> 0:01:53.320 for Goldman Sachs and equity trading, which was kind of 0:01:53.520 --> 0:01:56.200 a hybrid role between market making and prop trading at 0:01:56.200 --> 0:02:00.640 the time. And eight years later A decided to go 0:02:00.680 --> 0:02:03.480 and work for one of our clients based in Geneva, 0:02:04.520 --> 0:02:07.520 who was a large hedge fund and I ran a 0:02:07.520 --> 0:02:10.480 long short equity book for him. So I basically sat 0:02:10.520 --> 0:02:12.280 on the other side of the trading desk, which was 0:02:12.360 --> 0:02:17.200 kind of the investing role, investing other people's money and 0:02:16.639 --> 0:02:20.600 m and four years later I got um made an offer. 0:02:21.000 --> 0:02:22.639 This is this is a part of my life I 0:02:22.639 --> 0:02:24.840 don't talk about very much. But four years later I 0:02:24.880 --> 0:02:28.000 got made an offer by a small family office who 0:02:28.040 --> 0:02:30.280 wanted to see me twenty million dollars to launch my 0:02:30.320 --> 0:02:35.639 own long short equity fund, and I, you know, as 0:02:35.680 --> 0:02:38.520 most young aspirational traders, I jumped on the opportunity, and 0:02:38.560 --> 0:02:40.280 I thought, this is a this is an opportunity to 0:02:40.280 --> 0:02:42.400 make a name for myself and my own track record 0:02:42.560 --> 0:02:44.840 and do what I love doing. So I took the 0:02:44.880 --> 0:02:49.160 offer and moved to Zurich and I tried to launch 0:02:49.200 --> 0:02:52.360 my own long short equity fund, and my my dream 0:02:52.440 --> 0:02:56.560 quickly became my nightmare because it was a horrible year. 0:02:57.240 --> 0:03:00.280 UM Launching a fund with anything less than two hundred 0:03:00.280 --> 0:03:05.360 million dollars is very, very difficult in this day and age. 0:03:06.120 --> 0:03:11.320 UM there's an incredible amount of administration, operation compliance that 0:03:11.400 --> 0:03:14.440 needs to be done, and I was very naive thinking 0:03:14.480 --> 0:03:16.520 that I could do that with twenty million. I actually 0:03:16.560 --> 0:03:20.600 raised thirty million in total UM. But basically within a 0:03:20.680 --> 0:03:23.280 year I realized that most of my time was being 0:03:23.320 --> 0:03:26.360 spent in an operational and administrative role when I should 0:03:26.360 --> 0:03:31.280 have been focused on investing and preserving capital of my investors. 0:03:31.400 --> 0:03:35.480 And ultimately I decided to wind it down. UM, I 0:03:35.520 --> 0:03:37.840 was going to take a year off. But essentially during 0:03:37.880 --> 0:03:41.320 that year I discovered blockchain and discovered etherium, starting with 0:03:41.360 --> 0:03:44.400 bitcoin obviously, UM. And then and then I thought, why 0:03:44.440 --> 0:03:46.680 don't we do this all again? UM? I mean when 0:03:46.720 --> 0:03:48.200 I say do this all again, I mean, why don't 0:03:48.240 --> 0:03:52.280 we just reinvent the financial infrastructure so that we can 0:03:52.320 --> 0:03:54.640 lower these barriers to entry and automate all of these 0:03:54.680 --> 0:03:58.320 processes and and make it make finance much more easily 0:03:58.320 --> 0:04:01.600 available to people who want to um, who who are 0:04:01.600 --> 0:04:05.160 talented and and aspiring, and who want to be able 0:04:05.200 --> 0:04:13.760 to do things without the large headwinds. Yeah, that's that's awesome. UM. 0:04:13.960 --> 0:04:17.560 It's amazing to think that thirty million is not enough 0:04:17.640 --> 0:04:21.039 to start a fund, especially when you're saying that you're 0:04:21.040 --> 0:04:23.120 really being gobbled up or swallowed up by the fees 0:04:23.120 --> 0:04:27.240 and admin costs. Yeah, it's insane. I mean it's Anyone 0:04:27.240 --> 0:04:29.960 who's raised that kind of money before for the first 0:04:30.000 --> 0:04:34.440 time without a track record knows how difficult it is. Yeah. 0:04:34.520 --> 0:04:38.560 What what year was that? That was in two thousand 0:04:39.000 --> 0:04:42.919 and fourteen? Okay, okay, so even when you had a 0:04:42.920 --> 0:04:46.359 good market behind you, Yeah, so it wasn't about the market. 0:04:46.400 --> 0:04:49.200 It was really about the not about the performance of 0:04:49.200 --> 0:04:51.120 the market. It was about the market overall, or the 0:04:51.120 --> 0:04:54.280 regulations and admin costs that are involved with ut Yeah, 0:04:54.279 --> 0:04:56.480 it was just you know, I mean, if you want 0:04:56.640 --> 0:04:59.800 a little, you know, peek into what my my kind 0:04:59.800 --> 0:05:04.440 of average day look like. It was dealing with UM. Okay, 0:05:04.440 --> 0:05:07.240 So starting with the end of a trading day, you know, 0:05:07.480 --> 0:05:09.960 I'd have to fill in four different types of spreadsheets. 0:05:09.960 --> 0:05:14.200 Each of them had forty different columns reporting um, forty 0:05:14.240 --> 0:05:16.880 different bits of information on each trade that I had done. 0:05:17.279 --> 0:05:21.040 One spreadsheet for equities, one spreadsheet for FX or currency trades, 0:05:21.080 --> 0:05:26.400 one spreadsheet for bonds, once one spreadsheet UM for cash management, 0:05:27.279 --> 0:05:31.200 and report that into the fund administrator, who's then receiving 0:05:31.600 --> 0:05:34.680 the counterparties, you know, reporting on the other side, who 0:05:34.760 --> 0:05:37.240 checks them. Sends a bunch of emails the next day 0:05:37.240 --> 0:05:39.800 saying this trade doesn't match, that trade doesn't match this 0:05:40.120 --> 0:05:42.919 Your fourth decimal place doesn't match his fourth decimal place. 0:05:43.360 --> 0:05:45.080 Some one of you is wrong. We've got to settle 0:05:45.120 --> 0:05:48.680 this before we can settle the trade. That's one part 0:05:48.680 --> 0:05:50.360 of it. Then there was like you know p n 0:05:50.480 --> 0:05:53.680 L spreadsheets where you know, at the end of the day, 0:05:53.760 --> 0:05:56.640 I have my piano calculation of fund administrator has their 0:05:56.720 --> 0:06:01.599 calculation almost never matched. They were always slightly off. Have 0:06:01.680 --> 0:06:04.960 software for that? Oh yeah, you have software, but I 0:06:04.960 --> 0:06:07.520 mean you have software that costs a hundred thousand dollars 0:06:07.520 --> 0:06:11.160 a year to run. Again, that's back down to the 0:06:11.240 --> 0:06:12.800 you know, to the barriers. How much do you want 0:06:12.800 --> 0:06:15.640 to pay to run and operate your fund? You know, 0:06:15.680 --> 0:06:18.360 when you when you're thirty million dollar fund and you're 0:06:18.440 --> 0:06:20.719 charging what one per cent and feest you've got a manager. 0:06:20.960 --> 0:06:23.680 You know, you've got a manager. Operating costs become you know, 0:06:24.880 --> 0:06:29.760 quite crucial where you spend them, right right? Yeah, So 0:06:30.320 --> 0:06:33.000 even those p and and monitoring tools are not perfect. 0:06:33.080 --> 0:06:35.120 You know, they require they still require a lot of 0:06:35.120 --> 0:06:40.560 manual input. Right. Um, So those are the costly layers there, 0:06:40.760 --> 0:06:45.520 um that you saw. Now, so so you saw a 0:06:45.600 --> 0:06:48.320 theorym and then you figured there's some way that that 0:06:48.320 --> 0:06:51.240 that compliance piece, that those layers could be compressed down 0:06:51.360 --> 0:06:56.599 using the blockchain. Yeah, well, I mean what what what 0:06:56.680 --> 0:06:59.920 ethereum really gave us was well what let's let's take 0:06:59.920 --> 0:07:02.080 a step back. What Bitcoin gave us was a way 0:07:02.120 --> 0:07:05.840 too was an accounting system. Right, an accounting system which 0:07:05.960 --> 0:07:10.240 was UM a way to transfer money from A to 0:07:10.360 --> 0:07:14.760 B with no counterparty, no sorry, no into between two counterparties, 0:07:14.760 --> 0:07:18.760 with no intermediary in the middle, in a completely transferse way. 0:07:18.840 --> 0:07:22.640 Then you had Etherium, which took that same accounting methodology 0:07:22.680 --> 0:07:26.320 and secure secure accounting methodology and embedded an entire coding 0:07:26.400 --> 0:07:28.800 language on top of that, giving you something that looks 0:07:28.840 --> 0:07:30.960 like you know, they used to call it a computer. 0:07:31.280 --> 0:07:35.160 I think you know when you can code, when you 0:07:35.200 --> 0:07:40.920 can code UM rules and conditions onto how transactions can 0:07:40.960 --> 0:07:43.160 be spent, and when you know what you can and 0:07:43.200 --> 0:07:46.160 can't do. This becomes a very powerful tool in finance 0:07:46.200 --> 0:07:48.920 because it basically solves all This is essentially what the 0:07:48.920 --> 0:07:52.120 operational layers are there for, right, to make sure that 0:07:53.040 --> 0:07:56.640 fund managers don't UM run off with your money in 0:07:56.680 --> 0:07:59.640 basil your money, steal your money and run away to 0:07:59.680 --> 0:08:02.559 spend is in a way that wasn't that they weren't 0:08:02.560 --> 0:08:06.000 permission to UM as per the kind of advertisement or 0:08:06.280 --> 0:08:10.400 or fun perspective perspective of that product. UM. And we 0:08:10.480 --> 0:08:12.440 see that. You know, it's happened time and time and 0:08:12.480 --> 0:08:15.080 again in history, whether it's rogue traders at ubs or 0:08:15.080 --> 0:08:17.920 whether it's a model for whether it's whatever. You know, 0:08:17.960 --> 0:08:23.080 the system constantly fails people. People people managed to get 0:08:23.120 --> 0:08:26.960 away with things, spending investors money or savers money in 0:08:26.960 --> 0:08:28.880 a way that they were not permission to do. Yet 0:08:29.240 --> 0:08:32.400 we keep adding these layers of compliance and layers of 0:08:32.440 --> 0:08:35.160 operations to check and double check and triple check. But 0:08:35.280 --> 0:08:38.959 the problem with the traditional financial system is that it's 0:08:39.000 --> 0:08:42.360 so untrained, it's so it lacks transparency. There are so 0:08:42.360 --> 0:08:45.240 many layers of technology. There are so many there's such 0:08:45.280 --> 0:08:49.199 a lack of technology actually, and you know, tracing a 0:08:49.320 --> 0:08:52.520 trade is just like it's a very difficult process. So 0:08:52.520 --> 0:08:55.880 so it's easier to get away with things because there 0:08:55.920 --> 0:08:58.880 wasn't you know, there wasn't a good trace trace ability, 0:08:58.920 --> 0:09:00.560 and there's so many part is in the middle, you 0:09:00.600 --> 0:09:04.640 never know where something is. Um So blockchain etherium gives 0:09:04.640 --> 0:09:08.800 you this transparency, accountability and a way to kind of 0:09:08.960 --> 0:09:13.040 embed rules sets within smart contracts and enforce them. The 0:09:13.040 --> 0:09:15.680 blockchain can enforce them, so all of a sudden you 0:09:15.720 --> 0:09:21.120 can do away with these operations, compliance teams, um you know, 0:09:21.360 --> 0:09:26.160 accounting teams, etcetera, etcetera, because you have an immediate almost 0:09:26.200 --> 0:09:30.880 immediate settlement time. You have a completely transparent settlement system. 0:09:30.920 --> 0:09:32.680 You know when a trade fails and why it fails. 0:09:33.200 --> 0:09:37.000 You can see where everything is at any time. You 0:09:37.040 --> 0:09:39.680 can see in you know, we will get to Mala 0:09:39.720 --> 0:09:42.280 in a second, I'm guessing, but you can see, you 0:09:42.320 --> 0:09:44.800 can you can predefine rules by which people can do 0:09:44.920 --> 0:09:48.080 things or can't do things um. And there's absolutely no 0:09:48.120 --> 0:09:50.760 way those rules can be broken because they're embedded in 0:09:50.760 --> 0:09:53.400 a smart contract. So when you talk about the settlement 0:09:53.440 --> 0:09:55.840 times in the traditional stocks, I mean there's so many 0:09:55.840 --> 0:09:58.800 different people in the middle, right, So from the from 0:09:58.840 --> 0:10:01.199 the company issuing it all way down to the individual 0:10:01.360 --> 0:10:03.920 maybe retail investor or trader who owns that stock or 0:10:03.960 --> 0:10:06.320 thinks they own that stock. There could be what five 0:10:06.400 --> 0:10:10.040 six different people in between, and then when someone trades 0:10:10.080 --> 0:10:12.160 that stock or buys your shells at stock, then it 0:10:12.200 --> 0:10:14.439 has to get settled all the way through the line. 0:10:14.480 --> 0:10:17.520 Is that what you're talking about? Yeah? Absolutely, you know 0:10:18.120 --> 0:10:22.080 you need exactly you need to transfer ownership um And 0:10:22.640 --> 0:10:26.000 believe it or not, you know, ownership in the traditional 0:10:26.080 --> 0:10:28.600 world of finances is literally a bit of paper, a 0:10:28.679 --> 0:10:31.280 legal document that tells you yes, so and so owns this, 0:10:31.360 --> 0:10:34.240 we need to transfer, you know, the ownership of this 0:10:34.320 --> 0:10:36.880 asset to the new person. And this is it's it's 0:10:36.880 --> 0:10:40.520 a lengthy process, so it takes time, it takes verification, 0:10:40.600 --> 0:10:43.720 it takes people, it takes it takes a lot of 0:10:44.200 --> 0:10:47.240 manpower as it stands today, and manpower costs money. So 0:10:47.679 --> 0:10:50.440 it adds costs layers of costs. So some of that 0:10:51.040 --> 0:10:53.080 also has to do with like the custody, right, So 0:10:53.120 --> 0:10:55.920 then um, just like with what what the blockchain has 0:10:56.000 --> 0:10:57.960 enabled us to do is to take custody of the 0:10:58.040 --> 0:11:02.760 asset um not i and all these intermediaries to keep 0:11:03.000 --> 0:11:05.199 keep their ledgers up to date or sort of speak 0:11:05.360 --> 0:11:08.800 absolutely yeah. Yeah, But actually this is very interesting point 0:11:08.800 --> 0:11:11.880 that you bring up because so um, over the years, 0:11:12.040 --> 0:11:17.840 it's become a regulatory requirement that every hedge funder asset 0:11:17.840 --> 0:11:21.920 manager has a fund administrator and a legal custodian. And 0:11:21.960 --> 0:11:24.920 the reason that that those rules have been enforced by 0:11:25.000 --> 0:11:30.480 law are that it's it's a way of ensuring that 0:11:30.520 --> 0:11:32.880 the fund manager can't just run away with the assets 0:11:32.880 --> 0:11:35.480 and spend them on porsches and private jets and whatever, 0:11:35.559 --> 0:11:39.040 but they actually have to spend the funds they you know, 0:11:39.120 --> 0:11:42.800 investors are trusting them with in the within the within 0:11:42.840 --> 0:11:45.520 the kind of rule sets that have been defined to 0:11:45.600 --> 0:11:49.080 the investor. UM. When you talk about the world of blockchain, 0:11:49.720 --> 0:11:53.560 this rule actually just becomes a nuisance, right because investors 0:11:53.600 --> 0:11:57.000 always are the the the owner of their own funds, 0:11:57.000 --> 0:11:59.880 because they're always holding custody or at least the world 0:12:00.120 --> 0:12:04.000 defy decentralized finance is such that investors should always have 0:12:04.080 --> 0:12:06.920 custody of their own assets if they want it. Um. 0:12:07.120 --> 0:12:09.400 And so this rule about having a custodian and a 0:12:09.400 --> 0:12:14.960 fund administrator suddenly becomes quite interesting to to reassess because, um, 0:12:14.960 --> 0:12:17.720 everything is so transparent and everything is pre defined in code. 0:12:17.800 --> 0:12:19.960 So why would you need, you know, why would you 0:12:20.000 --> 0:12:24.680 need to replicate this role when it's arguably more efficient 0:12:24.760 --> 0:12:28.880 and potentially in future more secure than having uh kind 0:12:28.920 --> 0:12:33.120 of manual intermediary in the middle. Right. So to set 0:12:33.120 --> 0:12:35.200 the stage, then, so the big problem that you ran 0:12:35.240 --> 0:12:39.079 into and that everybody is facing is massive administrative cost 0:12:39.679 --> 0:12:42.320 because of the way that custody is happening and settlement 0:12:42.360 --> 0:12:45.400 has to happen through multiple people, and so the compliance 0:12:45.440 --> 0:12:48.000 to keep up with that UM is just just too 0:12:48.000 --> 0:12:51.760 burdensome and just to to cost too costly. Absolutely, and 0:12:51.760 --> 0:12:54.120 and you know, compliance requirements are only going in one 0:12:54.160 --> 0:12:58.120 direction because every years, there's every two or three years 0:12:58.120 --> 0:13:02.000 as another scandal, there's another you know, financial meltdown, and 0:13:02.040 --> 0:13:05.200 then regulators deal with it by slapping on more and 0:13:05.240 --> 0:13:08.440 more rules and more and more restrictions. And in order 0:13:08.480 --> 0:13:11.600 to you know, to to meet those reporting requirements and 0:13:11.640 --> 0:13:15.200 to meet those regulations and rules, you know, funds essentially 0:13:15.280 --> 0:13:17.400 just get slapped with more and more costs. So it's 0:13:17.440 --> 0:13:20.079 it's a yeah, it's a difficult environment for funds. And 0:13:20.440 --> 0:13:24.000 what you end up seeing is instead of the biggest, 0:13:24.320 --> 0:13:28.079 instead of the best fund managers doing best, doing well, 0:13:28.520 --> 0:13:30.240 what you end up seeing is it's the big ones 0:13:30.280 --> 0:13:33.679 getting bigger and the small ones getting smaller because the cost, 0:13:33.800 --> 0:13:36.720 because of the cost to do the administration. Exactly, you 0:13:36.760 --> 0:13:39.200 need the scale to be able to suck up the administration. 0:13:39.640 --> 0:13:41.640 It was a great I wish I could remember the source, 0:13:41.640 --> 0:13:43.960 but there was a great article um a couple of 0:13:44.000 --> 0:13:47.320 years ago. I think it's said something like of the 0:13:47.320 --> 0:13:51.480 world's assets invested in hedge funds are invested in five 0:13:52.000 --> 0:13:56.040 largest hedge funds. Yeah, one about that. We see that 0:13:56.160 --> 0:14:00.200 all throughout different areas in the world. For example, in 0:14:00.240 --> 0:14:03.040 e commerce, right, so you have am on that's continued 0:14:03.040 --> 0:14:05.520 to grow bigger and bigger and bigger, and then regulations 0:14:05.920 --> 0:14:09.800 have been constantly put into place for small businesses to 0:14:09.880 --> 0:14:13.240 keep up with, like local tax jurisdictions for example. UM, 0:14:13.440 --> 0:14:16.680 and so it's it's too burdensome for those small entrepreneurs, 0:14:16.679 --> 0:14:18.880 those small sites to keep up with those regulations. And 0:14:18.880 --> 0:14:21.440 so Amazon of course has the scale and they can 0:14:21.480 --> 0:14:23.720 do that. So UM and we can see that just 0:14:23.760 --> 0:14:27.360 play out over and over and over, and it's it's 0:14:27.440 --> 0:14:29.520 kind of kind of what you're saying, is it's kind 0:14:29.520 --> 0:14:33.120 of like, on one hand, Um, the regulations continue to 0:14:33.320 --> 0:14:35.440 build up and continue to make it harder and harder 0:14:35.440 --> 0:14:37.520 and harder. But at the same time, we're on a 0:14:37.560 --> 0:14:41.720 system that's been around for eighty years or I don't know, 0:14:41.760 --> 0:14:44.400 sixty seventy years and it hasn't really changed. Is that 0:14:44.480 --> 0:14:47.800 kind of what what you see? Absolutely? And and the 0:14:47.800 --> 0:14:49.800 thing is, you know, eighty years ago we didn't have 0:14:49.880 --> 0:14:54.400 very exciting technology. Today we do, and UM and probably 0:14:54.440 --> 0:14:57.320 you know we've had exciting technology for the last couple 0:14:57.360 --> 0:15:01.960 of decades as well. But the financial system, so UM, 0:15:01.960 --> 0:15:04.800 you know, it's it's so fragile right now because we've 0:15:04.840 --> 0:15:09.000 just slapped layers and layers and layers of um of 0:15:09.160 --> 0:15:11.800 old technology on top of our new technology on top 0:15:11.800 --> 0:15:14.920 of old technology for so many years that the technology 0:15:15.000 --> 0:15:17.640 stack that they're dealing with such a mess in banks 0:15:17.640 --> 0:15:21.080 and financial institutions. So to to try and you know, 0:15:21.360 --> 0:15:24.840 make any proper use cases or to use blockchain or 0:15:24.920 --> 0:15:28.440 new technology to its food potential, it's almost impossible if 0:15:28.440 --> 0:15:31.360 you're a large incumbent. And I think the people that 0:15:31.360 --> 0:15:33.160 are doing the really exciting stuff now are the people 0:15:33.200 --> 0:15:36.000 that can really start from fresh, take all the technology 0:15:36.000 --> 0:15:38.840 that's available to us today, and reinvent things from scratch. 0:15:39.840 --> 0:15:43.440 You I want to ask you, um how hard that's 0:15:43.480 --> 0:15:45.800 going to be because of the incumbents that are there 0:15:45.800 --> 0:15:48.520 on the regulations. But before we get to that, UM, 0:15:48.640 --> 0:15:51.960 let's jump back to UM. Let's just jump back now 0:15:52.000 --> 0:15:54.600 to melon. So you've seen these problems, You've you've had 0:15:54.640 --> 0:15:57.840 to deal with this in real life, the burdensome costs 0:15:57.920 --> 0:16:01.520 and compliance and labor and so forth, and so UM 0:16:01.680 --> 0:16:05.400 using this new technology of bitcoin, etherory and blockchain, UM, 0:16:05.880 --> 0:16:09.240 you think you found a better way? Absolutely? I mean, 0:16:09.600 --> 0:16:12.080 we are. It's still very early days in terms of 0:16:12.120 --> 0:16:15.240 where the whole space is UM, but I think you know. 0:16:15.320 --> 0:16:18.520 In February nineteen this year, we went we went to 0:16:18.600 --> 0:16:22.480 main net with version of one of Melon, and Melon 0:16:23.120 --> 0:16:26.280 enables you to As of today, you can set up 0:16:26.320 --> 0:16:30.720 a crypto fund within a few minutes. You can define UM. 0:16:30.800 --> 0:16:32.880 You can pre define things like who is allowed to 0:16:32.880 --> 0:16:36.600 invest UM, where to your asset universe, which trade, which 0:16:36.600 --> 0:16:39.280 exchanges are you allowed to trade with? Which, what's your 0:16:39.280 --> 0:16:42.560 maximum number of positions, what's your maximum position size? All 0:16:42.600 --> 0:16:44.520 the kind of things that you can define in a 0:16:44.560 --> 0:16:48.480 fund perspective which is enforced by financial intermediaries. We can 0:16:48.480 --> 0:16:52.280 start to define those by smart contract code in a 0:16:52.320 --> 0:16:56.920 customizable way. I can customize my fund with its rules 0:16:56.920 --> 0:17:00.040 and its parameters. I can select my fees, my my 0:17:00.120 --> 0:17:02.720 management and my performance fees, and I can deploy this 0:17:02.760 --> 0:17:04.879 fund to the blockchain. It takes the form off its 0:17:04.960 --> 0:17:08.840 token and people can invest. The smart contract takes care 0:17:08.880 --> 0:17:12.640 of the accounting, the share creation, the fund administration, the risk, 0:17:12.720 --> 0:17:16.000 the risk management, everything operational about the fund except the 0:17:16.760 --> 0:17:19.879 except the investing, which is done by the manager is 0:17:19.920 --> 0:17:22.040 taken care of, which just frees up the manager to 0:17:22.359 --> 0:17:27.000 focus purely on investing. Now, UM, that's huge when you 0:17:27.000 --> 0:17:32.000 think that. You know, my fund took six months to launch. UM, 0:17:32.080 --> 0:17:34.800 they can take up to twelve months to launch. And 0:17:35.200 --> 0:17:38.760 the costs involved before you even launch are north of 0:17:38.880 --> 0:17:43.720 a thousand dollars in most cases, and the running costs 0:17:43.720 --> 0:17:47.679 of a fund are at least that per year. So 0:17:47.960 --> 0:17:50.760 you know, we've reduced that to process to a few 0:17:50.800 --> 0:17:57.359 minutes and um less than a hundred bucks. And you can, yeah, 0:17:57.359 --> 0:17:59.919 and you can, and you can start to see. You know, 0:18:00.119 --> 0:18:03.720 the user experience is not as easy as UM. You 0:18:03.800 --> 0:18:06.160 know we'd like it to be, but that's largely because 0:18:06.160 --> 0:18:08.639 of other developments that need to happen. There is the 0:18:08.760 --> 0:18:12.160 user experience on setting up a traditional fund. It's true, 0:18:12.480 --> 0:18:14.960 that's true. But you know, blockchain is not perfect. And 0:18:15.000 --> 0:18:16.679 I'm not trying to sit here and say as of 0:18:16.680 --> 0:18:19.520 today it's perfect. But UM, if we keep if we 0:18:19.680 --> 0:18:23.840 keep improving, or if we keep developing things in the 0:18:23.880 --> 0:18:26.199 way at the speed that have they have developed in 0:18:26.200 --> 0:18:28.360 the last three years in the blockchain world, I think 0:18:28.400 --> 0:18:30.119 that three years from now we'll be looking at a 0:18:30.160 --> 0:18:34.480 system which is massively, massively better experience than the traditional 0:18:34.520 --> 0:18:38.879 experience of fun management. Now when you say a fund um, uh, 0:18:39.040 --> 0:18:41.320 there's there's a couple different things. I mean. Originally I 0:18:41.359 --> 0:18:43.919 was thinking MELON was like helping someone set up like 0:18:43.920 --> 0:18:46.679 an index fund, which means I would say, you know, 0:18:46.720 --> 0:18:49.200 for simplicity sake, I have ten different assets in there 0:18:49.200 --> 0:18:53.800 at at different ratios, and um, someone could buy into 0:18:53.880 --> 0:18:57.400 that index fund. UM. But I think now you're talking 0:18:57.440 --> 0:19:00.879 about setting up a fund where I could raise however 0:19:00.960 --> 0:19:04.159 much money and then go invest that kind of whatever. 0:19:04.160 --> 0:19:08.520 My thesis is, Yeah, I mean, and I use the 0:19:08.560 --> 0:19:10.720 word I default to the word fun because it seems 0:19:10.760 --> 0:19:12.800 to be a word that most people can relate to. 0:19:13.080 --> 0:19:15.800 But actually you can use melon to set up any 0:19:15.840 --> 0:19:17.960 kind of investment vehicle. It can be an e t F, 0:19:18.000 --> 0:19:19.600 It can be a hedge fund, it can be a 0:19:19.680 --> 0:19:21.640 VC fund, it can be whatever you want. It can 0:19:21.640 --> 0:19:25.960 be a dow UM. There's actually no limitations on because 0:19:26.040 --> 0:19:29.960 each each investment vehicle is customizable. But you know, what 0:19:30.000 --> 0:19:32.560 we give is and what we hope is that one day, 0:19:33.680 --> 0:19:36.080 you know, five years from now, maybe any kind of 0:19:36.160 --> 0:19:40.080 investment vehicle is doable on melon um all the rule sets, 0:19:40.080 --> 0:19:42.440 all the risk management rule sets. You can imagine are 0:19:42.480 --> 0:19:45.960 available because obviously there's a limit finite amount right now 0:19:46.359 --> 0:19:49.120 based on the fact that we're a small team UM 0:19:49.160 --> 0:19:52.080 and we're only two three years into the project. So 0:19:52.359 --> 0:19:54.680 um but you know, it's all open source, it's all 0:19:55.359 --> 0:19:58.119 code that's there for anyone to see, anyone can participate, 0:19:58.200 --> 0:20:04.000 anyone can um submit proposals or code, and it's you know, 0:20:04.080 --> 0:20:07.480 it's easily integratable. So there's absolutely no reason why it 0:20:07.480 --> 0:20:11.880 couldn't be used as the future financial infrastructure for all 0:20:11.920 --> 0:20:16.359 asset management. And so how how would someone use that now? 0:20:16.400 --> 0:20:20.680 I know, for example, we talked about um ash that's 0:20:20.720 --> 0:20:22.480 building on top of that, and they're doing some sort 0:20:22.520 --> 0:20:27.679 of like gamified UM fund fund investing type platform. So 0:20:27.720 --> 0:20:29.600 if I was a builder, I would want to build 0:20:29.600 --> 0:20:32.199 on Melon and I could come build my fund. I mean, 0:20:32.240 --> 0:20:34.840 I guess you're saying like the options are endless, or 0:20:34.880 --> 0:20:38.280 like I would set up like my own marks index 0:20:38.359 --> 0:20:41.359 fund or um or I could say, hey, this is 0:20:41.400 --> 0:20:43.200 just give me just raise a million dollars and I'm 0:20:43.200 --> 0:20:44.919 just gonna go invest it. However, I see fit, I 0:20:44.920 --> 0:20:47.439 mean any option that I want. So Melan just kind 0:20:47.440 --> 0:20:50.199 of takes care of the compliance piece of that. So 0:20:50.240 --> 0:20:53.639 You can think of Melon as the infrastructure, right, the 0:20:53.680 --> 0:20:56.520 infrastructure which gives you the tool kit to build whatever 0:20:56.560 --> 0:20:59.359 you want to build. In the asset management space, you 0:20:59.400 --> 0:21:02.320 can you can set up a vehicle. This vehicle can 0:21:02.359 --> 0:21:05.720 be invested in. You can limit the number of investors, 0:21:05.760 --> 0:21:09.000 you can keep it unlimited, you can you can select. 0:21:09.000 --> 0:21:11.080 It gives you all the tools that you need to 0:21:11.359 --> 0:21:15.080 to customize whatever you want to do. Now, we haven't 0:21:15.119 --> 0:21:17.200 got all the bits there, but we have a full 0:21:17.240 --> 0:21:21.200 feature set and we've delivered everything, all the features we promise, 0:21:21.280 --> 0:21:23.960 and we're now looking towards the future to what else. 0:21:24.119 --> 0:21:25.920 You know, what are the next features that people want 0:21:25.920 --> 0:21:29.239 to see? Ashes building a use kick that we never 0:21:29.280 --> 0:21:32.520 actually imagined on Alan and I just came along UM 0:21:32.760 --> 0:21:34.160 I think it was a year and a half ago, 0:21:35.040 --> 0:21:37.040 and they said, oh, we love what you guys are doing. 0:21:37.560 --> 0:21:40.240 We uh, we're really good with UX and you I 0:21:40.440 --> 0:21:43.520 and UM. We want to build a fun use case 0:21:43.560 --> 0:21:45.960 on Melon and we want to kind of do something 0:21:46.040 --> 0:21:48.720 like a Battle of the fund managers on Melon where 0:21:48.760 --> 0:21:51.360 people can just challenge one another to short or long 0:21:51.480 --> 0:21:56.320 term you know manager competitions and UM and you know 0:21:56.359 --> 0:21:58.280 there's a there's sort of sort of prize pool which 0:21:58.280 --> 0:22:00.880 gets allocated to the winner, and it's all very competitive 0:22:01.040 --> 0:22:04.360 and there's a very playful there's a very playful element 0:22:04.440 --> 0:22:08.359