CoinGecko Podcast - Bitcoin & Cryptocurrency Insights

Dr. Omri Ross Shares His Thoughts on the Future of Finance - Ep. 10

April 21, 2020 Bobby Ong Season 1 Episode 10
CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
Dr. Omri Ross Shares His Thoughts on the Future of Finance - Ep. 10
Chapters
CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
Dr. Omri Ross Shares His Thoughts on the Future of Finance - Ep. 10
Apr 21, 2020 Season 1 Episode 10
Bobby Ong

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Dr. Omri Ross, Chief Blockchain Scientist at eToro. Bobby interviewed Dr. Omri Ross on his story joining the eToro team, his thoughts on Ethereum, blockchain and the future of finance, Bancor whitepaper, as well as his works academically.

[00:00:02] Intro
[00:01:17] Dr. Omri Ross’ personal story
[00:04:25] How has things changed since Colored Coins days?
[00:07:56] Thoughts on how to improve Ethereum’s scalability
[00:11:35] Thoughts on how regulators regulate blockchain
[00:14:10] Thoughts on how blockchain would change the future of finance
[00:19:25] About Bancor whitepaper
[00:25:50] Dr. Omri Ross’ work with the Financial Transparency Group
[00:31:25] Dr. Omri Ross’ research at the university
[00:37:50] Where to follow Dr. Omri Ross 

Quotes from the episode:

“I think Ethereum is a good start and it's an amazing platform, and I'm a huge fan. But I think we need to see a lot of scalability within this ecosystem to be able to really predict who will be the winner in the long term.” [00:07:25]

“In the end, regulations are supposed to really look at the interests of everyone and every actor in the society.” [00:12:45]

“What brought me real full time to blockchain is that understanding that, I totally believe that blockchain will become sort of the rails for financial services are going to build up.” [00:14:15]


Links

Financial Transparency Group - https://rossomri.github.io/Financial-Transparency-Group.github.io/
LinkedIn - https://www.linkedin.com/in/omriross
Twitter - https://twitter.com/omriuk

Research Papers: 

https://www.ssrn.com/abstract=2897788
https://www.ssrn.com/abstract=3015219
https://www.ssrn.com/abstract=3488344
https://scholar.google.dk/citations?user=aevQE00AAAAJ&hl=en

Show Notes Transcript

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Dr. Omri Ross, Chief Blockchain Scientist at eToro. Bobby interviewed Dr. Omri Ross on his story joining the eToro team, his thoughts on Ethereum, blockchain and the future of finance, Bancor whitepaper, as well as his works academically.

[00:00:02] Intro
[00:01:17] Dr. Omri Ross’ personal story
[00:04:25] How has things changed since Colored Coins days?
[00:07:56] Thoughts on how to improve Ethereum’s scalability
[00:11:35] Thoughts on how regulators regulate blockchain
[00:14:10] Thoughts on how blockchain would change the future of finance
[00:19:25] About Bancor whitepaper
[00:25:50] Dr. Omri Ross’ work with the Financial Transparency Group
[00:31:25] Dr. Omri Ross’ research at the university
[00:37:50] Where to follow Dr. Omri Ross 

Quotes from the episode:

“I think Ethereum is a good start and it's an amazing platform, and I'm a huge fan. But I think we need to see a lot of scalability within this ecosystem to be able to really predict who will be the winner in the long term.” [00:07:25]

“In the end, regulations are supposed to really look at the interests of everyone and every actor in the society.” [00:12:45]

“What brought me real full time to blockchain is that understanding that, I totally believe that blockchain will become sort of the rails for financial services are going to build up.” [00:14:15]


Links

Financial Transparency Group - https://rossomri.github.io/Financial-Transparency-Group.github.io/
LinkedIn - https://www.linkedin.com/in/omriross
Twitter - https://twitter.com/omriuk

Research Papers: 

https://www.ssrn.com/abstract=2897788
https://www.ssrn.com/abstract=3015219
https://www.ssrn.com/abstract=3488344
https://scholar.google.dk/citations?user=aevQE00AAAAJ&hl=en

Bobby Ong:   0:02
Welcome to the CoinGecko podcast. I'm your host Bobby Ong. Each week we will be interviewing someone from the blockchain industry to learn more about this fast moving crypto currency economy. If this is your first time listening, then thanks for coming. The CoinGecko podcast is produced each week to help you stay ahead of the curve. Show notes can be found at podcast.coingecko.com. I highly encourage you to join our newsletter where we send out top news in the crypto industry every Monday to Friday. Come back often and feel free to add the podcast to your favorite RSS feed or iTunes. You can also follow us on Twitter and Telegram at CoinGecko. 

Bobby Ong:   0:00
Welcome to the CoinGecko Podcast. For today’s episode, let’s welcome Dr. Omri Ross, Chief Blockchain Scientist at eToro. Dr. Ross earned his Ph.D. in Mathematical Finance from the University of Cambridge. He currently holds an Assistant Professorship in Blockchain Technology at the Department of Computer Science at the University of Copenhagen. Dr. Ross has acted as an advisor, consulting with governments, banks, blockchain startups and larger corporations, and is a sought-after speaker on all topics related to decentralized financial infrastructure. Welcome to the show Dr. Ross.

Dr. Omri Ross:   0:00
Thank you very much. I'm happy to be here , Bobby.

Bobby Ong:   1:13
For the first question, we would like to know a little bit about your personal story. When did you first hear about Bitcoin and what got you to move full-time into this industry?

Dr. Omri Ross:   1:22
Yeah, I guess it's been a bit of a long process for me. I mean, I got to hear about it a little bit in 2011, 2012. But again, I think I got more interested in it actually, around the time of the work around Coloured Coins. But I followed from Yonni and other members of industry, of course Vitalik, and [inaudible]. Yeah, I guess at that time, I really see it as a very, very sort of interesting side line. But not something that serious, because I couldn't see how scalability can happen into the system. But the thing when Ethereum went out, that's when I really want to move full-time. 

Bobby Ong:   1:58
You are now with eToro as the Chief Blockchain Scientist. That's a very big title. Tell us about what you do at eToro and tell us more about how you joined eToro team from Firmo?

Dr. Omri Ross:   2:09
Yeah. I mean, of course. I mean, I think there were a lot of alignments between the vision that we had sort of in Firmo and of course, the much bigger vision that eToro is having right? Etoro's vision is to open global markets for everyone in this simple and transparent matter. And they executed very well on top of it, and we felt that we could actually contribute to that in offering another line of secure products which are much more tokenized and working around the Blockchain. We knew about the vision of eToro team and Yoni and others for long time, we collaborated with them, so it was very, very natural for us. What we do is we work a lot on the, sort of the pipeline of some existing projects as well as a varied sort of long ahead sort of planning project and long project that may or may never materialized. So it's a lot of fun and I think eToro is a great place because on one hand, it's quite of a large company. It is between the crypto space. But on the other hand, it's much act like startup. It's still a large company. Decisions are taken down and made by different members of the team, and it is able to move much faster than many other large corporation, which is really, really cool to try and rewriting finance together with that.

Bobby Ong:   3:24
I had earlier conversation you and you told me about how eToro's CEO, Yoni Assia is a big believer in Blockchain technology from the early days. Do you want to share a little bit more about Yoni's believes and mission in the Blockchain industry?

Dr. Omri Ross:   3:40
Yeah, so of course. First, I would like to invite you to invite Yoni to one of this podcast. He can probably tell much better than me about himself, but I think Yoni's believe in the transparency and financial market has being long going. I mean, look at the early days of his work on Coloured Coins. It's good example of actually looking into ways to make financial markets way more transparent and again, it's very, very much in line with opening the market in a simple way and transparent to everybody, which is eToro's vision. So in that regard, I think the technology by itself was very appealing from earlier stages. And, as the saying goes, it's been very fundamental for him. It will be both thought leaders and first movers in these parts.

Bobby Ong:   4:24
You started looking at tokenization even from the early days of the Colored Coins days. How has things changed since then? It seems like Ethereum is the one platform that is really fulfilling this vision of "Tokens everywhere".

Dr. Omri Ross:   4:38
Yeah, that's great question. And I think if you look at the early days while it was much more, a bunch of people looking into some crazy ideas which are more far away from this financial services and I think that with Ethereum, it at least became a, I know it's a camouflage or feeling that we can get much faster to offer some of the vision of tokenization of assets right, which is the main reason behind ideas such as the Colored Coin and platform such as Ethereum make it much more easy and possible to do things and interact with them and to build smart contracts that can interact with the contract. And a lot of people really like that vision, including myself, because it allows us to create compose-able contract, right? So what it means is that you can actually build building blocks. It's going to interact directly with each other. And that's, in my opinion, one of the biggest contribution of Ethereum, because it's making it much more easy or possible to people to trade base layers whether they're decentralize finance layers, project like MakerDAO or to some extent money market accounts like Compound, which are easily integrated into much from complicated applications. Now, if we look back into the financial sectors, transactions are complicated. Of course, they are easy and fast moving, but they require usually working for a bunch of collaborators, maybe transaction has some complex and meanings within paying agents, card companies as well as payment providers. But eventually they know to do one things, and they're not very flexible. You need to have a terminal that work to some specific protocols in a variety of places, and this technology can actually allow it decompose much richer sets of events, and you leave too much richer set of value proposition. On the other hand, one of the biggest challenges with this, which we've been talking about a lot of, issues around scalability and fit to market and regulation, which means we would love to see a real large scale financial sector runs on a platform like Ethereum, but it doesn't seem super likely today. This is about good scaling solution by issues as Lightning will be provided there or issues such as second layer Blockchain because without that, it would be very hard to work on the same level of throughput as we've seen with their financial sector, right? We want to be able to want transaction immediately that will be applied. We want to do it in secure manner, which is difficult in systems without any centralized party that can actually deal with misalignment and with theft , issues like that. And you need to add into insurance companies, you need to have some regulation inside. I think Ethereum is a good start and it's an amazing platform, and I'm a huge fan. But I think we need to see a lot of scalability within this ecosystem to be able to really predict who will be the winner in the long term.

Bobby Ong:   7:40
I think what you said is really true. I think Ethereum is suffering from a big scalability issue. Every time there's a huge change, increase or decrease in price, the Ethereum network goes into a massive bottleneck and then every transaction takes a long time to proceed. That's definitely a bad thing. Do you see any, anything that can be done to improve Ethereum's scalability in the short, medium and long term?

Dr. Omri Ross:   8:04
That's a great question. And I have to say that I think the Foundation is actually, and a lot of other providers are doing really good job about, of course, we all waiting to Eth2.0 to see how hopefully some of these problems are going to be a less acute than they are today. But I think I would not expect only Ethereum and the foundation to deal with it. I think that we will have a place for several service providers for several Blockchain for different use cases. And I would think it's not even fully fair to put all the weight on Ethereum because the way I look at Ethereum is an absolutely amazing project. But it's a startup idea, raising some funding in the past, building and product no one and including myself actually, believe will be that well executed, right? They actually build an EVM virtual machines that works on block home and actually made it happen. For me, it's tremendous. I feel like I've ever under scaling that, and they've done well in building an ecosystem around it. And I think, for their point of view doing an ICO as they did was creating more engagement from the community. It was a really amazing but, however, to assume that this will be the last product, it's hard to say. I think what stands good for Ethereum is the fact that they are some system that worked on it that may create legacy. And while we look a lot like legacy is a negative thing, if there will be system that are already based on Ethereum today, they may have hard time to move to other platforms. So I think what we will see, is we'll see much more sort of scaling short term solution. Like layer two solutions or solutions like Plasma that's going offer us much better scale-ability. But what I think will be much more interesting and something that will play much more on the long term will be to really enjoy fundamentally, seeing dedicated blockchain for dedicated issues. And I think that would be very, very interesting parts that I think will happen. I think there are another very, very interesting aspect that we're not maybe speaking enough about is really issues around regulation because integration of regulation will really allow us to on board much more attention towards the Blockchain work. And on boarding that attention and on boarding the traditional providers can actually allow sort of this setup on ecosystem of Blockchain to be moved away from a bunch of geeks working of it for many years and talking about changing toward to much larger scale adoption and will also allow us to build much stronger ecosystem. I think in doing that, the really hard part, would be to be able to see what can we imitate or how can we actually restrict some of the powers that Blockchain system have. For example, right, we cannot reverse transactions, which is, of course, a key value in the system. However, that means that insurance become much more complicated on blockchain, right? Because how do you ensure against a transfer or let's call it one transfer of money if you cannot really revert it in any other sense? There are a lot of work on really connecting the more traditional players to get to field and work with this technology. But I think that that's what you're going to see happen in the next 10, 20 years or even 5, 10 years.

Bobby Ong:   11:30
You brought up two very interesting points on the use of different blockchain for different things and also on regulations. So how do you see regulators regulating blockchain and the decentralized nature of it? Obviously it makes it really hard to do that.

Dr. Omri Ross:   11:45
It's an excellent question. And I think the way regulators will look into it, it's probably gradually and probably different in different jurisdiction. And while everybody, of course, want to initially work with the largest jurisdiction, such as the U. S. for example, it's not that simple to move there fast. We have seen the German regulation become really open into Bitcoins just and generally digital asset just recently, which is an excellent to step. We live in Denmark and we've seen the regulators here just been talking and engaging in discussions and are opening different sandbox models. So I think they will move ahead and do it cautiously like they should as regulators. I think the hard stuff from people like us that are being in this industry and are full time crypto as you said before, is that we are, we of course like that to happen way faster. But I think it's a little bit difficult because we're talking about the new technology, we're talking about, in the end regulations are supposed to really look at the interests of everyone and every actor in the society. And they are naturally exposed many to the downside, right? Opening, making, allowing some to work and it  doesn't work, they will be criticized for it. While if there are success stories then the entrepreneurs behind the success stories are much more benefiting and describing it. So I think, I think we have to be very, very patient, and I think we have to spend time talking to them, discussing with them and building focus, where for us in eToro, we have many members that are actually engaged with different element of regulators from us, which were eToro business regulating it and from eToroX is the exchange of the professional part of the business, engaging with the regulators on tokenization of assets and a vast other topics. But we also working on it as part of sort of thought leadership. It's part of their engaging with contributing to an academic discussion about these ability of this technology and publishing papers around it, which is another way to contribute to this discussion. Well, it's a long term one. It's not a short one unfortunately. 

Bobby Ong:   13:59
Yeah, it's definitely a longtime game, when you want to educate regulator because they have to understand it comprehensively and know every angle before they can make a decision on what laws to put in place. Next question is, how do you think Blockchain would change the future of finance? How will the banks of the future look like?

Dr. Omri Ross:   14:16
This is maybe my favorite question, because what brought me real full time to blockchain is that understanding that, I totally believe that blockchain will become sort of the rails for financial services are going to build up. Because of all the qualities we talked about before. The quality of being able to create decomposition and compose-able smart contracts, will allow each service to naturally connect to other service. Now that may sounds like a geeky discussion of a very, very specific item but that means really opening every service to anybody and possibly offering that service in full, transparent manners between smart contracts, between auditable code that people can actually see and examine. What it also means is that with current encryption technology, we can allow very, it's not that easy but it's not complicated as well, and we looked into it as well, how you can keep this information private so we can actually run private transactions on blockchains and keeping them private and with a variety of rather, simple mechanism such as, for example, Shamir's secret sharing or more complicated sort of MPC models. We can allow the players in this ecosystem to mutually and together agree when a specific transaction information should be revealed and information should be revealed. So why is it, in my opinion, so strong is because I'm looking a lot into how financial services work today. So either it is a transaction that happened, and we want to examine it, first of all, the regulator is not seeing that transaction as it happened, right? It runs within two banks or two institutions, and they will at some point receive information about this transaction, at some point will examine its transactions, probably in a much later stage. And we are talking now with this technology of offering sort of real time monitoring of transaction and events happening, at being able to sort of algorithmically agree when a transaction, let say, doesn't look so Kosher or so legit and being able to decompose it, being able to offer services build on top of each other which will open this market to much more competition. And then in the end, which is maybe where a lot of the blockchain work I would love to see, is getting that all things in a simple manner to everybody. So again, simply providing people a simple service such as payment, such as transfer and very clear client experience and at the same time, back them with sort of complicated technology that offer us much more transparency. So I think we could get much contribution to transparency, decomposition, and I think these are values that I personally adore and think are really great for the financial services.

Bobby Ong:   17:13
Very interesting indeed. And how do you see eToro full-filling this mission of the future of finance?

Dr. Omri Ross:   17:19
I think eToro is very strategically located within this. Because of Yoni's love to this area, which was composition in project like GoodDollar, composition into concept about the opening financial market for everybody. We've seen a large player within the financial service sector, which thoroughly and believes within the potential of blockchain. Which means one of the things I love best about my job is that I can actually come with an idea, and I would assume that I will get quite a lot of support from the eToro and from its leadership on actually pursuing it. If we can think about it, for example, if I was working with other large financial sector, and I would like to come with building a very strong system of [back to the party], there will be so many restrictions and hard time to actually go to market. While with eToro, for example, we built out tokenized assets and we provide 17 of those, 15FX and two gold and silver, so two commodities, and we built this product and we get a full support from the back end of the organization. As we often quote them by saying that we think the biggest transfer of wealth will be really transferring a lot of the, I wouldn't call it all but the traditional wealth towards the blockchain. That would be an interesting part in eToro. I feel it is located very well to do it, because it's deeply routed within the financial sector by being regulated, by working with the largest bank in the industry, by running large transaction value of, say, over a trillion a year, including large part of it being around stocks, around the commodities, around traditional markets and at the same time being highly invested into the blockchain, understanding technology, having the CEO that really understand and read by this technology and wanting to push it would be able to possibly make a sort of the glue that connect all the new work and doing that by offering clients very simple and transparent, sort of set up to trade.

Bobby Ong:   19:25
You are also an author of the Bancor whitepaper. Can you summarize in simple terms what Bancor is and how it’s a new model for decentralized exchanges for those who are not familiar with it?

Dr. Omri Ross:   19:35
Sure, I mean, I think, yeah, I won't talk much into that, but what I find interesting about the Bancor idea and generally what I would call the more general manner, swap exchanges is that, the first thing that we've seen when people move to world of the decentralize exchanges was trying to build different ways to sort of imitate the old world, right? You have in the old world you have an exchanges, you're trying to sell some assets. You try to build some book, bid and ask, people trying to offer different services and sell them and trade. And we also see that project like the 0x and others actually build around providing different interfaces to allow you to do it. I won't get into details into that. That could be another interview, maybe for example around how decentralize exchange works. But in very short term, what I like about this swap idea is that you build a bonding curve about how the relative prices of your assets work and you suddenly build a new product. That's what excited me. It wasn't possible before, being able to swap the tokens and see the price change while you tell some prices sufficiency is and among other things. I'll publish an academic paper that we're working on to actually describe much more of this mechanism from a much more theoretical and game theoretical perspective. I think that it's something that we couldn't do before. The contract to trade directly itself and provide inherit liquidity that already exist inside the contract. So this is a new animal, they didn't exist in traditional market. It's a bit early to  figure out all the use cases. Some of them could be offering liquidity for more liquid assets. But what's really got my attention into that was building a mechanism that can actually offer liquidity in the ways it wasn't known or possible in the more traditional world. And then I worked on more academically on trying to see how we can actually build on top of these things. And, you know, we see Uniswap and we're seeing a bunch of other players building around itself. I think it's very interesting.

Bobby Ong:   21:35
Were you the first person to come up with this concept of bonding curve and automated market making through Bancor or did someone came up with the idea first and you sort of got inspired and wrote a Bancor whitepaper based on that?

Dr. Omri Ross:   21:47
Right. So at first I got introduced to this paper and the ideas, after it was started working into that. So I have seen some of the work the early team, with Eyal and others. And many different part of the product, so I'm actually not sure who was the person that should be attributed the main ideas. But I do remember, is that I was very intrigued by it, and I felt that the initial approach to describe it was very businesslike, which may or may not be a good thing. It's not that, but I was really intrigued by the idea of contracts trading with themselves. I worked on developing some part of the use case, and in the second version, I'm making it much more sort of academically, then it was in the first one.

Bobby Ong:   22:33
Yeah, I think it's very interesting thing, like a lot of things, this automated market making bonding curve is something that cannot be done in the traditional world, and it's something only inherent in the Blockchain space. And sometimes people make mistakes are trying to replicate things that happen in the traditional or in the offline world and bring it online. It doesn't really work and the same thing we're seeing, some people try to take what works in a traditional market and try to replicate it in the decentralized market. What we really need is a new way of thinking, because technology allows us for new ways of doing things. I think the work that you did at Bancor is just Blockchain made it where having a contract trading among itself, to provide liquidity. So yeah, kudos to you for working on that, I would say.

Dr. Omri Ross:   23:15
I agree with you. I agree with you on the mentioned that you start by, you need to build new stuff. And that's where I'm getting excited about the compose-ability about smart contract because think about it, the more sort of philosophical. However, it's very natural that you first imitate all scenes in use, right? And when we do research in general, this is usually the first place to start. We start by saying okay, how this, when we see new technology, how would an old feature look on that? And then you started that and then later on you start questioning different parts in your design and that's where it's gonna be really creative and fun.

Bobby Ong:   23:51
Yeah, I remember one of the earliest decentralize exchanges that was out, EtherDelta. It was basically a replication of traditional exchange with order books and all. But it was such a bad user experience. It was expensive, and it was just very clunky way of doing things. And the Uniswap way of having a bonding curve just make it really simple to trade and provide liquidity for many of these assets, I would say.

Dr. Omri Ross:   24:16
Yeah, and as you know, I'm seating two roles. One is more academic as this sort of my work in university, which I enjoy thoroughly. One is more a sort of pragmatic, which is the work with the eToro. So in each case, wherever I sit I would look as an extremist. If I work with my academic counterpart on, like, let's connect our work towards affecting a true industry financial sector and build the rest there. And when I sit with my eToro counterpart I'm like, let's build a vision for 5, 10 years. I did not, you know, build things which are going to make a difference in the long term, longevity of the company. But I think this connectivity is really interesting and is really where I feel that I can fight to help this industry in growing. But, you know, I think my believe in this is really, really deep. And this is where one of the things I learned from [sort of it all the time]. It's also about the importance about regulation. But a portion turns of being part of growing that sort of discussion. For example, in the UK team, they're living their crypto a task force and advise governments and working directly with sort of getting the regulation and the environment much more engaged  into our work, into our life. And I think that's generate a lot of long term value.

Bobby Ong:   25:35
Yeah, certainly agree. I think, like Professors that work in the industry has a lot of industry experience, be able to contribute on this academic work instead of just staying purely in academia. So actually, I'd like to ask you to be on your work in academia now. You lead the Financial Transparency Group Research Center at the University of Copenhagen. Can you share what are some of the initiative that you guys are working on?

Dr. Omri Ross:   25:59
Sure. First before that, the reason why I started the Financial Transparency Group was very related to what I discussed before, because I totally believed that both the industry and academia should work much closer to each other and can achieve much greater goals in greater collaboration. And the Financial Transparency Group is really around that. It's around a building some deep research on core questions, but really worked with industry leaders on establishing what are the core questions to explore over the next 5,10 years. And some of the questions that we come up with and we're working on, are they leading to some grants that we're applying for an establishing and some PhDs and some other work on it. And also, if you look into the group itself, it's very diversified. So there are members from Economics department, from Computer Science department and as well as members from Business school and maybe more soft disciplines. And part of the things that we tried to establish there is to actually and build more than just a more initial [inaudible]. Example of such collaboration could be an innovation product we work with eToro, that is called the Lira. It's an open source language for DeFi. It's a language you can build on top of it financial contracts and execute them on the blockchain. There are of technicalities in it. It's a domain specific language. Part of the language has been formally verified on different features. So a lot of work on that has been very deep sort of academically. But we're also very keen about not just leaving it on the paper wise, but also allowing people to play around with it and try it. And we did by also building a demo where people can now create sort of options and future contracts and that. As well as open sourcing it completely and sharing some examples and how we built it and show people how you can utilize it for variety of contract. So I think this sort of view of both building the core research question of designing a language and building it on one hand, which is a lot of time, very academical and much work in publishing it and then later on pursuing it, building it and sharing it with the industry and try and get some more engagement and feedback from them, is what we're trying to be. And we do it across other projects. So that's an example of a problem work with. Another issues that we're very interested in is really, I'm a keen contributor and a fan of the word of stablecoin. I don't actually like the word stablecoin, I prefer to call it tokenized assets, because this what you do. But I think that what we've seen in the early versions and some of the great forces has been done thereby, you know, by corporation like [Maker] and DAI and others, is building infrastructure. But this infrastructure doesn't relate directly to regulation, and I think they're two reasons why early work is being this way, partly because it's very difficult to work directly with regulators and it takes a long time. And it's hard for startup and for innovative people to spend the time and build it. And secondly, there are a lot of discussion about the fact this regulation is often somehow, while it is doing a good way in protecting people but it also doesn't allow people to use product and in the spirit of free choice. And so people would like to be able to you know, both control the assets by tokenizing them, as well as trade them, transfer them, build stuff with them, really without kind of asking the big brother to approve or not approve that. And I get that one as well. But I think we can really achieve somewhat both goals at once if we build systems which are based on transaction of stablecoins, which will offer a layer of encryption on top of it. A layer of preventing these ability of some of this transaction information while still exposing them on public ledger. Why they say it because exposing this transaction on the public ledger means everybody can see that. Means this is transparent and you have no reason to sort of not show us the way things are working. On the other hand, with some smart encryption and decryption, you can actually live monitor when bad actions are happening. And I think then we really start building using a Blockchain technologies as the rail of financial assets and the rail of the future of finance, rather than focusing on the price of Bitcoin right? And I think that's why I'm getting excited and that's example of some of the project we're working on.

Bobby Ong:   30:36
You know, it's interesting that you brought up stablecoin . I think stablecoin is the sector that will have a lot of innovation in years to come. At this point in time, a lot of the stablecoins are mainly centralized. I use stablecoin like Tether, USDC, XOS. And then you have the other extreme, which is the crypto-collateralized stablecoins like DAI. But there was one type of stablecoin, which was they did not come to life, which was the algorithmic stablecoin such as Basis. I'm sure you have studied it, but it was unfortunate that the team decided to pull off the project due to regulations. But if it would have come out, it will be very interesting to see that come to life, to see how to maintain the pack peg algorithms.

Dr. Omri Ross:   31:14
I think it was fascinating. So I followed Basis. Yeah, I think the closest thing that now is live is Tellor, which is somehow are related to that.

Bobby Ong:   31:24
Do you write any academic papers? What are some of the research that you have done at the university?

Dr. Omri Ross:   31:28
Right. So yeah, of course. There are different topics we're interested in. One of the topics with published on is using KYC on the Blockchain, sort of reducing the cost of KYC. As currently sort of regulator require each financial institution to repeat the same KYC process for any user and corporate users. Even though you know you may trade with Bank of America and Citigroup but it will still need to do separate project with you. And obviously I mean, for individuals, it's maybe a smaller challenge because you just give your passport and some basic KYC information. But for cooperates, really building this KYC, looking into subsidiary and all of your information and varieties of languages is really, really lengthy, it's very costly. It's preventing businesses and, for example, do you want to guess what is the average cost of KYC for the largest thousand banks in the world in this institution?

Bobby Ong:   32:25
I have no idea, I don't know, maybe $100 to KYC one person.

Dr. Omri Ross:   32:31
I meant for the yearly cost for the operation. It's $60 million a year. This number doesn't include fines that are received for doing it wrongly and others. So we think like, you know, if you're thinking about a large corporation, they're probably not only aware of one banks, usually work with a few of them at least, if not many of them. And then it would make sense to actually allow the banks somehow to share this information. And the reason why it was not done and created a lot of costs for each individual banks is because, uh, they wouldn't like the process that one institution is providing sort of the KYC information and material, and then, in case of a challenge, that will have to find another institution that may rely on institution one and you have lack of clarity and responsibility. But you know, some of this information of how you managed transaction can easily be cleared on either DLT, sort of a corporate Blockchain if you'd like or on a public Blockchain and provide that information and provide massive saving to the industry. So that's one example. Other work we're doing is around the economical mechanism as I mentioned before. Some can relate to how you build a different equilibrium on different trending products. Since it may be related to a small basic changes. Another work we're building is around I mentioned it before Lira, sort of clarity of language for financial derivatives and how to build it, how we actually built it and sharing it, how to extend it, how to make it more useful. We also look into decentralized government, which is subject that I really love and many people in our industry really likes.  

Bobby Ong:   34:16
Like DAO I suppose? 

Dr. Omri Ross:   34:18
Yeah, yeah DAO. And how do you build this decentralized organization? I think it's always fascinating, right, because it's one of this concept that everybody feel very positive about in one hand. But really, to do it correctly is very difficult and to really initiate that. Yeah, we looked into work of, again something is done together with eToro like GoodDollar, trying to look into creating a global UBI, what to be the implication of that, how to build good and interesting product about it. Issues such as how to build leverage in decentralized systems, which are very interesting actually. My background is Math Finance, so I work a little bit with some questions like that. I mean, this is a lot of fun. But most of the concept right, that's working is really bridging  the AML, KYC, both regulation, but also both concept which could be theoretical and computer science deep and show how can we build new tools and hopefully support more innovation around that.

Bobby Ong:   35:15
Very interesting indeed. And besides those research projects, like what are some of the items that you're working on for 2020?

Dr. Omri Ross:   35:24
As I mentioned before, we also build a lot of product that may not materialize but are actually part of our way to exploring and building the pave for the futures. And I guess peer-to-peer lending is very interesting around the DeFi word. We're looking into different protocols which will offer more financial transparency. We're looking into how to work with leverage in the more decentralized infrastructure. We're looking into a project like GoodDollar, which I mentioned around the UBI and the Universal basic income, and which is an interesting question because you want to create an open system for everybody. The decision will be done by a mechanism such as a DAO. But you know that in the initial part of this project this system will be fairly centralizing controlled by a few members of the community, so you need to build also systems that become more decentralize gradually. We're looking into this kind of example of problems. We also can't talk about all the project we are involved with. However, we're very, very interested in working with more bright members of the ecosystem. I think one of the biggest achievement of Ethereum is unbelievable ecosystem of developers and builders and you know, now when you go Devcon, so many people are there and there's so much innovation. So I was very interested in working with people in this industry. When you take a company like eToro right, a lot of people are aware of our main sort of line of work we're doing, but  a lot of work is done aside from our main products, which are sort of copy trading and copy portfolios and offering the popular investors. It's actually trying to work on establishing innovation of index. Contributing to research, collaborative research with focus groups are being involved with regulators, and we're very interested in talking to people around this ecosystem and see how we can help, also smaller project in building towards more regulation. So some of the projects, of course, are more interested in the day to day the way we understand it and way wanna open a product to be completely decentralized with no KYC, no email, and this could be more challenging for us. But we were very interested in discussing about how to open their products, which could be more available for financial markets and offer it to vast majority of customers and more people by actually using this technology and regulations.

Bobby Ong:   37:48
Very interesting all the things that you do. Lastly, before we close off, if someone's interested in finding out more about the work that you do, how can they follow you?

Dr. Omri Ross:   37:56
Oh, thank you. Of course you can have that sort of find my Twitter, I guess, and my LinkedIn profile. I'm happy to contact anybody. Also, after the Corona time, I'm trying to go for many of the bigger conferences around the year. We plan to go to Consensus and to Ethreal, representing Ethereum. I guess it's gonna be an online conference this time. But, you know, right to me in LinkedIn or others. I'm always interested to learn about your project. Often, if I hear about it through a person that I work with and I already trusted in the past, it can easily get my attention. I think it should be pretty simple to reach people nowadays, as the system are much more open. Can use also my university. We can engage with work on different layers. Also as part of the, there is in the Financial Transparency Group. We have a variety of corporate which are taking part into it. A lot of other innovative projects that we are working with, like a gas station and many other products which are not maybe directly connected to what we're doing, but we think are going to contribute to the future of this space. If you're a builder, please get in touch. If you are more deep thinker, we have opportunities which are more related to research, PhDs and other stuff. But I should be easily, meet-able at least online nowadays. Yeah, very excited to hear about new work in progress and please share some of my information maybe in the commentary also because can get engaged directly.

Bobby Ong:   39:33
Yeah I will add them in the shownotes later on. Thanks a lot for taking the time to be on the CoinGecko podcast. We really had a lot of fun learning about the work that you do and very enlightening, I would say. 

Dr. Omri Ross:   39:44
Of course, it's been fun to talk to you, Bobby, and I love the work of CoinGecko and would love to contribute more and to help you in any way I can.

Bobby Ong:   0:00
Alright, thank you very much once again. All right, that wraps up the show. Thank you for listening to the CoinGecko podcast with Bobby. If you like our show and want to know more, check out podcasts.coingecko.com or please leave us a review on iTunes. Do you have any feedback? Do drop us an email at hello@coingecko.com. Join us for more next week. See ya. 

Disclaimer:   40:40
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