Fatih Balyeli: "A group like EDF has a role to play in Web3".

I think we can put ourselves in the second category.

What career path did you follow before finding yourself in this position?

I trained as an engineer and I also went to business school. Before joining EDF, I first worked in finance as a trader at BNP Paribas in Hong Kong and London, then I had a few entrepreneurial experiences. My arrival at EDF coincided with the creation of the EDF Pulse Ventures venture capital fund in 2017. I then launched Exaion in January 2020.

What is your experience in Web3?

I immersed myself in cryptos and Web3 through finance. I have to admit that I was quite disturbed when I discovered and saw the emergence of Bitcoin because I found it hard to conceptualise the issue of a currency that wasn't managed by a central bank. It went so far against what I'd been taught and what I'd seen on the markets!

After Bitcoin, I discovered many other applications and projects like Ethereum. For me, there are several generations of crypto protocols that differ in many ways: technology, operation, energy consumption...

What motivated the creation of Exaion?

When I was in venture capital, I spent a long time looking for a start-up capable of developing crypto projects in conjunction with major groups and institutions. When I couldn't find one, I decided to create it!

How many people work at your company?

There are currently around thirty of us (31 to be precise). The majority are based in the EDF Tower in La Défense near Paris, while the others are spread around our data centres and in the regions (Normandy, Brittany, Occitanie, Rhône-Alpes, Grand Est, Lyon).

With the addition of service providers, we're not far from fifty employees. The profiles at Exaion are very varied: infrastructure experts, blockchain developers, front-end and back-end developers, security and cybersecurity experts, energy experts, sales people, communications, etc.

How is Exiaon financed?

We have just completed a series A fundraising round with EDF. I can't reveal the exact amount.

What projects have you been working on?

In recent months, we've been working with teams at BNP Paribas and EDF Renouvelables on the first tokenisation of a bond to finance a renewable energy project.

We also worked with Société Générale, Goldman Sachs and Santander on the issue of the first blockchain-based bond. This was a €100 million transaction on behalf of the European Investment Bank. Finally, we worked with Progiss on the dematerialisation of elements related to animation and special effects, as well as with the Klapcoin project, which aims to support the diversity of French cinema.

How do you see France in the Web3 universe?

We have everything we need to become world champions in the sector. Because of our geographical location, France is in an ideal position to run a data centre business without having to resort to a lot of cooling thanks to free cooling (a method that uses outside air to lower the temperature, editor's note). In this respect, Normandy is particularly well placed because the climate is neither too cold nor too hot.

Also, we have the most decarbonised energy mix in Europe and one of the best in the world. Why is that? Because we have nuclear power. We are capable of building an eco-responsible digital environment.

In an interview published in April in The Big Whale, Emmanuel Macron called for the construction of European technological giants specialising in a few specific Web3 bricks. Do you see yourself in this speech?

What the President said in this interview reflects all of Exaion's ambitions! A group like EDF has a role to play in Web3.

Exaion recently entered the Canadian market. Are you thinking of moving into the US?

This market is very difficult because there's a lot of competition and everything costs a lot of money. A French developer costs 70,000 euros, whereas an American developer costs 350,000 dollars - five times as much! And it's the same for offices.

If we wanted to do the same business in the US as we do in France, we'd need a lot more capital. Nonetheless, it's a market that we're obviously keeping a close eye on. But for the time being, we're focused on Canada, where we've already invested over two million euros and where we plan to open around twenty datacentres.

What experience have you gained from working with the Tezos ecosystem for which you are validators?

We always like to put French technologies to the fore! At the moment, we manage most of the nodes that are hosted in France. We have a very good relationship with the French people at Nomadic Labs, which is a sort of research and development consultancy for the Tezos ecosystem (read our survey).

Tezos isn't the only protocol you use. The Big Whale recently revealedthat you manage over 150 Ethereum nodes...

We are protocol agnostic. We work a lot with Ethereum, on which we participate in transaction validation, but also with Hedera, Energy Web, Polkadot, Cosmos and Avalanche.

Historically, our strongest links are with Ethereum and Tezos. In the case of Ethereum, most of the nodes we operate are on behalf of customers, notably the French Just Mining. But we also manage 10 validation nodes of our own.

Was it Ethereum's move to proof-of-stake, which consumes much less energy, that made you decide?

Many of our customers were using Ethereum long before Merge. But when we started experimenting with Ethereum 2.0, we immediately switched over to it. As we had the technical roadmap, we knew that Ethereum would one day be less energy-intensive. We were never interested in protocols that didn't plan to move to proof of stake.

What do you like about Ethereum?

The proof of stake obviously. But above all it's a very beautiful technology that has made a lot of progress. It takes its ecosystem into consideration, and the teams take user feedback into account. It's part of a continuous improvement process, unlike... Bitcoin.

You've never considered mining bitcoins at EDF?

At my level and at Exaion's, it's always been out of the question. I can't speak on behalf of the group, but on Exaion's side we don't want to go there for energy reasons. However, that doesn't stop us from taking an interest in the ecosystem: we will soon be offering a bitcoin transaction explorer, which itself is not energy-intensive.

However, and you're in a good position to know this, bitcoin has shown that it can be interesting when it consumes the unsold surpluses of renewable energy producers...

Many miners say that they consume so-called "fatal" energy, but in practice this is less true. Most of the time, renewable energy installations are not connected to the grid.... The installations are 100% financed by private companies for the sole purpose of mining bitcoins!

And when they are connected to the electricity grid, isn't that an effective way of supporting the energy transition?

When the Texas power grid failed in the winter of 2021, people were unable to keep warm while facilities were mining bitcoin a few miles away. For me, this poses a problem because this electricity could have been used to power homes. There are only two possible hypotheses: either the miners were not connected to the network, or they thought that mining was more profitable than selling electricity. For us, this doesn't make sense.

We can nevertheless set up load shedding, as in Quebec, where miners contractually agree to turn off their facilities when demand for electricity is very high...

On this specific case, I don't know, since we've never been in the bitcoin mining business.

Couldn'tEDF come up with an agreement with the miners in which provision is made for a load shedding system?

You'd have to do a full analysis of the cycle and the market... But as I'm telling you, I don't know too much about the Bitcoin ecosystem, because it's never really interested me. We have the very ambitious goal of helping the blockchain community by building eco-responsible and low-carbon infrastructures. I didn't want to look at the specific cases where we could create value with the Bitcoin protocol. We are positioning ourselves on much broader and structural issues.

Could you play a role in the future digital euro?

Yes, totally. The digital euro will run on sovereign and European infrastructures. Currently, the only European player capable of doing this is Exaion, and no one else. Once the Member States and the European Central Bank have agreed on the outline of the project, we will be in a position to make our infrastructure and know-how available.