UNITALKS：Exclusive Interview with Olympus Labs Founder Kai Chen
Kai Chen:“We want developers to have fun and be creative on our platform”
Cryptocurrencies are experiencing a boom in trade volumes. The market cap for cryptocurrencies in January 2016 stood at USD 18 billion, and it has since boomed to USD 550 billion at this point of writing, representing an approximate rise of 3000% in two years.
The meteoric rise is fuelled by investors and individuals purchasing cryptocurrencies, with many seeking to capitalize on gains through investing in this new asset class. But what if the prices of cryptocurrencies fall?
In the stock market, there are financial products that allow investors to profit despite a fall in stock prices – with methods such as short selling and instruments such as futures and options. Financial products such as these would help to minimize risk and diversify an investment portfolio.
Olympus Labs, a blockchain startup based in New York and Singapore, is developing a protocol leveraging on blockchain technology that will define such financial products for the cryptocurrency market and allow the decentralized creation of cryptocurrency-based financial products. We spoke to Kai Chen, CEO and Founder of Olympus Labs, on his company and tips for making prudent investments in cryptocurrencies.
1.How did you get into blockchain?
When I was in high school I started trading and got into investments – right during the financial crisis of 2008 when the markets hit rock bottom. Soon after, I started getting into futures, options, foreign exchanges, silver etc. During college I interned at Morgan Stanley, performing options trading and then to PIMCO for asset management.
After building a hedge fund during senior year, I wanted to get closer to the business side and joined McKinsey in New York to work in management consulting. I wanted to combine my dual passion of business-building and financial innovation, and creating a platform for decentralized financial innovation on blockchain technology was the perfect mix of both, so I started Olympus Labs.
2. How was Olympus Labs conceived?
My team and I looked at different areas where blockchain and finance converged, for example developing cryptocurrency exchanges or investment funds. But these two spaces were already somewhat crowded, and we wanted to do something unique.
I started to explore parallels between traditional finance and the cryptocurrency market and saw a huge gap; the cryptocurrency market is in dire lack of financial products such as futures and options for the market to become more mature and stable, which is key to bringing main street and institutional investors into this market.
We foresee that as the next phase in the evolution of the cryptocurrency market, where futures and options will allow investors to hedge their positions in case the market goes down, protecting themselves from downside risks and even potentially profiting from the market volatility.
3. How is the demand for such financial products like in the market?
There already is huge demand. For example, the Chicago Mercantile Exchange (CME) already allowed futures trading for Bitcoin. The regulators are already supporting futures and options as the next phase – but these are still only one product focusing on bitcoin.
We now have a few thousand different cryptocurrencies in the market now, and if you hold let’s say a Kyber token, you might want to have a Kyber future to hedge your Kyber holdings. Olympus Labs will enable the creation of financial products for a wide range of cryptocurrencies.
4. What does Olympus Labs do?
Olympus Labs is a financial ecosystem built on blockchain technology that defines the protocol for financial products that have a cryptocurrency as an underlying asset.
Think of our protocol as a template – anyone with an idea for a financial product can create them on our platform using our protocol, and subsequently sell these products to interested investors. Investors on the other hand can purchase these financial products on our mobile app, or through our partners.
We want developers worldwide to have fun and be creative on Olympus Labs.
We will be hosting hackathons around the world to encourage more developers to showcase their ideas, subsequently promoting the most innovative financial products on our app.
5. What is in the pipeline for Olympus Labs?
For our 2018 roadmap, we will be focusing on building indexes, lending instruments, futures and options for each consecutive quarter.
Our indexes are slated for launch near the end of the first quarter – barring development delays – and we will make them open source for developers to use our protocols to build their own customized indexes for cryptocurrencies.
The same goes for lending instruments, futures and options – where we will develop and launch a few products on the Olympus Labs platform as a guide for more developers to build their customized versions.
6. How will transactions be conducted on the Olympus blockchain?
All transactions on the Olympus blockchain will be conducted via the native Mount Olympus Token (MOT). All investment activities will also be secured via smart contracts, which means that involved parties in a particular investment need not worry about anyone retracting from their pre-agreed engagement terms.
7. We look forward to your financial products in 2018. In the meantime, any advice for our readers regarding prudent investments in cryptocurrencies?
Research is key to making any prudent investment – albeit traditional stocks or cryptocurrencies.
As for major cryptocurrencies such as bitcoin and Ether, I believe market prices will continue to go upward in the long run due to us entering the new era of blockchain.
As for investments in smaller scale alt-coins, there are many blockchain applications in the market that do not actually have practical use cases that solve problems. These are the ones investors need to be careful of, if they choose to invest, as prices may crash quickly due to bailout by the founders of the project.
Reading a project’s whitepaper, looking at the background of its team-members and evaluating the practical use cases of an alt-coin will go a long way in making sure that your cryptocurrency investments grow over time.
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