GAINS Associates
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GAINS Associates

Alkemi Network — Telegram AMA — June 23

On Wednesday, June 23, we had the pleasure to welcome to our Telegram chat:

Brian Mahoney, Co-Founder & CSO.

We asked him questions about the development of the Alkemi Network.

Some sentences have been slightly edited for readability but the meaning has been conserved.

Summary

Alkemi is building an on-chain liquidity network with a suite of tools and products that serve as onramps for everyone to participate in decentralized finance. Alkemi’s solutions are optimized for seamless access between Web2 and Web3 digital asset allocators.

Alkemi Network is committed to ensuring the maximum levels of safety for their customers and their assets, integrating the platform security assessment framework initiated by ConsenSys/Codefi.

Alkemi Earn is a DeFi borrowing and lending protocol tailored to institutional requirements. Earn solves the friction points of capital, connectivity, and control for CeFi institutions, enabling their participation in the emerging on-chain structured financial product yields of open finance.

Alkemi Network will be structured as a community-governed DAO, where ALK token holders will have the authority to create and vote on proposals. The development of the network will be in the hands of the community with the role of the Alkemi team as “facilitators”.

Introduction

Q — Ayeley from GAINS: What did you do before crypto and did you have any other previous venture in crypto? What is your role at Alkemi Network?

A — Brian from Alkemi Network: I am the CSO and one of the Cofounders of Alkemi Network; responsible for strategy, business development, investor relations, and growth. I have over 10 years of experience in capital markets and fintech. Before focusing on bridging CeFi to DeFi, I led Corporate Development at AlphaPoint, a digital asset exchange infrastructure provider, powering the technology for 120+ crypto exchanges in 40+ countries. Prior to that, I was in the tradfi (CeFi) industry — sourcing and executing financial investments & transactions with ARC Capital, Reitler Advisory, and HSBC Bank in New York and London.

About Alkemi Network

Q — Ayeley from GAINS: What is Alkemi about in a few simple sentences?

A — Brian from Alkemi Network: Alkemi Network is all about enabling everyone to use DeFi. We are a decentralized liquidity network that facilitates on-chain access for professional DeFi users — which means that we have created the technology for institutions, exchanges, and individuals to earn compliant yields on their Ethereum-based digital assets. I’ve been building out Alkemi Network with the team for almost 3 years now. We currently have 10+ and are hiring (get in touch if you’d like to join us!). Check us out here

Q — Ayeley from GAINS: What extra features are you bringing to the DeFi sector? There are a lot of projects in the sector, so what will be your differentiators?

A — Brian from Alkemi Network: One of the biggest things that we are focused on bringing to the space is unlocking the ‘wall of money’ — i.e. institutional capital. DeFi adoption has been broadly retail investor driven to date (which has been phenomenal growth) but if DeFi is going to drive real change in the world and upend traditional capital markets as we know it, it needs to unlock off-chain capital to flow on-chain. Through our experience building out Alkemi Network, we have found the reasons why institutions are not able to come into DeFi directly generally fall into three buckets: capital, connectivity, and control. We call solving these 3 our ‘institutional beachhead (CeFi) strategy) and we have been focused on solving these friction points and provide institutions with a ‘bridge’ to DeFi, via our platform

A big focus of ours has been building our institutional community around our network and taking these folks with us on the journey as we decentralize and expand toward opening up our network for all to participate…. we have been seeing adoption across the user spectrum (retail users and institutions)

Q — Twitter user @jogamboa08: Alkemi Network is bridging CeFi to DeFi, building an on-chain liquidity network with a suite of tools and products that serve as onramps. Can you talk to us and explain how these tools allow the CeFi to DeFi connection?

A — Brian from Alkemi Network: Our mission is to facilitate access for all to participate in decentralized finance. One of the core groups that has been left out of the DeFi growth to date has been the institutions — this is for good reason in some instances, but in order for DeFi to change the world, the wall of money that is currently being held by “CeFi” institutions needs to flow on-chain. Our mission is to unlock this capital to flow in the space, which will benefit everyone. More liquidity, more opportunities for growth worldwide. That’s why we’re ‘bridging CeFi to DeFi’. How? We have been working with institutions over the past 3 years and especially, in the last 12–18 months, many of them were caught off guard by the Summer of DeFi in 2020 — now they are looking to come in but are prevented from doing so given their traditional corporate structures/outdated infrastructure.. so we are here to unlock that and provide a compliant way for them to access DeFi while taking advantage of the yield opportunities in this new system.

The core reasons why they have not been able to access DeFi goes back to the 3 categories I mentioned earlier: capital, connectivity, and control. Our mission is to solve these friction points and provide CeFi with a ‘bridge’ to DeFi, via our platform. Based on our traction of ~50 institutional users to date, our solution has been working. Our flagship borrowing and lending protocol, Alkemi Earn, meets the requirements of the institutional user as it provides a UI that could be easily accessed on the front-end (kudos to Ben Cooper on this!), which gave traders an easy-to-use, custody free platform to access DeFi… from Web2 to Web3, via their own wallets. We also created Alkemi Connect for exchanges & custodians to plug in to offer their customers yields natively, without ever needing to leave their platforms. Our forthcoming protocols will also be tailored to these requirements, with linked access to KYC-verified permissioned and permissionless digital asset pools.

One other point I want to mention is that in addition to onboarding direct users through borrowing/lending activity on the platform, we have also been building out partnerships with CeFi infrastructure partners (Defi onramps, in essence) — stay tuned for exciting announcements here!

Q — Telegram user Nico: Reading about Alkemi Network, I noticed that you can borrow and lend in a variety of digital asset markets, including ETH, WBTC, DAI, and USDC. However, can you give me details on whether other digital asset markets such as BTC, BUSD, BNB, or ADA can be used?

A — Brian from Alkemi Network: Yes, we currently offer 4 markets to borrow/lend on our platform: USDC, ETH, wBTC, and Dai. We have a focus on stablecoins with additional dollar-based, Euro-based, exchange tokens, and other emerging market stablecoins to be added to Earn markets in the future. Stablecoins are a great asset for borrowing & lending markets due to their low volatility and high yield potential. All of our users earn interest on the principal deposit (as a lender) or pay interest on borrow (as a borrower) and further earn ALK tokens through our liquidity mining program (ability to earn for borrowers AND lenders — it’s a 50/50 split), which you can check out in more detail here.

Token

Q — Ayeley from GAINS: What role will the token play in the ecosystem you’re building?

A — Brian from Alkemi Network: The ALK token will be a utility token. Its primary use is for governance, so ALK holders will be able to propose and vote on decisions to determine the future of the protocol, such as setting interest rate models and fees, selecting asset markets, and updating contracts. It’s interesting because Alkemi Network is the first decentralized liquidity network to facilitate both KYC permissioned and permissionless liquidity pools governed by one network utility token (1 network, 2 pools, 1 token). The token is very much the center of our ecosystem and will be distributed widely across our stakeholder communities and user groups. Further, because of the way the network has been designed, 80% of our token supply is dedicated to stakeholders, with the biggest bucket at 35% that is dedicated to liquidity rewards for network participants (i.e. platform users), so by using Alkemi Network’s protocols — such as Alkemi Earn — users become stakeholders in the network, in the ecosystem.

Q — Twitter user @kathdm3: There is currently no Alkemi network token. Are you planning to launch your own token soon? Have you thought of any governance token for the platform?

A — Brian from Alkemi Network: We are indeed. We’re planning for our token generation event to take place in July when we’ll launch the ALK utility token. The primary use will be governance, to enable proposals and voting to determine the future of the network. Please see my earlier comment above tagged here.

Security

Q — Twitter user @syed_beshara: For a project to have good development and survival it must have a good performance in security, stability, and ease of use. I would like to know how Alkemi performs in these mentioned areas?

A — Brian from Alkemi Network: As we have positioned ourselves as a professional DeFi solution, security, stability, and ease of use are mission-critical values for us and the network. We have partnered with Quantstamp (also a stakeholder in Alkemi Network) who will be carrying out an end-to-end protocol audit prior to our TGE next month. In addition to the Quantstamp audit, we are exploring the possibility of a bounty-driven community audit to add a further layer of security to the network. Further to the above, we have diligent internal functional testing and user acceptance testing with our users/stakeholders prior to every release. We also have built out real-time monitoring, alerting, and troubleshooting for smart contracts (Tenderly integration, for example), and we always make use of security-trialed, community-reviewed code libraries when available, continuously improved, and tested by developers worldwide.

Partnerships

Q — Telegram user Super-Girl Says 💬: Can you give the name of any centralized institution that has invested or at least is interested in investing in Alkemi?

A — Brian from Alkemi Network: We have many CeFi (and DeFi!) investors behind us. Some of our public investor partners include LedgerPrime (Cefi fund), Shift Markets (Cefi exchange), Outlier Ventures (Cefi venture firm), ConsenSys (Defi venture firm), GSR (Cefi market maker), Techstars (Cefi startup studio) along with many others. Partner/investor logos can be found on our website.

Q — Telegram user James: So far with the strategic partnership you have made, can you tell me how this has contributed to the development and growth of the Alkemi Network project?

A — Brian from Alkemi Network: We have seen tremendous traction so far, given we have been operating in “stealth” for much of this year, only having publicly launched in late April 2021. We currently have ~50 institutional users and $25m on the protocol today. Each month we update our community and stakeholders with our ‘state of the ecosystem’ reports, I encourage everyone to give our latest one a read (stay tuned for June’s report in early July!)

Financial

Q — Ayeley from GAINS: Did you raise funds so far? If so, how did you handle them? Are you planning to do any future raises?

A — Brian from Alkemi Network: Yes! We have a big vision we are executing on :) We have raised $6m+ in total, having closed a $4.6m private sale investment round in Q1 of this year. No immediate fundraising plans.

Business Development

Q — Ayeley from GAINS: What stage is the project at? And what should we look forward to in the coming months?

A — Brian from Alkemi Network: Alkemi Network officially launched out of stealth in late April of this year! Our flagship borrowing and lending protocol, Alkemi Earn, has been live on the Ethereum mainnet since Dec2020. We have seen significant growth/traction this year, recently hitting ~$25m of total value locked (which we refer to as Assets Under Protocol) across ~50 institution-grade borrowers and lenders on the Alkemi Earn platform. We have been optimizing for the diversity of users/participants looking to drive high adoption to the platform, so we have been capping initial deposits at $500k / user. This will be lifted as we move into the TGE. Further, we have had our liquidity mining program live Early Liquidity Providers and it has seen tremendous success. If potential users are interested in joining/participating on Alkemi Earn, we encourage folks to apply. The product can be found here. Coming this summer, we will be hitting 2 significant milestones: TGE and launching Alkemi Earn Open (our second, permissionless pool underneath the network).

In short, we have nailed product-market fit and are rapidly scaling up! The inflection point for Alkemi Network is here 🚀

Thanks Brian, for coming in today. It was a pleasure having you in our group, and taking the time to answer our questions. With such a hardworking team and great determination, Alkemi’s goal of unlocking off chain capital to flow on chain will definitely be a reality. Anything else you’d like to say? Where can we follow you to stay updated? — Ayeley Commodore-Mensah from GAINS Associates

Thanks for having me. Everyone asked great questions, amazing AMA! 🤘Please give us a follow on our channels!

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