Decentralized Finance and Blockchain
Good evening, everyone. warm welcome for today's webinar on decentralized finance and blockchain. As Sunil said, just a two three minutes introduction and over to Sunil a brief introduction about me. I am susan. Taking care of the admissions for our triple IIT Hyderabad and talentsprint blockchain and distributed ledger technologies program. I have almost nine years of working experience helping students and professionals take better career decisions. Prior to talentsprint. I was working with Indian School of Business and works in School of Business. The topic is decentralized finance and blockchain. decentralized finance. We often call as defy refers to the shift from traditional centralized financial systems to peer to peer finance, enabled by these centralized technologies built on Ethereum blockchain. And there's a lot of things happening in and around D five and blockchain. So there's a reason we taking this topic today. And just to understand is the rise of d phi or disruption or an opportunity and what blockchain means for the growth of d phi? And moreover, how can professionals associated with the impacted industry prepare for this revolution? To discuss this and more, we have our lead faculty from the blockchain program, Mr. Sunil Agarwal With us to discuss about this, a short introduction about Sunil. Sunil has spent almost two decades in three integrated areas of teaching research and startup ecosystem. His core areas of professional interest are emerging blockchain technology startups, and online learning solutions and digital business models. So that's all from me, Sunil, you can definitely go ahead and take it forward from here without wasting any more time.
Okay, thank you,
let me start with this session. Just a minute, this problem Yeah.
In past him also. So, Neil, so we actually run it in PPT mode only not on fullscreen. Okay.
Let me let me shift to Google Slides. Friends. Today's session is going to be a bit interesting because this is a session which might not look very formal blockchain technologies session because whenever we do webinars on blockchain technology, we generally discuss blockchain use cases. And when I say blockchain use cases we discuss trade finance, we discuss payment remittances, we discuss supply chain, we discuss custody of us assets, we discuss broad industrial use cases of blockchain technology, but, recently there has been a very, very interesting change. And that interesting change is somewhat bit unbelievable. And I wanted to discuss that particular change which has happened because of blockchain technology. So, that's that aim here is what I call decentralize finance. So, I wanted to showcase whatever is happening in decentralized finance. Of course, this area is a very, very big area, but I wanted to give you a brief glimpse of that particular thing, okay. So, let us start diving into this particular thing. Okay. So, if we need to first contextualize blockchain then we need to understand that blockchain is not one phenomenon. blockchain is multiple things to multiple people. If we just ask for a simple understanding. Well, blockchain is basically a shared ledger technology and the shared ledger particularly among peer to peer actors. But the fact is that this is more or less a technical definition, but if you start looking blockchain from accounting technology perspective, then it can be called a real time auditing system or a self auditing system, which means that here, human intervention as far as auditing, planning and settlement is concerned, human intervention is not required. And if you look at blockchain from an organizational purpose perspective, then I would say that blockchain is a game of disintermediation where existing third parties will be replaced by software protocols. Now, if you look at blockchain for innovation purpose, then I would say that blockchain is basically a permissionless. space, a space, where you can program a ledger, where you can do multiple things with a ledger. And if you start looking blockchain from the perspective of territorial borders, then I would say that blockchain represents something which is far bigger than territorial borders, borders, it is a planetary phenomena. And if you start looking blockchain from the perspective of cash, then I would say that blockchain is basically reinvention of cash as digital cash. I'm not saying digital money, I'm saying digital cash, there's a difference between digital money and digital cash. And if you start looking, start looking at blockchain from a capital perspective, then I would say that in blockchain, you can actually re invent a corporation and that reinvention of corporation is something which happens with the help of smart contracts. So, now, the next thing here is that how blockchain has built defy decentralized finance. Now, that becomes a very, very interesting area, because
when Bitcoin happened in 2009, Bitcoin was if I say, in a simplest sense, Bitcoin was just a payment system and a payment system which it transferred value from point A to point B. Now, the issue here is of course, very small kind of conditions are context could have been built into bitcoin. For example, if you want to send Bitcoin to your kid or to brother or your friend on his or her birthday, then you can basically add one condition like check time lock verify, which means that you can ensure that your friend or your relative would receive his or her bitcoins on the prescribed day. So, these are the very, very basic simple kind of contracts which could have been built into bitcoin, but otherwise, the space for building smart contracts in Bitcoin was not there. But in 2014, when aetherium blockchain came, it based basically introduced a completely disruptive potential with smart contracts. Now, what is a smart contract, smart contract is nothing but a in terms of a mechanism, it is a self verifying a self executing mechanism, which means that entire a job is is to be done by a code itself, because in aetherium, there are two kinds of accounts. One is a normal account the way Bitcoin blockchain has a normal account system, you can have a normal account, you download a valid and you can make an account and that account will have public key and private key This is the normal definition of an account. But any aetherium ecosystem, you can also have a contract account, which means when you build a smart contract, and you deploy it on a blockchain on ether aetherium blockchain then in generates a contract address. And that contract address is is basically a kind of a mechanism that if you send a particular amount of ether to that particular address, then that contract would do a certain function. And that certain function would be written as code. Now, this is something which looks completely, utterly unbelievable, but how can this happen? But Ethereum was designed like this, because aetherium is a Turing complete virtual machine or it can be called a world computer, which means that anybody can build an application and host his or her application on this world computer. Now, the issue here is that what is the range of these applications and since aetherium, is a Turing complete virtual machine which means that any thing that is expressible as logic, anything in the world, that can become a smart contract, which means that wherever a developer imagination can go, that can become a smart contract and in a threat Because since it can be hosted on aetherium blockchain, let's start simplifying what is the actual equivalent of smart contract in our real work? For example, we work for companies and what is a company company is basically a aggregation of multiple contracts, for example, there is a wage contract, there is an attendance contract, there is a key performance indicators contract, there is sales target contracts. So, like this company is a proxy of smart contracts. Now, it may look very, very
idiotic for for a moment, but if you reduce a company from a human level to just basic functional level, then on that level, the definition of company as a proxy of smart contracts will not be a wrong definition. Now, let's go a bit deeper into it, let's choose a kind of a company which is let's assume a bank. Now, what is a bank banks core function, the core function of a bank is lending operation. And when you lend you design a lending product, for example, you design a mortgage, okay, you design a mortgage for 20 years. Now, when you design that kind of a lending product, it has certain rules and the lender and the person who is buying that mortgage, both are very convinced about those rules, that EMAS would be every month on 15th of every month, it will go on like that for 20 years. And if you don't pay your EMI on that day, there will be a penalty of X amount of rupees per day like this, you know that it is 9% rate of interest and duration is 2020 years. Now, if you see at a functional level, then this lending product is built around rules. Similarly, if you are going to buy us equity derivative, or any kind of financial derivative, then it is also built around certain rules. So the issue here is that every financial institution is actually built on a ledger. And that ledger is built around rules. So, if you basically do an abstraction out of this entire discussion, that what is the core functionality of a financial institution, then you will say that this financial institution is in effect, a ledger. And this ledger is built around certain rules. Now, that functionality, that abstract functionality of our financial institutions is what can be reproduced as a smart contract with the help of blockchain, which means that a blockchain which can be programmed, a ledger, which can be programmed, can virtually replace a financial institution. Now I know that whatever I'm saying right now, may look completely unbelievable, to be honest, a few years back, this also looked completely unbelievable to me. But the fact here is that this smart contract capability of Ethereum blockchain does have that capability of replacing a financial institution. Before I go into, actually, that part of the story, I will just stop here, and we'll see what are the
Nieto Shah has said, How is blockchain going to change the way we deal with consumer finance? Neil, just hold on. Just hold on. I'm coming on to that. Your second question is what is difference between digital money and digital cash See, cash is a kind of money where you have complete control. But when you have digital money, the money is actually in a bank account. So you don't control the actual control is with the bank. Okay. So in that sense, you are basically sending an instruction to the bank. To do a transaction you are not in the complete control but if you have cash then you know that you can spend it anytime. So, digital cash is equalent of cash but in a digital manner for example Bitcoin is digital cash
Ravi Kumar no question so ginagawa is cryptocurrency a use case of blockchain or is it different? See, of course, it is a use case but today I'm going to focus on decentralized finance, decentralized finance actually emerges from cryptocurrency Hello, the issue here is when you are asking what is the difference between cash and money you need to understand that cash in terms of functionality cash can be dollar cash can be rupee cash can be Yuan cash can be any paper currency note or a coin Okay. Now, the issue here is that money has a larger definition because if you ask how much cash has been printed in India, then it is around 27 trillion rupees 27 lakh crore rupees, but if you ask what is the money in circulation in India, then it is around 200 trillion rupees this So, which is m three and this major part of the money is coming from commercial banks lending operations. So, in that sense there is a very serious difference between cash cash is the actual currency with the public cash, currency cash plus coins. This is called currency with the public. And actual money is the total money in the entire banking and monetary system that is m three which is around eight times more than the cash handle. We want defy projects will be huge on.or big chain, we won't go into that part. Okay, so let's move on to the other part of our session today. So if a blockchain, which has the smart contract capability can design multiple kinds of smart contracts, then it means that the functionality is hidden in that smart contract can actually replace a financial institution. And that's where decentralized finance becomes very, very important. Because in just last one year, if you can see the graph, the value of the centralized finance has actually jumped from literally few 100 million dollar to around $40 billion. Now, what is a decentralized finance these centralized finance is nothing but a financial infrastructure, which is actually built using smart contracts, and currently using smart contracts of aetherium blockchain. And these smart contracts have built multiple kinds of products, I will showcase those products to you also. But what I'm trying to say here is that this is a kind of financial infrastructure, which is not created by any government, which is not created by any institution. This is created by individuals who can belong to any part of the world. And they have written smart contracts and those smart contracts have multiple kinds of functionalities. So it is a developer's imagination, which is getting visualized here. And if you can see the growth, see, from August 20, to march 2021, in a period of roughly six months or eight months, this has jumped from one or $2 billion to $40 billion. And this is a massive increase in such a short time. And imagine this is just only on one single blockchain and that is aetherium. Now what What kind of products that are coming on to decentralized finance, there are multiple kinds multiple categories and if you can see at the top
there is a category of lending, there is category of decentralized axes, which is called x, then category of derivatives, payments, assets, multiple kinds of categories are coming up. And if you can see the first major product which is a made which is called maker dow, the full name is maker, dow maker, decentralized autonomous organization. So, which means, it is a completely decentralized organization, no single human being or body actually controls it of course, then the governance mechanism, but this governance mechanism is not like a corporate governance or political governance, no, it is not like that, it is basically based on voting by all the token holders of maker dow and that token is called maker Okay. I will come into the details, but if you see, the maker dow is basically a project whose core focus is lending and this is the value 6.3 7 billion and this is the value of today. And this value has jumped literally 100 eggs in last one year 100x in last one year, then there is another project compound. It's again a lending project, basically, you may call it as a bank in a common common sense a bank particularly dealing with personal loans, okay. So, in that sense compound has a locking value of $5.25 billion. So like these, if you can see, top three are in lending categories, then there are decentralized exchanges cofinanced uniswap, sushi swept, then there are derivatives exchanges, then acid. So, and this is only a representative figure, the reality is that today there are more than 70 different defy solutions on aetherium more than 70. And the total value of all those solutions is around $42 billion today. Okay. Now, let's, let's try to understand some of these defy solutions one by one. So we'll start with maker dow. Now maker dow is a very interesting project because it is basically a credit platform, but it does issue credit, but in a completely decentralized way. Now how does it work? Well, let's assume you have aetherium or ether cryptocurrency with you, and you don't want to sell it, but you need some liquidity for you for some purpose. Now what you would do, now, you can't you don't want to sell it, but you need money, which means that you need a solution which can finance your ether cryptocurrency. So you go to maker dow and deposit your ether in a wallet, okay. Now, once you deposit your ether in that wallet, then you can borrow 66% of the collaterals market value which means then, the system the smart contract will generate something called di BA II D II which is a stable coin. But this is a very unique kind of a stable coin and this is basically anchored to unite a US dollar which means that whatever be the price of ether, the entire smart contract is designed in such a way that it it algorithmically settles the dye issuance accordingly. And since it has a margin of 34% in terms of borrowing range, so it manages that volatility long. So which means that if let's assume you Have 10,000 worth of ether with you today let's assume you have five ether which is six ether which is around 10,000 rupees a $10,000
and you need money. So, you can go to make $1 deposit you have six ether and you can get 66% which means $6,600 as dye, okay. And this dye is something which you can spend on whatever is your meat and for the period which suits you. Now, you may say that, if I can spend die, then what will happen to my ether, the smart contract in maker dow will will hold your ether, it won't go any weird. So, if you want to earn your ether back or get your ether back, then you will have to deposit those 6600 dive back with a fee which can be called interest, but here it calls it is called stability fee. So, once you pay back your die with a fee, you get back your ether. So, in reality, this is exactly what our bank does. You go to a bank for a loan bank ask something to be taken to be depository in terms of collateral for example, gold alone, if you go to a bank for a loan bank repaid the goal and give you around 60% of the amount. So, in that sense, this entire system is a very very transparent system, because the person who is going to take debt from maker dow knows that terms and conditions. Now you may ask what is the stability or what is the risk factor of collateral value going down? Okay, now, the system has been designed, the smart contract has been designed designed in such a way that if the collateral value of a wallet falls below a level, then it is subject to 13% percent penalty and also liquidation which means that that ether would be sold in open market at 3% discount. So, if you feel that your value is going down, then you can deposit more ether into your wallet to escape the penalty and liquidation. Okay, so in that sense, the system knows who to punish, when to punish, and how to punish. And naturally, somebody somebody among you can ask what happened. If there is a black swan event, if the market value of the collaterals all the collateral in the maker dow system declines very, very fast, very steeply. What will happen then. The issue here is, that's where the governance system of maker dow which is a decentralized autonomous organization comes in, because maker dow has a native token and the number of those native tokens is fixed at 1 billion tokens. Now, anybody who holds maker doubt tokens is basically a governance partner. These token holders can come together and vote on the risk parameters of a maker dow and they can change those risk parameters. For example, they can change this boring rate of 66% they can change this stability fees, they can change this penalty rate they can change the liquidity liquidation parameters. So, maker dow has a system which has a governance model, but that governance model is completely different from your regular corporate governance models. Here, nobody will appear before you for a KYC check. No KYC instant so you hold your maker dow token as ERC 20 tokens, maker token is a is a cryptocurrency and with this, you have a proportionate voting power in the decision making. So if majority decides to do something, then majority decision will be implemented in all these parameters. And not only this lending capability maker dow also offers some sort of a savings bank account facility, where you can basically
do a kind of a deposit and maker dow will get some sort of the the person who is depositing money, we'll get some sort of interest rate from the maker dow now, from where these fees comes, it comes from all the interest fees earned by method. So, just don't forget that maker dow is nothing but an organization, but an a kind of organization, which has never been there in the world, it is a completely virtual organization and it is controlled by people with token voting power and you don't know them, but since it is a community people vote on the safety of the system. This is something which is very, very interesting. So, maker dow, you can regard maker dow as a muthoot fincorp of the world where instead of gold, you are basically depositing ether or any other ERC 20 token currency like back as a collateral. So, this is a difference, but this is also the uniqueness okay. So, let me move into the second major example which I want to share with you which is called a uni strap. A uni stripe is very interesting because uniswap is basically an exchange, but this is a decentralized exchange, which means no single person or single organization is managing it which means that this is a collection of smart contracts. And all on on this decentralized exchange there are two unique features. And those unique features are number one, you can go on to Eunice web and you can create a liquidity pool which means let's assume you want to sell some some kind of ERC 20 token and you say that I will sell 10,000 ERC 20 tokens of that variety let's do x y Zed tokens, I will sell 10,000 ERC 20x y Zed tokens for one ether. So this trading pier becomes a liquidity pool. So you will deposit X amount of tokens or ether and in this way you will create a market now you need to strap has a condition that you can create only one market per ERC 20 token. So which means that as you feel that token is good for trading, then more and more people start joining that particular market. So in this way, the liquidity pool starts getting bigger and bigger. So that actually anybody can buy and sell. So when buy and sell happens, then the supply of ether and those crypto tokens will go up and down. So this liquidity management is done by those fools and all those orders are matched by automated matchmaker. So this is the beauty here you don't have to depend on any centralized software to do that matchmaking this entire order matchmaking happens in a completely automated manner. And the trading fee is very simple, whatever be the value of trade point 3% would be the trading fee, and this trading fee would go into a pool and that would be distributed to all those people who had deposited their ether or their tokens to build multiple liquidity pools. So whatever be your share, so you will start earning out of that. Now the issue here is that this units web is now so all successful decentralized exchange that it is currently doing $50 billion of trading volume per month.
No human being is managing the show no human being, but still. This entire game is being run by smart contracts. So this is the beauty of decentralize finance. Okay. So, the way maker dow can become a equalent of muthoot fincorp. Similarly, a uniswap can become equivalent of National Stock Exchange, something like that without any particular player controlling it. And of course, uniswap also has a governance token earlier, it didn't have that governance token and now they have a governance token, which is called you and I are unique. So, they can also do some changes in this particular pair of smart contract risk parameters. So, the issue here is that this entire game is a code driven game, completely permissionless innovation completely without actually managed by any single player. So this is the beauty of decentralization and smart contracts. And then, third one, as an example, which I'm taking is called Republic network, the current name is called Ren VM. The refereum is a very interesting project, let's assume you have Bitcoin, okay. And if you have Bitcoin, then you cannot connect with aetherium network, because both have different kinds of protocols. Now, how having Bitcoin you can interact with these centralized financial solutions on aetherium platform. So, this is a very, very big problem. Now, REL VM exactly solves that problem. So Ren VM is basically a bridge your deposit your Bitcoin on Ren v VM, it will convert your Bitcoin into real BTC or one to one ratio, if you deposit point five it will create point five rent BTC and when we we BTC is a ERC 20 token and its value will be equal to Bitcoin. Now, with that Ren BTC, you can basically enter aetherium ecosystem and you can buy other kinds of currencies using uniswap you can basically create a debt for yourself using maker dow so which means that your bid one which was lying idle is now working, but by using the bridge of rent VM. So this is basically a kind of interoperability as well as accessibility and the beauty of this network is that today, the value which is locked in this virtual machine, this collection of smart contracts is 1.0 2 billion sorry
1.0 2 billion and this project is not even a one year long project. And already 600,000 plus ether have been locked 20,000 BTC plus have been locked. So people who have Bitcoin they want to earn extra income, they want to use their Bitcoin for interacting with multiple other options and not just Bitcoin. Rent VM is offering that kind of a bridge possibility for Bitcoin cash, pile coin, Dodge coin, Digi byte z cash and many more digital assets. So this is the beauty of around here. So I've taken three examples. First one was maker dow second was Eunice Webb and third third one is Ren VM. So, if you see these three major examples, all these major examples are on aetherium network and they are basically a result of smart contract capability of aetherium. And the beauty here is that not just these three, there are multiple other solutions, which are defy decentralized finance solutions, which are on aetherium network Ave is the compound john five flex up polygon makes us much mutual. For example, polygon polygon is already a billion dollar unicorn and it is a India based group. And you you will be literally finding it unbelievable but it the entire talent for polygon which was earlier called medic network comes from India and it is a layer two solution on aetherium blockchains. Because Ethereum blockchain cannot handle more than 15 transactions per second. But if you shift to polygon or x Matic then you can do even 100,000 transactions per second and transaction will be confirmed in one second and the cost of a transaction will be less than three pests. So this is the beauty of polygon. And if you see that, what is the potential future of defy solutions and more and more defined solutions are now moving from layer one aetherium to layer two aetherium, which means on solutions like polygon, and already already polygon has more than 100 daps, which are using layer two solution of aetherium. So what in summary I'm seeing here, the fact here is that defy is very, very unique. A year back, I would not have chosen a topic or defy for discussing blockchain. But over the last one year defy has exploded literally, despite scalability challenges of aetherium $42 billion of locked value in less than a year. This is an explosive speed. And this speed has forced me to take up this particular topic. And I'm going to add this particular topic into our regular cohort six also. And not just that, the speed is great. Along with that, you can build a decentralized project and the value of that project can reach a billion dollar in just a few days, that has happened.
Okay, so the road to unicorn status can happen in a few days. And the beauty here is that whatever was happening on aetherium is now going to happen on other smart contract capable blockchains like cosmos, avalanche polka dot cardano. And these blockchains are scalable blockchains, these blockchains are interoperable blockchains, which means that the cost of transactions will be less speed of transactions will be high. So which means that if defy is $42 billion on aetherium, then it can reach 10x 20x, or even 100x. On these other new smart contract capital blockchains. And the most surprising and the most both surprising and disturbing aspect of defies that you don't need to get any kind of regulatory clearance for it. And no regulatory power can actually stop you. You just build an application and start sharing it with community just create a smart contract, deploy it on blockchain and share it with everybody. So these are the things which have already happened. And they are scaling up very fast. Of course, there is one very serious challenge. People don't understand what are the risk parameters of using a smart contract? What if there is a bug? There has been some some cases where there have been bugs. So in that sense, there is one risk that people at a broader level, when they start using these defy applications, they don't understand risk parameters very seriously. So in that sense, that's where a lot of awareness needs to be created. Okay. And another thing is that the market for defy is moving very fast because no government or no corporation can actually stop it. Why Facebook is thinking of launching its own cryptocurrency called libre, which is now being called time dollar. The reason is actually defy it is not cryptocurrencies, it is actually defy, because the space for decentralized finance is being captured by dozens and hundreds of new players. And ultimately, it will be very difficult for Facebook to win over them because they're all decentralized. So Facebook wants to launch. It's all time dollar as early as possible. But Facebook has got some regulatory challenges. Facebook cannot do it without getting approval from regulatory players. So in that sense, Facebook and governments are fighting and on the other side, defy players are literally scaling up very fast and the way things are moving on layer two, it seems that they can actually scale Very fast. So and that scaling is far better than global banking system, because in global banking system, if you need to make a transaction, it is normally t plus two or t plus three, which means it takes two to three days to get a settlement, and the cost is 20 to $30 per transaction. But in a layer two defined solution, the cost would be hardly five pesa. And transaction would be happening in one second, any part of the world. So, it means that if things are moving like this, then defy can become a blackberry moment for financial sector. blackberry never knew what happened to them, a company which was at $5 billion suddenly went to $4 billion in a span of a few months. What happened to Blackberry, it was simply outdated in a very, very short period. So, what I'm saying is that if defy solutions keep on growing like this, then there is a possibility that it may become a blackberry moment for activists, global financial institutions.
let me see. Okay, Robbie, can you open your unmute yourself and ask me Go ahead. I think there's some issue with the mic.
Central. You go ahead. Please raise your hand so that I can locate you. Yeah, go ahead, unmute yourself and ask.
Hi. Hi, Sunil.
Thank you for this session. It was you know, a great insight but I just I'm a chartered accountant, I just want to know how this collateral you're talking about is getting valued. Is there any mechanism or is there see I can understand the goal does you know valued you know, in terms of the price, whatever it is, you know, the market value. So how these collaterals are valued in the manner or defy so that is what I'm okay
But, so firstly, I have a few couple of questions to you. Have you ever interacted with cryptocurrencies?
Yes, I have
not directly indirectly Yeah, so central
let's assume you have ether ether cryptocurrency with you? Correct. Now, ether cryptocurrency has a market value. Now, comments may not consider it as a legal tender, but ether is considered a crypto asset clear, clear. Now, this crypto asset when it is deposited into maker doubt, okay. Then a smart contract basically calculate algorithmically that is valid and this data feed is going into smart contract. Other Oracle's these Oracle's are basically third party data feeds Okay. Now, this system then calculates what should be the exact right, calculating the right price. It says that it's it can create 66% which means 60 is the net price of one single ether is around 1600 rupees, because ether price keeps on jumping on a daily basis on our to our basis, it finalizes a particular value on basis of that value, it finds a total value multiplies it by six or whatever and then says that 66% of the value can be used as die. Now die comes out again a year sequence and you can use this die which is almost equal to dollar you can spend it anywhere you want. This dye it can be sold and purchased in more than 100 different exchanges of the world. Understand
that there is some algorithm which is used to calculate this
exactly. The smart contract itself
itself okay and
and whenever, whenever you centralize financial selection is it is offered with a white paper and anybody can go and read that smart contract. This is Complete open source Thank you
there is some background noise somebody has an
Okay, we are discussing on this decentralized finance solutions and smart contracts. But this is like we understood it logically and how these solutions got built? So are these solutions are so easy to build like those built in within months? And is there any requirement of data center required to run such solutions? We just have seen the logical understanding of that, but in detail like somebody like you're running Academy, so, to understand this and learn, like what are going to be the career options and how can you first of all, what are the parts of
see, first of all, anybody who understands Ethereum blockchain, and no solidity language, can write a smart contract. And in certain in these cases, in most of these smart contracts are written in 100 to 200 lines of code, you don't need a very, very heavy coding environment to build these kinds of applications. Okay, okay. So in that sense, anybody who has domain expertise and knows how to code or at least can can actually write the logic and that logic can be developed by some programmer, then that kind of a team can can actually build, for example, the founder of compound is an economist, he is not a programmer. And compound has a total value locked of around $2 billion. So you need to understand the domain and the logic of your product.
So that you can from any area,
exactly. Okay. Yeah.
Yes, yes. Thanks.
Yeah. Gavin said, Go ahead.
Hello, yeah. Sorry. I was on mute. Yeah. My question was that, would this program teach like a technical coding for creating smart contracts are, this would be more like a theoretical understanding of blockchains and the defy and all the space ecosystem of
C C's the issue here is this program is 5050 50% theory. 50%. Practical in terms of our 68 hours or theory and 72 hours are practical. And even in 68 hours of theory, a large portion belongs to demo demo based classes. Okay, so that's first thing. Now the issue here is that whether you want to get into a coding related role, or non coding related roles, that's your choice. But we do feel that some basic understanding of coding is going to help you now, it should not handicap handicap, you know what, how we do it. For example, when you do aetherium lab, we basically offer you two options management track option and developer track option. Let's assume there is a use case and the use case is custody of assets. And here we are talking of let's assume custody of land records, okay. Now, if you choose to do management track assignment, then you will build a business rationale, you will do the market research, then you will design the architecture of the product. Now, if you choose to do the developer track thing, then you will actually write the code for the same assignment. So which means the same assignment is not divided into two parts management rack and developer track. Ultimately, we will merge developer track and management track, but you need to understand that these two tracks will go Side by side, you need to understand that ultimately both these things are required. And in blockchain field, there are three major categories. One major category is developer and architects category where coding would be required. The second category is blockchain based business models where you need to understand how your you can extend your domain expertise to build new kinds of business models, new kinds of business products, like decentralized finance. And the third category is where you know how to build a community, where you use those kinds of skills. So everybody is not an extrovert. So you need to understand blockchain and you need to simplify this thing. To make a large community. For example, maker dow cannot be a successful project, if it is not supported by millions of people, polygon or medic cannot be a successful network, if it is not supported by millions of people who will build those millions of people's community. So that says these three roles developer and architect, business model, and community builders, so jobs and opportunities are in all these three areas. Yesterday, we invited a person who is head of marketing and strategy at easy fi. Easy fi is a decentralized financial solution on polygon network, it was launched in October. And in less than six months, it has already got a market cap of $42 million. And the person who is heading the marketing and strategy is a retired Air Force pilot. So in that sense, blockchain doesn't say no to any category, but you have to make a choice out of these three categories of roles, which suits you most, where you find a quick opportunity, whether you want to go into corporate organizations, or you want to basically enter into a world of startups. It is a choice, you have to make that choice. Is that fine color?
Yes, I get that. Okay. But I would also like to know if you'd help us to network with any startups or any like minded where we could get some kind of opportunity. God, we could know, from the present corporate, and men. Yeah, yeah. And move in something.
Yeah. See, industry interaction is a mandatory part of in this entire course, we call eight industry speakers for regular interaction, every cohort, every cohort. And not just that we also have a one to one mentoring session, every week. Because I also I myself belong to industry, apart from teaching here. I'm also a consultant to two large very large projects.
Yeah. Okay. Thank you. Thank you so much.
Hello. Yeah, go ahead. Thank you so much for the insightful talk, sir, it was really it was really eye opening. I had a question, which, towards the end, where you said that currently we cannot accept that many governments do not accept cryptocurrencies as legal tender. So that means that I, for instance, cannot take a cryptocurrency like say Dogecoin and exchange it for, say, buying pizza, or get or going to the hair salon and getting the service. I was thinking what the hesitation is from government side, in, in particular, say the US are some other Western nations that have made their currencies already feared. So they're not really backed by any gold. And per my best understanding. I don't think they're backed by any tangible assets that the country has. So in a sense, they are they there they are centralized. That's the only difference, I'd say. Tender wise between that and crypto, is it so I was wondering what the other side of the perspective is save What were the challenges for governments to make this legal tender? I this is this a pretty big question. So
this is not just a big question, I think this is the elephant in the room.
The issue here is that governments do under stand that the territorial currency models are not going to succeed in 21st century. This is a very, very obvious thing right now. Because cryptocurrencies are basically decentralized currencies, and they are digital cash, which means users control them, corporations or governments don't control them. Now, whether a government regards them as legal tender or not, in real sense, it depends upon people whether they regard crypto assets as something of value or not. And if they want to exchange those crypto assets for something else, then it is a private Well, now, the same question can be understood in the in the context of gold for example, gold is not a legal tender, but gold exist gold is a is a is a recognized asset, it may not be considered legal tender, but it is a valuable asset, or you may call it as a valuable token.
so what I was saying for now, that currently if you compare Nigerian fiat currency with cryptocurrency, this is basically a case of comparing reliance your with vsms. I'm not using this analogy to shame anybody, but I'm trying to say here is that if you compare market share of reliance with market share of BSL, then there is a whole lot of distance. And 10 years back, BSN was a market leader. But today, it is not, but it was a market leader in landline field, the entire game has shifted from landline to mobile phones, and that to high speed data. So the issue here is that we are in times of fast change. And I'm saying that these centralized financial solutions can become blackberry moments for certain kinds of those financial institutions who don't adapt fast. Clear. Does that make sense?
Yes, sir, that makes sense. So this is really a this is a really an inflection point. So it could go factly. The other
issue here is that to understand this inflection point, the core capability is blockchain technology. Whether you understand blockchain technology in a business model sense or a developer sense, that's a later on question, but ultimately, the core anchor for moving into this kind of a future would in a winning role would be blockchain technology. Clear?
That's clear. Okay.
Please go ahead, unmute yourself.
Alright, listen, if anybody is not asking question, then this is Amit again.
Please, please just hold just hold. There are a few more people just hold issues. Please unmute yourself. Okay. She doesn't have the option on mobile. Could me now? Yeah, yeah. Yeah, Lord radica.
Hi, Mr. gravelle. It was quite, you know, quite a nice session and lots of information for me. I have lots of question actually, as well just, you know, put it point my point. One is, I understand it is not controlled. So entire aetherium is not controlled by any single entity. It's all based on technology. And it's a community ideally a virtual community where in this entire this entire transactions are happening. So first question is who is the who's the beneficiary like in a bank actual banking transactions, even if created by an international transaction? And in Indian context transaction, the amount or the benefit that's happening is coming into the economy who is the beneficiary in these kinds of transaction? That's my first question.
So let me go one by one. Okay. So Radhika The first question is that today there are more than 100 million crypto currency users across the world. 100 million is not a small number. All those people can use defy solutions and this number bar is increasing day by day, if to give you one more example, there is a cryptocurrency exchange called coin base. This is a US base x change and it has filed an IPO with a projected valuation of 100 billion dollar. And it started its operations in 2012. Eight years, centralized cryptocurrency exchange gets a valuation of 100 billion dollars. Okay, and 1/3 of American adults 1/3 of American adults have invested in Coinbase. Okay, so that's first, I think, that makes sense.
We are saying that because there are users and because there is already an existing community, hence you were a part of the community are going to get benefited because the community is transacting between themselves?
Um, second thing is Okay, fair, you are a part of the community, it is not recognized by governments as such. So are we saying that are we looking at a future where it will get into the mainstream or it is just a value that will be unlocked by being a part of the community? I'm in position here, the being in community still gets you into a beneficiary position or position wherein, you know, these will be our biggest our view of the future? Or is it that because it will tomorrow surely get into like you said, I mean, nobody can exchange these kinds of innovations. So it will come in mainstream and hence one should get into this
project. First of all, what is the benefit of getting into this community? What is the value proposition? So I hope if you believe in returns, people who ventured in Bitcoin in 2012, the price of bitcoin was $20. Today, the price is $50,000. Now what happened in 2014 aetherium people said anybody who gives his or her Bitcoin to us, we will give 2000 ether against one bitcoin. So a lot of my friends basically invested in ether and they got a good amount of ether. Today, one ether is around 1.25 lakh. Okay. So which means that the value proposition for those who believe in it is immense. It is game changing. crypto world has already created, I would say 1000s of millennials. But they they are not captured by media the way swiggy zomato or Flipkart are captured. So that's one thing. In terms of value proposition. The second thing is about garments. So let's agree on two counts, what we call a government monitoring system. It is basically standing on a single point failure system what happened during D monetization, it was a single point failure system. Now the issue here is either government needs to adopt blockchain so that the single point failure system vulnerability is permanently gone. That's one thing which means that government has to adopt enterprise blockchain solutions in a big way. And already national payment Corporation of India is building blockchain based solutions. And for your information, new umbrella entity licenses, which has which have been recently applied by six major consortiums, which are basically going to build more alternatives of national payment Corporation of India, more interoperable platforms, which means that all these new umbrella entities would be using blockchain for clearing and settlement because that's the only way of safeguarding yourself because payment revenue is not that huge. But if you are losing money in disputes, then that revenue will never be yours. So if you
want to get later I agree. I agree what you're saying. So that, you know blockchain is going to be is the next technology for transactions and I completely understand why
did you take that? Just Just a minute, just about just let me complete the last part. What I'm saying here is that government has two choices. One choice is to adopt blockchain technology at an enterprise level, like hyper ledger framework like Korda, that's one thing and that option is not for government that is also for corporates, that's one option. The second option is to build a regulatory framework and for for your information recently, as finance minister, cabinet finance minister as well as state finance was board have said that we are going to take a very calibrated approach towards public blockchains which means cryptocurrencies and the future for blockchain, both public blockchains or you may call them open blockchains, as well as enterprise blockchains in India is excellent, because now the top minds top decision makers of of the country are showing a promise in these open blockchains. Now, over to you.
Yeah, so, actually, I wanted to understand the openness of the countries, you know, government officials as well as the the authorities were controlling the transactions is, is is there a buy in from that? So, I think you've answered that question. Thank you for that. The only last one that I have here is you were available comparing the value of the cryptocurrencies with gold. So, is it is it or like, like to like comparison, because gold has actual value these currencies have notional values and my understanding is correct me if I'm wrong
radica remember, every value is subjective. When that subjectivity is adopted by a majority that becomes a universal standard. For example, let me compare the notion of value in my own family. To my wife gold is very, very valuable. But to my son, gold is not at all valuable. He doesn't think gold is gold makes any sense. Rather, to him vbox makes sense. He says that Papa in my this Sony PlayStation visit game fortnight and in that game, there are vbucks which are digital assets, said collect vbucks. Now, tell me who among them is is right or wrong? Both are right, both are wrong. Can you deny that value is not a subjective phenomenon? Sir, I
would just like to interject here, it's it's a it's a valid example from the point of view of usability to each person. So I understand that you know, your son would be interested in vbox while wife would be interested in gold. However, you know, when it comes to actual transactions, gold still fetches value while we do not know today or tomorrow, the other kinds of currencies may or may not have the validity and hence it may
ronica, just or just hold what was the value of rupee in 1991. I'm old man in that sense, the value of rupee in 1990 was eight rupees to $1. In 1991 post reforms, the value jumped from 80 to 80. By index 20 years, today, it is around 74. So can you say over time, the value of currency doesn't change. currencies are always volatile, though, in short term, they don't look volatile. You should speak on value of a currency on a time horizon, not on just a logic on a time horizon, all these currencies actually lose value.
Alright, so yeah, thanks. Thanks.
Okay. Raji, but now,
it's an interview hear me Yeah. So, by this line of argument, I go with this, even if you look at gold, the value of gold itself program has been changing depending on demand. So it is again, subjective, as demand grows, and the supply being constrained, the value of gold goes up. So everything including gold is subjective in terms of value. And also by this line of argument that you've given, governments will not really have an option to avoid the growth or to deny the growth of cryptocurrencies or distributed finance, but in doing so, which they will find inescapable, they will also lose control over an important revenue stream which was used to run the economy because now things could bypass the central system. revenues coming into the Exchequer through taxes and so on, made him dwindle down. And because going to be a popular economy that will run borderless. So, in fact, the country as a whole
see rally the factory. This government also has very intelligent people and government has already announced that they are going to bring CB DC. What is CB DC CB DC is a cryptocurrency launched by a central bank, because government understands that money is completely getting into a digital mode. Government understands that. Now the issue here is that if today, 7 million people in India are using cryptocurrencies and tomorrow government launches cptc, which is used by a billion users, ultimately, governments share or regulated monetary market share would always be larger than cryptocurrency market share, but with one condition, that governments should look at innovation in a positive manner, the governments who don't innovate will, will literally lose the game. But I personally feel that in India, the innovation space is not that bad. I would, for example, Bangalore is considered number two startup capital of the world. So in that sense, I would say that we are at an inflection point, not just in terms of technology in terms of also regulatory shift. And now the regulatory shift is about to happen. We don't know what would be its format, what would be its policy guidelines, but that is about to happen.
That's one question here.
It makes sense.
Yes, it does. This is another question spinning off from what we just said. So, there will be therefore several different financial streams happening the existing bitcoins and ethers and the new cbdc and people would have to make a choice as to which one they would subscribe to, or would that again be regulated or
not see the issue here is when there is a regulatory framework, then that choice is possible. Today, you have 14,000 stock stocks available from NSE there is a choice because there is a regulatory framework, there is an infrastructure similarly, tomorrow there will be a complete infrastructure you can make a choice.
Okay. Mr. Malaysia.
Yeah, please go ahead. Can you hear me? Yes, yes, sir. It's like these are my confusions free prevails. They'll say like, we have fires across the world, with the different countries and the dollar ruling the world and China's currency fighting against dollar and with the cryptocurrencies coming up, means today's lecture was like, I thought I will learn something in a great way, but like, it's just bouncing on me. Again, and again, that the origin like how exactly the safe way takes place, from the current state of economies and asset class, to the digital currencies and asset class. And where do we stand as on date today?
Okay. Okay. See Mr. Murray shot, let's understand one thing, that the level of awareness regarding blockchains and crypto assets other than Bitcoin is very, very low in India. Okay, that's very first
Second thing is that technological awareness on what smart contracts and programmable Ledger's can achieve is also very, very low in India. Okay. Now, these two submissions, we need to understand that there have emerged two fundamental problems. The fundamental problems our government has yet not build a regulatory framework, though have they they have announced that they are about to build one. But up till now that regulatory framework is missing. That's one major problem. The second major problem is because of the lack of a regulatory framework. corporates have not built a good capability to embrace these new technologies the way they are they are active in AI. They are not that active in blockchain, particularly in open blockchain. Not because of these two problems, regulatory framework is missing. And corporate capability is yet not built because of these two problems. What is happening, that mass awareness of decentralized finance and open blockchains is is missing. People just think that Bitcoin is blockchain, which is actually complete lot like yeah, I'm saying I'm saying that we need to expand this base of blockchain technology education. I was very, very afraid when I propose this topic because we have done dozens of webinars in last two years. And we have never given this topic of decentralized finance, because I was always aware that when this topic is discussed, senior people like you would raise very, very fundamental questions of doubt, suspicion and fear, I do understand that I share your experiences, I share your feeling. But the point here is since last week, both finance minister Nirmala sitharaman G, and State Finance Minister, Mr. Rob Taku, both have expressed in public that they are going to be open towards public blockchains. This gives me very, very strong hope. And because of this thing, I could see that decentralized finance as a topic, as a theme needs to be shared. And the second reason is, in the face of progress in decentralized finance is so fast that if we don't adapt ourselves accordingly, there is a serious possibility that our commercial banks and other parts of financial sector may definitely face a blackberry moment in next five years. Very true. That's what is my my my concern. So, I know that this area is a difficult area, this area needs a very alternative mindset, this needs a completely out of the box thinking to adopt, I do understand that. But the issue here is that when these moments come, nations chart out a new history for themselves. And this is a new history for India, if India bear is a good regulatory framework, where people know how to choose what to choose. in that kind of environment, we will have not just one Bombay as financial capital of India, we will have 100 bombas as financial capitals of India. So this is the kind of promise which decentralized finance is offering right now. Just imagine, just imagine. That's you, Mr. Malaysia, you basically run a blockchain department in let's assume sudut or R or M Darbar. Now, you have 200 students of a university who can design aetherium based smart contracts, and you can design defy solutions for all kinds of population, poor population, middle class, population rich population, don't you feel that those 200 students can actually become the power house from Surah terranova?
And that's, that's what I'm trying to do here. That is my case.
the issue here is that deep defy has the potential of creating 100 Bombay's out of 100 moomba is out of it. And that's where we need to create capabilities of expanding this awareness. Okay, thanks. Thanks. particular
one, one now question which is correlated with this. See, it basically means it means that whenever there is a change, you know, the change is inevitable. And all the values, you know, all the values are transferred into currencies, x, y, Zed currency, there's own data and maybe commodity or maybe precious metals, wherever it is. And this is the fifth wave of all the currencies and all the battles and all the taxes of the world. After 100 years after the Second World War and banking crisis, I see I see we are on the verge of collapse of the entire economic system of the world. And at that juncture, at that juncture, we are trying to intervene in everyone in the country as well as outside the country that is world. If you're trying to be into this digitalized currency and blockchain and convert all the existing values in the asset class, to the decentralized ledger, it's a mammoth task. It will take maybe five years, how much but but this is maybe the beginning of the sift of the values in the world Exactly. The values lying in the asset class.
Yeah, exactly. Now you are historically properly positioned. That's an excellent way of putting the entire thematic proposition. Good. Thank you. Thank you. Let me go to last.
Thank you very much. Oh,
anybody else? Mr. Matthew, I will give you last Question yeah good. So, can
I may I? Okay. Yeah, thing is like I would like to know is currently government of India they are thinking about going to this blockchain platform and they are working on it, maybe within a few years this things will be reality. And that time like the existing it software companies, they will go for the contracts for government like in between there was other kind of a platform and thing like in your mind tree got the contract, something like that. But recently Also, these companies are running some blockchain projects. So, what is current infrastructure, how they run these projects? Is there any capability like let's say a person is working in IT organization, let's say in a testing role or a consulting role, and he is completing your course. So, how easy for him to shift laterally into this blockchain projects? And what are the current opportunities, like on site opportunities? and other things in existing organizations? Like let's take an example of you Okay, got
it got it got
Got it? Because whatever the organization you're talking about, are all startups.
Got it? Got it. See, I mean, now, you are basically asking a question about enterprise blockchains. Can we use enterprise blockchains to create such kind of disruptive solutions? This is your question. Am I right?
No, that is my question. That is not my question. My question is like, Are there any decentralized blockchain project going on in these organizations like me? Yes, that's what I was saying. And if there is any opportunity for a person working in the same organization,
yeah, GOT GOT GOT IT. See. The issue. Just let me give you example, yesterday, South Asia head of our three CV which is basically an IT company multinational company, which is building Korda, which is a decentralized ledger technology solution for enterprise customers. Now, Korda is a blockchain solution which can conduct 20,000 transactions per second, it is certified by all US regulators for enterprise readiness. And currently in India, there are 70 odd startups which are already working with major financial organizations like Federal Bank, like National Stock Exchange, like this kotak Mahindra bank yes bank already these solutions are being tried. I'm just giving you example of one technology platform which is called Korda. Now, the issue here is that this kind of capability that how to use Korda in which kind of a context is something which needs to be learned and for your information, Korda has become a talent Sprint's partner and you will get corder certification as additional certification long with this program free of cost. So, in that sense, not just in quarter there are opportunities there are projects which are happening in hyper ledger fabric as well as aetherium. There are multiple such projects for for your information in the current cohort five, there are three startups which are already coming out after this course. Three startups. So in that sense, as far as your readiness for corporate carriers or startup carriers is concerned, we take both these things very, very seriously. Clear?
Yes, yes, yes. Okay.
Okay, gathered, I will last.
Okay. Thank you so much. Again, yeah.
This is the Getting Started before you conclude the question answer session. Can I launch the poll? So that meanwhile the word correct. Okay. So I request all the parties to participate. Okay. Yeah. Great. Thanks. So
we have launched. Yeah, please. Mr. Sager. Go ahead. Yes.
Thank you, sir. I it was very informative session, which we got a lot of info. I just wanted a little more information about the probe program actually what you are taking, so that I fully understand what What we are getting into I understand that you said that it would be 50% theoretical and 50% practical and building solutions? And would there be any solutions or frameworks which we'll be building or actually I am not an programmer, I am into the though I am in the IT sector, I am more on the functional side and management side and not into the programmer. And but, but I would like to definitely understand building the smart contracts and how it would be built. Also, what I one more question is that, I would like to also know, if there is any platforms or smart contract capabilities that coming out in Bitcoin, and that is in BTC. That's what I had the info that VTC also will be having the capabilities or how having, it's also my tracks. Yeah, so, what would we be learning that like cardano or Adda?
But yeah, okay. See? The issue here is that the questions which you are, you are asking, these are very regular questions, and 70% of our students are exactly like you they are techno functional. You'll be surprised to learn that.
previous cohorts, IPS officers have learned a 76 year old real estate tycoon has learned this program. pharmacologist has participated in this program. So these were the people who did not have serious programming background. But the CIL they learned a lot from this program. Because we have designed this program in such a way that even if you don't know coding in, we will teach you very small nuggets of coding in a very, very small graded manner. For example, you will be asked to write four lines of code after a three hour long session. So small assignment. So over a 24 weeks you will do around 20 assignments. And these 20 assignments will teach you these things in a step by step manner. So that's one thing. Second thing is that we have balanced out both the management track option and the double track rock option. Very interesting. Lee, you will love it. The Another thing is that this entire space is something which initially creates lots of doubts. And people when they join this particular course, they have lots of questions, but by the time they reach fourth or fifth week, they are completely settled. Because this space is so innovative, and it poses lots of challenges. So people do have a lot of anxiety factor behind that. So we we do understand that and that anxiety factor gets settled in four to five weeks. Don't worry about that. And another thing is that I would suggest you to come to us with a thought with an idea in mind. For example, you want to work for a particular organization or you want to work for a particular sector or you want to have build a particular project as a startup. So, you should be very clear that these kinds of things I have in mind and I want to build upon that and within this one to one mentorship, we will actually train you towards that Currently, there are three active projects which are willing to go into startup mode number one, number two, apart from these starter projects, there are two white papers which are being developed by two of our cohort five participants. So in that sense, this area is actually continuously evolving. And challenges and opportunities are continuously evolving. You will you will see a new day, every day here. Okay. Yes, thank
you so much. Another The second question was about the smart contract capabilities in Bitcoin.
Yeah, yeah. Now, as far as Bitcoin is concerned, it doesn't have smart contract capabilities, but what people are doing, they are basically using Bitcoin through bridge networks. And this for example, this Rand VM, the project which I showed you, you can use your Bitcoin for. On aetherium network wire and via this is one choice, but all bitcoins will be used on smart contract patrons through some sort of a bridge there is another very good project which is coming up which has yet not launched its main net and the name of that A project is called rootstock. rootstock is basically aetherium clone, or aetherium fork, which is basically building a kind of a bridge network or aetherium over Bitcoin where you can use bitcoins to get all the smart contract capabilities, but since this project is yet to be launched, so that smart contract capability for Bitcoin is yet not there. And as far as cardano blockchain is concerned cardano blockchain is yet to launch smart contract capabilities. So though the Cardo cardano token has been launched, and the token transactions are happening on blockchain, but as far as smart contract capability of cardano is concerned, this is yet to happen. So when it happens, only then we can introduce into our curriculum.
Okay. I had heard that there are a lot of projects being started on cada akara. No.
See, no doubt, they those projects are basically those projects are being made mentored by cardano Foundation, but they are yet not public. Once the smart contract capabilities are there, then they will go public. It may happen in few weeks. Nobody knows when that would happen. But once that happened, we'll have to evaluate what is the adoption curve of cardano blockchain is once that is clear to us, only then we can take a final decision on whether to take cardano as a technology platform for development in our cohort or not.
Thank you so much.
Thank you. Okay. Okay.
So let me close. I hope you people enjoyed the session. And I do feel that this session was difficult session and a bit out of the way session because people can't believe that blockchain has reached this level. So I knew that this kind of challenge would be there. But this risk was important to be taken because we are in a very difficult historical time. And if we don't adapt fast enough, then we may be left out. So that's why I chose this topic. Thank you for attending.
Watch the entire interview here https://youtu.be/hRvODrxW_kY