An interview with:
- Tunde Awe. Pentrust Ltd (Crypto Wealth Managers) &
- Ajibola Lawal. Practice Lead at Kaicho Capital
Q: Who are the growing and key players in the DeFI sector in Nigeria today?
A: There are two ways to approach the question. In the first instance, from the perspective of the global DeFi platforms that Nigerians are using. And that is an easy answer. In that, Nigerians are using the same the top global platforms everyone around the world use, which include Aave, Compound, Yearn Finance; on the fully decentralized side as well as Nexo, Voyager and BlockFi on the Centralized DeFi end.
The difference between both options just refers to whether the users funds are fully managed themselves, or they are managed by a private entity on behalf of customers. More locally, there are a few emerging protocols; some in stealth and currently being built, the others on the verge of being launched. It may be worth it to look out for these Africa focused Decentralized Finance Platforms in the near future.
Q: What is DEFI and what does this mean for the creative industry and other traditional industries?
A: Decentralized Finance, known in short as DeFi, simply refers to an alternate system of financial primitives that puts users/customers in the driver’s seat of the control of their finances from end to end. Very simply, it means that users themselves perform the core functions of a bank, directly, without intermediaries. These functions range from providing lending opportunities to entities in need of that liquidity, and the performing currency exchange functions.
Prior to the rise of DeFi, being able to perform these functions have been the exclusive preserve of regulated financial institutions and intermediaries. With the removal of these institutions and intermediaries, is the unlocking of a new layer of value, that isn’t captured by monolithic entities but are delivered straight to individual retail investors.
Q: How do we get to hear about it, are there magazines, online portals, NGO outreaches?
A: There are several disparate sources of information about Cryptocurrency and Decentralized Finance. As of now, it is difficult to find singular repositories of such information, and this speaks to how nascent the space is.
However, good places to start with learning about and gathering information and news on DeFi include Chairman’s DeFi Primer, Darren Lau’s How to DeFi book, and for news updates and articles about the industry, we have The Block, Coindesk and Arca.
Q: When can we expect to see DEFI operators like banks franchise, private beauro de change operators, and finance houses?
A: Already, major entities like Goldman Sachs in America and Societe Generale – the third largest bank in France — are already making concerted forays into the Decentralized Finance space; through the use of DeFi platforms like Aave and Maker Protocol. In this instance, not as DeFi service providers but as institutional users seeking Alpha and Capital Efficiency.
At a second level, we also have crypto-native asset management Firms like Jump Trading and Alameda Research – with assets under management mirroring those of on-par Traditional Hedge Funds — being heavily involved in the DeFi space.
In essence, it is not a question of expectation of when the big players will get involved. It is a question of how much further, these players and other stakeholders, will entrench their participation.
Q: Where do you see this emerging DeFi trend going and which sectors given global and local frameworks and politics can DeFi be applied to?
A: The emerging DeFi revolution will be more encompassing than any individual – without a functioning crystal ball – can truly begin to imagine. A good analogue would be to compare the promise of Decentralized Finance to knowing as of the time Twitter launched, that it would be deeply instrumental to the Arab Spring revolutions witnessed in the early 2010s.
The best we can all do is prognosticate. And in the service of that, we are likely to see the improvement of the fairness of global financial markets, we will see Financial Inclusion grow in leaps and bounds, the speed of international remittance and settlement will far outpace its current levels. International trade will also become far more efficient than it is today. It is within the milieu of these economic and capital efficiency gains, that an explosion of wealth is created and redistributed.
Q: Why are we also seeing a concurrent rise in certain aspects of the blockchain, crypto and metaverse on a global scale I.e. DAOs, NFTs et al and from these trends what do you predict the future of DeFI is especially where Africa and Nigeria are concerned respectively?
A: The answer to this question is easy. In the same way that we saw the explosion of business innovation, and the creation of new jobs, paradigms and business with the introduction of the internet. The same thing is happening at the behest of Blockchain Technology and the possibilities offered by distributed ledger technologies – that underpin all of cryptocurrency and DeFi. Prior to the advent of Crypto and DeFi, there were no internet-native payments infrastructure in existence.
Babatunde Awe is the CEO, Pentrust Business Solutions Limited and Co-owner of Crível Watches, both started off in 2019.
Prior to this, He was a dedicated member of the Sterling Bank Nigeria Ltd team for over 11 years, a period in which he gained meaningful experience in Treasury, Wealth Management, Trade, Marketing, Information Technology and Project Management.
Since branching out to kick off his own enterprise, he has been involved a number of diverse portfolio briefs within his skillset base, in various sectors across the Nigerian economic landscape and recently began developing niche financial solutions in the visual arts space with leading artists and curators in the space like Ayoola Gbolahan and Mr Burns Effiom.
He is now also venturing into aspects of DEFI analytics and consults for artists and creatives alike in the blockchain- Metaverse- NFT space, with an agency in the UK called Gold Mind Resourcery.
Ajibola Lawal is the Practice Lead at Kaicho Capital. He is a decentralized finance specialist with extensive cross-industry experience across commodities trading & gaming.
He works extensively with discerning private investors and institutions looking to explore opportunities for consistent, reproducible, risk adjusted returns within the nascent cryptocurrency space.
At Kaicho Capital he manages a multi-million dollar digital asset portfolio across the entire digital asset spectrum from liquid assets, to derivatives and blue-chip NFTs