This happened purely by accident on a sunny day of June 2021 when a strange mail hit my inbox. I couldn’t tell immediately if the message stemmed from a sect, a spammer, or a respectable business.
By that time, I had already decided to kiss goodbye to my career as an investment banker and finance professional. For roughly two decades, I managed global bond portfolios, fought for each basis point of return while doing my best to make rich clients richer and investors more invested. And of course, I got paid for this endeavour a fair compensation which is the way banks express their gratitude. However, after a prolonged period of plummeting yields, tight valuations and negative rates, the fixed income asset class had lost both its “fixed” and “income” components. Following the dramatic desertification of return opportunities, something serious had to be undertaken.
The mail that I received was a formal invitation to a job interview for an executive role in a start-up. Shortly after a meeting was set, two pairs of protruding eyes and computer-lit white faces were staring at me in a video call. The colourful narrative of these two guru-like entrepreneurs was about yield farming, minting tokens, accessing liquidity pools, or embarking on cyclic arbitrage via decentralised exchanges. During the conversation, I felt increasingly intrigued and captivated as the story related to things that I knew already in finance but sounded at the same time futuristic, implausible and esoteric. I ended up interviewing them more than they interviewed me.
Curious or incautious, I accepted their offer. Such as the character Neo in the 1999 cult movie “Matrix”, I swallowed the red pill and fell down the rabbit hole straight into the blockchain.
As a new convert to decentralised finance, I was far from suspecting the size and momentum of a universe where 10% annual yield is considered as a risk-free rate. In addition it offered limitless financial engineering possibilities, frictionless trading, no middlemen and no regulator spoiling the party. I was told that the system could auto-regulate itself via DAOs (Decentralised Autonomous Organisations). Besides the initial theoretical hurdles, the crypto world and its attributes remain the object of prejudice and misconceptions. Against all odds, I found it quite fascinating that this whole ecosystem could hold together under the anonymity of participants but without any coercion or mutual trust. Just imagine a similar constellation in traditional finance or politics.
Will then crypto make you rich or richer? It surely can if market statistics such as the exponential growth of the Total Value Locked in 2021 is considered (surging from USD18 bn to USD237 bn). Alternatively the massive flows in fintech venture capital largely crossed the mark of USD100 bn. But before aspiring to fame and glory, the price to pay is leaving a comfort zone, sleepless nights, and facing a vertical learning curve.
Interestingly, in the midst of the actual Metaverse hype, the fourth opus of the Matrix saga was released after nearly 20 years. This episode is about a war between the human-led resistance and a race of sentient machines who imprisoned humanity within a virtual reality, the so-called “Matrix”. Are blockchains also threatening Matrix-like entities? Is reality already beyond fiction? What is reality? I would love to answer today but I will have to ask first my avatar.
