Derek Edward Schloss (TDW): Mitesh, great to sit down with you on STA’s The Digital Wrapper. Let’s start off by hearing a bit about your pre-blockchain background, and how you found your way into the space.
Mitesh Shah (Omnia Markets): Before jumping into the blockchain space, I was a student and received my MBA after a five-year accelerated program at St. John’s University, Tobin College of Business. I started working as a financial and equity analyst at SKN Capital Management LLC where I managed several portfolios. In my role, I would come up with different portfolio strategies, and eventually started using — and became certified for use with — Bloomberg Terminal¹. I ended up becoming very passionate about the blockchain and crypto space, and over time, I wanted to bring my expertise as a financial analyst into blockchain and cryptocurrency and carry these same tools with me. What made this even more exciting were the advances in artificial intelligence² and machine learning³ abilities. I started exploring new ways to apply these new abilities to the data analytics that I am familiar with.
Derek Edward Schloss: Did you find that some of the tools weren’t as strong in the cryptoasset space compared with those in our legacy asset markets?
Mitesh Shah: Exactly. There really was no similar tool to do the research I wanted to conduct. A lot of analytics platforms, while having come a long way, still have a ways to go. For example, I found that the information regarding price fluctuations were often displayed on historical price charts, with no information pertaining to potential causes or precursors, or explaining why the prices themselves fluctuated. I wanted to find sources where we might pull that information from — build teams around this. That led me to create Omnia Markets.
Derek Edward Schloss: Understood. Omnia Markets is described as a crypto analytics platform. Can you walk me through the vision of Omnia Markets, and the specific problems your team is trying to solve?
Mitesh Shah: Omnia Markets plans to become a one-stop platform that provides cryptocurrency-based data, proprietary and non-proprietary analytics, and industry information and trends to both individual and institutional investors. Besides providing the typical financial ratios that you can get at sites like Yahoo Finance, for example, we’ll also provide actionable proprietary analytics based on user-defined parameters — backed by our artificial intelligence and machine and predictive learning⁴ algorithms. Our goal is to provide reliable and pertinent information specific to the crypto industry. Additionally, we plan on having hub locations in several areas of the world, including alliances and partnerships, and intend to provide unmatched data and information for use with our proprietary machine learning program. What is also unique to our approach is how we plan to develop our own journalism and news reporting division that will provide our own generated content.
Derek Edward Schloss: The idea of building a global physical presence in this industry is always interesting to me, given some of the global benefits enabled by blockchain-based assets. How are you thinking about regulation as the platform starts operating across a variety of jurisdictions? Do you hope that some of the cross-border regulatory expertise you obtain will eventually translate into your products?
Mitesh Shah: Definitely. One of our goals is to become a leading voice within the industry — today, we’re actively participating in legal landscape conversations, specifically here within in the U.S., and we want to expand that participation around the world. We want to help contribute to the creation of legislation that encourages growth for the industry, while also promoting reasonable and appropriate safeguards for participants within the industry. To that point, being able to break this down in an easy to understand language for our consumers is important to us, and something that we’re really focusing on. We aim to provide all kinds of industry information so that any user can come in, get a handle on the industry quickly, and start to understand what makes the industry move.
Derek Edward Schloss: It would be great to unpack how the Omnia platform works — let’s say a new client starts using the platform. What might the customer journey look like? What’s a potential idea or data point they may be researching, and then how would Omnia play a role extracting and filtering that data into a package that a customer might be looking for?
Mitesh Shah: When it comes to any of our users, whether it is institutions or just everyday users, we offer different tiers. For starters, we offer a basic tier — a free tier where they can receive basic information on the industry. In the simplest example, an individual or institution may want to figure out a certain kind of cryptoasset to build into their portfolio — immediately, they can use Omnia Market’s reporting platform to begin analyzing and comparing different assets, filtered by their own parameters to match their investment strategy. They can also go to each asset’s basic data page to really understand the asset itself. In addition to the more basic historical price charts, we’ll combine these with other algorithms and tools to allow users to understand why a crypto price might be moving the way it has. As they go throughout the platform, they can start getting more hands-on, with reports and cryptoasset comparisons based on unique parameters and strategies.
Derek Edward Schloss: What might some of Omnia’s higher tiered products look like?
Mitesh Shah: We ramp our tiers all the way up to specialized and customized tiers for institutions. For certain categories of institutional investors, they’ll be able to create AI and ML-backed reports based on their own specific parameters and criteria. In addition, other customers might want a more customized product, which could include a dedicated in-house team at Omnia Markets. The great thing about blockchains is that they’re something you can easily access. When it comes to sourcing data, the blockchain is one of the major sources we rely on, among other key sources, that makes our platform unique. With that said, the industry has to be very careful with this information — recently, CoinMarketCap⁵ came up with a new type of filtering to take out the inaccurate information we might get from blockchains. Similarly, we want to make sure that all the information we’re getting is properly vetted and not manipulated in any way.
Derek Edward Schloss: Interesting. As it relates to pulling manipulated data —what is the role of things like artificial intelligence, machine learning, and predictive learning? How might some of these concepts help filter out some of the bad data one might get when pulling raw information from these transparent blockchain ledgers?
Mitesh Shah: Yes. Historically, we’ve seen AI and ML used in different platforms in the cryptocurrency industry, like using these types of tools to scan social media to come up with sentiment around a specific cryptoasset. Similarly, AI is starting to help companies and analytical platforms like Omnia Markets comb through the vast amount of data on blockchains and from our other sources. These concepts help eliminate unnecessary or inaccurate data — a data fog — allowing us to show more relevant and reliable information. So while some firms use things like AI to measure overall market sentiment, it doesn’t actually explain what causes prices to fluctuate. In other words, it’s a great first step, but it’s unable to answer the underlying cause behind the measurable sentiment.
Derek Edward Schloss: I think I understand what you’re saying— today, AI and ML for something like sentiment analysis⁶ might help explain the effects, but not necessarily the causes of asset movements.
Mitesh Shah: Yes. With Omnia Markets, the platform will be able to generate reports based on user defined criteria that provides insight into the likely causes and trends for price movement. With that said, this isn’t something that can be done overnight — it’s going to take time to develop. Our in-house analysts will need to make sure that the data being output has a high degree of accuracy. Eventually, we’ll take that data and combine it with AI and ML to generate insights from news and events around the world. It’s going to be an ongoing process starting from day one, when we first release the platform. Around year three or year four, we predict the full feature set will be built out.
Derek Edward Schloss: Blockchains are a ledger innovation, and that innovation comes with some unique transparency benefits that are still fairly untapped. I think the industry is really just scratching the surface with how the extraction and curation of transparent data might look in the future. Right now your team is focused on cryptoassets, but eventually, do you imagine your clients will expect to have the same information pulled for blockchain-based securities and security tokens?
Mitesh Shah: This is something that we’ve definitely thought about, even well before we decided to launch our own security token offering, or STO, with the team at Securitize. Right now, our initial strategy is to tackle existing cryptocurrencies in a top down manner based on market cap and volume traded — this is where the majority of participants are located. So, whether it’s Bitcoin, Ethereum, Ripple, Litecoin — we’re going to tackle it from the top down and provide information to as many people as possible. As we move forward and we start to go down the list of cryptocurrencies, we’ll also start tackling security tokens. And we’ll do it in a unique way on our platform, leveraging AI and ML algorithms — in addition to traditional information.
Derek Edward Schloss: As it relates specifically to blockchain-based securities, what are some of the on-chain analytics you think might be important to pull in the future?
Mitesh Shah: Today, a majority of security tokens are either equity-backed or revenue-backed. Looking at historic company performance will give us an insight into how that token might perform in the future, as well as if that security has any other additions built in — like dividends. All of this information is going to be key to investors. We’ll be able to pull any financial information, provide traditional ratios, and eventually, investors will compare that information against other security tokens, or other traditional crypto tokens like Bitcoin.
Derek Edward Schloss: I’m always interested to hear — why did your team decide to fundraise using a security token vehicle?
Mitesh Shah: I’m passionate about the industry, and the benefits of this industry — I considered a traditional offering, but I think it’s important to stand behind this technology. I also like the idea of building in different features into the token. In other words, while our investors have the ability to start trading the security tokens once the one-year lockup period ends, the tokens can also be used to purchase different subscription tiers on our platform. The ability for the token holders to trade after the lock-up period provides flexibility that an equity raise wouldn’t provide without taking the company public. That imposes a significant burden on the company to become public before it is quite appropriate. And yet, the token holders will also have the ability to use the tokens as currency to buy our products and services, something an equity holder would not be able to do. Moreover, our planned distributions based on profits to the token holders also provide an annual rate of return that would be difficult to structure in equity raises after several rounds of fundraising. I believe the STO, in full compliance with the SEC regulations, provides significant benefits to us and the investors.
Derek Edward Schloss: Your security token technology is powered by the tokenization team at Securitize — can you share what it’s been like working with them, and why you decided to move forward with that team?
Mitesh Shah: There are several companies working on this type of technology — I reached out to Securitize, and Jamie Finn, the Securitize Co-Founder, reached out to me on social media to start discussing our strategy at a high level. They have been absolutely amazing to work with, and have really assisted in the development of everything we’re looking for as far as technology goes. They’re also implementing their digital security protocol, the DS protocol, into our smart contract which gives our security token an additional layer of security when it comes to following securities laws.
Derek Edward Schloss: Mitesh — wrapping up, how do you think about the cryptoasset space evolving over the next year? What are some areas you’re excited to follow?
Mitesh Shah: You are very right when you said we are just scratching the surface here. There are a number of industries really starting to get involved with blockchain technology — to name three, healthcare, traditional finance, and real estate. We’re starting to see these industries use blockchain-based technology to address existing issues. As this starts to increase, we’ll continue to see new evolutions in how this technology can be applied to existing problems. I believe in a few years blockchain technology will be mainstream. And as the tech evolves, so too will the information and analysis. That’s where I’m most excited for Omnia Markets — to provide information for the industry, and to be part of that evolution.
Derek Edward Schloss: Mitesh, on behalf of Security Token Academy, thanks for joining me on The Digital Wrapper.
You can learn more about Omnia Markets and Mitesh Shah at the following links:
Mitesh Shah (LinkedIn): https://www.linkedin.com/in/miteshshah93/
Mitesh Shah (Twitter): https://twitter.com/MiteshShah93
For more content from the security token industry’s leading educational platform, visit us online at Security Token Academy, join the conversation on Twitter @security_token, and jump in to our industry-leading security token Telegram group at https://t.me/SecTokenAcademy.
¹ Bloomberg Terminal enables professionals in the financial service sector to monitor and analyze real-time financial market data and place trades on its electronic trading platform.
² Artificial Intelligence (AI) is an area of computer science that emphasizes the creation of intelligent machines in areas like speech recognition, learning, planning, and problem solving.
³ Machine Learning (ML) is the scientific study of algorithms and statistical models that computer systems use to perform a specific task without using explicit instructions — instead relying on patterns and inference. It is often referred to as a subset of artificial intelligence (AI).
⁴ Predictive Learning (PL) is a technique of machine learning (ML) in which an agent tries to build a “predictive model” of an environment by trying out different actions in various circumstances.
⁵ CoinMarketCap is a website that provides cryptoasset market capitalization information and charts.
⁶ Sentiment Analysis is a way to evaluate written or spoken language to determine if the expression is favorable, unfavorable, or neutral, and to what degree.
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