Who’s behind this? #27: AiX, UK (an artificial intelligence broker)
Hi, you founded AiX in 2017 as an artificial intelligence broker, using the power of AI and blockchain technology to give traders unprecedented insight and control. Can you share a bit about your background?
Hi Etienne, firstly, congratulations on the success of your weekly newsletter- keep up the good work.
I started my career in the IDB (Inter dealer broker) market and eventually launched my own IDB business called “Red Ops”, where I built a brand-new market in the commodity options space. I went on to sell the firm to a competitor in 2012 and began trading and investing in A.I. and big data startups. Around 2016 I realized the tech now existed to enable automating the inefficient voice IDB market and so I started AiX.
I am now thrilled to be declaring AiX open for business. The team has created technology that is going to revolutionize the OTC markets and bring much needed disruption to the world of inter-dealer brokers.
How did you get into the bitcoin and blockchain industry?
I had originally planned on launching into commodity derivatives as that was my specialty, but whilst getting a proof of concept of the AiX platform built I began to explore the crypto markets in depth and realized 2 things — firstly that OTC crypto markets were identical to OTC commodity markets before the days of centralized clearing and secondly that the costs of transacting were exorbitant. I realized that we could have a much greater impact in bringing costs down in crypto by launching there, and so set my sights on that.
Tell us a bit more who is behind AiX? How big is your team? Are you hiring?
The AiX platform has been built by a team with decades of experience in building enterprise grade software at institutions like Deutsche Bank, Goldman Sachs and Credit Suisse, typically specializing in trading/broking/portfolio management in financial and commodity markets. Our conversational A.I. and cognitive lead developers have 30 plus years’ experience in architecting, designing and implementing commercial A.I.
The team is comprised of 34 talented employees, consisting of 25 developers, 5 business development executives, onboarding/legal staff, the COO and me.
On the hiring front, we are always on the lookout for exceptional, hard-working individuals that can add value to ensure we exceed customer expectations.
What is the vision of AiX? How are you bridging the gap between the crypto and traditional investment spaces?
AiX is set to disrupt traditional voice broking across asset classes utilizing our A.I. natural language system. As such, we intend to become the world’s first conversational AI Broker for wholesale institutional OTC trading.
The AiX system interacts and works for a trader the same way the best human broker would, holding conversations, facilitating negotiation and succinctly managing orders/interest. However, the similarities end there because the A.I. beats a human every time when it comes to scalability, efficiency, and critically cost — The bot can successfully handle thousands of orders and requests for prices simultaneously at any time.
In regard to the long-term vision, we will eventually have a network where all institutional traders can connect centrally into one system. It will then become much easier to find and aggregate liquidity for new instruments (such as new types of tokens) even if they are niche and wouldn’t be supported by an exchange.
We follow the traditional broking model and charge commission per trade, but without a huge shop of brokers to feed we are able to pass on dramatic savings to our clients.
Our aim is that the system drops seamlessly into mainstream usage and so therefore have partnered with Telegram and Symphony for the front end, resulting in an easy to use chat without occupying additional desktop real estate. In keeping with this, we have built our business in accordance with regulatory best practice.
We launched in the crypto markets on the 30th of January, our first negotiated trade was a BTC/USD transaction between GSR Markets and DV Chain. It was great to see these two leading market participants among others embrace our transformative technology. Pending regulatory approval, we intend to extend into the commodity markets in Q2 2020 followed by other traditional asset classes.
With the full-scale launch of AiX can you talk more about the technology behind AiX and what sets your firm apart from your competitors? How is AiX addressing the fiat-to-crypto onramp challenge?
Sure Etienne, we conducted a study in 2019 with Professor Lemon’s team at Herriot Watt university of four top conversational NLU systems — Watson, Rasa, MS and Google.
Based on that study, we’ve taken the top scoring entity and intent recognition models and combined them with proprietary algorithms that we’ve developed. Our head of conversational A.I. was the lead for IBM conversational AI services work in UK and Ireland, so we are in good hands there!
We have a patent pending on holding a multiple counterparty negotiation brokered by conversational AI. It covers the core aspects of our model for broking trades with A.I., where clients are able to negotiate after receiving a two-way price response instead of simply crossing a spread.
So far our competitors are still the human brokers, as nobody else has built a system like ours. There are certainly elements of our system that exist elsewhere (for example chatbots for data entry are common — that is a tiny part of our system), but ultimately what we have done is combine a large set of technologies into a single, huge platform that automates the broker workflow from price discovery to negotiation, execution, settlement, trade management and invoicing. It is a phenomenal task and I am not aware of anybody else attempting it. That’s for a good reason by the way — it’s incredibly difficult!
With regards to the challenge faced in addressing the fiat -to-crypto onramp challenge, AiX acts in the capacity of an agent for institutional OTC crypto trades, so we provide best price execution between established institutional players in the market, AiX doesn’t hold any client funds, we don’t get involved in the initial fiat to crypto onramp process.
What’s your business model?
We simply charge commission for trading, just much less than humans!
You can view our Product video here
Who is your target audience?
Any Institution looking to gain exposure, or to mitigate risk in digital assets through OTC trading e.g. Hedge funds, miners, asset managers, market makers, family offices etc.
Can you share a bit more information on your traction, whether it be clients or partnerships?
We have onboarded some of the world’s most recognized market makers and participants. Our ecosystem is focussed particularly on a geographically diverse client base, which we anticipate will generate unique flow.
We have integrated with some market leading infrastructure for settlement and custody solutions, agreeing partnerships with well-known names like SeedCX (Zerohash) and Fireblocks.
What are your thoughts on the crypto European ecosystem?
With negative rates prevalent in Europe, it is clear that institutional investors are very concerned about what the future might look like for their assets. Crypto markets are a natural place to look for places where wealth can not only be stored but might have upside from increased participation or functionality in future.
From the conversations we have daily, it appears that momentum continues to build in every corner of Europe.
Anything you read recently that you think is very interesting?
I absolutely loved ‘The man who solved the markets’ about Jim Simons and Renaissance Technologies. Ultimately, they made their money exploiting reliable inefficiencies in market prices. What’s interesting about blockchain and crypto markets is that they are providing the same function in the infrastructure of markets rather than prices and rather than being capped at $10bn as Renaissance’s main fund is, the potential is much, much greater. We are very excited about that opportunity and creating a piece of the puzzle that will help facilitate the dream becoming reality.
Anything to add?
If any readers are interested in trading more efficiently and securely in crypto, please reach out to us!