2024-12-26T09:03:49+0000

1/ In this insightful session at REDeFiNE TOMORROW 2024, Ambre Soubiran @ambresoub, CEO of Kaiko @KaikoData, and Alex Wenham @APWenham from @Bloomberg discuss the evolution of cryptocurrency market data over the past decade and its role in the future of finance. 2/ Kaiko, founded in 2014, is the oldest market data provider dedicated to the crypto industry. They serve institutional clients, including regulated entities, regulators, research companies, banks, custodians, and market infrastructure providers. 3/ In the early days, Kaiko focused on aggregating data from centralized exchanges. As the industry evolved, they expanded to cover decentralized finance (DeFi) and decentralized exchanges (DEXs), requiring them to run blockchain nodes and contextualize on-chain data. 4/ Kaiko's offerings now include centralized exchange data, DeFi market data, derived data (analytics, risk management metrics, implied volatility surfaces), and indices (rates, benchmarks). 5/ The client base has shifted from early arbitrageurs and researchers to institutional investors. Tradfi's interest in crypto as an investable asset class and blockchain technology for asset tokenization began around 2020-2021. 6/ Bitcoin ETFs have seen impressive growth and traction since the beginning of the year. There is excitement around the prospect of an Ethereum ETF being approved this summer or fall. 7/ While Bitcoin and Ethereum are highly liquid, building thematic indices on a larger number of cryptocurrencies is challenging due to liquidity constraints and the need for institutional-grade custody solutions. 8/ Kaiko is working on exchange ranking, custody solution vetting, and creating a vetted asset pool for creating financial investment products. Asset eligibility and vetting are crucial steps in the index creation process. 9/ Kaiko Indices, a regulated subsidiary under the Benchmark Regulation (BMR), issues benchmark rates for settling financial products, competing with providers like CF Benchmarks. 10/ Most cryptocurrency options are traded on Deribit, with significant OTC activity. Traditional spot exchanges like Gemini and Bullish are starting to offer perps and derivatives, increasing the availability of trading venues. 11/ Tokenization of traditional assets and securities presents a significant opportunity for the capital markets industry to rethink operational and infrastructure aspects. Initiatives like Blackrock's tokenized bond on a public blockchain highlight this potential. 12/ Data providers will play a critical role in the tokenized future, serving as the catalyst for the execution of on-chain contracts and bridging the gap between blockchains and traditional financial market data systems. 13/ Standardizing data taxonomy and onboarding traditional market data infrastructure into blockchain are essential pillars for scaling the next wave of innovation in tokenized products. 14/ Industry agreement on additional metadata required for tokenized instruments is crucial, as different risk profiles may emerge based on the type of blockchain (private vs. public) and settlement medium used. 15/ Kaiko and Bloomberg are actively participating in working groups focused on standardization, taxonomy, and data management to facilitate the integration of traditional market data into tokenized products.