Umami Labs CEO Alex O’Donnell grew up on the outskirts of Philadelphia earlier than attending Temple College to review literature and economics. That path led him to commit seven years of his life as a monetary journalist at Reuters, the place he specialised in M&As IPOs.
He mentioned his tutorial focus created a “fairly pure synthesis” when it got here ot monetary journalism. Nevertheless, he mentioned he turned “disenchanted” together with his business whereas he was cooped up at house through the Covid-19 pandemic. “There actually was a three-way alliance between journalists, authorities officers and expertise corporations making an attempt to regulate the move of data,” O’Donnell mentioned in an interview with Cointelegraph.
He started tinkering with cryptocurrency, which led to his introduction with Umami DAO — and in the end his creation of Umami Labs.
O’Donnell and his spouse, Sanjana, are getting ready for a “third, smaller individual” to affix their household subsequent yr. Within the meantime, he mentioned he’s additionally gearing up for an additional crypto-related enterprise. The main points aren’t absolutely public but, however he mentioned he plans to launch extra data the months forward.
1) How’d you make the transition from journalism to crypto?
I’d been a journalist for the higher a part of a decade primarily masking mergers and acquisitions. I all the time had an curiosity in finance and tech. However I began changing into a bit disenchanted with the mainstream media across the time of the pandemic. That was the primary time I began changing into a bit extra cynical about my very own business’s position within the data economic system. So I began paying extra consideration to points like privateness, censorship and different issues I had not taken as a lot curiosity in earlier than.
In 2020 I spent most of my time masking the Covid-19 pandemic. There actually was a three-way alliance between journalists, authorities officers and expertise corporations making an attempt to regulate the move of data. It wasn’t even that the official line was improper. It was that dissent was being stifled within the first place. That actually peaked my curiosity in decentralized platforms.
At that time, I began to turn into meaningfully serious about crypto. On condition that I got here from monetary journalism, decentralized finance (DeFi) particularly caught my curiosity. I actually began actively investing in numerous crypto protocols as a retail investor in 2021. I used to be getting extra concerned in DeFi communities, and certainly one of them was the predecessor to Umami — ZeroTwOhm.
2) How did that result in you creating Umami Labs?
I obtained concerned in ZeroTwOhm as an everyday retail investor aping in as many individuals did. It was a reasonably small group, so I used to be capable of fairly shortly get in touch with the builders constructing the protocol.
However they didn’t actually have a transparent sense of route about what they needed to do subsequent. They’d bootstrapped a number of hundreds of thousands of {dollars} in capital that was largely simply sitting there. It felt like any individual wanted to step in, and the builders have been, frankly, very happy handy duty off to another person, which ended up being me.
3) What are you centered on now?
What I’m most serious about now’s zeroing in on an issue that turned very clear to me throughout my time at Umami. Primarily, as Umami Labs geared as much as launch our first product in early 2023, I used to be assembly with numerous crypto-focused hedge funds and enormous particular person traders. There was this gaping want for some option to securely earn curiosity on USDC, USDT, and different stablecoins with out having to simply utterly transfer off-chain.
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I already centered at Umami on growing one other product that was designed to generate returns on stablecoins, however the actual want is for one thing that’s as safe and boring and dependable as a traditional financial savings account, however for individuals who have been holding stablecoins on on-chain wallets. There have been forays into that space by different gamers, however I’ve but to see a whole resolution to that drawback. It takes a mixture of getting the precise regulated entities off-chain and seamless mechanisms for on- and off-ramping on-chain.
That’s one thing I’m personally centered on now. I’m collaborating with some others on growing one thing, and getting suggestions from potential early customers. We’ll have extra particulars to share throughout the subsequent couple of months. However for now, it’s nonetheless within the early phases.
4) What do you assume would be the greatest crypto traits in 2024?
In my private opinion, I do assume that the excessive level of the crypto market in 2021 actually was the high-water market of this period of very DIY, unregulated, form of community-run bootstrapped protocols. I feel that getting in subsequent years, together with now, we’re going to see a reasonably stark shift during which DeFi stops trying a lot like a very separate ecosystem. It can for all intents and functions turn into a subset of TradFi.
Associated: Coinbase launches regulated crypto futures companies for US retail merchants
I don’t assume the DeFi versus TradFi distinction goes to final. Clearly, we’re seeing various ETFs present process the registration course of. Within the background, main gamers are acquiring licenses to interact in a wider array of monetary actions within the U.S. Coinbase, for instance has, registered as a Futures Fee Service provider and in addition as a Designated Contract Market with the CFTC. That authorizes them to function an alternate and open accounts throughout the futures markets. These shall be focus, in fact, on Bitcoin and Ether.
Coinbase and Circle are accumulating totally different elements that can enable them to turn into deeply built-in operators inside conventional finance. I feel that could be very attention-grabbing. In parallel to that, you could have people equivalent to Constancy and Franklin Templeton and BlackRock growing regulated crypto funding merchandise. Franklin Templeton is growing its personal tokenized Treasury Invoice ETF. It’s fairly clear that shall be a supply of momentum for the business over the subsequent a number of years.
5) What’s essentially the most attention-grabbing to you as an funding proper now?
Actually, the one factor in crypto that I’m serious about as a long-term funding is Ether and its staking and re-staking derivatives. I feel we’re nonetheless at a degree the place the overwhelming majority of potential investments in crypto are extraordinarily speculative. The underlying worth proposition of the tokens remains to be unclear. I feel ETH is likely one of the few exceptions. So I do maintain ETH, and I’m snug with it as a long-term funding.
I’m being attentive to the staking protocols like Lido and Eigen Layer. Eigen permits individuals to take ETH they’ve already staked and re-stake it to any variety of totally different associated staking protocols. That very considerably expands the vary of actions that may be accomplished trustlessly. I anticipate to see, over time, numerous constructing on high of Eigen and different comparable protocols. I feel we’ll see a proliferation of funding funds and ETFs specializing in taking ETH and staking it and re-staking it.
6) What do you assume is the primary hurdle to mass adoption of blockchain expertise?
There must be a full fusion of protocols on the bleeding fringe of blockchain, and extra established corporations which are built-in into the standard monetary sector and able to working compliantly from a regulatory perspective. We have to see established gamers integrating refined sensible contracts and taking full benefit of blockchain’s potential. Then we’ll begin to see blockchain changing into a part of on a regular basis monetary transactions and actions.
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