In an engaging conversation with Dimitrios, CEO of the groundbreaking startup Ithaca, we explore his fascinating transition from the high echelons of Goldman Sachs to the dynamic world of cryptocurrency and blockchain technology. Dimitrios shares invaluable insights into how his extensive background in finance and his entrepreneurial ventures, especially with Nomisma, have shaped his strategic vision for Ithaca.
Exclusive Insight: How Ithaca Stands Apart in the Crowded Crypto Space
Ishan Pandey: Hi Dimitrios, I am delighted to welcome you to our "Behind the Startup" series. Can you share insights into your background, particularly how your experiences at Goldman Sachs and your involvement in prior ventures such as Nomisma have shaped your perspective and approach in your role as the CEO of Ithaca?
Dimitrios : I feel blessed to have experienced markets at the highest level from all perspectives: from performing academic research with Nobel prize winners at the University of Chicago, to rising to partner through the ranks of Goldman Sachs, and finally through my own ventures. Goldman has an entrepreneurial culture, and I was fortunate to thrive in that environment.
Whether I was working with trailblazing market teams in Europe in the 2000s, navigating through the GFC, or building and leading businesses in Asia Pacific, those experiences prepared me for what was to come. I went on to work in commodities, emerging markets and crypto, and built and led a multi-family office business. Along the way I learned a great deal, including hard lessons about asset allocation and risk management.
I started dabbling in crypto in 2013 and was too early in building a regulated digital asset derivative business in Nomisma. Now having spent the last bull market and its denouement at a firm that was deeply enmeshed in the workings of crypto markets I feel as though my long career has been preparing me to build Ithaca all along.
Derivatives are the most exciting segment in a truly revolutionary market and I am lucky to have the background to seize this opportunity.
Ishan Pandey: How does Ithaca's options trading protocol differ from existing solutions in both centralized and decentralised venues?
Dimitrios : I will take it one step further. We differ from anything that has been presented across Tradfi, CeFi and DeFi across enough dimensions that you could deem our approach to be revolutionary, both in terms of liquidity creation for the benefit of end users, but also in terms of potential disruption to existing markets. Our major innovation is the ability of our matching engine to directly incorporate a variety of rules that are usually internalized by market makers, bringing these to bear at the user level to improve market liquidity.
We can do that because we utilize auctions instead of continuous limit order books. While there is some debate on the relative merits of auctions in the context of spot / delta one markets, they have not been implemented in the context of derivatives where they are most needed. The principles of replication and portfolio dominance in the context of full composability of all statically replicable payoffs - including, by the way, digital options - allow for synergistic liquidity across all orders for all products to coalesce around the one auction. One gets a much bigger buck for a given liquidity buck.
Ishan Pandey: How does Ithaca address the challenges related to on-chain governance?
Dimitrios : We will present an internally consistent, incentive aligned governance framework in the context of our point system. I am confident that our community engagement, our investor support, and our background in mechanism design and corporate finance will not only allow us to address usual concerns, but also to promote the healthy growth of our ecosystem for all stakeholders.
Ishan Pandey: Could you provide insights into the decision to use Off-chain Java backend pre-match processing and Arbitrum post-match settlement in Ithaca's architecture?
Dimitrios: We like to describe our system as an off-chain oracle that manages matching and collateral optimization as well as on-chain settlement. The approach is well established among other DeFi protocols. In any case, we would like the community’s focus to be on our financial engineering innovation. The computational intensity of the matching engine does not allow for on-chain calculations, but there are both trivial and nontrivial solutions towards more trustlessness and decentralization. This is a road we will travel on post launch.
Ishan Pandey: Can you explain Ithaca's revenue streams, including the key offerings like trading fees, Position Builder, Collateral Optimization, and Pre-packaged Strategies?
Dimitrios: Our fees will be competitive with any other DeFi or DeFi options offering. Considering the fact we will be offering liquid digital options, our associated fees by transparency will be market-leading.
Further considering our composability competitive edge, our fee structure will incentivize experimentation with custom conditional orders for experienced users, and pre-defined strategies and ‘stories‘ for users looking for more convenience or in need of a bit more hand-holding. Our state of the art collateral optimization engine will be free at the point of use.
Ishan Pandey: As the CEO, how do you ensure compliance and regulatory engagement for Ithaca's operations?
Dimitrios: There is a clear consensus emerging on how aspiring DeFi protocols protect themselves and their users from land mines: we follow best practices in terms of restricted jurisdictions and the protocol presents thorough and strict terms and conditions of use.
Ishan Pandey: How do you see the future of Web3 derivatives trading evolving, and what role does Ithaca play in shaping that future?
Dimitrios : Options are punching below their equivalent weight in crypto compared to any other asset class. Ithaca will not only address all the pain points, but it is also uniquely designed to provide a unified framework towards short-cutting the creation of liquid derivatives markets on new asset classes. As RWAs flock on chain and streams of social activity are ‘financialized’, Ithaca is uniquely placed to be the vehicle of their derivatization: the opportunity is mind boggling.
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