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November 10, 2020

Market Spotlight

Discussing the idea of looking for real-world assets as collateral in DeFi liquidity pools with Vertalo


Dave Hendricks, CEO of Vertalo, talked about the evolution of the company from a due diligence platform to a transfer agent cap table shareholder registry for digital assets, which they built as a result of the problems they faced issuing their own digital asset in a compliant manner. Hendricks discussed the state of the blockchain today, saying:

(17:03) “In May of 2019 we introduced Keyless custodial wallets. Our feeling was that Keyless custodial wallets look most like eTrade or Coinbase and that if you want to refuse the complexity and the barriers and the obstacles to adoption of digital equities, programmable assets, what you have to do is is you first have to get the nerd stuff out of the equation. And the nerdiest thing in crypto or blockchain is definitely the wallet. Managing private keys, passphrases, using MetaMask and these other things. People don’t want to bother with it and they’re scared to self-custody. So we first simplified that…

(19:21) The wallets solved a complexity problem for the investor. We then wanted to solve a complexity and cost problem for the issuer as well. So in the summer of 2019 we introduced three-click tokenization.”

Vertalo also launched Vertalo Real Estate launched during COVID-19. They acquired a team out of Philadelphia, handpicked real estate industry veteran Gary Brandeis to run it for them, and it has been off to the races.

(21:17) “Now they’re signing a lot of deals. This week we’re going to add a new client, it’s called Mount-X. They are in Mexico and Canada. And Mount-X is bringing on at least 15 properties onto Vertalo and tokenzing those. We have another real estate project…it’s a $100 million…offering, which is, it’s multi-family assets in the Northeast. I’ll announce that one shortly…And every day, we have more real estate companies calling us saying, ‘Hey, how do we use this technology to reduce costs for fund administration but also improve liquidity for our investors?’”

There’s been a slow rise in liquidity in the cryptocurrency space but a very fast rise in DeFi. Hendricks discussed the idea of looking for real-world assets as collateral in these liquidity pools.

(24:45) “There’s a whole world of assets which are illiquid today such as real estate and other cash debt/instruments where no market exists. There’s not a borrowing and lending, there’s not really a
selling market. And there are these pools of owned assets which are ideal to be pledged as collateral to underpin and support DeFi markets and provide liquidity. Vertalo’s plan is to enable asset owners, real estate funds, real estate investors and people who own debt instruments to bring those assets under the Vertalo platform and then in a couple of clicks turn them into a tokenized asset that can be pledged as collateral on DeFi networks.”

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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