ICYMI — AMA with Michael Swan on Youtube

12 August 2021

Hello Unido-ers!

We want to thank everyone who participated in our first YouTube Ask Me Anything (AMA) this week with Unido Co-Founder and Chief Commercial Officer Michael Swan.

Michael holds unparalleled insight into the often closed-off or moated wing of Traditional Finance (TradFi), but luckily for our sake, Michael, who has many years of experience working at the likes of Goldman Sachs, is here to guide us to understand better the needs of the different corporate and institutional investors for Unido.

His insight can be captured right here with all the great questions that our Unido community asked, along with some product updates, that Michael so effectively answers in our latest AMA.

Without further ado, here are the answers to your community questions:

For Reference* — Community Questions (CQ) & Michael Swan (MS)

CQ: Michael, can you give us any update on any technical or product updates?

MS: From a technical standpoint, the development team is working on two streams: the EQIBank integration and finishing the work on the Unido Enterprise platform. The final touches are being put into the DeFi dashboard and integrating the various yield investment opportunities that we hope to be bringing to market towards the end of Q3, the start of Q4. The go-to-market is a sophisticated sell through our various networks, mapping the zero distribution model, which was successful through accountancies. We’ve talked about this before, but we will be partnering with professional agencies such as lawyers and accountants, where the corporates will lean on those professional services, advisory providers on where they could be storing their cryptocurrency. Of course, we will have integration with partners that make us a natural sell option for an accountant to push the product to their clients, and they can receive data feedback for accounting purposes.

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CQ: Can you give us any updates on the EQIBank partnership?

MS: From a commercial perspective, we are very excited to launch with EQIBank, our first Unido Insto client that launched last week and is building their entire crypto business on our custody platform.

The revenue we earn from our partnership with EQIBank will go back to buying the Unido token (UDO), which will burn per the burn schedule mentioned in our white paper.

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CQ: What sort of marketing are you working on in the upcoming months?

MS: We’ve been building out the marketing team, and we welcome two new faces: Viko from India and Adam from the U.S. Both join us as experience marketers to continue to push the good word of Unido out into the community. We look to build brand recognition and a clear understanding of our value and encourage more UDO holders into our ecosystem. You’ll see both Viko and Adam hanging around in the telegram group, say hi, ask them questions. We are excited as we ramp up our marketing team capability in the third quarter of the year.

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CQ: Do you have any new institutional clients you’re onboarding now?

MS: From a client sentiment perspective, we’ve had numerous conversations with corporates, especially the institutional and hedge fund levels. These large institutions are still very bullish on entering crypto from a capital investing perspective and a crypto-as-a-client service perspective.

I would encourage the Unido community to keep in mind that entering crypto is not an overnight decision, especially with large institutions. These have various committee sign-offs, reputational considerations building out products. The process takes months, if not years, to get there, but what’s encouraging is that every client we’re talking to wants to engage on the topic of crypto and how to do it, and they recognize the differentiating factor that Unido Insto brings for a client offering perspective.

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CQ: What are some of the points you provide to enquiring institutions regarding apprehension due to DeFi volatility?

MS: So, the first thing to remember is that institutions carry various client types with different risk profiles. Crypto covers various other risk profiles, from stablecoins (which aren’t volatile) to highly volatile tokens, and they have multiple factors as to why they are volatile.

The thing to remember is that institutions have different clients, and this is just one client offering, so it’s typically offered as a mixed bag amongst other investments or for clients who have specific risk tolerances. So it’s a matter of picking the right institution with the right client that wants crypto exposure. The exciting this is crypto exposure, and the demand for crypto exposure, especially from the high net worth community, is growing at an astronomical rate. So, we are getting many inbounds from institutions that recognize the volatility and want access to this type of investment.

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CQ: What can be the motivation and benefit for investors to continue to hold the UDO token in the long term?

MS: Let’s remember the client base which is targeted primarily for EP; it’s institutions, hedge funds, and corporates who want to hold crypto for treasury, for investment use, as well as day-to-day spending as we see methods of transacting, including crypto which has become more and more common. There is firstly a need for custody to be able to deal with these clients. But it is a popular investment method to take a higher risk in something such as Bitcoin. We have all seen what Tesla has done at the start of the year; we think that will be an engaging thematic for the rest of the year.

The thing to keep in mind here is that custodial products provide custody, which is required for any cryptocurrency by any corporate or hedge fund. So whether we are holding Bitcoin, or a client is holding Bitcoin, or they’ve cashed their Bitcoin in a bear market into a stablecoin, regardless, they need a custody provider for either token. So the thing to remember is that regardless of a bull or bear market or what cryptos are popular or not, the hedge fund investors, the institutional investors need to hold it regardless.

The fees we charge and the revenue we derive from our Unido Insto clients is per holding; it’s not per crypto type, so whether it’s bull or bear, we still get revenues in every market. It’s a significant takeaway because it helps flatten the risk curve when it comes to revenue planning and, of course, what we do with the revenue — we go on to buy the $UDO token. So once we get a solid client base that has the same sentiment, they’ll park, whether bull or bear, in one crypto or another. The idea is that you have a consistent revenue base because the fees are earned on any tokens that sit in the wallet.

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CQ: Which institutions does Unido want to/intend to work with shortly?

MS: The product is suitable for any institution. It can work as a standalone siloed product, or it can be performed in the case of EQIBank, integrating into a broader core banking system. We see the larger institutions take an appetite in offering crypto products. But of course, as I mentioned, there is a long runway to get there from the concept to provide a product.

We see an immediate uptake in the new neobanks or the smaller banks that are actively chasing high net worth clients that require these sorts of products. I’d say the smaller end of institutional offerings in North America, custodial products in Asia, and east and west Europe are targets.

I wouldn’t say that there is any particular size or client base other than banks and custodial providers who are motivated to move now. Those will be the ones we focus on first, and of course, we continue to nurture the slower, more prominent movers, but that’ll take time.

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CQ: With the current environmental concerns and the look on energy-efficient systems such as Proof-of-Stake (POS), is Unido planning on allowing staking or any other mechanisms in the wallet system?

MS: Environmental concerns are very much a hot topic. The cost of electricity or the consequences of electricity for Proof-of-Work (POW) makes POS coins very popular. We’ve already talked about Tezos going into the wallet.

We will primarily be driven by demand for certain coins as they are added to the wallet and various DeFi options per coins as they’re added. There are certain advantages and popularities lately regarding efficiencies of POS. So we do believe POS coins will be more popular from a demand perspective; hence they will be supported in the wallet as the market dictates.

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CQ: Liquidity providers play an essential role in the ecosystem, and they receive necessary incentives in the form of UDO tokens, but these rewards go through various adjustments and correction parameters. Can you tell us what they are?

MS: So I believe this discusses Impermanent loss or gain depending on how you look at it. That is a situation where you provide liquidity into a liquidity pool as a pair of coins, and as the prices change, and the ratios change from one coin to another and markets move quickly, your share of a particular pool depending on what depreciates in the weighting changes of that pool can affect what you take out.

Impermanent loss is a risk with providing liquidity on any tokens that have a variable price. We will attach an explanation regarding impermanent loss. It’s good to understand these risks as you enter the pool. The liquidity program we think is fascinating. I just looked it up, and the current yield is UDO/USDC 174% per annum, and UDO/ETH is 66%. So we’re talking triple-figure returns, and as the person alluded to in the question, there is impermanent loss, and you should take that into account. We think the rewards are very handsome, but of course, do your due diligence.

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CQ: How much will NFTs play in the future of Unido?

MS: So we’ve seen the rise of NFTs, and if you look at NFTs, over artwork have been going for very large sums of money. The reality in NFTs, of course, is a token issued on the blockchain, and the market, rightly or wrongly, ascribes a very high value, or what can be a very high value to these instruments.

So they are investment instruments. We at Unido don’t decide whether they are worthy of the price. We recognize that if the NFT is in demand, and the market dictates it wants to be held, and it’s something worth holding, we put those into the process of adding them to wallets. So if it’s written on Ethereum, we are looking at custom ERC tokens; we can put your NFT token in. There is a pipeline of work around new blockchains, but we don’t discriminate NFT versus utility token versus a security token. It all comes down to the demand for the instrument.

We are covering professional investors, corporate investors, institutional investors, and if they have the appetite for these kinds of assets, they will need custody so that we will provide them with it. It’s a market-driven thematic of demand, so if there is demand for holding NFTs in the wallet, then we will accommodate.

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Final Thoughts from Michael:

Thank you to everyone in the community for your questions. I hope the updates on the project were helpful.

We will try to give updates via video on our YouTube channel periodically. Please stay tuned to our announcement channel as we will pop out all bits of news for everyone!

Do follow me on Twitter; while I document my thoughts and personal views on the market, I update what I’m seeing from clients. We are engaging in Telegram jump-ins, so be sure to join us there for conversation.

This concludes the Unido YouTube AMA. Please feel free to reach out to the Unido team on Telegram or our other social media channels if you have any additional questions.

Important Unido Links:

Official Website: www.unido.us

Telegram: https://t.me/unidogroup

Medium: https://unidocore.medium.com/

Twitter: https://twitter.com/Unidoep

LinkedIn: https://www.linkedin.com/company/unidocore/mycompany/

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