January 29, 2024
In an exclusive interaction with NFTMetta Journalist Anjali Kochhar, Crypfi’s founder, Pranav Srivan Elankovan, discusses the development of Crypfi (An Indian company headquartered in Bangalore) and the incorporation of CeDeFi into crypto trading. The company aims to bridge the gap between decentralized trading and the needs of both traders and institutions. Crypfi’s strategy involves creating a KYCed self-custodial derivatives trading platform, and the founder emphasizes the importance of a hybrid approach to blockchain technology for security and efficiency. The company’s plans include diversifying crypto trading, introducing traditional finance derivative instruments, and developing DeFi lending products to establish Crypfi as a comprehensive financial ecosystem. Predicting specific figures for short-term and long-term crypto trading is acknowledged as challenging due to the dynamic nature of the market.
Q. What prompted the development of Crypfi and the incorporation of CeDeFi into the crypto trading landscape?
A. In 2019, as the crypto wave gained momentum, I ventured into the web3 industry. Initially drawn towards social media, inspired by the success of platforms like Facebook and the rising influence of influencers, my focus was on addressing the payout issues prevalent in existing social media platforms. However, our attempt to build a social media platform in late 2022 faced challenges, particularly in unit economics, leading to demotivation within the team. Entrepreneurship often demands bold decisions, and recognizing the need to pivot, I explored new avenues. Coming from a trading background with a strong understanding of finance, I found myself captivated by the concept of self-custody during Ethereum’s peak. While centralized exchanges dominated the trading landscape, a significant gap existed in decentralised trading. Despite the substantial daily trading volume in the crypto market, a large portion, especially in derivatives, remained centralized. Centralised exchange failure created a major impact on me to do something. The existing decentralized protocols lacked user-friendly interfaces, hindering trader adoption. Additionally, concerns around anonymity in the decentralized space posed challenges for regulatory acceptance. In light of these observations, we concluded that the sweet spot lay in creating a KYCed self-custodial derivatives trading platform, aiming to bridge the gap between decentralized trading and the demands of both traders and institutions.
Q. Can you tell us about the inspiration for Crypfi and how your engineering and financial backgrounds influenced this venture?
A. With a background rooted in engineering, my inherent curiosity about how things function and operate became a driving force. As an engineer, the desire to invent and engineer solutions naturally guided me towards the dynamic world of technology. This curiosity, particularly ingrained in core engineering principles, propelled me to delve into the intricate details of developing products in the web3 industry. Moreover, my engineering background laid a solid foundation for understanding the technical aspects of the industry. This knowledge was further complemented by insights gained through trading and preparation for the CFA (Chartered Financial Analyst) exams. The financial expertise acquired allowed me to navigate valuations, comprehend equity, analyze profits, and decipher balance sheets. This dual proficiency provided a comprehensive understanding of how capital markets operate and served as a crucial foundation for grasping the intricacies of tokenomics and tokenization within the cryptocurrency space.
Q. What motivated the establishment of Crypfi and the incorporation of CeDeFi into cryptocurrency trading? Briefly, how does Crypfi’s strategy address the needs of both traders and institutions?
A. Driven by a profound interest in capital markets, banking, and fintech, Crypfi, or Crypto Finance, epitomizes the convergence of crypto, next-gen web tech, and finance through CeDeFi. This hybrid technology empowers Crypfi to craft advanced trading instruments, focusing on meeting institutional needs and excelling in high-frequency derivatives trading. Our strategic use of blockchain is limited to asset custody, ensuring a nimble and cost-effective trading experience. Simultaneously, we’re actively developing a proprietary settlement layer—a forthcoming initiative designed to enhance transaction speed and settlement efficiency. This strategic approach enables us to offer instant transaction finality and low fees, addressing pivotal concerns in the crypto trading landscape. CeDeFi’s prowess, ongoing innovations, and the implementation of KYCed whitelisted trading cement Crypfi’s position as a pioneer in the crypto trading realm. Committed to serving the diverse needs of traders and institutions, Crypfi presents a dynamic and versatile solution within the evolving crypto finance landscape.
Q. What are Crypfi’s future plans, and how does the company see its place in the growing crypto trading landscape?
A. In the short term, our focus centers on propelling Crypfi into the market, augmenting its capabilities with additional trading support, and introducing exotic trading instruments. Our commitment to diversifying crypto trading involves bringing traditional finance derivative instruments into the crypto market, expanding the spectrum of trading possibilities. Looking beyond trading, our roadmap encompasses the strategic development of DeFi lending products. These offerings will cater to emerging market credit, on-chain institutional capital, revenue-based financing, and invoice factoring. We aspire to evolve Crypfi into the go-to partner for financial freedom and growth, extending our suite of products beyond the trading domain. Our long-term vision involves establishing Crypfi as a comprehensive financial ecosystem, seamlessly integrating various financial services to empower users to navigate the evolving crypto landscape with confidence. Whether you’re a trader seeking diverse investment opportunities or an individual looking for innovative lending solutions, Crypfi aims to be the catalyst for your holistic financial journey.
Q. How does Crypfi secure the security and efficiency of its trading ecosystem, particularly with the introduction of automated market makers (AMM)?
A. Crypfi places a paramount focus on the security and efficiency of its trading ecosystem, leveraging a thoughtful approach to automated market makers (AMM) and hybrid systems. While AMMs offer on-chain security, Crypfi has implemented a unique hybrid model. We keep on-chain the assets and capital, ensuring their security with the trustless nature of blockchain technology. However, we strategically keep the order book off-chain. This hybrid approach tackles inherent issues associated with on-chain AMM pool-based systems and on-chain order books. Capital efficiency is optimized by securing assets on-chain, while scalability concerns are addressed by keeping the order book off-chain. Crypfi’s hybrid system aims to mitigate slippage challenges, enhance price discovery, and provide a secure trading environment. Through this innovative blend of on-chain and off-chain elements, Crypfi achieves scalability, efficiency, and security, offering users a robust platform for their cryptocurrency trading needs.
Q.What do you think of the figures of crypto trading—short term and long term?
A. Predicting specific figures for short-term and long-term crypto trading can be challenging due to the dynamic nature of the cryptocurrency market. Short-term figures are influenced by factors like market sentiment, news, and short-term trends, making precise predictions difficult. Long-term figures are shaped by broader market adoption, regulatory developments, and the evolving role of cryptocurrencies in the global financial landscape.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.