Category Archives: Voices

May 27, 2022   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, FinTech and Alternative Finance, Fintech Opinions, Fundraising, Investing, Trading, Innovation and Resources, Voices, Web3, Decentralization, DAOs   No comments

Vitalik: Designing Principles-based Stablecoins that (may not) collapse

Vitalik Buterin | May 25, 2022

Vitalik Buterin thought experimentsThe recent LUNA crash, which led to tens of billions of dollars of losses, has led to a storm of criticism of "algorithmic stablecoins" as a category, with many considering them to be a "fundamentally flawed product". The greater level of scrutiny on defi financial mechanisms, especially those that try very hard to optimize for "capital efficiency", is highly welcome. The greater acknowledgement that present performance is no guarantee of future returns (or even future lack-of-total-collapse) is even more welcome. Where the sentiment goes very wrong, however, is in painting all automated pure-crypto stablecoins with the same brush, and dismissing the entire category.

See:  Stablecoins: What’s old is new again – speech by Christina Segal-Knowles

What we need is not stablecoin boosterism or doomerism, but rather a return to principles-based thinking. So what are some good principles for evaluating whether or not a particular automated stablecoin is a truly stable one? For me, the test that I start from is asking how the stablecoin responds to two thought experiments.

1. Can the stablecoin, even in theory, safely "wind down" to zero users?

First, the volcoin price drops. Then, the stablecoin starts to shake. The system attempts to shore up stablecoin demand by issuing more volcoins. With confidence in the system low, there are few buyers, so the volcoin price rapidly falls. Finally, once the volcoin price is near-zero, the stablecoin too collapses.

2. What happens if you try to peg the stablecoin to an index that goes up 20% per year?

there is no genuine investment that can get anywhere close to 20% returns per year, and there is definitely no genuine investment that can keep increasing its return rate by 4% per year forever.  There's basically two ways for a stablecoin that tries to track such an index to turn out:

See: 

How Stable is your Stablecoin?

IMF: Capital Flow Management Measures in the Digital Age: Challenges of Crypto Assets

  1. It charges some kind of negative interest rate on holders that equilibrates to basically cancel out the USD-denominated growth rate built in to the index.
  2. It turns into a Ponzi, giving stablecoin holders amazing returns for some time until one day it suddenly collapses with a bang.

But this also shows a deeper and more important fact about stablecoins: for a collateralized automated stablecoin to be sustainable, it has to somehow contain the possibility of implementing a negative interest rate, can be done in two ways:

  1. RAI-style, having a floating target that can drop over time if the redemption rate is negative
  2. Actually having balances decrease over time

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 25, 2022   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Digital Identity, Privacy, KYC, AML/ATF, FinTech and Alternative Finance, Innovation and Resources, Voices   No comments

Vitalik Proposes Web3 Credentials of the Future: ‘Soulbound Tokens’

The Defiant | Jason Levin  | May 25, 2022

Soulbound tokensEthereum creator Vitalik Buterin recently proposed a new kind of token standard that will help users gain insights into others’ real-world activities, accomplishments, likes and dislikes – something like a glimpse into their soul.

Buterin’s soulbound tokens (SBTs) are non-transferrable NFTs held by unique crypto wallets called Souls. In the paper Buterin co-authored to introduce the concept, he described multiple ways SBTs could be used – as university degrees, education credentials, and as web3 credit scores.

See:  Interview with Idris Mootee of urbancoolab: Creative collaborations between Humans and AI Machines

Instead of a web3 hiring manager calling up your alma mater or checking LinkedIn, he could check your on-chain resume for a transaction showing the university’s Soul transferring you an SBT.  SBTs have the ability to decentralize power away from major institutions and companies and towards the users – instead of a private database owning your credentials, you would own the keys to your credentials.

Vitalik Buterin:  Souls can encode the trust networks of the real economy to establish provenance and reputation.

On-chain credentials are already being used by companies like 101 and RabbitHole. Ben Yu told The Defiant that his team at Curious Addys will soon be using SBTs for their web3 Q&A platform Curious.xyz to help users build on-chain reputations for answering questions.

Privacy and Free Speech

Beyond issues with spam and private key protection, having key aspects of people’s identity exposed in a public blockchain sounds like a privacy nightmare, said Richie Bonilla, founder of DAO dashboard Clarity.

See:  Modernizing Privacy Law in Canada – Striking the Right Balance

Some went as far as to suggest that SBTs sound like the social credit system adopted in China where all citizens get a score that fluctuates based on their behavior. The dystopian scenario could emerge in a far-flung situation where SBTs are used for every aspect of online life, and not just for web3 credentialing.

“You don’t want everyone to see every facet of your identity,” Bonilla said in an interview. “What about persecuted groups?” Bonilla asked. If you go to a religious conference that gives out SBTs, could you never hide your religion?

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 25, 2022   FinTech and Alternative Finance, Innovation and Resources, Leadership, Competition, Human Capital, Health, Legal Issues, Regulation, Consultation, Voices   No comments

Employee Ownership Trusts: How Employees Can Become Legal Shareholders for Free

CBC Radio | May 24, 2022

Heather Payne JunoWhen Heather Payne, CEO of Juno College of Technology in Toronto is one of a number of Canadian business owners who are considering moving their company ownership structure to an employee ownership trust (EOT).  It's a legal structure that allows employees to become shareholders without paying directly for their shares. Shares are held in trust and owners are repaid for them out of company profits. Employees can acquire additional shares over time.

The federal government said in its 2022 budget announcement that it would amend the Income Tax Act and introduce employee ownership trusts to encourage employee ownership of businesses.

Simon Pek, Assistant Professor, Peter B. Gustavson School of Business at the University of Victoria:

We can learn from other jurisdictions and also from experts and practitioners and organizations that have done this in the U.S. and the U.K.  There's a high possibility that if they take the right time to reflect on this, think through the mechanics correctly, they can make … a 'made in Canada' solution that will work really, really well and meet all the objectives they have.

See:  Sounds like a DAO, Looks like a DAO: Introducing the Modern Digital Organization

Public campaign for employee ownership

The government's commitment follows a public campaign from Social Capital Partners, a Canadian non-profit financing company, to create a dedicated EOT in Canada, as well as stakeholder consultations.

Jon Shell, Managing Director, Social Capital Partners:

Part of what makes EOTs so appealing is every employee becomes a shareholder of the company through the trust for free, and they earn additional shares every year, allowing them to grow their wealth over time [and] when they leave the company or retire, the company buys back their shares for cash.  It gives owners a choice to sell to employees that they really like.

This gives an additional option for mid-sized companies — which Shell says are usually family- or founder-owned — to sell to.  [Otherwise], their options are generally to sell to a competitor, creating more concentration in an economy; or to a third party, like a financial buyer [or] private equity fund.

See:  McKinsey Global Banking: Revenue pools moving to customer-ownership with embedded digital financial services

Democratic co-ops another option in which the co-operative is owned and self-managed by the workers and have a democratic say in the running of the firm, and what's done with revenues and the strategic orientation of the business.  [But] if you don't structure the democratic practices right, and if you don't kind of keep a pulse on them and improve them over time, what can happen is that a certain subset of individuals tends to take on leadership positions or even stay in those positions over time.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 24, 2022   FinTech and Alternative Finance, Fundraising, Investing, Trading, Innovation and Resources, Leadership, Competition, Human Capital, Health, Venture Funding and Building, Voices   No comments

A Look at VCCI-2: Canada’s Venture Capital Catalyst Initiative Version 2

Private Capital Journal | Richard Rémillard | May 24, 2022

Venture capital programThe Canadian federal government released its Request for Proposals (RFP) for fund-of-funds and fund managers wishing to apply for its Venture Capital Catalyst Initiative-2 (VCCI-2) program in mid-May. This program follows upon the Venture Capital Action Plan (VCAP) of 2013 and the VCCI-1 of 2017. All three versions have had the express purpose of strengthening the Canadian venture capital (VC) industry by injections of public monies in partnership with private capital sources.

See:  Improving the Regulatory Environment for Entrepreneurial Capital Formation: JOBS Act 4.0

VCCI-2

  • VCCI-2 sets out a more ambitious target for attracting private capital than did VCCI-1 in that VCCI-2 requires fund-of-funds applicants under the $350 mm.
  • Stream 1 to secure $3 of capital for every $1 from the federal government.  The financial incentive does not appear as generous as that under VCCI-1 which was a $2.25 to $1 ratio.
  • Private capital remains the first to be paid with contributed capital returned plus 5% preferred return per annum (NB:  VCCI-1 fixed the amount at plus 7% per annum.
  • Requires detailed, intrusive some might find, reporting requirements regarding Diversity, Equity and Inclusion (DEI) measures that are designed to address shortcomings of certain disadvantaged groups, such as women.
  • It is assumed by the government that its own commitment to DEI (i.e., $300 million Equality Fund which was established to invest in womens’ movements in the global South and whose partners with Ottawa include one Schedule 1 bank and one venture capital fund) will not have a negative impact on the private sector’s assessment of the attractiveness of the VCCI-2 from a financial returns perspective.
    • This suite of DEI measures has been substantially expanded from the general call for greater gender parity under VCCI-1. Taken together, achieving the $3 to $1 target leverage ratio may prove difficult, if not unrealistic.

Stepping back and looking at the forest not the trees, VCCI-2 reveals the essential small ‘c’ conservative of federal venture capital support policy going back to Prime Minister Harper’s VCAP nine years ago.  A prime example of the inflexibility of the program design has to do with the list of industries in which successful applicants are forbidden to invest. These include the usual cast of suspects, namely tobacco, alcohol, gambling, pornography and weapons.

See:  Decentralizing Venture Capital: DAO

VCCI-2 is also a very big “L” Liberal entity that strongly reflects the ethos of the current federal government. Of course, it has long been criticized for neglecting National Defense and has been the subject of intense criticism on the procurement front and so the prohibition against investing in weapons firms under the VCCI-2 seems to provide further evidence of Ottawa’s reluctance in dealing with military hardware. That ethos extends to what it calls DEI which is a very important component of VCCI-2 and even includes a small $50 million amount for five to ten managers in this particular space. The political risk to the fund of funds, their LP’s and their investee companies and funds that choose to sign on to the VCCI-2 is that that very participation signals their concurrence with the political priorities of the current regime in Ottawa and in so doing makes less likely any future support program under a different government whose own priorities are likely to differ.

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 18, 2022   Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Innovation and Resources, Stories, Voices, Web3, Decentralization, DAOs   No comments

Sounds like a DAO, Looks like a DAO: Introducing the Modern Digital Organization

Institute of Corporate Directors | Chami Akmeemana | Mar 14, 2022

10 Capabilities of Modern digital organization

Source: Convergence.Tech

New era, new capabilities

Modern, digital organizations are adopting new approaches to establish the capabilities needed to solve their most significant problems. They are using the power of these maturing emerging technologies coupled with advanced process engineering to design solutions with people at the centre, using anthropological techniques, such as behavioural science and human-centred design.

See:  Arca Report: DAOs – Institutional Guide to Decentralized Governance

We have defined 10 key capabilities that are essential for modern, digital organizations.

  • Credential-based Digital Identity – the evolution of traditional centralized identity solutions, such as Identity Access Management (IAM), to enable a more decentralized, self-sovereign identity (SSI)-based solution. This is the new entry point for organizations that are increasingly aware of the risks and obligations of safeguarding personal information. It is also important for participation in the open ecosystems, marketplaces and platforms that make up web 3.0 and government identity frameworks that aim to empower their citizens with portable identities.
  • Decentralized & Open Systems – as the world moves toward more open, transparent platforms, organizations will shift from closed, linear relationships to being a part of a broader ecosystem. To do this, they must adapt to a more decentralized model. This involves shared networks, distributed ledgers and finance, edge intelligence, and the extension and opening up of internal systems through open application programming interfaces (APIs) and industry standard protocols. This evolution requires change beyond technology, and calls for operating models, processes and governance structures to shift to more decentralized authorities and shared control.
  • Digitized Assets & Services – traditional assets, services, products and experiences need to transition to a digital form, one that is codified, machine-readable and virtual. Through this transformation, new types of data are created, events and processes can be simulated at ‘real-life’ scale, new insights can be developed, greater assurance and authenticity can be provided, and new opportunities identified.

See:  VC-backed DAO Startups Racing to Define What DAOs Actually Are

  • Augmented Digital Intelligence – the ever-expanding list of challenges modern organizations are facing requires a highly effective intelligence layer to improve operations, enhance decision-making, uplift functions, redesign processes, and deliver more relevant and meaningful interactions. In effect, this becomes a digital intelligence backbone running throughout the whole organization, designed to improve the decisions, tasks and interactions people perform every day.
  • Complex Decisioning – although there is merit in pursuing a strategy centred on simplification, rationalization and cost efficiencies, leading organizations are realizing complexity is not something that will go away, and is in fact continuing to increase. Therefore, the need to have an ability to manage this complexity through a sophisticated decisioning capability becomes an essential part of a high-performing digital organization. These capabilities combine advanced knowledge systems with AI and machine learning, business rules and policy management, alongside modern governance approaches providing clear guardrails and parameters for execution.

As directors of Canada’s organizations, it will be important for you to understand the risks and opportunities that may be presented by these new technologies. Here are some key questions for directors:

  • What are the opportunities? Are there ways to streamline operations, enhance new strategic initiatives, cut costs, build customer trust, develop new markets, and refocus and enhance employee development?
  • What are the risks involved not only in implementing these new tools but also in not being aware of the opportunities and taking appropriate advantage of them?

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 18, 2022   Enterprise, Scaleup, FinTech and Alternative Finance, Fintech International, Fintech Opinions, Fundraising, Investing, Trading, Stories, Voices   No comments

Musk Reacts To Snoop Dogg’s Interest to Buy Twitter

Afrotech | Josh Rodgers | May 16, 2022

Musk and SnoopElon Musk and the acquisition of social media giant, Twitter, have caught the attention of many high-profile individuals. Whether it’s celebrities denouncing their association with the app because they disagree with him or A-listers trying to gain a piece of the pie, there is no shortage of interest around the estimated multi-billion-dollar deal.

AfroTech previously reported that Meek Mill tweeted his desire to purchase shares of Twitter after the billionaire bought it. Now, LA rap legend Snoop Dogg has entered the chat, and he doesn’t just want to buy a part of it — he wants the entire thing.

In a tweet from May 13, Snoop Dogg wrote, “May have 2 buy Twitter now.”

See:  Snoop Dogg Reveals He’s An NFT Whale

While it’s unclear whether the California rapper was serious or not, he did follow up his original tweet with some detailed plans if he were to go through with purchasing the social media platform. From changing up the board of directors to giving everyone a verified blue checkmark, Snoop’s hypothetical purchase comes with some big shake-ups. He even started the hashtag #WhenSnoopBuysTwitter to chronicle his list of ideas.

With all of this activity coming from Snoop, he gained the attention of Musk. The Tesla CEO responded to Snoop’s original tweet with two fire emojis. Snoop continued by replying,

“You bring the fire I’ll bring the smoke!!”

Continue to the full article --> here

NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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May 18, 2022   ESG, Financial Inclusion, Sustainable Finance, FinTech and Alternative Finance, Fintech International, Innovation and Resources, Research, Voices   No comments

World Bank Report: Fintech and the Future of Finance

The World Bank | Michael Geller and Arpita Sarkar | May 18, 2022

World Bank Report – Fintech and the Future of FinanceThe ongoing digitization of financial services and money creates opportunities to build more inclusive and efficient financial services and promote economic development.

This digital transformation presents a paradigm shift that has various policy implications, including:

  • Foster beneficial innovation and competition, while managing the risks.
  • Broaden monitoring horizons and re-assess regulatory perimeters as embedding of financial services blurs the boundaries of the financial sector.
  • Be mindful of evolving policy tradeoffs as fintech adoption deepens.
  • Review regulatory, supervisory, and oversight frameworks to ensure they remain fit for purpose and enable the authorities to foster a safe, efficient, and inclusive financial system.
  • Anticipate market structure tendencies and proactively shape them to foster competition and contestability in the financial sector.
  • Modernize and open up financial infrastructures to enable competition and contestability.
  • Ensure public money remains fit for the digital world amid rapid advances in private money solutions.
  • Pursue strong cross-border coordination and sharing of information and best practices, given the supra-national nature of fintech.

Countries should embrace these opportunities and implement policies that enable and encourage safe financial innovation and adoption. Technological advances are blurring the boundaries of both financial firms and the financial sector.

See:  World Bank’s investment arm injects $10 million into FintechOS to help boost financial inclusion

New infrastructures, providers, products, business models, and market structures are shaping market outcomes in profound ways. As such, it is necessary to ensure that market outcomes remain aligned with core policy objectives as the financial sector continues to transform and policy tradeoffs evolve.

This flagship report explores the implications of fintech and the digital transformation of financial services for market outcomes on one side, and regulation and supervision, on the other, and how these interact.

This overview paper provides a high-level perspective for senior policy makers and is accompanied by a set of notes that focus in detail on selected salient issues for a more technical audience.

Download Links:

 

Download the full series of all reports --> here

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NCFA Jan 2018 resizeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

NCFA Financial Innovation MapNCFA Innovation Opportunity BriefsNCFA Fintech Insights
NCFA Fintech WhispererNCFA Fintech Fridays PodcastNCFA Weekly Newsletter

 

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