Jason Jones: I have joined Centrifuge to build protocols for global trade and to impact economic opportunity everywhere
I recently joined Centrifuge to lead our commercial development and I want to tell you about it.
I spent the last 20 years of my career as a technology focused portfolio manager and entrepreneur. While I have had many opportunities to join a target portfolio company, this is the first time that I have made the leap. I think Centrifuge will soon be in a sweet spot and I have a unique skill set to help this team achieve its goals.
In my new role I am focused on driving growth and market share as we prepare to bring our first product to market. I work alongside Lucas, Martin and Philip on our leadership team and I make sure that all functions of the organization are aligned to meet our strategic commercial objectives. This role combines my experience building early stage projects in blockchain, alternative credit, and investing.
About two years ago I decided to leave Cardinal Rose Group, a company I co-founded and built for five years with my partners, Bo and Peter. At the time of my departure, we were a maturing company approaching 50 employees and over $10 million in revenue and it felt like it was time to get back to my roots. My sweet spot is in the early stage; I love the startup culture. Specifically, I love the creativity required to wrap structure and vision around an idea, especially if it is a big idea. Centrifuge is the right size and the right stage of development. It is a big idea that aligns well with my worldview; I will talk about that more later.
I have had the good fortune of founding two previous startups. I spent thirteen years as a tech analyst to begin my career, including seven years as founder and CEO of HighStep Capital, a data-driven tech-focused hedge fund where we were early pioneers in many of the quant strategies in use today. Then I spent five years as co-founder and CEO of Cardinal Rose Group, which launched a fintech media and events company (LendIt) and the world’s first alternative credit robo-advisor (NSR Invest). When I left CRG, I joined ConsenSys as an Entrepreneur-In-Residence and Head of their Asset Management team. I spent about two years in a blockchain deep dive where I helped to build and invest in new fintech blockchain projects, which is how I found Centrifuge.
Centrifuge is a team of 16 highly talented developers, entrepreneurs, and dreamers who are building a global trade protocol for asset originators including lending platforms, payment companies, banks, and embedded software solutions. We “fingerprint” each individual asset (loan, invoice, royalty, etc) using our tokenization method and then we administer the collateralization and financing of pools of assets in order to accelerate payment and allocate risk more efficiently. Our protocol plugs into the rapidly developing open financial ecosystem known as DeFi (decentralized finance). You can think of Centrifuge as a “pay me now” protocol and as a crypto bridge to real world assets.
If we achieve our mission, we will lower the cost of capital for any of the more than 400 million businesses around the world. Our decentralized finance technology will help to create jobs and hopefully improve the living standards of millions of people. This is a project with massive social impact potential.
The founding team are start-up veterans that previously founded Taulia, a supply chain fintech solution that has accelerated over $20b in payments. The team has cutting edge blockchain development talent, which makes me extremely confident in our technology foundation. We are also well funded by a collection of top tier early stage VCs. With the right team in place, proper funding, and a transformative vision, Centrifuge is set up for success.
This project aligns well with the trends that I care about most deeply. With that in mind, here are my high conviction insights for 2020:
- I have analyzed hundreds of blockchain companies and have concluded that supply chain finance is the best use case for the blockchain simply because the supply chain is the world’s largest finance chain.
- The average Fortune 500 company creates over 18,000 invoices per day and some create more than 10 million invoices per year. At its base level, the Centrifuge chain will individually ‘fingerprint’ every new invoice and uniquely administer these massive volumes.
- Centrifuge is the only on-chain supply chain solution of any substance in the world today. Our competitors are all building private enterprise chains, which are basically closed door consortium's using a common database. Meanwhile Centrifuge is tapping the open finance trend and it is well positioned to change the rules of global trade. As we all know, open platforms win.
- The Centrifuge blockchain will help to unlock deep tier finance, a huge new asset class that was previously inaccessible before the blockchain. People often ask why use a blockchain? Well, in this instance we can lower the cost of capital for millions of small businesses in a way that hasn’t been possible before. I would say that is a pretty good reason why.
- Centrifuge is building a protocol. We are a system of logic to coordinate global trade. As Chris Burniske stated, successful protocols must be minimally extractive and widely distributed. There are over 400 million businesses globally that could use our chain. We need wide distribution. It is my job to align partners in order to scale.
- I have ridden the Internet wave for my entire career. I chose to jump into the Blockchain space because it is Internet infrastructure. We are one of a small group of blockchain solutions that are collectively building the Money Protocol layer into the Internet, which will coordinate the sharing of data, documents, and money. It is a big mission that people struggle to understand (the money layer to the Internet will reshape global finance).
- Embedded finance is the largest trend in fintech in 2020. The best way to embed finance into software platforms at scale is to integrate with money protocols like Centrifuge using decentralized finance.
- We are on the verge of entering a multi-chain world. It will look like a hub and spokes model where Ethereum is one of a small handful of general purpose blockchain hubs and there will be many single purpose blockchains, like Centrifuge, that interoperate across chains. We intend to eventually connect to and transact with virtually any blockchain around the world.
- You get the point, we are building a base layer protocol that addresses some of the biggest problems and opportunities in the world of finance.
- Decentralized Finance is one of the first categories within the blockchain industry to find product-market fit. Over the past two years, the total value locked in DeFi has rapidly accelerated to over $800 million. Centrifuge’s Tinlake protocol provides the securitization infrastructure for DeFi and serves as a bridge to real world assets.
- The US government spends too much money. Period. At some point, it is inevitable that the US dollar as a reserve currency will be challenged. I am long Bitcoin as digital gold, MakerDao as the crypto Fed, and Centrifuge as the crypto bridge to real world assets as a hedge. These investments will do well in a benign market, and could materially outperform in a turbulent market.
- The asset management industry is just figuring out that robo-advisors are fully automated hedge funds. I built my first robo-advisor in 2008, a year before Betterment was launched. Next up, DAOs will be decentralized robo-advisors. I want to be early again. We are considering building a credit DAO. If we do this, we will be the world’s first full-stack DAO, a fully decentralized on-chain self-governing system that will continually acquire new assets and optimize capital allocation globally. Remember I said that I have a unique skill set to offer?
- I have been focused on the intersection of finance and tech for so long and so far tech hasn’t changed finance, it has only added a tech veneer on top of an old system. But DeFi changes all of that. DeFi is the Internet native form of finance and it reshapes financial services at its core. The Centrifuge protocol is going to help to reconnect the world to financial services along this new paradigm in a way that empowers everyone. While Wall Street’s mantra has always been to be “long term greedy”, DeFi’s mantra is to create “long term abundance for all.” I think DeFi will move financial services in the right direction.
Alternative Credit & Data
- Short duration, high yield, asset backed private credit remains the most attractive area of lending. We want to bring private credit strategies to decentralized finance. If you want to learn more, please read this excellent primer written by my former colleagues at Cambridge Associates.
- Asset allocation to private credit continues to boom because investors are yield starved. My previous companies, LendIt & NSR, were downstream beneficiaries of this trend. Centrifuge will be as well.
- Alternative data is gold. I have based my career on alternative data, first web-scraped and proprietary data sets data for trading Internet companies, then alternative credit data combined with high speed order execution engine for alternative credit, and now on-chain data for blockchain projects.
I have intentionally chosen to be on the bleeding edge of innovation. I enjoy pushing new boundaries. My challenge is convincing people to join me. I must show people how their business will benefit by minting assets on Centrifuge and leveraging the benefits of blockchain technology. I am seeking asset originators, alt credit service providers/administrators, lenders, proof of stake validators, and VCs to experiment with our global trade protocol. I need transaction growth on Centrifuge and I am seeking your help.
If you are reading this and you have been a part of my journey over the years, then please reach out and let me know what you think. Let me know if you want to explore how the blockchain will impact your business. I would love to reconnect and build together.
Here is to 2020!
Wishing you the best and Happy New Year,