EthCC Voices: Kevin de Patoul, CEO and co-founder of Keyrock

In this discussion, Kevin deep dives into how institutional adoption of cryptocurrencies has surged, exemplified by BlackRock’s Spot Bitcoin ETF. He further expands on the advancements in Layer 2 (L2) solutions, including optimistic and zk-rollups, bolstered scalability. For the future, he expects tokenisation trends, from treasuries to diverse assets, to bridge TradFi and DeFi, enhancing liquidity and unlocking new opportunities. Additionally, he believes that Yield-bearing stablecoins, backed by tokenised assets like Treasury bills, can potentially attract conservative investors, fostering liquidity and innovation in DeFi.

Welcome to EthCC Voices, the Medium Series for the EthCC community. Taking place in Brussels from 8–11 July 2024, the conference organised by Ethereum France is regarded as Europe’s leading Ethereum conference for the community by the community!

Kevin de Patoul is the CEO and Co-Founder of Keyrock, a digital asset market maker building more inclusive and efficient markets.

What do you think are the highlight moments in crypto over the past year?

The institutional adoption of cryptocurrencies has gained significant traction over the past year evidenced by BlackRock’s Spot Bitcoin ETF’s performance. We also saw significant advancements in L2 solutions by leveraging innovations like optimistic rollups and zk-rollups to enhance scalability.

Additionally, the rise of derivatives in the crypto space marked a significant milestone. Market maturation has led to a growing demand from institutional investors and traders. We launched our Crypto Options Desk in February. Having built our leadership on the spot market by offering competitive pricing and providing deep liquidity, we launched our Crypto Options Desk in February. It was the natural next step to widen our offering to meet emerging needs.

What are some new trends you think will emerge over the next 12 months, which ones are you excited about?

Tokenisation is a major trend. Over the next months, tokenised treasuries will continue to play a crucial role, serving as a bridge between TradFi and DeFi. However, the major market trend for DeFi this year will be the tokenisation of all assets. Companies like Superstate are already facilitating the migration of several ‘offline’ assets.

While tokenised treasuries are a starting point, other real-world assets such as stocks, bonds, real estate and carbon credits will potentially undergo tokenisation. This shift is expected to enhance liquidity, reduce transaction costs, and provide new opportunities for DeFi protocol designs. We’re particularly excited to have taken part in PV01’s first sale of its digitally native bond on Ethereum.

Another significant trend is the development of yield-bearing stablecoins backed by tokenised Treasury bills. As stablecoins already play a crucial role in the DeFi ecosystem, incorporating yield-bearing features backed by real-world assets could attract more conservative investors, which will, in turn, contribute to increased liquidity, accessibility and innovation within the decentralised finance space.

How has being a part of the EthCC impacted you/your team thus far? Has anything come out of it?

A big plus for us has been the opportunity to meet both emerging and established projects and protocols in the wider Ethereum and crypto community. Being part of EthCC allows us to explore ways to work together and grow. We are not just a service provider. We support the growth of Web3 startups through initiatives such as accelerator programs and we help build ecosystems by injecting liquidity into promising DeFi, RWA, and NFT protocols. We had the chance to meet many of them last year, and we are excited to continue our journey with EthCC, this time in our hometown, Brussels.

What impact do you think Ethereum updates this year will have on the overall ecosystem, crypto projects, and mainstream adoption?

I believe they hold immense potential. Ethereum’s Dencun Upgrade has helped with transaction fees and introduced other beneficial features to the Ethereum network. Faster transaction speeds, lower fees, and increased interoperability with other blockchains and Layer 2 scaling solutions could create a more connected and seamless blockchain ecosystem. A by-product of improved infrastructure will be better liquidity flows across different networks.

This will be an important step forward, akin to a streaming aggregator platform, merging content from various networks into a single subscription service. This aggregated approach will offer superior liquidity, broader user demographics, minimised dependency risks, and enhanced versatility for users​​.

Anything else to add?

We started market-making on centralised venues in 2017. But over the past 4 years, we have witnessed the massive rise of decentralised exchanges. This led us to adapt our algorithms and make a massive shift to being active on-chain. We are now fully active by LP’ing, borrowing and lending, participating in governance, injecting capital in the NFT market and much much more. You can keep up to date with all the things we are doing on our Twitter account: https://twitter.com/KeyrockTrading. The future really is on-chain, also for firms like ours.