Interview with Ellis at KnowYourToken
What is Know Your Token, and what services does the company provide for the digital currency market?
Know Your Token (KYT) is a full service initial coin offering (ICO) due diligence, audit, and advisory firm, specializing in providing detailed due diligence covering the latest ICOs hitting the market globally. We provide neutral, third-party assessments of projects with the goal of improving the overall quality of the market — basically, getting the garbage out and helping the good projects rise to the top.
What is your professional/educational background? What skills did you acquire during your past endeavors that you have are leveraging for competitive advantages with Know Your Token?
Before founding KYT, I worked at Kroll where I conducted due diligence in the traditional finance sector. I worked on a variety of types of projects, including pre-IPO due diligence, reputational investigations, regulatory and litigation checks, and analysis of company shareholding structures. Before that, I studied at the Hopkins Nanjing Center and UNC-Chapel Hill, where I developed my research skills. KYT’s research and due diligence capacities outstrip any of our competitors and my past endeavors helped set the foundation that they’re based on.
When did you first learn about digital currencies? Has your opinion changed since then if at all?
I first learned about Bitcoin and blockchain technology in 2015, through the Bitcoin Association of Hong Kong. My opinion about digital currencies in general has improved as I’ve gained a greater understanding of them. The first time I was around a group of people that was discussing Bitcoin and other cryptocurrencies, I started taking some notes of things that I needed to look up later. Eventually, I got to a point where my notebook was so full that I was forced to duck out early, run to a computer, and started looking things up. It was information overload and, honestly, I loved it. I’m thankful that that aspect of the industry hasn’t changed much over the last few years. There are constantly new technologies to study, new innovations to learn about, and new projects to get excited about.
In terms of my opinion changing, I’d say that I’ve really just come to realize that not everything in this space is made of gold. It’s easy to get excited and optimistic when you first learn about blockchain and virtual currencies because of their capacities to change the world for the better. But there are plenty of less than savory projects in the space as well and it’s important to separate the wheat from the chaff.
Can you outline a past engagement that KYT had with a client and what services your firm provided?
Sure. We worked on a project recently for an ICO client that was interested in our advisory services. We always start our advisory relationships off with an audit. These audits aren’t free but they help us make sure we’re spending time on projects that are serious and high quality. We assessed the project comprehensively, looking at aspects including (but certainly not limited to) their shareholding structure, background of their core team members, token economics, marketing efforts, and of course their whitepaper. Then we delivered an audit document and a list of recommendations with how they could improve their project and bring it more in-line with industry best practices.
We discussed the list with them to see whether they were receptive to feedback and interested in improving their project. Thankfully they were and they brought KYT on as an advisor. We’ve been helping them improve their project and making introductions in Hong Kong to external parties that can also help them. We’re excited about the progress that we’re seeing.
Has KYT noticed a slowdown in ICO activity, potentially resulting from the uncertain regulatory climate?
Here at KYT, we look at a LOT of ICOs. Though the space is certainly changing in the current regulatory climate, I wouldn’t necessarily describe it as a slowdown. The size of an individual ICO has certainly decreased since late 2017/early 2018, with projects setting lower soft- and hard-caps in their fundraising goals, while the overall number of ICOs has increased. The ‘hype’ of the industry has died down a little bit and so I’ve recently seen a trend of projects entering the ICO process with more information, a better understanding of the process (and the associated costs), and an interest in being more compliant with industry best practices. I’m optimistic that, as regulations slowly fall into place, they will affect the ‘good’ projects much less adversely than the ‘bad’ ones.
What are your thoughts on the current market conditions? Do you believe the necessary pieces are in place for a market expansion?
Sure. I think the cryptocurrency market is due for an expansion. In a bear market like this, many of the bad projects die off and the good projects are able to shine through. That being said, I think that the projects that are keeping their heads down and “buidling” are likely to be the most successful in the long run. It definitely feels like a bunch of the players in the traditional financial sector are just waiting for someone else to be the first one to jump into crypto headfirst. I don’t believe it will be long before many of them take stronger crypto positions and hopefully help to bridge the gap between the cryptocurrency maximalists and those that have no clue what the industry is about.
Excluding Bitcoin and Ethereum, what digital currencies do you believe are best positioned for long-term success?
Because KYT doesn’t invest, we try to avoid giving strong opinions on which projects are good buys and sells. Personally, I feel as though many of the spaces are getting crowded; I’ve seen plenty of projects (both dapps and protocols) that are claiming to be addressing the same pain-points and it can be hard to distinguish between them.
Right now, I think very highly of projects that already have already secured strong blockchain development capabilities and are actually starting to “buidl”. It’s exhausting to see the sheer number of projects that raise funds first and then go out looking for developers — and struggle severely at putting a team together. Also, I’m definitely excited and optimistic about some of the up and coming NFT projects!
What areas of the space interest you the most (governance, privacy, oracles, etc)
I’m interested in so many different spaces. I personally love projects that empower people — through access to privacy, currency, etc. I’m also very interested in new updates to regulations in the space. I think regulators have a really unique challenge when it comes to blockchain: the space develops extremely quickly and regulators move extremely slowly. It’s going to be difficult lining things up in a way that regulations work effectively but I’m optimistic anyway.
One piece of advice you’d give to someone looking to start a career in the industry or simply learn more about the market.
Be critical — slow down a little bit — do some due diligence! There are some good projects out there, but you’ll need to dig through plenty of garbage before you find them. If you’re looking to start a career in the industry, start asking questions and digging for answers. If you’re lucky, you’ll find a position where you can keep doing that throughout your career. Lastly, you probably don’t want to position yourself as an expert — even if you passed some online blockchain course.
Where can our readers learn more about KYT’s services if interested in doing so?
If you’d like to learn more about KYT, check out our website at https://knowyourtoken.com or feel free to email me directly at ellis@knowyourtoken.com.
