AMA with Alkemi
On the 14th of October, 2021 at 11:00 UTC, Decentralized Club had the honor of hosting Ben Cooper, Co-Founder and CXO at Alkemi Network for an Ask-Me-Anything session on their Telegram page with a community of over 60,000 people. It was hosted by DC Admin, May.
The session was divided into four segments. Introductions were made in Segment 1, questions from the Twitter and website community were answered in Segment 2 and 3 respectively, and live questions from the community members in attendance were answered in Segment 4.
If you missed this event and would like to know what Alkemi Network is all about, you can find a recap of the interview here. Note that slight edits have been made for clarity, and links in this recap lead to images, documents, or other media.
Segment 1 - Introduction
Hello, 大家好, नमस्ते, Selamat!
My name is May and I'll be hosting the AMA with Alkemi Network.
Today, we have with us a guest from the Alkemi Team.
Hi everyone! :) Great to be here
Hello Mr. Cooper. You're welcome to the Decentralized Club and it's an honor to have you here.
How's your day going?
Great day so far, how about you?
All good :)
Before we get to the main session, could you quickly tell us more about yourself and your job description at Alkemi Network?
I am the co-founder and Chief Experience Officer at Alkemi Network. I have over 15 years of experience in UI/UX, design, and branding, I am responsible for overseeing product user experience, marketing, and engagement. Before joining Alkemi Network, I worked for numerous start-ups and development companies in various design and management roles. Prior to that, I was the SE Asian project manager for the United Nations where I oversaw the development and auditing of clean energy projects under the UNFCCC. I also served for over 6 years in the Australian Army.
This is a very impressive bio, Sir!
Thank you :)
Let's jump right into the main session, shall we?
let's do it!
Q1. What is Alkemi Network about and what idea was it created out of?
Alkemi Network was co-founded by Ryan Breen (CEO), Brian Mahoney (CS), and myself (CXO) in 2018 with the aim to enable everyone to use DeFi. Ryan and I had been working on arbitrage bots - building in DeFi before it was even called DeFi - and we met Brian during our successful time at Techstars.
Brian had over ten years of CeFi experience and as we began working together we discovered the constraints preventing institutions from accessing DeFi… Brian calls them the 3Cs - capital, connectivity, and control. There was an emerging opportunity for us to build a custody-free, decentralized liquidity network that could enable institutions, exchanges, and individuals to access DeFi and earn yields on their Ethereum-based digital assets. So we got to work on creating Alkemi Network, a name we chose to describe the fusion of our CeFi and DeFi expertise.
Our goal is to bring the wall of institutional capital to DeFi so we can help the decentralized financial ecosystem to grow… and importantly, help migrate capital from the legacy financial system to a new natively digital infrastructure - on-chain.
If you haven’t seen it yet, check out this quick explainer video https://youtu.be/WudaItEjfJI and follow us across Telegram, Twitter and other social platforms at https://t.me/AlkemiNetwork, https://twitter.com/AlkemiNetwork
A minute for the community to view.
I love the goal of enabling the widespread use of DeFi.
Q2. What innovative solution is Alkemi Network bringing to topple its competitors with similar offerings in the financial market?
We were built from the ground up to solve the trusted-counterparty liquidity problem, bringing CeFi experience to tailor our DeFi protocols to the requirements of a centralized institutional client base. We worked with a number of hedge funds and other CeFi institutions to integrate a reporting system with risk management features that weren’t available in the market.
We established a KYC/AML partnership with KYC-Chain and built our first protocol, Alkemi Earn, with two liquidity pools. The ‘Verified’ pool can only be accessed by users who go through KYC/AML verification processes and our ‘Open’ pool is permissionless, so anyone can access it like they would regular DeFi. The important thing is the pools are kept totally separate and there is no mixing of funds.
Q3. How can users earn interest on their Ethereum-based assets on Alkemi?
Our flagship protocol, Alkemi Earn, is Alkemi Network’s DeFi borrowing and lending protocol. Users can access the protocol at https://earn.alkemi.network
By depositing Ethereum-based digital assets into either our KYC compliant ‘Verified’ pool or our ‘Open’ pool, users can earn a dynamic APY yield.
We have also established integrations with exchanges - our first integration being Shift’s ‘Nexus Markets’, where their clients can access our DeFi yields natively from their exchange through Alkemi Vaults.
This is great!
Q4. Could you briefly talk about $ALK and the utilities?
Alkemi is the first decentralized liquidity network to facilitate both KYC / AML permissioned (‘Verified’) and permissionless (‘Open’) liquidity pools governed by one utility token- $ALK.
ALK holders will be able to propose and vote on decisions concerning protocol parameters and properties such as:
-Setting interest rate models and base fee structures (e.g. origination fees)
-Administering asset markets (e.g. add, remove, lock, unlock)
-Updating protocol contracts and risk parameters (e.g. utilization limits, collateral ratios)
-Amending admin roles (e.g. Liquidators, KYC admin)
$ALK utilities look really good! Well-done.
Q5. Are there any incentives available to users of Alkemi Network?
We established a Liquidity Mining Program to increase platform participation. By deploying network incentives through a participation-reward system, the network intends to build a balanced composition of lenders and borrowers across the markets and pools.
Liquidity Providers (‘LPs’) and Borrowers accumulate network rewards in the form of native Alkemi Network (‘ALK’) governance tokens. Reward tokens are distributed according to participants' allocated and borrowed capital in the Alkemi Earn markets across the KYC 'Verified' (permissioned) or our 'Open' (permissionless) digital asset pools. An interesting feature of rewarding both borrowers and lenders is that by receiving a stream of ALK tokens, borrows are subsidized and, when borrowing rates are low, may actually lead to negative borrowing rates (paid to borrow - i.e. net positive yield).
The liquidity mining program will be running for the next 4 years and will allocate 35% of our total token supply to borrowers and lenders across the pools. You can find more information in our protocol documentation here: https://docs.alkemi.network/alkemi-network/liquidity-mining-program
Dear community, please go through this pinned document at your convenience.
Q6. What major news should we still look forward to from Alkemi Network by the end of the year?
We are in talks with some market-leading CeFi and DeFi partners to integrate them into our network over the coming months. It’s going to be a busy time in terms of onboarding new clients to Alkemi Earn. So far we have brought on 80+ institutions with $30m+ assets under protocol across the pools and we anticipate that number rising considerably as we bring on new partners.
Be sure to follow our Telegram and Twitter channels for all our exciting upcoming announcements: Telegram, Twitter, and other social platforms at https://t.me/AlkemiNetwork, https://twitter.com/AlkemiNetwork
Let's now take three questions from our Twitter community.
Segment 2 - Twitter Questions
Q1. How do users of the Alkemi Network become stakeholders in the network too?
Twitter Username: @static_current
Hi @static_current! Our Alkemi Network (ALK) DAO token is currently available on Uniswap and SushiSwap pools. You can also join the community and earn $ALK token through various events and competitions that are announced on our social media channels (for example, we recently ran a Quiz Competition); By joining the Alkemi Network Advocate Program and proactively contributing to the project / participating in monthly tasks; Or by entering our Liquidity Mining Program and also borrowing/lending in the Alkemi ‘Earn’ directly.
Q2. What are the major issues that are preventing institutions to adopt DeFi and is Alkemi going to tackle all those problems?
Twitter Username: @cradled_in_
Hi cradled_in, great question! The main friction point preventing institutions from accessing DeFi is the compliance risk posed by a permissionless ecosystem. By creating a trusted-counterparty liquidity environment with enforced KYC/AML processes, we solve this key issue and enable market participants to access compliant DeFi. We have also integrated advanced reporting and risk management systems into our flagship ‘Alkemi Earn’ protocol to meet the institutional requirements.
Q3. Alkemi is the first decentralized liquidity network to facilitate both KYC / AML permissioned (Verified) and permissionless (Open) liquidity pools governed by one utility token. So what interesting features come with this liquidity network?
Twitter Username: @AbayomiNathani2
Hi AbayomiNathani2, thank you for your question. Alkemi Network enables institution-grade DeFi borrowing and lending. As an institution-grade network with KYC/AML ‘Verified’ markets available for compliant participation in DeFi, Alkemi Network is solving the trusted-counterparty liquidity problem and increasing institutional participation in the DeFi ecosystem, which will help to grow the ecosystem as more institutions allocate their treasury and trading capital to digital assets.
We have also extended the feature offering by developing advanced reporting and risk management processes.
Very detailed answers! Thank you
Let's now take three questions from our website community.
Segment 3 - Website Questions
Q1. I read that Alkemi is the first decentralized liquidity network to facilitate both Permissioned and Permissionless liquidity pools governed by its network utility token $ALK. My question is, what are some of the unique benefits of Alkemi Permissioned/Permissionless Liquidity pools to its users? Can you further explain more about your Permissioned liquidity Pools? What are the benefits it has over other existing Liquidity Pools?
Telegram Username: @RuthPius
Thanks for your question, Ruth! Of course, so the benefit of the permissioned ‘Verified’ pool is that users can interact within a trusted-counterparty liquidity environment. What this means is that only KYC/AML allow listed wallet addresses can interact within the pool. This functionality is important for market participants who are required to meet their internal risk and control guidelines, mainly institutions who are looking to access DeFi in a compliant way. By maintaining a ‘know your counterparty’ environment within the ‘Verified’ pool, there is a more secure mechanism for tracking funds and preventing exploits.
The open pool has the benefit of being permissionless, so anyone can access it without having to undergo KYC. Users of the open pool can also benefit from the liquidity mining program. The interesting functionality comes when users begin to arbitrage between the APYs differentials offered by each of the pools.
Users of both pools receive liquidity provider and borrower rewards as per the liquidity mining program.
Q2. Could you please explain your liquidity status? I see a lot of news from your team on how Alkemi Network is not directly involved with liquidity as it is still WIP. Are there provisions for liquidity on any trading platforms currently?
Telegram Username: @zeybertn
G’day, zeybertn! Due to Canadian and US regulations, it’s not possible for the company to manage liquidity or participate in the market listing directly, so we can’t comment upon liquidity on 3rd party platforms, unfortunately.
That's alright :)
Q3. Upon research, I came across KYC approved liquidity pool and open access liquidity pool. Can you tell us why the Alkemi network has such a feature? What are the differences between the two liquidity pools? What benefits do the LP providers get in each case?
Telegram Username: @albertjaison
Thanks for your question Albert, this is part of our vision to make DeFi accessible to everyone;
We established the KYC/AML ‘Verified’ pool for institutional clients that would require a trusted-counterparty liquidity environment so they could remain compliant whilst using DeFi. We created the ‘Open’ permissionless pool for anyone who doesn't want to undergo KYC/AML. That way, we could provide a DeFi access solution that fits everyone, institutions and individuals alike.
Great answers so far! Alkemi looks like a solid project with great backing!
Thanks, May :)
Before we take live questions, could you tell us the inspiration for the project's name?
Alkemi derives from the word "Alchemy" which is the process of transformation, creation, or combination of elements. As we were combining DeFi and CeFi to create a new protocol we thought this was a fitting name.
I agree! It's perfect!
It's now time for the most popular segment of the AMA
In this 4th segment, I will open the group for some seconds for the live community to shoot you some pressing questions.
Please pick four original questions to answer.
Try to ignore generic, vague, and copy-paste questions 😊
Let's do it, Excited to see what questions everyone has!
As a measure to deter bots and reward hunters, could you please pick an emoji that will be included in the questions so you can tell original questions apart?
Great choice! The group will be unmuted shortly.
---Chat was then opened for the live community to send in their questions---
Segment 4 - Live Questions
Guest, please select the questions now.
Kindly prioritize the questions with the 🧙♂️ emoji
🧙♂️ Hi, I would like to know about the Alkemi Advocate Program and also if there are any remote staff openings on your team? I have a huge interest in Alkemi. Thanks
Great question! Our Alkemi Network Advocate Program is open for submissions at: http://bit.ly/alkemi_advocate
As part of the program, we ask every 'Alkemist' to complete 4 compulsory tasks each month (with additional task opportunities where available) for a chance to qualify for a monthly $ALK retainer.
For any open positions, please check our AngelList where we list available job postings: https://angel.co/company/alkemi
3️⃣ more questions to go! 🎉
In news, it is written that the USA will tighten crypto regulation. How do you think Alkemi will adapt to this regulation? What impact does this regulation have on Alkemi?
Great question! Yes, we have seen a lot of recent SEC moves that point to a more regulated digital asset ecosystem with a particular focus on DeFi. This is one of the considerations we took into account as we were building the Alkemi Network. We see the ecosystem gradually reaching a middle ground where decentralized finance is possible but with a level of KYC verification through decentralized identification. We integrated our KYC/AML process for the ‘Verified’ pool as a way to offer users a compliant access point. We also took a very conservative approach when launching our protocol and token to ensure that we as many precautions as possible to ensure the future longevity of the protocol even if the SEC continues to crack down on other protocols in the DeFi and Crypto space.
🧙♂️🧙♂️🧙♂️ Do ALK token holders have the authority to create and vote on proposals?
What is the rollout strategy for Alkemi Network?
Yes indeed, although this is a gradual rollout... See our Medium post: https://medium.com/alkemi/alkemi-network-progressive-decentralization-update-q3-2021-1d740f87af63 for more details.
With the minting of ALK tokens at our TGE event on 9th September, we completed an important milestone in our progressive decentralization journey. While the Alkemi Network has been established as a DAO with the appropriate on-chain governance functionality, the process of providing full voting rights to community token holders will be a more gradual process over time to reinforce protocol stability and security.
During this transition, ALK token holders can discuss proposals and engage in community voting. In tandem, an Administrator account is in place to ensure a safe transition, with various functions like pausing the protocol in case of a problem.
ok, 1 more :)
is KYC necessary for everyone or just for big investors? can you guarantee that the token holders' KYC data is safe? I am new to crypto can there be any steps for KYC? 🧙♂️
Hi! whilst KYC/AML is not required to access Alkemi Network's 'Open' pool, it can be a useful process especially if users are concerned about the provenance of funds. This is typically more of a concern for larger investors although it is relevant to everyone, especially if funds are frozen. We partnered with KYC-Chain to provide a KYC/AML solution and they are responsible for maintaining the security of the data. Typically for any centralized exchange (Coinbase, Binance, Kraken, etc) users are required to undergo KYC to verify their credentials.
If anyone has additional questions that would like answered please join our official TG community at t.me/alkeminetwork and we will be happy to answer.
It's a wrap! 🎉
Thank you so much for your time with us, Mr. Cooper!
The session was insightful!
Dear community, please follow Alkemi Network here!
Big thank you to May for being an amazing host and to everyone who took the time to join and ask such great questions!
Thank you, Mr. Cooper, thank you, everyone.
Our regards to the rest of the amazing team at the HQ working so hard to make Alkemi a success!
Thank you - have a great day everyone!
Until next time, do enjoy the rest of your day!
The AMA with Alkemi Network is now over.