HomeCrypto GamingFigment CEO Lorien Gabel’s Big Bet on Staking Has Paid Off

Figment CEO Lorien Gabel’s Big Bet on Staking Has Paid Off

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Lorien Gabel has spent a long time constructing web infrastructure corporations, from ISPs to cloud safety companies. In 2018, recognizing the transformative potential of proof-of-stake networks, he co-founded Figment, which has since change into one of many world’s largest impartial staking suppliers, providing expertise and companies that allow customers to stake their tokens with out having to make use of a centralized alternate or custodian.

As we speak, the corporate manages $15 billion in belongings and serves over 500 institutional purchasers.

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Right here, Gabel, who might be a speaker at Consensus Hong Kong, discusses Figment’s growth into Asia, bitcoin staking experiments and his firm’s cautious course of for deciding which new crypto networks to assist.

This interview has been condensed and evenly edited for readability.

What led you to begin Figment?

That is the fourth firm my co-founders and I’ve constructed collectively over three a long time. Our earlier ventures had been all in web infrastructure. Once we began exploring blockchain in 2018, staking was barely a factor — Tezos had launched, and Ethereum was nonetheless solely discussing it. However we noticed a pure alignment between our experience in community safety, cloud infrastructure and scaling B2B options and what proof-of-stake (PoS) might change into. If PoS gained traction, we believed our expertise in constructing safe, institutional-grade networks can be invaluable.

We initially deliberate to begin a fund, and now we do have a VC fund. However the fund didn’t come first — the staking infrastructure firm did, after which we launched Figment Capital. We mainly took a flyer on proof-of-stake, believing it had some benefits over proof-of-work, and we had been fortunate sufficient that it truly labored and took off.

How massive is Figment now?

We presently handle $15 billion in staking belongings and serve 500 institutional purchasers. Whereas worker rely isn’t at all times a significant metric, we’ve got about 130 workers and anticipate to achieve 150 by year-end. Asia is our subsequent massive growth focus. We opened our Singapore workplace final yr, and we’re including Japan, Hong Kong and different key markets. Whereas North America stays our base, Asia’s demand for staking companies is rising quickly.

What challenges do you see to Asia’s adoption of staking in comparison with different areas?

First, Asia isn’t one market — it’s a group of vastly totally different economies and regulatory landscapes. Japan, Indonesia and Korea, for instance, have distinct enterprise cultures, adoption ranges and regulatory frameworks. We’ve at all times been compliance-focused, working solely with institutional purchasers somewhat than retail customers. However in Asia, compliance varies extensively by nation. Not like the U.S., the place you primarily navigate SEC and CFTC guidelines, every Asian market has its personal regulators and insurance policies.

Additionally, Western corporations typically fail when increasing into Asia by not understanding native hiring, scaling methods or buyer habits. I used to be born in Kuala Lumpur, and I’ve seen North American companies overinvest too rapidly or misinterpret market wants. That’s why we began small in Singapore with three individuals, so we might be taught earlier than scaling.

Schooling is one other problem. In lots of Asian markets, staking will not be well-defined and is usually misconstrued as DeFi lending. We spend loads of time at conferences, consumer conferences and media interviews explaining what staking is and why establishments ought to take into account it over riskier yield-generating alternate options.

What has been the most important problem in scaling your small business, and the way did you overcome it?

The toughest a part of any startup is the “zero to one” part — determining whether or not an concept will work, what clients want and the way the enterprise mannequin will evolve.

Early on, we ran a number of experiments — we had a distant process name (RPC) infrastructure enterprise, a developer data portal and totally different income streams. However as soon as we discovered a robust product-market slot in staking, we shut down the remaining and targeted solely on scaling one core providing.

The second main problem is crypto’s volatility. Our enterprise operates like a combination between an information heart firm, a fund and a software program enterprise, however with variable pricing in dozens of unstable digital belongings. That complicates planning. I joke that my unofficial title is “Chief Stoic” — I don’t get too euphoric when markets are booming, and I don’t panic when issues go south. Whether or not it’s FTX’s collapse or bitcoin hitting $100,000, we concentrate on long-term execution.

Are you seeing elevated institutional curiosity in staking in Asia?

Sure, institutional adoption is accelerating, notably from banks and telecoms. We’ve had institutional fairness buyers from Asia for some time — massive names like Monex and B Capital—however over the past yr, we’ve seen extra conventional monetary establishments actively coming into staking. Every market has its personal dominant exchanges and custodians, and we regularly associate with them somewhat than coping with finish customers. As extra banks discover staking, we anticipate adoption to snowball — just like how establishments within the U.S. began cautiously investing in staking earlier than scaling operations.

How do you resolve which tokens to assist for staking? Do Asian markets affect this?

Now we have an analysis framework that we’ve refined over the previous six years. Since we are able to solely assist a restricted variety of new tokens every year, we’ve got to be selective — final yr, we added assist for 12 or 13, which is quite a bit given the complexity of every integration. Proper now, we’re supporting round 40 networks, however each new addition requires cautious evaluation.

The method begins with the fundamentals: is that this an actual venture or a rip-off? Does it have a robust thesis and a crew able to executing it? In some ways, it mirrors a VC framework. From there, we dig deeper, talking with the inspiration and founders, assessing the extent of custody assist out there — since that’s essential for institutional adoption — and evaluating the broader ecosystem.

In some unspecified time in the future, although, when you might have 20 robust candidates however can solely assist 10, it’s a must to make a guess. Generally we get it proper, typically we don’t. Through the years, we’ve seen sufficient community launches to develop a robust instinct about what works and what doesn’t. We attempt to provide steerage to tasks the place we are able to, although in the end, it’s as much as them whether or not they take our enter.

Buyer demand is one other think about our decision-making, and the Asian market is a vital a part of this. Sometimes, a significant institutional consumer will request assist for a venture we’d not have in any other case thought-about — and even heard of — so we conduct an expedited analysis. In some instances, we’ve needed to inform purchasers no, both as a result of we don’t see the venture as reputable or we suspect it could be a rip-off. These are robust conversations, however they’re essential. Finally, we additionally take a look at what number of of our purchasers are prone to maintain or stake a given token, which performs into our ultimate choice.

With many Asian buyers looking for high-yield alternatives, how does Figment guarantee aggressive returns whereas staying safe and dependable?

Staking will not be the highest-yield exercise in crypto, but it surely’s the most secure approach to earn yield with out counterparty danger. We concentrate on offering the very best risk-adjusted staking rewards. Whereas some suppliers chase increased returns by reducing corners (e.g., ignoring OFAC compliance or MEV dangers), our purchasers — primarily establishments — prioritize safety and compliance.

In crypto, staking is the equal of a 10-year Treasury bond — it’s the steady, dependable possibility in comparison with high-risk DeFi methods. Some buyers desire liquidity pooling or lending for increased yields, however establishments usually select staking for its safety.

Are there any staking-related traits or improvements in Asia that excite you?

A number of the most fun traits in staking proper now embrace liquid staking and re-staking, with EigenLayer main the cost globally in these areas and having a robust presence in Asia. Bitcoin staking is one other space of curiosity, with tasks like Babylon exploring its potential, although demand stays unsure. Moreover, we’re seeing new chains with important Asian affect, corresponding to BeraChain, which is quickly rising its consumer base within the area. We’re actively supporting BTC staking whereas carefully monitoring new staking fashions rising from Asia.



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