TBW Premium #16: DeFi scores big at EthCC

TBW Premium #16: DeFi scores big at EthCC

Read all about The Big Whale's 16th Premium newsletter.

Hello Whales and welcome to the newcomers who have just joined us in the Premium edition!

This week, we've prepared a special feature for you with videos shot on site (here and Here's the 2nd of 3 editions.


Focus on DeFi 👻

Who knows Stani Kulechov? Outside crypto, hardly anyone. But in crypto, the founder of the decentralised finance protocol, Aave, is a REAL star. And his talk late yesterday afternoon at EthCC in Paris made that abundantly clear. While not all the keynotes drew crowds at the Maison de la Mutualité (also because of the parties and side events), his was a hit.

Is that surprising? Not necessarily. Because while many sectors were well represented this year, it was indeed DeFi that held the top spot. And by a long way! On the stands and on the panels, the "finance of tomorrow", without intermediaries and without banks, is the main topic of discussion. The projects are proliferating, and many of them are French 🇫🇷. "The French are perhaps the best in DeFi", we were told by one of the world's biggest investment funds present at the event.

On this point, it's hard to prove him wrong (and we're quite happy to do so) as Morpho, Mangrove, Angle and other 'nuggets' continue to make headway. But how do you explain such success? We talked about it with one of those who knows the sector best and has invested in (many) projects: Frenchman Julien Bouteloup (StakeDAO, Stake Capital, etc...).


Our exclusive news

👉 Celsius, the real reasons for the crash

Week after week, the Celsius fleshes out a little more. A few days ago, the American lending platform, which froze all its activities in June, filed for bankruptcy. A hearing is scheduled for early August to get a better understanding of what happened to cause the company to collapse like a house of cards. What is certain is that the explosion of Terra Luna in May and the market correction will not be enough to explain the company's downfall. According to our information, Celsius had in fact been experiencing serious difficulties for a long time. In recent months, many of the group's employees have been looking for ways out in other companies in the sector. "We received an abnormally high number of applications from Celsius employees and this had started well before the market crash", a foreign start-up whispered to us.

👉 Ledger and Cathay are firing on all cylinders

When they presented their investment fund (€100 million) in June, Ledger and Cathay Innovation had announced their intention to "move forward quickly". But how fast? According to our information, the Web3 fund set up by the French digital asset custody giant and the technology investment company has already invested in several crypto start-ups. Some deals were already in the pipeline, like the one in France's Flowdesk (€30m in total), but others have just closed like the one in US-based Syndicate, which is a fundraising platform. "Things are moving fast. There are lots of opportunities and great projects on the market", explains a person close to the fund. Other investments are expected to follow, particularly in French start-ups.

Do you have any news?

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Julien Bouteloup: "We can clearly talk about the French Touch in DeFi"

Julien Bouteloup

A jack-of-all-trades, Julien Bouteloup (StakeDAO, Curve, Stake Capital, etc.) is probably one of France's leading DeFi experts. For him, France has an incredible breeding ground for projects.

The EthCC is one of the biggest crypto events in Europe. What do you think of it?

I even think it's the best crypto event in the world (laughs). There are other major events like the DevCon conference, but this one is organised by the Ethereum Foundation and you don't find as many people. The EthCC is very community-based, very qualitative. The projects on site are not there to aggressively sponsor and sell their projects at any price. At the EthCC, people are there to build and develop, and that's what the event's reputation is all about.

Just speaking of projects, which ones have caught your attention the most in recent months?

It's not easy to answer, there are so many. I've spent a lot of time abroad, but I've always made most of my investments in France (his various structures manage hundreds of millions of dollars, editor's note). Recently, I've invested in French projects such as Angle, Mangrove and Morpho (read the fundamental analysis of the project). What's interesting is how good their teams are. Decentralised finance, and blockchain in general, correspond very well to these engineering profiles that we find a lot of here, and that's precisely why France shines in this area.

Can we talk about a 'French Touch' in DeFi? The French are everywhere in the big projects...

The French school is excellent in mathematics, which means we have a lot of profiles that are very well suited to decentralised finance. Young people coming out of the grandes écoles immediately understand DeFi. Almost all DeFi projects have French people working on them. At Curve, where I work, more than half the team is French. At Aave, several managers are French. If you add to that all the other companies in the sector, you can clearly speak of the 'French Touch' in DeFi. That's why we're trying to raise the issue at a political level. France has a real card to play.

In what way do you consider crypto to be revolutionary?

Crypto is just one modality, one way of improving society, the economy... After the subprime crisis in 2008, we saw the emergence of what has been called the "sharing economy", with giants like Uber, Airbnb, and so on. But these groups do not really embody the "sharing" economy. They continue to dominate the economy and own the data that goes with it. It is precisely Web3 that should help to redistribute the cards by allowing people to reappropriate their data...

To what extent are the Celsius and Three Arrows cases penalising the crypto sector?

All those who lost big in these cases come from traditional finance. They have nothing to do with DeFi. You have to understand that these people wanted to do DeFi while keeping the way traditional finance works... But that's not how DeFi works. DeFi is about sharing. Many of these players used their customers' deposits to borrow money left and right, and everyone held each other's hand. When the markets turned, the house of cards collapsed.

Should we fear a domino effect?

Every time there's a crash, it's the big ones that fall first. Celsius and Three Arrows are the tip of the iceberg, so they're the ones we talk about a lot. But others are going to fall, and that's going to hurt. We can expect a lot of bankruptcies of small businesses and family offices that used Celsius. Some of the big players in the sector, such as FTX founder Sam Bankman-Fried, will then be able to shop around on the market.

Is Sam Bankman-Fried really the Good Samaritan that some would like to portray?

He's an extremely intelligent person who understands the mechanisms of traditional finance and uses them to make profits in decentralised finance. He has a very aggressive approach, between acquisitions and liquidations, while taking advantage of events to make manipulations on an... unregulated market.

Do your investments go beyond DeFi?

I only invest in what I can understand. My area of expertise is blockchain in the broad sense, where I invest quite heavily. I buy into projects very early on. These are often fairly risky bets, but that's how I like to work and it allows me to invest personally. As well as blockchain, I also invest in machine learning, artificial intelligence and quantum physics start-ups. And here too, most of my investments are in France, because I want to keep in regular contact with the teams.

What is France lacking to really become a leader in crypto?

Our real problem is regulation. Many of the projects I've invested in are still forced to go and register in jurisdictions like the Cayman Islands because the legislation isn't adapted.

You've been fairly critical of European legislation on cryptos (MiCA, TFR). Why?

Honestly, we're missing the real issues. Apart from some people like Adan, and I've spoken to them about this, few people are happy with the outcome. If we want real results, we're going to have to shake the coconut. I'm 100% in favour of regulation, and the latest episodes with Celsius and the other platforms clearly show that there are problems, but we need intelligent regulation. Those making the law don't really have a grasp of the subject, most of them have never used a wallet or bought cryptos... And by the time they understand what's at stake, it will be too late.

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