Interview with Exotic Markets: Launch of Dual Currency Note

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It has recently been a turbulent period in the crypto markets. With the macroeconomic climate worsening to the point that we have more bearish sentiment than ever since the Great Financial Crisis, coupled with the now infamous UST debacle that saw a stablecoin worth $ vanish into thin air. billions, investors are battling intense risk of a bearish environment. It is precisely this environment that highlights how vital diversification and allocation of your portfolio. This is part of the thesis behind Exotic Markets, which we interviewed last week following the launch of a Dual Currency Note (DCN) on the Solana network. In short, this product allows investors to generate yield by selling higher. Investors receive an upside in their preferred currency while avoiding the need for wrapped tokens or alternative assets. To get a real insight into the process, as well as various other topics, we caught up with Joffrey Dalet, founder of Exotic Markets. Below is the full interview. CoinText (CT): You mentioned in the press release that this “will rekindle the ‘general interest in cryptocurrencies after the recent Earth-UST debacle ”. Do you think this incident was a major blow to the industry? Joffrey Dalet (JD): The blow to general sentiment has been severe and there may still be second degree effects such as the pressure on other stablecoins. However, this will also provide opportunities, especially in the structured product space. When people lose faith in the direction of the market, they are more likely to seek returns from alternative sources and that is exactly what Exotic Markets offers. TC: Are you worried about the timing of this launch, so soon after the crash and with the markets in general in a strong downtrend? JD: Bear markets are a great time to build. Most of the best projects in the blockchain sector were realized during the crypto winter of 2018. And our private sale participants are some of the strongest and most supportive institutions we could ever want. CT: The statement states: “For example, a Solana holder can invest in a dual-currency banknote and receive their upside in Bitcoin. There is no need for alternative assets or token wrappers ”. Can you explain what is the advantage of pursuing this path over buying Bitcoin directly with the desired exposure? JD: There may have been some confusion, but in our DCN products you get your return in the deposited token. In this case, the investor will receive their return in SOL for the exposure to the performance of SOL / USDC. CT: La Your confidence in Solana is absolute, judging by your statement: “Despite the current landscape, there is a real possibility that a new highest price of all time is recorded relatively soon. ” What makes you think that this all-time high can be reached soon, which would reflect almost 6 times the current price? JD: We design for the worst and hope for the best. The team is well funded and can continue to build during a crypto winter. Our team is also experienced enough to have witnessed these cycles before. Historically, the blockchain industry has managed to escape crises stronger than ever. CT: Le repeated interruptions on Solana worry you at all? JD: Yes, we’re worried. There were other concerns besides the disruptions as well. For example, we found it difficult to work with bridges for packaged assets. The fact is that every blockchain has trade-offs and Solana overall is still one of the best. CT: Rewarding users with the yield in the currency they already own certainly makes sense. Could you please give more details to readers about where the surrender actually comes from? JD: The yield derives from the sale of options. Selling options can be a very scary thing for the average user and requires a steep learning curve to master. Structured products remove the layer of complexity by packaging the product in a simple note. And this yield is sustainable because it involves a trade-off such as limiting the upside potential. CT: If this decline continues over a longer period of time and turns into a sustained bear market, how do you expect to perform and what do you expect to see from the broader market of cryptocurrencies? JD: A decline could benefit Exotic Markets for two reasons. During sustained bear markets, people stop making directional bets and start looking for yield instead. This is exactly what happened to Japan when the bubble burst in the early years 90. Structured products can offer a better and sustainable yield because it involves some kind of compromise. In fact, people sell options and that translates into yield. DeFi is in recession for 7 months already and the total frozen value has remained flat compared to March levels 2021. Meanwhile, structured product platforms have shown incredible resilience. For example, Ribbon Finance amassed $ 5 million in TVL over this period. Structured products can excel even in difficult times. CT: What is the greatest risk for investors wishing to invest in DCN? JD: There are many risks. Like the rest of DeFi, there is a risk of smart contracts. There is also a risk that currency movements will affect the value of the underlying asset. Volatility has its own volatility and this can affect the return that structured products can offer. There is also a risk that sellers of structured products will not provide a fair price to buyers.


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