For a few months earlier this year, we supported a couple of students writing their Master’s dissertation in Financial Technology at University College London (UCL). Under the supervision of Dr Christopher Clack, who incidentally co-authored the piece that inspired Richard Baker to start Tokenovate, and with the help of our product gurus John and Stephen, the students delivered excellent papers and demonstrated in-depth knowledge of their respective subjects.
Here we talk to one of those students – Vincenzo, or Enzo, about his experience:
Ciao Enzo, tell us a bit about yourself
Originally from Italy, I moved to the UK when I was 18 to challenge myself in an international context. First I studied Artificial Intelligence and Software Engineering at the University in Edinburgh, and then after four great years in Scotland, I moved to London and UCL.
When I am not studying (or working), I love cooking and baking as much as I like hacking together fun bits of software. So you’ll often find me munching on raspberry pies or coding on one.
That’s a good one, Enzo! Now, your dissertation focused on enhancing liquidity and reducing risk in the collateral management processes involved in derivative trading. What did you find out?
Well, currently, managing collateral is a very cumbersome and expensive process which imposes considerable operational overheads and ties up capital that could be otherwise more efficiently deployed in the market elsewhere. While efforts from regulatory bodies such as ISDA are underway to standardise and digitise the industry, the current market infrastructure is too antiquated to support the wave of new requirements. Data fragmentation and manual input are two of the key barriers to innovation.
The proof-of-concept I built as part of my dissertation aims to alleviate these pain points by leveraging the properties of blockchain, in particular the Bitcoin Satoshi Vision (BSV) chain. More specifically, near-to instantaneous settlement and automation of margin calls reduces the amount of manual input (and therefore human error) required for reconciliation between different counterparties (or between different units within the same organisation). BSV’s cheap transaction costs and large block size are uniquely fit to support the high throughput and volumes of data populating the derivative world.
Alongside building the PoC, I also studied how a fully tokenized system would be legally classified and what the security and compliance implications would be for the maintainer of the system. As the sector is still in its infancy, in particular when it comes to the BSV (and more generally Bitcoin-based) ecosystem compared to its Ethereum counterpart, I found it challenging to find resources online. I think more partnerships between financial institutions and blockchain developers must be fostered to ensure that the blockchain world and the traditional financial world can co-exist and benefit from each other.
That sounds a lot like Tokenovate could really help you?
Absolutely! Working with Tokenovate has been an incredibly insightful experience. Working on this project with a strong software background, I found the help from the Tokenovate team on the financial aspects of the dissertation particularly useful. I received actionable feedback on a weekly basis and got introduced to a vast network of people working in the space. I also had the opportunity to work from their really cool office on Liverpool Street!
Now that you have submitted your dissertation, what are you up to next?
I am now beginning my entrepreneurial journey at Entrepreneur First here in London. My plan is to fully commit to my startup idea – not fully-defined yet, but definitely in the fintech and possibly blockchain space. It is an extremely exciting space to build in right now, as the crypto and blockchain ecosystem more broadly are maturing and real use cases are starting to emerge, especially at the intersection with legacy infrastructures – in finance and beyond. I am sure Tokenovate’s path and mine will cross again in the future.
We certainly hope so, Enzo. Fingers crossed all goes well with your dissertation!
You can connect with Enzo on LinkedIn here.