Decrypting DeFi and Cryptocurrency Markets with Paul Barroso, CEO at Atani.com

Paul Barroso: Thanks for having me. So, I have a background in software engineering. Developed a career in London and worked for Morgan Stanley, the US investment bank. In 2013, I started investing in bitcoin and, what initially was a hobby, became a whole new career. I eventually decided to go full-time and ended up creating a crypto proprietary trading desk.

As a trader, I suffered the pains that go hand in hand with managing crypto, trading on multiple exchanges, using different crypto-related services, or dealing with taxes. And the lack of better alternatives drove me, together with my sister and business partner, to build our own solution. That solution is Atani, the all-in-one platform for crypto traders. I am currently the company’s CEO, where we work hard to make crypto trading easy and affordable.

Paul Barroso: They are already exploring other cryptos. As I see it, institutional investors adding bitcoin to their portfolios is just the tip of the iceberg. Obviously, mobilizing institutional capital takes time. As an institution, you have to update investment mandates. You have to KYC who you do business with. There is also a lot of disclosing and board management that needs to be done, especially in publicly traded companies. But the interest from institutions in crypto is clearly there. And it is only going up.

One strong signal of that interest is the listing of Ethereum futures contracts on the CME. Institutions can now easily manage their exposure to ether price, and that is just the start. Look, for instance, at Decentralized Finance. Many DeFi products offer very high yields, and there are DeFi protocols that are cash-flow generating machines. In a context where investors are yearning for yield, DeFi is extremely attractive, and institutions will look for ways to get exposure to it.

From a retail investor perspective, institutional money means more liquidity and market depth. Overall, it is positive for price discovery and market efficiency.

Paul Barroso: For me, the most critical thing you can do in order to make an application secure is to ensure that the reward for a successful attacker is zero or close to zero. For instance, if you built a cloud-based terminal, that would mean that the API keys that enable trading for every user would be stored in some centralized server. If a hacker compromised that single server, they would have access to all that information and profit from it in multiple ways.

At Atani, by contrast, we have chosen to build a desktop trading terminal that is non-custodial. API keys are stored locally in each user’s device and secured with military-grade encryption. That means that our servers never have access to the API keys or funds of users. So, in the unlikely event that Atani gets hacked, attackers would not be able to steal any funds, which we believe is critical for an ecosystem-based on bearer assets.

Paul Barroso: The process is fully automated and, for the user, it takes only one click. Behind the scenes, the software first retrieves all the historical transaction data for each of the crypto exchanges that a user connects to Atani. The data goes through an extensive normalization process, as the way data is structured and reported in each exchange is different. Then, the transactions that have to be considered taxable events are identified, following different tax jurisdiction criteria. After that, tax calculations are performed as per the applicable law (e.g., income or capital gains, FIFO or LIFO accounting, etc.) and finally, a downloadable tax report is generated.

Paul Barroso: There is no doubt that the sharp increase in monetary supply has a net positive effect on the crypto markets. Several macro factors are coming into play. On the one hand, fear of inflation fuels the “Gold 2.0” narrative that is pushing the price of bitcoin upwards, as trust in fiat currencies as a store of value is put into question.

Also, the low-interest-rate environment is driving investors that are searching for yields to increase their exposure to alternative assets. And crypto has come out of age as an alternative asset class in its own right.

Finally, the current crisis has made evident some of the limitations of the current financial system. There is a lot of smart capital and top talent that aims to rebuild the financial system, and it is now being channeled to the crypto ecosystem.

Paul Barroso: We do not see customer support as a problem. It is a tremendous opportunity to interact with and learn from users for us directly. How they are using Atani, what they like about it, what confuses them, and so on. Our customer support people are critical to us. They provide quality service via email, our Telegram channel, or social networks and gather all that valuable feedback. They are the ones that know our customers and our product best. That is why leaders from every area of the organization, and the founders ourselves, like to be very close to customer support. We take all the feedback that we receive very seriously and use it to shape our product roadmap and priorities.

Paul Barroso: The EU proposal for a regulation of markets in crypto-assets (MiCA) is a very comprehensive framework for all crypto-related service providers and it brings further clarity and security to the ecosystem. Its emphasis on ensuring that consumers have access to the best and most innovative products is also very positive.

I think that this is an excellent opportunity for regulators to take a stand and promote the development of the crypto ecosystem. There will be massive benefits for any country that takes a leading position in building the “Wall Street” of the future. And, sound policies and regulations can ensure that for the next 10 to 20 years, Europe is at the forefront of technological innovation.

Paul Barroso: There has been a massive increase in both. We see all-time highs not only in price but also in liquidity and trading volume. That is great news and clearly, a sign of the crypto market maturing. The more accessible, liquid, and efficient the markets are, the better the ecosystem.

Paul Barroso: The demand for infrastructure for decentralized apps will keep on rising in the foreseeable future. And Ethereum is the clear leader there. It has a very strong ecosystem of developers, applications, and protocols built on top of it. Those network effects are very difficult to replicate.

Obviously, there are concerns on scalability, and rising fees just reflect that. The Ethereum community is very conscious of that and that is why they have started building Ethereum 2.0. Beyond that, several blockchains, like Polkadot, Solana, Flow or NEAR, among others, are making very interesting work on scalability. But they have yet to prove that they can achieve the same level of network effects Ethereum has.

What is going on with Binance Smart Chain is also interesting. It has the backing of Binance, is growing in transactions and total value locked, and is relatively centralized, keeping transaction fees relatively low. But it is still early to know if they will be able to achieve sustained traction.

Paul Barroso: There are a lot of very interesting things going on in the industry. One is DeFi, which will keep on growing in value and utility. Another relevant trend is NFTs, which are still in the very early phases, but that will definitely bring fundamental value to the ecosystem once people figure out how to set up the right incentives for token holders.

Beyond that, the two sectors that will likely get more traction in the future are prediction markets and tokenized stocks, where I see crypto eventually eating traditional finance.